Budget Resolutions and Economic Situation

Edward Leigh Excerpts

Wednesday 3rd March 2021 Commons Chamber

[Sir Edward Leigh (Gainsborough) (Con)]

I cannot agree with the hon. Member for Wallasey (Dame Angela Eagle). I personally believe that, faced with the most severe challenge for any Government since the second world war, this Chancellor and his Budget are entirely realistic. We are and must remain the party of sound Budgets, and we must return to borrowing only to pay for investment. That is our long-term aim, but faced with this pandemic, we have to make accommodations.

Although I commend the Chancellor for his Budget, the most important thing, of course, is to get the economy moving again and get us out of lockdown. The success of the vaccine roll-out, which will get the economy moving, has been absolutely staggering. Only this morning, I went to Lord’s cricket ground—probably the only time I shall ever be invited there, to the executive suite—for my second jab. I was in and out literally within 10 minutes. Like all the wars we fight, perhaps we do not perform very well at first, but we exit well; we have exited this war against the virus more effectively than any other country in Europe, and that is down to this Government and this Prime Minister.

As with all Budgets, we have to be realistic. I may make some gentle criticism, but I fully accept that the Chancellor has been faced today with an impossible task.

[Sir John Hayes (South Holland and The Deepings) (Con)]

In making those gentle criticisms, I wonder whether my right hon. Friend will challenge the Government on the issue of small businesses that now have to pay VAT when dealing with the European Union. They can reclaim it, but there is a delay, which brings cash-flow problems. I am mindful particularly of the heritage craft sector, from blacksmiths to silversmiths and so on; they do so much for our economy and employ nearly 200,000 people.

[Sir Edward Leigh]

My right hon. Friend makes an entirely valid point. One of the points that I want to make in my short contribution is that we have to accept that the high street and small businesses have moved on. The truth is that we have a very unequal tax system. Giants such as Amazon are paying an infinitely small proportion of their profits and turnover in business rates, and are driving small businesses and shops out of the high street. I personally think that there is something to be said for abolishing business rates all together. How would we pay for that? We could actually pay for it through a 3% increase on VAT on all businesses. That, of course, would hit the very large businesses such as Amazon, which pay derisory levels of tax, very hard indeed. My right hon. Friend makes a very fair point.

May I repeat what I say in every Budget? Perhaps I am a bit of a broken record on this, but I do believe in transparency, and I believe that ultimately we should try to reform our whole tax system. The TaxPayers’ Alliance has counted 1,651 tax changes since May 2010, including: 58 changes to air passenger duty; 130 changes to national insurance; 68 changes to stamp duty; 256 changes to VAT; 53 changes to tobacco duty; and 258 changes to vehicle excise duty. Our tax code is 17,000 pages long—or it was in 2015; it is even longer now. We should compare that with the tax code of an enterprise economy such as Hong Kong, which is only 350 pages long.

As things get easier next year, my plea to the Chancellor is to make our taxes clear, simple and fair. Tax complexity creates a structural bias in favour of the very rich and the big corporations, and that is not fair. Global giants can hire entire departments of tax advisers. I therefore agree with my right hon. Friend the Member for South Holland and The Deepings: let us look after middle-class people, who pay PAYE and bear the brunt of all tax increases, and let us direct tax increases at those who can pay, namely the digital giants.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Before I call the next speaker, I should explain that we are trying to get everybody into the debate. When there are interventions, if the speaker sticks to the time limit, that is fine—there is nothing against interventions—but the intervention on the right hon. Gentleman has effectively prevented a colleague from getting in. I am just pointing out that we are that tight on time.