Budget Resolutions and Economic Situation

Andrew Murrison Excerpts

Thursday 17th March 2016 Commons Chamber

[Alok Sharma]

My hon. Friend is absolutely right. As the Secretary of State said, Labour had 13 years to fix this and it did not. This Government are now getting that right.

I spoke this morning at the Association of Chartered Certified Accountants, which is much more interesting and exciting than it sounds. It greatly welcomed the business measures in the Budget, particularly the drop in corporation tax. I have to say to the shadow Chancellor, who is now back in his place, that if we drop corporation tax rates, investment will come into the country, which will allow us to raise more money. That is something that he needs to understand if he ever hopes to become Chancellor himself.

The changes to business rates are incredibly welcome to many small businesses, for which business rates constitute a large component of their fixed costs. I welcome, too, the abolition of class 2 national insurance. I hope that we are seeing a move towards a merger of national insurance and income tax. I know that this is potentially very complicated, but the dividends it will pay in terms of tax simplification will be huge, as will be the benefits for businesses.

Investment in infrastructure—many billions have been invested since 2010, and there is more to come during this Parliament—has been a hallmark of this Chancellor’s Budgets. My own constituency has benefited from significant rail investment: nearly £1 billion has been invested in Reading station, and Crossrail is coming, as is rail electrification. There has been investment in local stations as well. However, may I issue a plea to those who are looking at the Hendy report consultation? Two stations in my constituency, Theale and Green Park, are fully funded, but their development has been delayed. I hope that, as a result of the consultation, we can actually get moving so that my constituents can benefit. I welcome the work that the National Infrastructure Commission is doing in driving forward investment and infrastructure in the United Kingdom.

A few weeks ago, I was appointed the Prime Minister’s infrastructure envoy to India. I think that the experience that will be gained by us in this country, and by our companies, will be fantastic. It will not only allow us to help countries such as India with growing economies to raise finance in the London market, but enable our world-leading businesses that are involved in infrastructure to go out and assist those economies.

Finally, let me say something about Europe. I am very much in favour of a stronger, safer, better-off, reformed European Union, and I will be campaigning for us to stay in the EU. I know that we have a limited amount of time today, and I do not want to initiate a huge debate on the subject, but I will say this: if, on 24 June, we wake up and find that the British people have chosen to leave the European Union, there will be a period of uncertainty. That is the one thing with which no one can disagree. There will be uncertainty because we will not know how long it will take us to renegotiate some kind of relationship with Europe, what the cost will be, or how investors will react. I have heard Conservative Members say that investment will continue to flow in, but I do not agree. Given what is being said by foreign countries and foreign companies, I think that they will think twice, and will wait to see what our relationship with Europe looks like before investing in the United Kingdom.

Uncertainty has two impacts. Businesses hate it, which means that they stop investing, and consumers hate it, which means that they stop spending money. The effect of all that will be very bad news for our economy. Both the Office for Budget Responsibility’s book and the Red Book contain all sorts of predictions about how our GDP could be hit if we left the European Union, but, by any measure, it will go down. All the net savings that my colleagues who want us to leave the European Union say we will gain will, I think, disappear as a result of the losses that will follow a fall in GDP and a consequent hit on tax revenues. I therefore hope that all of us, not just in the House but throughout the country, will think very carefully before voting in the referendum on 23 June.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

Does my hon. Friend remember the same concerns being expressed when this country was considering whether it would be wise to join the eurozone?

[Alok Sharma]

I have never been keen on our joining the euro. All I can say is that I think there will be a huge amount of uncertainty if we decide to leave the European Union. That is what I want to guard against, so I ask everyone to vote to remain in the EU.

I commend the Budget to the House.

--- Later in debate ---

[Dr Andrew Murrison (South West Wiltshire) (Con)]

I followed the remarks of the hon. Member for Lewisham, Deptford (Vicky Foxcroft) with a great deal of interest. Clearly, I do not agree with many of them, but I do commend her for the passion with which she prosecuted them.

