Budget Resolutions

Chris Evans Excerpts

Wednesday 11th March 2020 Commons Chamber

[Chris Evans (Islwyn) (Lab/Co-op)]

Thank you, Mr Deputy Speaker. May I begin by welcoming you back to your rightful place in the Chair? It is the first time you have called me to speak, since you were re-elected. We have often disagreed politically, but when I was a new MP looking for guidance and advice, you were always there. Like many Members of this House, I am grateful to you for your various courtesies and kindnesses over the years.

I also thank the right hon. Member for Forest of Dean (Mr Harper) for, again, a very insightful speech, though I did not agree with much of it. I must take issue with him. After my right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne) spoke, I was expecting him to mention that infamous letter. I feel that I have to mention the infamous letter that Reggie Maudlin wrote to James Callaghan in 1964. He said, “Sorry, cock, for the mess I’ve left it in.”

What is important is that the Government have to strike the balance between the pandemic of coronavirus and not inciting mass hysteria. I hope that that has happened today with the tone of the debate in this House around coronavirus. It is a virus that we do not yet understand, and that we do not have an antidote for, but what we have seen today in our reaction is the House at its very best.

The major measure that was put in place by the Chancellor today was the freezing of business rates, which will come, I am sure, as a welcome relief to those who are struggling throughout the country. Small businesses, particularly shopkeepers, are the beating heart of our communities. We can often measure the temperature of our economy by how well our high street is doing.

I have heard so many great maiden speeches today from both sides of the House. Everybody said how fantastic their constituency was and to come along for a visit, but how much of that is simply about the shopping in town centres? What worries me is seeing some of those town centres. Recently, I went back to where I grew up to drop off my wife to have dinner with my mother. We drove through the town centre, which I had not seen for a long time. The thriving bingo hall that I remembered is now a dilapidated building. I remember seeing boarded-up shops like I had never seen before, and bricked-up ATMs where the banks had moved on. The place looked like a ghost town; it was not something to be proud of, and it concerned me.

It is 16 months since the last Budget, and this country has changed beyond all recognition in the last 16 months. We have had three Chancellors, two Prime Ministers, a general election and Brexit, but at the same time our high streets have been absolutely devastated. We have lost 180,000 retail jobs to businesses going bankrupt or financial distress. Household names like Debenhams, Mothercare and Beales are now resigned to a past of black and white photographs from the 1950s and ’60s, when they thrived. Yes, it is difficult for retailers. It is difficult for the high street with juggernauts such as Amazon and when other online retailers are emerging every single day. How can small businesses and shopkeepers compete with one hand tied behind their back?

I welcome the business rates holiday for so many shopkeepers, but it is only a sticking plaster on the real problem faced by our high streets. Business rates have been described as “lunacy” and “perverse”. The president of the CBI has called them “uneconomical, unsustainable, and…unintelligible.” This was brought home to me most recently when I visited Tidal’s Store in Blackwood—a retailer of high-quality furniture and homeware. If any new MPs who gave their maiden speech today are looking to furnish flats or new homes in their constituencies, I would highly recommend Tidal’s. However, the problem it faces is that its business rates are three times as high as the retail park at the bottom of the high street. Many companies on retail parks are large, multinational businesses, and other retailers are not in a position to compete. Tidal’s is also paying more for its position on the high street than if it was further down the street. How can these companies expect to compete when they are paying four or five times more than others?

When I ask the Valuation Office Agency about the issue, I am told that this is the law. The agency says that it calculates the rate by multiplying the rateable value of the property by the multiplier, which has increased since 2017. That is hardly a comfort to shopkeepers who are struggling with this regressive, outdated tax. Equally, the council has told me that it collects the tax but cannot readjust it according to market rates, so even though it is desperately trying to save the high street by introducing free car parking, and through events that will bring people into the high street and town centre, it is hamstrung by business rates.

Companies in financial distress are not helped by business rates. According to The Guardian, Tony Brown—the former chief executive of Beales—said that the group’s punitive annual £2.8 million business rate bill suppressed any attempts to rescue the 23-store chain, which is now closing with the loss of 1,000 jobs. He cites Beales as an example of what could come.

The Chancellor announced a review of business rates, but for the business community this is simply a case of kicking the can down the road, when many businesses are at breaking point. The issue was looked at in 2014 by the Department for Communities and Local Government, and again by the Treasury in 2015, and there was a non-committal response from the Government to the Treasury Committee’s report just last year. Simply put, what confidence can the business community have in this Government delivering a change in business rates if they do not take the action that is needed now? It can be argued that a review will not change much if the Government are insisting on raising the same amount of cash from the same companies.

Under the present system, business rates allow retailers to be put at a disadvantage compared to those operating from cheaper out-of-town warehouses. Just to put this in perspective, Amazon’s bill last year was £63.4 million, almost £40 million less than Next’s. In my view, the Government have to introduce a 2% online sales tax to level up the playing field. Equally, they need to bring in a tax collection mechanism, similar to the way that VAT is collected, with a levy of 1% to 2% as a retail sales tax. It is estimated that this would bring in between £4 billion and £8 billion.

If we do not save our high streets, we see the knock-on effect on tourism, on apprenticeships and on employment. It is terrible to see well-loved high streets and town centres go to rack and ruin and become ghost towns. But there has to be a political will to act. Reviews are all well and good, but now is the time for action.

