Budget Resolutions and Economic Situation

Baroness Laing of Elderslie Excerpts

Monday 20th March 2023 Commons Chamber

[Andrew Bridgen (North West Leicestershire) (Ind)]

I remind the Chamber of my entry in the Register of Members’ Financial Interests. For 22 years before coming to this place, I was the managing director and chairman of a food processing company. I am also a qualified transport manager, and I remain the equal largest shareholder in that company.

First, I want to highlight an aspect of the Budget that is of particular interest to my constituency of North West Leicestershire, which is fuel duty. The level of fuel duty is of immense importance to my constituents, given two facts: the first is that public transport is extremely limited—in fact, my constituency does not have access to any main line railway station, or any railway station at all. The second is that, since North West Leicestershire is the centre of the population of the UK, with good communication links with the M42 and the M1, a third of all jobs in North West Leicestershire are in distribution or are logistics-related. As such, the freeze on fuel duty that was first put in place in 2011 has been extremely significant to the huge economic growth we have seen in North West Leicestershire.

To think tanks such as the Social Market Foundation that complain that the Treasury has forgone money to benefit the rich, I say, “Why do you think we should penalise my constituents who have to use a car to get to work?” The fuel duty freeze is the right thing to do to maintain economic growth, and my constituents will certainly support it—and not just my constituents. We already have 1.2 jobs for everyone of working age in North West Leicestershire, so a lot of people have to travel in from surrounding constituencies to work in my constituency. I am sure those people will be very grateful for the tax freeze as well.

With regard to the lack of a railway station, I cannot help but give a push for the reopening of the Ivanhoe line, which Network Rail said would be the most beneficial reopening of a railway line that it currently has on the books. That line would link the great town of Burton upon Trent with Leicester, and would pass through North West Leicestershire and South Derbyshire, benefiting all of our constituents. It has cross-party support, including from the Members from Leicester.

Turning to energy and science, I would like to mention an energy source that I have been promoting for some time, which is small modular nuclear reactors. Only in November last year, I said to the Secretary of State that renewables cannot be relied on to provide all our energy needs, due to their intermittent nature. It is clear that we need to add more reliable baseload capacity, and nuclear is the favourite for that. Hundreds of my constituents work at Rolls-Royce, and many of them work on the development of small modular reactors. Therefore, I very much welcome the announcement in the Budget of a competition through Great British Nuclear to build small modular reactors in the UK, and the inclusion of nuclear energy in the green zero carbon taxonomy. I am sure that my skilled worker constituents at Rolls-Royce in Derby will step up to the mark, and that we will see reliable baseload energy produced from that source sooner, rather than later.

Next, I turn to investment zones, and I note that the Treasury has identified the proposed east midlands mayoral combined county authority to deliver that policy. I feel that I have to point out that the ongoing issue we have in Leicestershire, and indeed in Leicester, is the veto being exercised by the current Mayor of Leicester, which is preventing Leicester and Leicestershire from joining that authority and creating that critical mass in the east midlands. That has particular relevance to the topic of the debate, as Leicester is home to the National Space Centre and has many space and science-related companies around it. Indeed, my own constituency of North West Leicestershire is home to a space company in the form of Zeeko, which makes ultra-precision polishing solutions for the optics for satellite cameras. Quite honestly, it would be an outrage if our county and the city of Leicester were to miss out on an opportunity to be involved in this situation because of the intransigence of the city Mayor. I wish all those in the city seeking to abolish the mayoralty very well in the May elections.

Energy security and scientific innovation are key to the future of the UK’s economy and stimulating economic growth. There are many measures in this Budget that will help us to maintain and improve our place in the world when it comes to science, and this Government have demonstrated their commitment to that goal. In the area of energy and security, this Government are being realistic, and it is clear that nuclear has a significant part to play in achieving that goal in the future. Picking up on some points that have been made by the Opposition, I would add that the relationship between business and our excellent research establishments—our universities—has certainly improved, but more progress needs to be made. If we could harness all the innovations in research that we have at our great universities, we would be really accelerating our economic growth. We must work towards that endlessly.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call Stewart McDonald.

