Budget Resolutions

Chris Bryant Excerpts

Monday 11th March 2024 Commons Chamber

[Damian Green (Ashford) (Con)]

It is always a pleasure to follow the hon. Member for Worsley and Eccles South (Barbara Keeley). I was also entertained by the speech by the hon. Member for Ilford North (Wes Streeting), partly because, as ever, he had some good lines, but mostly because in a very long and indignant speech excoriating the Budget, he tried hard to disguise the fact that on its central proposal—the cut in national insurance—he and the Labour party will be in support of it, so I felt that some of that indignation may have been a touch performative.

I am happy to observe that the Chancellor has passed his first test. I often feel that Chancellors, like doctors, should start with the old medical rubric, “first do no harm”. That may seem a low bar, but we have all seen Budgets that failed to get over it. This one has, and for that we should all be grateful. Indeed, I go much further than that slightly grudging praise, because I am generally very positive about the measures in the Budget. There are one or two elements that I wish had been added to the Chancellor’s statement, but in general I praise him for his navigational skills in some choppy waters.

The evidence is there from the OBR that the economy is turning a corner. It makes the point that inflation has receded more quickly than it expected, which strengthens near-term growth prospects and should enable a faster recovery in living standards. Many people in this country have experienced a tough few years, but we can see the path to recovery and we are taking the first steps along it. And not just in the short term. The IMF is forecasting that we will have the highest growth of the big European economies over the next five years, including Germany and France. It is important to recognise that when so many people have a vested interest in rushing around and claiming we are all doomed.

In an era when political and economic debate has become partisan or borderline hysterical, it is time to be calm and realistic. The UK economy will start growing again in 2024. The inflation rate will come down to reasonable levels, and interest rates should fall. As a result, businesses will be more inclined to invest, and consumers more inclined to spend. That is all good for the economy, the day-to-day life of millions of families, and the general wellbeing of our society.

In the run-up to the Budget, in a spirit of helpfulness, I published an article with my hon. Friends the Members for Boston and Skegness (Matt Warman), and for Wimbledon (Stephen Hammond), which set out what such an approach would mean in practice. Our main taxation ask as one nation Conservatives was that any tax cuts be aimed at ordinary, hard-working people. I am glad that the Chancellor took the same view and concentrated the cuts on national insurance. Our other, more long-term ask was that we should set out on the road of simplifying the tax system, with the ultimate aim of taxing all income at the same rate, regardless of its source—be it earnings, benefits or dividends. That will, of course, be a very long journey, but there is an indication that the Chancellor is thinking about that; the idea to eventually remove the separate income tax that we call national insurance is a good indication that the direction of travel is correct.

It has taken many decades for the tax system to become as absurdly complicated as it is, so it will take years, if not decades, to make it significantly better. Moving in that direction is really important. A streamlined regime would have the dual benefit of reducing red tape and incentives to avoid tax. Such a regime would be demonstrably fairer and more progressive, and would reduce in-work poverty. Nigel Lawson used to have the admirable aim of abolishing a tax in every Budget. It will take some time before the public finances are in a shape to allow that to happen again, but even small steps in the right direction are a good sign.

I welcome one specific package of measures, namely the help for the creative industries set out by my right hon. and learned Friend the Secretary of State for Culture, Media and Sport at the start of the debate. The Culture, Media and Sport Committee has been assiduous in trying to persuade the Treasury to recognise the economic importance of the creative industries, on top of their obvious cultural significance, and I am glad that the Chancellor was listening.

[Sir Chris Bryant (Rhondda) (Lab)]

I hope that the right hon. Gentleman will also acknowledge that there has been cross-party support for the tax reliefs across the years. They were originally introduced by the Labour party and were expanded by the Government. Contrary to what the Minister said earlier, there has never been a vote on any of the individual tax reliefs.

[Damian Green]

I am grateful to the hon. Gentleman for that point, and I am glad that this is another Budget measure on which there can be cross-party consensus. That feeds into my general point that there are things that the Government are doing that should receive support from the Opposition Benches. The day after so much British success at the Oscars is the right time to welcome measures that will help to maintain the extraordinary success of this country in making films and high-end TV programmes that are seen around the world. That success, which will no doubt be helped by the extensions to tax relief announced in the Budget, has meant full production schedules in many studios around the country. I declare a constituency interest, because in Ashford we are in the early stages of building a new studio complex, helped by levelling-up funds. I want the industry to thrive in years to come, when those studios are occupied.

I also declare a cultural interest, because I want British independent films, as well as Hollywood blockbusters and series, made for streaming services. The enhanced tax credit for British independent films with a budget of under £15 million hits exactly the spot in the market that film-makers told the Committee is in need of help. That well-aimed subsidy will, I hope, ensure future successes along the lines of that enjoyed recently by “One Life”.

As I said, I am overwhelmingly positive about the Budget, but I wish to enter two caveats about issues that I hope can be addressed in future Budget. The first is about helping rural communities that want to decarbonise their heating. Four million people live in oil-heated homes in rural communities, and are off the gas grid. They want to do their bit for the environment, but they are disincentivised from adopting renewable liquid fuels. Those fuels have lower carbon emissions, but are taxed, while fossil-fuel heating oil is not. Scrapping the tax on renewable liquid fuels in the Budget would have reduced their cost and made them a viable alternative to fossil fuels; I hope that in future Budgets, my right hon. Friend the Chancellor will look to do that.

