Budget Resolutions and Economic Situation

Damian Green Excerpts

Tuesday 9th March 2021 Commons Chamber

[Damian Green (Ashford) (Con) [V]]

I congratulate the Chancellor on passing the first test of a successful Budget: it is now the last day of the Budget debate and the Budget is still intact. I have seen Budgets hailed on Wednesday, doubted on Thursday, excoriated on Sunday and reversed by Tuesday, so the Chancellor has passed his first important test.

Longer term, what will make this Budget a success is a rise in productivity, so the most important of the Budget documents published alongside the statement is the plan for growth. That is starkly revealed by the GDP forecasts from the OBR. The forecast is 7.3% next year, which sounds extremely encouraging, but after that we go back to a procession of 1.6% or 1.7%. Straight- forwardly, if we do not improve productivity, we will not improve those figures to 2-point-something or even higher, which is what we need to achieve, because if we do not, we will permanently suffer from pressure on public finances and public services. We know that it is not impossible to achieve that because, in some parts of the UK, we do. Some areas in the UK are 9% more productive than Germany at the moment. Other parts, sadly, are less productive than some other former communist economies of eastern and central Europe.

Levelling up—the central purpose of this Government —is not just a political slogan; it is an economic necessity. We need to do what we already achieve in some places in all places in the UK. Some of that will involve traditional infrastructure spending, and at this point I welcome the continuing support for the lower Thames crossing, which is essential for not only spreading growth but spreading traffic heading towards the channel into both Kent’s motorways, not just one.

Apart from physical infrastructure such as roads, bridges and broadband, equally important is human capital. For 70 years, the biggest weakness in our education system has been the relative neglect of vocational and practical skills. I am delighted that the ministerial team at the Department for Education are trying to rectify that, but that much used phrase about “parity of esteem” between academic and vocational qualifications will just be lip service if we carry on making more careers graduate-only for entrants. Why on earth have we done that for the police?

We also need to level up on health because the disparity between healthy life expectancy is not just bad for those involved; it is a drag on our economic growth. Also, we need innovation, particularly in green products and sectors, which we will need to lead the world on. Overall, I congratulate the Chancellor on a balanced Budget that meets one nation ideals and purposes by aiming to bring the whole UK on to a higher growth path.