Budget Resolutions and Economic Situation

David Heath Excerpts

Friday 20th March 2015 Commons Chamber

[Mr David Heath (Somerton and Frome) (LD)]

I think that I can confidently predict that this will be the last Friday morning sitting to which I will contribute. It is a great pleasure to follow the hon. Member for Luton South (Gavin Shuker), who is proving the exception to the unhappy feeling that this is a special Budget debate, organised for elderly Members of Parliament not seeking re-election.

With any Budget, there is almost a parallel with the Hippocratic oath, which I swore so many years ago, or particularly the gloss to it, which is “primum non nocere”—“first, do no harm.” The first principle of any Budget is that it should not actually make things worse. By common consensus—I include the shadow Chancellor—this Budget certainly does no harm, but I would say that it actually does an awful lot of good. I shall refer to some of the things that leapt out of the pages of the statement that I believe to be substantial contributions to the benefit of the country.

On the continuing changes to the pension system, I think that history will suggest that my right hon. Friend the Minister for Pensions is one of the highest-achieving Ministers in this Government, because he has transformed public policy on pensions and done so to the good. I am particularly pleased to see the finance for mental health—so often the forgotten service—advocated by my right hon. Friend the Minister of State, Department of Health, and others, because that is a missing component of the national health service.

I am pleased to see the investment in science, so ably advocated by the right hon. Member for Havant (Mr Willetts), when he was in office, continuing through the election and, I hope, into the next Government. I share his pleasure at the announcement of additional investment in broadband, although I have to say that, in Witham Friary in Somerset, I will believe it when I see it, because we have been waiting a long time for broadband to arrive in any meaningful sense of the word. [Interruption.] And here is the Minister for Culture and the Digital Economy—the man himself—who will deliver that commitment in the next few days.

I am pleased from a parochial point of view to see the additional announcement of infrastructure development in the south-west. We have been a long time waiting for major projects to be done in the west country. Now they are being delivered after many, many years, and I feel that I can retire from the House at least having achieved something happening on the A303, as that has been one of my most devout intentions over the years. I am pleased to see an additional freeze on fuel duty. That has a huge effect on people in rural areas who depend on their cars not for pleasure but because cars are the only way to get about. I am pleased to see something I advocated when I was farming Minister: the averaging of farming profits over five years, which will make a big difference and help a lot of farmers who suffer from inevitable fluctuations in their fortunes year by year.

Of course I welcome the reduction in cider duty. I am rather a cliché, I am afraid: if no one else will speak up for cider drinkers and cider makers in my constituency, it has to be me. The 2% reduction in duty is, of course, enormously welcome, but I am still worried about the EU ruling on the exemption of small producers. I hope that the Treasury is taking that very seriously indeed and will find a way around it.

Of all the measures in the Budget, the increase in the tax threshold to £11,000 is beyond even what my colleagues and I promised at the last election. This is a serious change in tax policy, delivered over five years, reducing the rate of tax for 27 million of our fellow citizens and taking nearly 4 million people out of tax altogether. What a superb achievement from a coalition Government.

When I look at the overall background to the past five years, I believe that the measures taken have been crucial in taking us back from the brink of potential economic disaster, which we faced in 2010. I echo what the right hon. Member for Havant said: we have imposed rigour. Goodness, we have imposed rigour! Anyone who has sat through Cabinet Sub-Committees where they have been quizzed on their departmental spending knows the rigour that has been applied to Government spending, but it has been tempered by pragmatism constantly. When the eurozone collapsed, yes, the Chancellor recognised that this would affect the country’s revenue and trade and adapted the plans accordingly. Even last year’s autumn statement has been revised in this Budget to take account of reality. Even as late as yesterday, we discovered that orchestras now include brass bands, and as a former flugelhorn player for the Burnham-on-Sea and Highbridge town band, I am very happy about that.

The result of all this is a transformation in the country’s economic circumstances. It is all very well for people to say, “Well, it’s not quite as fast as we would have wished.” No, it is not, but I remember the 1980s when I had 17% unemployment in Frome. I now have a constituency that has statistically full employment: there is less than 1% unemployment in my constituency. That is a fantastic achievement, and it is down to the common sense and hard work of the Government in which I was privileged to play a small part.

I have three concerns, which I want to express briefly, as I have the opportunity to do so. First, I very much welcome what the Chief Secretary said yesterday about further measures to deal with tax avoidance. All Governments say that they will deal with tax avoidance. All Governments try to factor in substantial receipts from dealing with avoidance and evasion. Very few of them actually achieve the results that they say they will achieve, so I hope that the next Government will redouble even the substantial effort that has been made. One of the things that I want the Government to look at is the role of the accountancy profession and auditors. It beggar’s belief in my view that the big accountancy firms, which are paid an enormous amount of money to provide audited accounts, never seem to notice what the individuals and companies that they are auditing are doing with their money to prevent themselves from paying tax. So how about holding the accountants to account in the execution of their professional duties?

Secondly, our difficulty in achieving the £30 billion fiscal consolidation, which all parties in the House are signed up to, is that by protecting 50% of departmental spending the entire load is put on the remaining 50%. I know how difficult it was in the Department in which I was a Minister to achieve that. My concern here is that we are getting to the point where the resilience of Departments, particularly those that have to respond to emergencies and even those where the baseline may be fine, will be stretched beyond breaking point. That must be reflected in the measures that are taken.

The last point that I want to make is that we often talk about inequality. Some people suggest that inequality is increasing, whereas the statistics actually show that it is not. The inequality between rich and poor has marginally decreased. It has moved in the right direction, not fast enough in my view, but it has moved. There is a different inequality: the inequality between generations; the inequality between young people growing up now and finding their way into the job market and the elderly and the baby boomers who have had a pretty good time of it. That needs to be addressed by the next Government. That inequality is just as corrosive as that between the rich and the poor or anyone else. I hope that future Budgets will address that issue.

It has been a great privilege to have had the opportunity to speak in this debate and so many others over previous years, and I look forward to doing so for at least another four days yet.