Budget Resolutions
Debate between Andrew Mitchell and Heidi Allen
Mr Andrew Mitchell (Sutton Coldfield) (Con)
I draw the House’s attention to my outside interests, laid out in the Register of Members’ Financial Interests.
It is a pleasure to follow the hon. Member for Islwyn (Chris Evans), who made at least one point with which I strongly agree.
There are many ways of judging a Budget, and this Budget seems to me to have much to commend it, not least thanks to the hard work of the Governments since 2010 in ensuring that, today, we raise more income than we spend on our current account. I choose to judge the Budget by the extent to which it addresses the deep divisions in Britain today. I speak not only of Brexit, which hangs over everything, but the divisions between those who gain from globalisation and those who do not and who fear it.
I am especially concerned about intergenerational unfairness, which in Britain is exemplified in the ownership, renting and part-ownership of homes, which the Budget does something about. We see it also in the heavy burden on the younger generation of university fees, and of paying for the burgeoning elderly population. The younger generation increasingly do not see the benefits of free enterprise, a strong private sector and capitalism, because we Conservatives are not standing up properly for those things, so I was pleased to see the Chancellor do that to some extent today. Capitalism and free enterprise are not only about delivering white goods at the best possible price for those on average incomes. They are about protecting our freedoms and liberties.
The economic position in the west midlands is generally improving. When I was first the Member of Parliament for the royal town of Sutton Coldfield, the west midlands had the worst unemployment in the country; now, we have the fastest growing economy, and real progress is being made on new businesses and unemployment, particularly youth unemployment, which was extremely bad. That is in part because we have a strong and activist Birmingham chamber of commerce and a brilliant new Mayor, Andy Street, who is reinvigorating the system. However, the midlands engine, which I believe punches below its weight, needs stronger leadership and a bit more oomph.
The second matter I want to discuss has been mentioned by many hon. Members—universal credit. Everyone agrees that the reform is right in principle, but with experience of benefit reform in my time as a junior Social Security Minister between 1995 and 1997, I warn Ministers that they ignore the wisdom of the right hon. Member for Birkenhead (Frank Field) at their peril. The cardinal rule governing benefit changes is not to use the change to take money away—to reduce the income of those on benefits and at the bottom of society. A Government can get away with a standstill position for the future or constrain increases, but they cannot reduce funding for what is already dependency income. Whenever the Treasury breaks that golden rule, ironically, it costs more. Some steps have been taken today in that respect, but we are not out of the woods yet. This important reform has some considerable way to go before the House can bless it.
Heidi Allen (South Cambridgeshire) (Con)
I have been dissecting today’s announcements. Would my right hon. Friend be interested to know that a single parent not in receipt of housing benefit will see their work allowance improve from £397 to £492, but it will still not be where it should have been on pre-2015 figures, which is £734? That remains a massive gap. I do not think we have heard enough of the detail today.
Mr Mitchell
My hon. Friend eloquently makes the point that a Government can have a standstill for future income when they reform benefits, but they cannot take benefits from some of the very poorest people in the way that, I fear, we were trying to do.
My third topic is that of tax fairness. We are in a period of high income tax, as my right hon. Friend the Member for Chelsea and Fulham (Greg Hands) made clear. Some people have taxation at 60% on their income. It is worth remembering that throughout the period of Conservative-led Government, since 2010, people in income tax have paid more every year than in any year in which Labour was in power. However, points have been well made, including by the hon. Member for Islwyn, about the way the giants of the tech world are avoiding their fair dues. For example, Amazon, on £2 billion of sales, pays only £4.6 million tax, Google, on £5.7 billion of sales, pays only £15 million tax, and Facebook on £5.1 billion of sales pays only £840 million through the “double Irish” or the “double Dutch” tax avoidance schemes. That is quite wrong, and I am glad the Government are going to start to rectify that. It would be better if it were rectified through OECD agreement across the piece, which was of course the subject of the British G8 conference, at which taxation reform and transparency and the importance of paying tax where revenue is earned were strongly supported. There was strong British leadership on that subject, and we need more of it. Also, the effect of digital platforms on town centres is important in areas such as mine. Royal Sutton Coldfield is suffering grievously from the rapid changes in Britain’s high streets, so the measures announced today are welcome.
The fourth and final area I wanted to mention today is the spending on mental health, which is very welcome indeed. We must ensure that this is genuinely incremental spending that buys new and expanded services. On 25 November 2015, George Osborne, in his spending review, mentioned the work that the right hon. Member for North Norfolk (Norman Lamb), Alastair Campbell and I were doing as part of the all-party group on mental health services. He pledged that for young people, particularly girls, there would be an increase of £600 million. That was very welcome, but the money, to our great sorrow and irritation, went mainly to pay off overspends in the system and very little genuinely made its way to the frontline as we had hoped. I hope that the Treasury will keep a very close eye on how this new money is spent to ensure it goes straight to the frontline.
The £20 billion increase in spending on the NHS is enormously welcomed by all of us, but I remind the House of the autobiography of Tony Blair, in which he singles out the fact that the extra money new Labour put into the public services did not lead to the reforms they wanted when they put the money in. He refers to the marks on his back from the difficulties of public sector reform. We must be sure that we really get the gains for our constituents that this enormous amount of extra money should bring, and address the ongoing issues relating to how public services are funded.
The burden of funding the NHS in the future, which above all will go to helping and caring for the elder generation, must not only fall on the income tax of working people to pay for asset-rich retired people. In spite of the very significant political problems of confronting this issue, we must ensure we do not make the intergenerational unfairness, which is so keenly felt by many of our younger constituents, worse by funding the NHS in the future in that way.