--- Later in debate ---

[Sir Robert Syms (Poole) (Con)]

I draw attention to my entry in the Register of Members’ Financial Interests. I am in the parliamentary pension fund and I may be affected by the lifetime allowance changes.

Listening to the debate today, one would be forgiven for forgetting the fact that we had the worst public health emergency for 100 years, in which the Government had to take actions to lock the economy down. I had my disagreements with my right hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson), but you cannot say his motives were bad. He was trying to save lives and to get through a pandemic. We did not know whether the disease was going to be deadly, mild or what. That cost a lot of money and had a big impact on many businesses. If several million people are sent to sit at home for months on end while the Bank of England is printing money, it should not be a surprise if, at the end of that, inflation is high and living standards are under some challenge. The only people who could be surprised about the fact that the last 12 or 18 months have been difficult economically are those who did not think that there would be any consequences to lockdown. There were consequences. We are getting through them and things are improving, but that means there have to be some tough and difficult decisions on issues such as tax.

On the Government Benches, sometimes we do not like to put up taxes, but sometimes it is necessary. If we look at what the Government have done, we see that they have a plan, which is working. Between now and the next general election, there will probably be five statements or Budgets. We are at stage 2, so there are another three to go. In November, there were predictions of a recession—quite a big recession, actually—in the early part of this year, a rise in unemployment and a black hole in public spending. They have all sort of disappeared, which means the Government have stabilised the situation.

The Government have been trying to ensure that more people can get back into the labour force, with changes to childcare. They have protected a lot of capital budgets through their decisions, and their main objective in the Budget is to keep the economy growing. I understand why people quote the International Monetary Fund, but its predictions, which are always educated guesses, were produced before the German economy went into a recession at the end of last year. At the moment, neither the French nor the German economy is performing as well as the British economy.

The truth of the matter is that we have a spike in inflation, which should come down quite rapidly this year. There will be a crossover point, somewhere around May, June or July, at which inflation will fall below the rate of pay increases. We will then start to have an increase in living standards from this summer onwards, and some of the squeezes that families are facing will be reversed. If the public finances improve as we grow, I hope that my right hon. Friends on the Treasury Bench will be able to cut taxation. There is a lot to be said for the Budget, which is one further step in the direction of sensible economics and nursing our economy and our public and individual finances back to health, so I support what the Prime Minister and the Chancellor are doing.

I was pleased by what my hon. Friend the Member for Ynys Môn (Virginia Crosbie) said about nuclear, particularly small modular. It is very important that we get on with that because, as always, we need a balanced range with not just renewables and gas but nuclear power.

I am generally pleased with what the Budget has done: I think that the outlook has measurably improved. We can still see some fragility in the world economy, certainly when we look at Switzerland or the United States, so we have to take a cautious approach, but I am sure that if we do so and nurse the economy back to health, our nation will be rather the better for it in 12 or 18 months’ time.

I say to the Opposition: if we are right, we will beat you, and if you are right, you will beat us. I keep hearing about these 13 years of misery, but we won an election in 2015, we won an election in 2017 and we won an election in 2019. We may well win the election in 2024, but it will really be determined by whether the Treasury team get it right. My view is that they probably are getting it right; the Opposition’s difficulty is that they have to sit there and watch us getting it right. I think it is going to be an interesting 18 months.

The hospitality sector in Bournemouth and Poole thinks that VAT is too high. The Isan Thai restaurant in Poole and the Lakeside restaurant in Poole would like to see it reduced when we can afford it, not least because many restaurants do not pay VAT on food, so the real rate of VAT at 20%, when they do not have many offsets, is quite a painful thing to pay. I told them that I would raise that point in this debate.

I think we are going in the right direction. I think we will see an improvement as we go through the year, and it will fundamentally change the politics of our country.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call Liz Saville Roberts.