Autumn Statement Resolutions
Debate between Catherine West and Liam Fox(1 year ago)
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Dr Liam Fox (North Somerset) (Con)
I warmly welcome the Chancellor’s statement as a move back towards some sound Conservative principles that have been somewhat lacking in recent years. I would have liked his language to have been even more explicit, because the No. 1 principle that underpinned what the Chancellor was saying—if not expressed so explicitly—was that there is no such thing as public money, or Government money: there is only taxpayers’ money, whether they are personal taxpayers or business taxpayers. We are beginning to get away from the sterile tax and spend debate that has bedevilled our country and, I would argue, our party for too long, and to get back to the territory of how to create wealth.
It was right of the Chancellor to remind us of Nigel Lawson’s maxim that borrowing is just the deferred taxation of the next generation. No one would think it was reasonable behaviour to max out their credit card and then give the bills to their offspring, but that is exactly what overspending and over-borrowing leads to, and it is exactly the same recipe that the Labour party is putting to the British public all over again. Like the shadow Minister, the hon. Member for Ealing North (James Murray), I very much look forward to a general election: we will be able to expose the fact that the Labour party cannot even tell us as a matter of fact—as a matter of its credibility—what proportion of current inflation it thinks is due to, for example, the commodity price shock that resulted from the invasion of Ukraine. Labour Members absolutely refuse to accept that anything is responsible for inflation other than UK domestic pressures and domestic policy. If they believe that that gives their party credibility in the markets, they have got another think coming. We will want to make sure that the electorate understand that analysis very well.
Catherine West
The right hon. Gentleman talks about which questions will be asked during a general election campaign. Since last year, my constituent has had to move with her husband and children back into her parents’ home: she cannot afford a mortgage, because when she went to renew hers, the right hon. Member for South West Norfolk (Elizabeth Truss) had crashed the economy. My constituent and a lot of other people who live in Crouch End and Muswell Hill cannot afford their mortgages because this Government crashed the economy. Can the right hon. Gentleman tell the House what the Government will say to my constituents at a general election?
Dr Fox
Unsurprisingly, the hon. Lady was both incapable of answering the question and unable to do so. The question was, “What was the cause of inflation?” It was inflation that drove up interest rates. I reiterate the point that my hon. Friend the Member for Torbay (Kevin Foster) made: the Fed rate is 5.5%, while the Bank of England rate is 5.25%. I presume the hon. Lady thinks that—in her words—my right hon. Friend the Member for South West Norfolk (Elizabeth Truss) crashed the American economy too. It is complete nonsense; it is a bogus economic analysis.
We all know the impact that inflation has. We know that it hits the poorest people in our society hardest, which is why the Government, along with the Bank of England, were willing to see the pain of higher interest rates applied. Inflation does not help anyone. What I wanted to know, which I did not get from the hon. Lady or from her Front Benchers—surprise, surprise—was what they thought was the external responsibility for that inflation. We do not have an answer from Labour, and therefore we have an Opposition who have no credibility on one of the most basic questions: what causes inflation? If they do not know the answer, they cannot possibly be trusted to be in charge of this country’s finances.
One of the other things that I welcomed today is that we are moving slowly—still a little too slowly, I would argue—towards a lower-tax economy. The Chancellor set out the reasons why a lower-tax economy is a good thing. It is not just an abstract economic argument; it fits with Conservative ideas of individual responsibility, reducing the size of government, giving individuals greater choice, and providing incentives for those who will generate the wealth on which our future public services will depend. By emphasising the importance of creating prosperity, rather than the sterile debate about whether we should spend less or tax more, we are getting back into the right territory for a Conservative Government.
I was especially pleased to hear the measures for small businesses. My hon. Friend the Member for Sevenoaks (Laura Trott) recently had to endure my previous speech on this subject recently, in which I pointed out that, unlike what you would believe if you listened to the Labour party, public sector and private sector jobs in our economy are not in balance. The public sector produces only about 17% of the jobs in our economy; it is the small businesses and the private sector that produce the jobs and prosperity on which our country depends. We have had too high a tax burden on small businesses as they have come out of the pandemic, so I welcome the measures today.
I still have trouble with this term “growth” that goes around. I do not believe that growth as measured by the standard definitions is appropriate for a UK economy so highly geared towards services compared with goods. I know that it is the accepted norm, but I think we need to find better ways of describing it.
I welcome some of the moves towards improving capital availability, because if our businesses face one real problem, it is the lack of capital available for growth in our economy compared, for example, with the United States. That is because our economy is still too heavily geared towards the banks, and not enough towards private equity. We need to look at the breadth and depth of the private equity or venture capital industry in the United States and find out how we can replicate that in the United Kingdom if we are to give even more help to our small businesses.
I very much welcome the incentives to work that the Chancellor announced. Again, getting people back into work is not just an economic exercise; it is what I would regard as a moral imperative. If the only value people know they have is what the state gives them to do nothing, how can they possibly know what value they could be to themselves, their families and their communities if they were allowed to realise their full potential? Getting 200,000 more people back into work is a socially progressive thing to do, and if we are able to get more disabled people back into the workplace, so much the better for them, not just for the economy. I welcome what the Government have announced, because the best way to tackle poverty is to get people into work, and it is not just financial poverty but poverty of aspiration and poverty of hope that we are addressing by making this important social change.
There were one or two other elements on which I would have liked to have had some more detail from the Chancellor. I hope my hon. Friend the Minister might be able to provide that in responding to the debate. One of the problems right across the economy, particularly for small businesses, as the Chancellor stated, is late payment. However, one of the most important culprits in late payment is local government. Local authorities are spending the taxes that we in this House have to raise, in addition to the taxes they raise themselves, and surely it is not acceptable to us that the taxes we raise are spent in a way that actually adds an extra burden to small businesses. It should be a requirement on local authorities that they pay all their bills to small businesses on time. I hope the Government will look at that, because I believe there would be widespread support across this House for measures that compelled local government to do so.
I very much welcome the additional £20 billion investment over the next decade. That will help to address the one problem that has bedevilled our economy more, I think, than any other factor: productivity falling behind that of our competitors. Improving the horizon for freeports by up to 10 years will give additional stability, and again I hope we can look at how we can have a deregulatory exercise in those areas. That could test exactly how much we would get were we to expand the concept of freeports. I hope we can look more at the experience of countries such as the United States, where freeports have greater freedoms than they have in the United Kingdom. The Government are moving in exactly the right direction, but let us move further and faster on that.
The Chancellor talked about other supply-side reforms to the economy, one of them being the speeding up of improvements to the grid so that we can take advantage of the investments that have been made, for example, in renewables. I do not expect a response to that in the wind-up today, but I introduced a private Member’s Bill exactly to ensure that individuals impacted by the speeding up of improvements to the grid would have access to an independent arbitration programme, and not have National Grid deciding whether they should get compensation and how much they should get. That was an unacceptable position. We have not yet seen the regulations that will produce that independent arbitration, and we need to see them quickly. If we are to see the roll-out of an improved grid, it will impact more people, and we have to see a fair, equitable and affordable system where individuals can seek redress if they feel they have been dealt with unfairly.
I will briefly mention the continuing whinging victimhood of the nationalists. When they were talking about the ridiculous position that they are put in by being part of the Union, they just forgot to mention—I am sure it was an omission—that the block grant has now risen to the highest level since devolution began, at £41 billion this year. For every £100 that the UK Government spend in England, the Scottish Government receive £126 per person in Scotland.