Budget Resolutions and Economic Situation

Andrew Jones Excerpts

Tuesday 21st March 2023 Commons Chamber

[Andrew Jones (Harrogate and Knaresborough) (Con)]

In the many forecasts that we receive in the Budget, there was one that particularly pleased me. That was the projected fall in inflation to 2.9% by the end of this year. Tackling inflation means tackling its underlying causes, and that means boosting supply in a way that does not drive inflation. I believe that improving productivity is central to this—a point that was made eloquently by my hon. Friend the Member for South Cambridgeshire (Anthony Browne).

When we discuss productivity, we must be clear about what we mean and what we do not mean. It does not mean working harder; rather, it means working smarter so that there is more output for the same input. I therefore strongly welcome the Budget change in capital allowances, which will mean that companies can get up to 100% tax relief on investments in plant and machinery and on upgrades to IT equipment and production lines. The OBR suggests that this measure will increase business investment by 3% per year. The Treasury forecasts suggest that that measure is expensive, costing up to £25 billion, but it is also critical for international competitiveness. This decision makes the UK the only major European economy with full expensing and gives us, jointly, the most generous regime of any advanced economy.

Other measures in the Budget boost supply, but the supply of people and skills are critical in building capacity and longer-term growth. Recruitment challenges are the challenges most frequently raised with me by businesses in Harrogate and Knaresborough, which echo the comments of businesses I meet through the all-party parliamentary group on infrastructure, which I chair, and are backed by the data on the number of vacancies in the economy. I am pleased to see the measures to boost work participation: reforming universal credit, expanding childcare and abolishing work capability assessments. Each is to be welcomed.

One measure I particularly welcome has already received some comment, and that is the measure on pensions. I recently had a conversation with a doctor in my constituency who told me that he is leaving the NHS due to pension issues, as he would literally have to pay to go to work, which is a ridiculous position. He is a senior brain surgeon in his early 50s, doing important work that he loves. Our conversation was one of sadness and regret. The lifetime allowance change makes his problem disappear, and I hope this most expert and most pleasant constituent will now reconsider his life plans. People know there is a problem to solve on pensions, particularly in the health service and the public sector, and they want it tackled. It is good policy to encourage people to make provision for their future, and it is good policy to make things simple and transparent.

This Budget, as a whole, is about getting the wiring of our economy right and solving problems. In a different, post-pandemic world, it is about making the UK a better place to do business and supporting people through difficult times. The Budget is not showy, but it addresses long-term competitiveness and productivity issues, the fruits of which will address growth, inflation and debt in the longer term. I am particularly pleased to see supply-side reforms across a number of sectors.

The energy market will be a future area for attention. New technologies and new opportunities require new Government and regulatory responses, but this is future work. The Budget shows the direction of travel and where work should be focused. With its much more encouraging forecasts, this Budget shows that the plan is working, and it puts in place the framework for future progress. I commend my Treasury colleagues for all they have achieved.