Budget Resolutions and Economic Situation

Cheryl Gillan Excerpts

Wednesday 19th March 2014 Commons Chamber

[Mrs Cheryl Gillan (Chesham and Amersham) (Con)]

It is a pleasure to follow the hon. Member for Dundee East (Stewart Hosie), although my Scottish father would be turning in his grave if he thought that Scotland would ever go down the independence route. With your Scottish ancestry, Mrs Laing—although, sitting in the Chair, you could not possibly acknowledge this—you probably agree with me. I heard what the hon. Gentleman said, and I hope that there are many more Budgets to come for the whole United Kingdom. Scotland remains better off with the rest of the United Kingdom.

In the brief time available, I welcome the provisions in the Budget. The Chancellor has held firm despite the many voices that have tried to steer him off his course. Today he is beginning to reap the rewards of his courage in sticking to a path, however difficult, and making sure that he was not diverted from it. I was particularly pleased to see the help for savers, because we must rebuild our savings culture in this country. The simplification of ISAs, the extension of the annual limit and the introduction of the pensioner bond will make a great deal of difference to many of my constituents. I am also pleased to see the new pension flexibility. Treating pensioners like grown-ups by not forcing them to buy annuities will be welcomed across the board, and it is long overdue. I am glad that a Conservative Chancellor has seen sense on that.

I am particularly proud that a Conservative Chancellor is pursuing our natural Conservative tax-cutting instincts. It has to be right to take more and more people out of paying income tax. Equally, it is right to make the other changes that make a difference to people’s lives, and which the Opposition welcomed. Even the halving of the bingo tax from 20% to 10% is something that nobody, on either side of the House, could quibble with.

I was pleased to see the support for manufacturing and businesses. Having been Secretary of State for Wales, I was particularly pleased to see the continuation of support to energy-intensive industries through compensation for green levies. That has been an enormous problem in Wales for companies such as Tata Steel, and the measures will make a great deal of difference to our manufacturing base and its recovery. It is good that we are doubling the annual investment allowance. Giving our companies the most competitive export finance in Europe will certainly help. In the official EUROSTAT figures announced yesterday, I was pleased to see that the UK recorded the strongest export growth in the European Union last year and outstripped every other large economy by a large margin. I want that to continue, and the Budget will help to keep our businesses on track.

I would like to thank the Chancellor for the attention that he has given to the fuel duty incentives for cleaner fuels. In the autumn financial statement, it was noted that the fuel duty differential between the main rate of fuel duty and the rate for road fuel gases such as compressed natural gas would be maintained until March 2024. That, together with the differential on liquefied petroleum gas reducing year on year by 1p a litre, remained to be reviewed on vehicle uptake and public finance grounds at Budget 2018. In Zero-m, a company in my constituency, Mr Peter Dodd has been pursuing that relentlessly with his team, and I think it will make a great deal of difference in future. Methanol is a clean fuel, which pollutes less than other fuels. It produces virtually no particulates or oxides of nitrogen, and a reduced amount of CO₂. It is less explosive than petrol, and therefore even safer. Those measures are most welcome.

I want to make a point on my pet project, High Speed 2. I notice that HS2 is again included in the infrastructure pipeline. In the words of Sir Rod Eddington in his 2006 transport study:

“The risk is that transport policy can become the pursuit of icons. Almost invariably such projects—‘grands projets’—develop real momentum, driven by strong lobbying. The momentum can make such projects difficult—and unpopular—to stop, even when the benefit:cost equation does not stack up…The resources absorbed by such projects could often be much better used elsewhere.”

Public sector overspend is certainly the trend. Two recent projects—HS1 and the channel tunnel—went 36% and 99% over budget respectively, and the average overspend on 11 recent major public sector building projects has been 158%. If HS2 continues, that trend will cost around £72 billion, and the Institute of Economic Affairs has estimated that it could go up to £80 billion.

We do not even know what the HS2 compensation packages will add up to. There are nearly 500,000 properties within 1 km of the proposed line, but the Government have not yet been able to give us details of the compensation package. I hope that when the Financial Secretary to the Treasury responds to the debate, he will be able to provide a light at the end of that particular tunnel, although I hope that it will not be in the form of a train coming towards me. Those people need to know what the compensation package will be, and when it will become available. Constituents of mine are losing their houses and their livelihoods. They are being evicted from their properties without proper compensation, and they need to know that the Government are listening and paying attention to this matter.

This project has to be queried at every step along the way. We are still paying down a large debt, and to pay down the money that will be spent on HS2 will involve us in untold interest and expenditure. Even business and industry do not want HS2. The Institute of Directors recently surveyed more than 1,300 directors to gather their views. The results revealed that the IOD’s members would rather see £50 billion spent on bringing Britain’s existing transport infrastructure into the 21st century. Over the past two years, the importance of high-speed rail to IOD members’ businesses has fallen significantly. HS2 is not the infrastructure project that Britain needs; nor is it the one that British business wants. Not enough businesses stand to benefit from it. It will benefit the few businesses, rather than the many.

I ask the Treasury to take the opportunity of this 2014-15 Budget, which is excellent in many ways, to re-evaluate the value for money on this project. If it cannot cancel it, will it at least look at how the benefits could be spread more widely and people’s interests could be protected, and announce proper compensation as soon as possible?