Finance (No. 2) Bill

Alex Chalk Excerpts

2nd reading: House of Commons
Monday 11th December 2017 Commons Chamber

[Helen Whately]

I appreciate the hon. Lady’s point, but I still think that she very much spoke about spending and not about the content of this Finance Bill.

Our job in this House is to make difficult decisions not just on what we spend money on but on how we raise that money—who we tax and what we tax, when we are reluctant to tax people and would much rather they had the money in their pockets to spend themselves. Our aim is to make things better for our constituents, young or old and those in between. It is not our job to make promises that cannot be kept, to write cheques that we cannot cash, and just to say things that sound nice, like massive amounts of spending, but might turn out to have nasty consequences like high unemployment. Labour Members may tell us differently, but spending that we cannot afford is not the moral high ground—it is the moral low ground.

This Finance Bill builds on the tough decisions of the Governments led by Conservative Prime Ministers over the past seven years who have reduced the deficit by 75%, while as of next year debt will fall as a share of GDP. Let us not throw that all away, as Labour Members would, with uncosted proposals and unquantified borrowing. As we heard earlier, they could not answer our questions on how much their borrowing would cost.

[Alex Chalk (Cheltenham) (Con)]

Twenty-three times.

[Helen Whately]

I think it was at least 25 times that Labour Members were asked, and still no answer other than “See if you can look it up for yourself.” Why it could not be said at the Dispatch Box, I do not know, but I fear that they are inevitably planning to pile up debt for future generations.

I welcome three things in particular. First, there is the Government’s commitment to help people on low wages. The continued increase in the personal allowance is taking people out of tax and enabling them to keep more of what they earn to spend as they need to. Alongside that, the minimum wage is rising, but at a rate that is manageable for businesses so that they do not have to lay people off in order to pay it. Policies in the Budget to increase the supply of houses should bring down rents, which, we acknowledge, have been going up far too fast. In this Bill, there is a stamp duty cut for first-time buyers to bring buying a home within reach of more families—a particular challenge for my constituency in the south-east. As Shepherd Neame brewery is the largest employer in my constituency, I should mention the very welcome freeze on beer duty, which will be good for it and good for beer drinkers across the country.

Secondly, I welcome the actions on tax avoidance and evasion to make sure that we collect more, if not all, of the tax owed. That builds on the Government’s track record in this area, as the Financial Secretary to the Treasury pointed out. Particularly in the context of my constituency, I welcome plans to cut down on online VAT evasion, with the advantages that gives to online businesses in paying VAT, because I want us to achieve a more level playing field between online businesses and those with premises such as our high street shops. Regarding the policy on landfill tax, in my area we have an ongoing problem with rogue land fillers who start off in line with the law and seem to end up not in line with it.

Thirdly, I welcome the incredibly important commitment to addressing our productivity challenge. This has been acknowledged by this Government many times—it is not suddenly news. In fact, the measures in the Budget and the Finance Bill are the product of a huge amount of work looking at how we can improve productivity—a long-running problem in this country. It is vital that we raise productivity because that means that people get more money for every hour that they work. That is the key to improving living standards and funding the public services that we want, particularly with NHS costs going up as people need and want more care. There are many factors underlying our productivity challenge. Skills are a challenge for us. There is an issue with companies investing in workers, and workers investing in themselves. It is, to some extent, a cultural challenge. One venture capital investor told me that the key difference that he notices between British and American start-ups is that it is common to see in the business plan of American start-ups investment in training for themselves as the founders of the business. He rarely sees that in British start-up companies. That is, to some extent, a cultural challenge; we do not see investing in ourselves and our skills as part of life.

We know that we lag behind other countries in the use of technology and investment in automation. One specific example is our robot density. In Japan, there are 305 robots per 10,000 employees. In Germany the figure is 301 and in the Netherlands it is 120, but in the UK it is just 71. That is just one example of where we lag behind in investment in technology and automation. We have to drive up investment in those areas, as the Finance Bill does. Such investment cannot just come from Government spending more; we have to stimulate private investment in those areas, as my hon. Friend the Member for North West Hampshire (Kit Malthouse) said eloquently. We have to mobilise private capital through incentives such as the EIS, which really works. I welcome the increases in that area, which will help to ensure that more businesses start and grow in this country, to provide the jobs and the higher wages that our constituents want.

There are no easy answers; what matters is getting the right answers. We need to help people on the lowest wages to keep more of what they earn, get a fair contribution from high earners and global businesses, build a more productive economy and invest in skills and technology. We want people to have higher wages in the jobs of the future so that they can live as they aspire to.

--- Later in debate ---

[Robert Courts (Witney) (Con)]

It is an honour to follow my hon. Friend the Member for Redditch (Rachel Maclean), whose impassioned speech took in so many detailed points with respect to the Opposition Front-Bench team. It was a forensic dissection of their economic policy from which they will struggle to recover for months and years.

This is a Budget and Finance Bill that the people of Witney and West Oxfordshire will warmly welcome. It is strategic and finely focused on the challenges that the country faces. Moreover, it operates within a constrained and careful financial climate. The Government understand the requirement for sensible fiscal policy. They understand that it is not possible simply to promise endless spending without any idea of how it will be paid for. They do not think it is simply a matter of appealing to certain groups by promising them whatever it is suggested might be wished for at the time. The Government take a sensible, practical attitude—one of financial probity and, one might even say, prudence, a concept that was once respected and beloved by the Labour party. For all those reasons, I welcome the Bill, which forensically and strategically identifies the challenges the country faces and puts in place methods and means by which to combat them.

I start my brief remarks by looking at the positives achieved by the Government and their predecessors since 2010. It is worth repeating this because it is an extraordinary record, and I hope very much that the Minister will repeat some of it, if he thinks these achievements are worthy of repeating. We have an extraordinary financial and economic record. The Government have achieved an economy that has grown by 15.8% since 2010. The deficit has been cut by two thirds and debt is scheduled to start to fall next year.

[Alex Chalk]

Does my hon. Friend, like me, welcome the fact that at the same time as the economy has been growing the tax system has been made more progressive so that the top 1% now pay 27% of the entire tax revenue—

[Stephen Kerr]

Twenty-eight per cent.

[Alex Chalk]

I am corrected: they pay 28%, which is a higher proportion than ever before.

[Robert Courts]

My hon. Friend makes an extremely good point that we have not heard often enough. We should absolutely keep making the point that although we hear talk of a progressive tax system from the Opposition, we see action from the Government. The 1% of highest earners now pay 28% of tax. That proportion is higher than it ever was under Labour. That is a record to be proud of. It is real progressive, practical politics from the Conservative Government.