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[Sir Edward Leigh (Gainsborough) (Con)]

There have been some fine maiden speeches, and I particularly congratulate my hon. Friend the Member for Grantham and Stamford (Gareth Davies). He is a fellow Lincolnshire MP and he spoke without notes—a worthy successor to Mrs Thatcher from the birthplace of our great former leader.

Although we have had a fine victory, it is important that we maintain our sense of momentum as Conservatives, so I will now do what I usually do—I know this is deeply unfashionable in these debates—and give a Thatcherite speech, as I happen to believe that that is the best way of creating wealth in our country. I will start by drawing attention to three items of public expenditure, as examples of waste in public spending. I have just completed 18 years on the Public Accounts Commission and Committee, and I am convinced that we have a lot more to do to root out waste in public spending. Unless we do that, it is neither advisable nor prudent to go on increasing public spending at the current rate.

I will begin with one example that is close to home, because expenditure on decant from our own parliamentary building is now set to rise to more than £10 billion. The incompetence of that project does not bear any scrutiny whatsoever. First, the Joint Committee on the Draft Parliamentary Buildings Bill was told that Parliament could decant because there was room to build a temporary Chamber in a courtyard of Richmond House. Once it produced its report, however, it was told that the measurements were wrong, and that the Chamber could not fit in it. We are now told that we will have to demolish Richmond House, which will produce 25,000 tonnes of carbon. Costs are rising all the time—we have seen the exponential rise in the cost of refurbishing and renewing Elizabeth Tower. Where will it all end?

I have been working with SAVE Britain’s Heritage, the architectural heritage association, and we have proven that far from it being necessary to demolish Richmond House, we could build, at much cheaper cost, a perfectly satisfactory temporary Chamber in one of its courtyards. Even better, we could do what they did in the war—this House could decant to the House of Lords, and we could take services in from outside. That is one example. It is very close to home, and involves expenditure of up to £20 billion in London. We do not need to be spending that much money on ourselves in London; we should be a one-nation Government, and there is a much cheaper solution with which we can save public money.

[Chris Evans]

rose—

[Sir Edward Leigh]

I cannot give way; I have less than eight minutes to speak.

Secondly, there is High Speed 2. I will not go through all the arguments, but I do not think anybody would begin that project now if they knew that costs would increase to at least £100 billion. Again, the incompetence of the project defies belief. As was said earlier, the original justification for HS2 was speed, but that has now been dropped and we are told that it is all about capacity. We could have solved so many of those problems with better digital signalling, or by laying down lines with existing technology, but instead we are now trapped in this project.

I have told the Government that I will support the project—it now costs £100 billion—if they will release just £1 million to persuade London North Eastern Railway to kickstart a through train to Cleethorpes and Grimsby, via Market Rasen. There are already many good, fast express trains to Birmingham and Manchester, yet a quarter of a million people living in north-east Lincolnshire do not have one through train to London. They have to take a slow service that lasts the best part of three hours, changing trains to get to London.

A third example—I see the Chair of the Defence Committee is in his place—is the farce of the procurement of aircraft carriers. Again, I will not go into all the arguments, but there was a change in specification, the stop-go, and the fact that the Labour Government delayed it for a year when I was Chair of the Public Accounts Committee, which costs us £100 million. There was a whole emphasis on a prestige project for the Royal Navy, rather than on building a smaller specification aircraft carrier, or concentrating on what we really needed the Royal Navy to do, which was to protect our fisheries, and protect our coasts from migrant incursions.

Those are three examples of wasteful public spending. I will not even talk about all the money wasted on huge IT projects, such as Tony Blair’s initiation of the new IT project for GPs that left us £12 billion in the red—we could go on and on. Promising to spend more public money is not the solution, and every Conservative MP should wake up every morning, come to the Chamber, and argue for a smaller state, and for reduced and simpler taxation. We still have, outside India, the longest tax code in the world. We still have a staggering number of tax reliefs. In October 2019, there were 1,190 reliefs, of which 362 were tax expenditures. The sum of the estimated cost of those tax expenditures, in tax that the Government have opted not to collect, was £155 billion. In 2018, the 23 largest tax expenditures had a forecast cost of £143 billion. Some 92% of forecast costs are tax expenditures. We still have a highly complex tax system. We have armies of accountants persuading businesses, large and small, to avoid taxes. If we could just begin to simplify taxes, we would make so much progress.

I have probably sat through 40 Budgets in this Chamber. I do not remember many of them. Once one has got past the next day’s headlines and read the Red Book, one realises that, really, the Government have probably taken back just about the same amount of money that they dished out. However, I do remember one Budget where Nigel Lawson set out to simplify taxation. If one reads Charles Moore’s biography of Margaret Thatcher, one can see that that was a popular Government. Nigel Lawson reduced the top rate of taxation from 60% to 40%. For all but a few months, the Labour Government were prepared to keep that top rate of 40%. That was a dynamic Budget and a Budget of simplification.

That is what I want this Conservative Government and this Chancellor to do as they gear up for the future. I want the Chancellor to look at the far horizon and say, “I am a Conservative. I believe in low taxes and simple taxes.” As Nigel Lawson said, if we reward entrepreneurs we get more entrepreneurship. Let us also learn the lesson of Wandsworth. I understand that a certain person who is now prominent in No. 10 was running Wandsworth Council for many years. Why have we been so successful in Wandsworth? Why do people queue up to vote Conservative in Wandsworth? Because the Conservatives deliver good governance and low taxation. That is what I will continue to argue for.