Budget Resolutions and Economic Situation

Bob Stewart Excerpts

Wednesday 8th July 2015 Commons Chamber

[Tom Tugendhat (Tonbridge and Malling) (Con)]

Thank you, Madam Deputy Speaker; I will stick as closely as I can to your request. I would first like to congratulate my hon. Friend the Member for Louth and Horncastle (Victoria Atkins) on her maiden speech. Her fantastic tour de force as the champion of her constituents was quite something. I was also grateful to hear—sadly by television, rather than in the Chamber—the maiden speech of the hon. Member for Coatbridge, Chryston and Bellshill (Philip Boswell).

This is the first Budget that I have had the honour of hearing in this House. It is a delight to be able to support my right hon. Friend the Chancellor, because he has done some fantastic things for our country. The three that I will focus on are not exactly the same as those that have been extrapolated by so many of my right hon. and hon. Friends, which I will allow to stand on their own.

The first measure is the drop in corporation tax, which is linked, brilliantly, to the rise in the national living wage. That is an absolutely essential part of any Conservative manifesto, and it is absolutely right that my right hon. Friend has made it such a priority. Tying the amount that a company pays in taxation to the amount that a worker can earn is essential if we are to break the moment at which the state puts its hands in their pockets and, in so doing, merely adds grit to the engine of the economy. That is important because when taxes are taken the state charges for the privilege, and when it hands out benefits it does so again. By removing the state, all that happens is that both sides benefit.

The reduction in corporation tax will have a further effect: it will spur industry and help to spur international competition. The United Kingdom already has one of the lowest rates of corporation tax in the European Union. I welcome it falling down that list. As it falls and moves towards the rate that Ireland has adopted, we will have a greater ability to compete with others, and we will do better because of the industry of our people, not because of the intervention of our state. I am confident that that, in turn, will lead to an increase in revenue. That increase in revenue is absolutely essential for the things that we need as a nation.

We need one of those things very much. I am very glad to welcome my right hon. Friend the Chancellor’s decision to link defence spending to the UK’s GDP. By making that 2% commitment, he has effectively guaranteed an extra £6 billion of defence spending a year by the end of this Parliament in 2020. That is a very important sum not only because of what it will contribute to immediate defence, by which I mean the purchase of ships and aircraft and the hiring and training of soldiers, but because of the message it sends to our friends and allies. By tying ourselves to NATO’s 2% target, we are stating very clearly that we are a committed member of NATO, that we will face the aggressions we see around the world, and that we will face them squarely. We will stand with our allies and face our enemies. I am very proud that this Government have made that commitment.

[Bob Stewart (Beckenham) (Con)]

I thank my hon. and gallant Friend for allowing me to intervene. The commitment also sends to our armed forces the incredibly important message that this Government will be steadfast in their support, which will be very good for morale.

[Tom Tugendhat]

I welcome my hon. and gallant Friend’s comment. In fact, he pre-empts the next part of my speech. The amount we spend also points to our priorities as a nation, and he is right that this is vital for our future. It points to the importance of readiness. The amateurs always talk about numbers; about kit and money. The professionals talk about readiness, and they do so because that is what we get with those numbers. It is the morale that he talks about. It is the training and preparation that mean a group of young men are not a rabble, but an army; that a bunch of steel is not simply a welding exercise, but what my gallant friends in Her Majesty’s Royal Navy often refer to as Her Majesty’s sleek grey messengers of death. I am very pleased that the things I have described are what our soldiers, sailors, airmen and marines will be getting. This welcome increase comes as we are reconsidering our priorities as a nation at the time of the strategic defence and security review. I must declare a slight interest as my wife is working on it on behalf of the Foreign Office.

As the decisions are being made, I urge her and the Ministry of Defence to think hard about where they allocate this money. It could go to various areas. It could go, rightly, into a lot of the ship purchasing being done, whether that means the two carriers that are being built in Scotland, the submarines being built in Barrow or the equipment programme for the Army. But I would I urge that they put this money into the things that are so often overlooked: training and ensuring that our soldiers, sailors, airmen and marines are properly housed and that their families are cared for.

I also welcome the joint security fund, which is a fantastic development that puts into the defence budget the flexibility that has so often been lacking. Those of us who have worked in defence know that very often the size of the budget is a fiction, not in the sense that it does not exist but in the sense that it is unusable in any flexible sense. It is so committed to a carrier or a submarine programme that when we suddenly need money for something else we do not have it. The joint security fund is a brilliant development that will inject that flexibility.

