Budget Resolutions

Derek Thomas Excerpts

Tuesday 12th March 2024 Commons Chamber

[Derek Thomas (St Ives) (Con)]

Since the Chancellor delivered his Budget last week, I have given a lot of thought to the subject of productivity and how we address it. There are three key ingredients that create the most fertile environment for productivity to grow: aspiration, skills and secure housing.

Aspiration can be nurtured in many ways, but a significant part of that must be to reward work by ensuring that people keep as much of the money they earn as possible. This is a core Conservative value. In recent years, the Treasury has been right to put support for families and businesses first. The obvious examples of that are support for business through grants, and support for employees through the furlough scheme during the pandemic. Alongside that, there has been additional money for the NHS and for schools—both vital public services for any household.

[Darren Henry (Broxtowe) (Con)]

I am sure that many of my constituents will be delighted and relieved at the cut in national insurance. It is right that individuals keep more of their hard-earned money. Does my hon. Friend agree that we must continue to look for responsible ways to ensure that those who are working hard and contributing to our economy keep as much of their wages as possible?

[Derek Thomas]

I agree with my hon. Friend, and I also think it is perfectly reasonable to have an ambition that we can work towards making a commitment.

Support for household energy bills has also been essential, but obviously it has put pressure on the nation’s finances. These measures hinder the Government’s ability to cut taxes, but productivity is compromised if the burden on business and our workforce is too great. It is good, then, that the Government are now able to further address the pressure on household finance further. This year’s cut in pay-as-you-earn taxes for the average worker from 32% to 28% means that households in west Cornwall, on Scilly and across the nation will benefit by keeping more of what they earn. This is a helpful tool to support the aspiration that Conservative Members want our constituents to enjoy.

The increase in the VAT threshold for small businesses is something that I have been keen to see ever since I was elected. Personally, I would like it to be increased to £120,000 as soon as possible. I see the drag of VAT on small businesses in my constituency, which are curtailing their business in order to avoid the cliff-edge threshold. The increase to £90,000 is welcome and will encourage small businesses to stay open for longer, especially in hospitality in coastal communities such as Penzance and on Scilly. Not only will the business stay open longer; owners will also be able to offer more secure employment and look to grow their business—both of which will benefit Government coffers and drive aspiration.

To support aspiration, we also need to support skills. Wherever we look, we see a shortage of the skills we need: in food and farming, renewables, house building and retrofitting, engineering and manufacturing, health and social care, tourism and hospitality, education, and many more areas. I listened carefully to the speech made by the hon. Member for Huddersfield (Mr Sheerman), including his comments about climate change. Addressing climate change is about changing the way we do and make things, so the Chancellor was right to announce in his Budget a further £120 million to support the expansion of low-carbon manufacturing, which will support the creation of jobs and skills that have not even been invented yet for our school leavers. Also, to further address the climate change issue, the Chancellor has committed £427 million to support investment in agriculture, productivity and innovation. That will secure a farming sector that has provided skilled and local jobs to people across Cornwall and on Scilly for generations, and will continue to do so.

For too long, British business has missed out on an untapped pool of talent, so it was good to hear the Chancellor set out measures to offer new training opportunities for out-of-work older people and confirm the continuation of the “train and progress” element of universal credit, which will also give people a fighting chance to get the skills they need and will help meet the workforce shortages I described. As I say, for far too long, we have not allowed many people to access the work they can do, and have missed out on that pool of talent.

Finally, Conservatives have for years believed in the power of home ownership to give people the opportunity to take a stake in their community, raise children in a secure home, and invest in and improve that home using local skills and local suppliers. The various measures that the Government are taking to make the housing market fairer for people who want to live and work in our communities are very welcome. Owning a home helps to drive productivity: there is nothing quite so tangible and motivating as the sense that hard work can enable someone to provide a safe and secure home for them and their loved ones.

As the Government support councils and social landlords to create the homes we need, will they take a close look at how accessible so-called affordable homes are to local constituents such as mine? For example, properties advertised in Cornwall as three-bedroom affordable homes are marketed at £335,000, and two-bedroom so-called affordable homes are marketed at £265,000. Few people in my constituency are in a position to afford that, and they are effectively abandoned into a rental market that is in great demand.

Productivity is achieved in a low-tax, high-skilled society where a home of your own is within reach. I welcome this Budget’s direction of travel, and ask for much more of the same.