This is a good Budget, and it is a good Budget for the next generation. I am the father of five children, so the next generation is important to me. I also represent a number of schools that have benefited from the pupil premium and other such changes, and a large number of service families who have been particular beneficiaries of them. I most certainly welcome the acceleration of the move towards fairer funding for schools.

However, I am ever so slightly cautious about the maths thing. I noticed that we will be consulting on whether we should have maths to the age of 18. Maths can be great, particularly vocational or lifestyle maths—the sort of maths that my hon. Friend the Member for Chippenham (Michelle Donelan) had in mind—but it can also be demotivating and a somewhat depressing experience for children for whom maths is not their bent. I would be a little bit of cautious about making the introduction of that particular discipline compulsory to the age of 18.

I am a strong supporter of the sugar tax. The Opposition has suggested that this may be a pun-rich artifice to draw attention away from the three fiscal tests. That is grossly unfair, because the sugar tax will come to be seen as an historic tax. It is an indication that the Government are prepared to act on important public health measures when it becomes clear that voluntary measures have not succeeded.

I am very conscious of Robert Chote’s clarification of the position of the Office for Budget Responsibility on Brexit and the importance of not misrepresenting organisations such as his. However, as we have already had talk of the European Union as part of this Budget debate, I would like to weigh in with my own observation about the tampon tax. I commend the Chancellor for his imagination in finding £12 million from this tax to spend on relevant women’s charities, but it is a great pity when a country such as ours has to tiptoe around a requirement instituted by the European Union. Where on earth is the sovereignty in a state that cannot determine even the tax paid by its citizens on tampons?

The Chief Secretary to the Treasury will be undertaking a drive for efficiency and value for money. In so doing, I hope that he pays attention to Lord Carter’s review of efficiency in hospitals, which was published last month. It is a marvellous piece of work that draws attention to the unwarranted variation across our national health service that is costing somewhere in the region of £5 billion a year. The concept of a model hospital and metrics such as the adjusted treatment cost and the weighted activity unit are absolutely necessary if we are to make what is an efficient service even more efficient, and bring our healthcare outcomes up to the level of the very best in Europe, and not, as is so often the case, around about the level of the worst.

Simon Stevens’ £22 billion funding gap seems unbridgeable without measures of the sort that has been presented by Lord Carter of Coles. Part of the answer is right-sizing the national health service estate, and we will increasingly have to get to grips with the need to regionalise our acute sector and secondary care hospitals. That will involve some difficult political decisions, but we must not baulk at them if we are to drive up healthcare outcomes.

Yesterday, I was called a health fascist by a colleague for my views on the sugar tax and on taxing tobacco. I make absolutely no apologies if indeed that is the case. I am particularly exercised about tobacco. Smoking is the captain of the men of death in this country. It kills 100,000 people a year, far more than obesity, alcohol and illicit drugs put together. It causes death before normal retirement age in 50% of those it kills. It causes 20 times as many smokers as die to have smoking-attributable diseases and disability. If we are serious about public health, we have to be serious about smoking, and although rates have fallen in recent years, they appear to have reached a plateau, and we need to drive them down much more and much more rapidly.

There is no safe threshold for smoking. Unlike many substances which we might like to control—I am thinking particularly of alcohol—there is no safe threshold. It is surprising, maybe, that this product is available for sale at all. Half of all health inequality between social classes 1 and 5 is thanks to cigarettes. Poorer people consume more, draw on their cigarettes harder, use higher tar products and leave shorter stubs. Their smoking is worse not only in quantitative terms, but in qualitative terms.

Bravo to the Chancellor for listening to Action on Smoking and Health. Well done for raising the duty by 2%. I would like to see it higher. Well done for the innovative minimum excise duty tax to head off trading down. In all, it is a good Budget—a good Budget for the next generation.