For example, today it could be used to fund GCHQ, the Royal Navy or our Border Force to deal with the scourge of people traffickers and that vile crime, which exploits the poorest and most vulnerable across the world. In a few years’ time, perhaps it could be used to hire cyber-experts to address the threats that are already coming from China and Russia, attacking our NATO allies and our own businesses. In the future, who knows what it could be used for? It could be used to develop technologies to put spy cameras into the small brooches that some people wear, Madam Deputy Speaker. All those things are possible, as the fund is entirely flexible.

--- Later in debate ---

[Huw Merriman (Bexhill and Battle) (Con)]

I warmly support the Budget that the Chancellor delivered today. I hope that the House will permit me to consider how the Budget will impact on my constituents in Bexhill and Battle. Indeed, I contend that my constituency contains many of the attributes and challenges that other hon. Members find in their localities. I will reflect on three key areas that were addressed by the Budget.

The first area is work and welfare. I am pleased that the number of my constituents claiming jobseeker’s allowance has decreased from 1,400 in 2010 to 613. Those aged 18 to 24 account for just 135 of that number, which is down from 385 in 2010. Those figures demonstrate that some of the 2 million new jobs that have been created in the UK have certainly been delivered in my constituency.

I was pleased to hear from the Chancellor that the Government will continue to protect those who, through disability, cannot work and will never be able to do so. Those individuals deserve our care and compassion, and I am pleased that the Government continue to focus their energies on that. I am passionate, however, about giving people the opportunity of work and equally passionate about ensuring that there is not a choice between work and welfare. I am therefore pleased that the welfare cap in my constituency will be reduced to £20,000, which will ensure that work always pays.

[Bob Stewart]

In my constituency, which is relatively rich, many people go to work and raise a family on well under £20,000.

[Huw Merriman]

I thank my hon. Friend for making that point. It applies to my constituency, too, which is just further south than his.

It has to be right that those who work should not feel disadvantaged and as though there is no incentive to work. The cap of £26,000 has been a great success. Indeed, the Labour party has adopted that policy, too.

I support the withdrawal of housing benefit from 18 to 21-year-olds. It cannot be right that people of that age who are in work are required to save up for a home of their own or to pay rent, whereas those who are not in work are able to move out and reside in housing that is paid for by the state.

In pledging to deliver a balanced economy that will permit the creation of a further 1 million jobs, I believe that we can help the 613 jobseekers in my constituency to find work and give them a fairer future than the downward spiral that benefits and welfare inevitably bring.

The second area is productivity. I welcome the Chancellor’s commitment to improve Britain’s productivity, particularly his recognition that investing in transport infrastructure will help towards that end. Bexhill and Battle has poor transport connections to London and beyond. Trains from Bexhill take almost two hours and spend more time going backwards or on pause than moving forward.

The Chancellor has brought the news that the Government will support a new high-speed rail service that could take my constituents from Bexhill to London in 78 minutes. Indeed, I noticed a typo on page 79 of the Budget report, where it speaks of the line going just to Hastings and Rye. I hope the author will ensure that that says Bexhill as well, which is planned to be on the route. The new rail link will help us attract new employers to the constituency.

Thanks to the Government, a new link road is being built from Bexhill to Hastings, which will deliver thousands of houses, a 42-acre business park and a country park, all of which will attract high-skilled jobs and boost our economic regeneration and productivity.

In addition—this is still linked to productivity—I welcome the commitment to freeze fuel duty for a further year. In a rural constituency such as the one I represent, a saving of £10 a tank will continue to remain a huge boost. I welcome the commitment to road building and the improvements via the new vehicle excise duty that—when it is introduced—will ring-fence motoring taxes for roads. I would be delighted if the Chancellor wished to spend some of that money on dualling the A21. The productivity gains from new roads, rail, housing and jobs will be immense in my constituency, and I welcome Government spending in that sphere.

My third point is about making work pay. Increasing the tax allowance will take more than 800 of my constituents out of the tax system altogether in 2016. A further 50,000 of my 80,000 electors will benefit from having their tax allowances increased. Those changes show that the reward for those who work and move off benefits will be given to the worker, not taken back by the Government and merely recycled or wasted. To that end, I spoke yesterday in this House, and in urging a reform of tax credits and encouraging employers to pay their staff more, I suggested that

“there is a case for the Government sharing the cost of this reduction with employers…with some of the savings being recycled as further corporation tax…reductions.”—[Official Report, 7 July 2015; Vol. 598, c. 274.]