My second caveat is about the vexed issue of tax-free shopping. The abolition of VAT-free shopping, when other big EU countries allow it, clearly sets the UK at a disadvantage. The Treasury has argued that VAT-free shopping would cost the Exchequer billions of pounds, but other economists argue that the knock-on effects of greater tourism would more than make up for that. I hope that discussions continue about which set of economists is right, so that we can move to a more rational system that helps our tourism industry.

Putting aside those caveats, we should be grateful to the Chancellor for producing a sensible, pragmatic and positive Budget. The economy is recovering. It does not need shock treatment, and it certainly does not need the unfunded commitments made by Labour Members, even when they are trying so hard not to succumb to their basic impulses to tax and spend. The economy needs a continued steady hand to nurture the recovery, and under this Chancellor, I am confident that it will continue to improve.

--- Later in debate ---

[Sir Chris Bryant (Rhondda) (Lab)]

I warmly support the measures in the Budget to help the creative industries, but I simply say to the Government that it does not work without guaranteeing a creative education for every child in all our schools; it does not work if kids in the Rhondda do not get an equal opportunity to think of a job in the creative industries, along with anybody else in this country; and it simply does not work if Ministers constantly deride creative industry and humanities degrees—we cannot have one thing without the other.

There are things that I feel desperately sad about; there is nothing in the Budget for the people of the Rhondda. Most of the changes to taxation and to child benefits will benefit people who earn far, far more than the average in the Rhondda. I am sorry but I have to say to the hon. Member for Mid Norfolk (George Freeman) that it is the Conservative party that is taxing more; it is giving with one hand and taking twice as much away with the other. It takes a particular skill to have the highest tax take for 70 years, rising every year of the Chancellor’s forecast, and the biggest fall in living standards and the prospect of swingeing cuts in public services still to come.

I want to talk about growth, because it has been anaemic for all 14 years the Conservatives have been in charge. If we want growth, first we have to take the whole nation with us. Failing to level up simply is not an option, which is why I feel so angry about the preposterous levelling-up process used by this Government. They made levelling up a competition between local authorities. Worse, they made the poorest local authorities in the land, which are already strapped for cash, compete with one another for tiny scraps of cash. The Government side-stepped any proper assessment of need, in many cases intentionally ignoring deprivation indices when considering where cash should go. Thus, the Prime Minister’s wealthy constituency gets £19 million, and last week £242 million of levelling-up funds went to Canary Wharf. The Government doled out cash to constituencies on the notorious Tory MPs at risk register, with £10 million here and £5 million there. It is shameless, it is degrading for MPs and it is utterly corrupt.

Fewer than one in five projects granted levelling-up cash through the Tories’ towns fund have been completed, even though the whole point was that these had to be shovel- ready projects that could be completed by the end of the relevant financial year; that works out at only 154 of 973 projects.

That takes me on to the Rhondda tunnel, as at least four Cabinet Ministers and more than a dozen junior Ministers have told me to put in a levelling-up bid for it. But every time I meet a Minister to discuss it, they get moved. Sometimes they get moved before I get to meet them. Sometimes I wonder whether they get moved because I am going to meet them. First we were told we could bid in round 2, but then we were told we could not. We were then told, “What about round 3?” Then we were told there was not going to be a round 3 because the Government had already allocated the cash to, guess what, Conservative constituencies. Then I was told that we should put together a special, bespoke bid of our own. Last week, I was told by a Minister that they had

“given up on levelling up.”

That is basically the message we have got. This is no way to run a whelk stall.

Secondly, we cannot achieve growth in the UK economy unless we have a fully functioning NHS. A significant number of the nearly 8 million people on the waiting list—it was 4.8 million before covid—are desperate to get back to work, but they are waiting for the surgery or treatment that makes that possible. Let me give the House an instance of that. In 2021, I was asked by the right hon. Member for Bromsgrove (Sir Sajid Javid), the then Health Secretary, to co-chair a programme board to set a national strategy for acquired brain injury. I know that officials have tried their best, but, yet again, the Ministers have kept on changing—I am now on my fourth—and every deadline gets pushed back. So we still do not have a national strategy. If we could get proper neurorehabilitation for everyone who has a brain injury in the UK—about 1.4 million people—we could give more people with brain injury back a real quality of life and we could get more people with brain injuries into work, earning money rather than relying on the state. Sadly, the Department tells me there is not even money to pay for establishing how many people are living with a brain injury, let alone putting together a impactful strategy. That is a false economy in the end.

Thirdly, growth in our country depends on national infrastructure that works. Every time a train is cancelled or delayed, someone wastes another couple of hours and our economy becomes just a little bit less productive. How on earth did the country that invented the telephone, the television and the worldwide web end up spending millions of pounds every year on legacy IT systems just to keep the show on the road? Why is it only now that the Government are putting money into digitising the NHS properly? Why is wi-fi on our trains so completely hopeless? Why can the French do it better than us? Why have vast tracts of our country been trapped in mobile phone notspots? It is a shameful legacy, but that is the legacy of this Government. The right hon. Member for Chelsea and Fulham (Greg Hands) says the voters should just judge them on their record. Yes, I suspect that people will; in the words written on the wall at Belshazzar’s feast,

“thou art weighed in the balance and found wanting”.