Budget Resolutions

Giles Watling Excerpts

1st reading: House of Commons
Thursday 1st November 2018 Commons Chamber

[James Brokenshire]

I am sorry if the hon. Lady does not recognise the important steps that are being taken in the Budget, including allowing councils to borrow in order to invest in new housing growth, our commitment to our affordable homes programme and our long-term deals with housing associations, all of which are making a difference.

[Giles Watling (Clacton) (Con)]

My right hon. Friend will be aware that we are attempting to build three new garden communities across north Essex. That will necessitate building the infrastructure to go with them. What is he doing to assist us in that endeavour, which will of course supply some of the houses that are needed in north Essex?

[James Brokenshire]

I very much welcome the authorities that are coming forward with ideas for garden towns and villages, which will be an important part of the vision of a home becoming a reality for more people and of meeting our intent to provide 300,000 new homes per year. I would point my hon. Friend to the housing infrastructure fund, which is focused on delivering the infrastructure and support that allows housing growth to take place. It is important to recognise the additional support that the Chancellor has provided for that initiative in the Budget.

Councils and housing associations undoubtedly have a lot to contribute when it comes to helping us to build more homes more quickly, as do our small and medium-sized builders, which is why Monday’s Budget bolstered continuing efforts to support their revival and market diversification with £1 billion of new guarantees implemented by the British Business Bank. I am grateful to my right hon. Friend the Member for West Dorset (Sir Oliver Letwin) for his review of the vital issue of build-out rates, which was published on Monday. He has not found evidence to suggest that our large house builders are engaged in speculative land banking, but he recommends reforms to the planning system on very large strategic housing sites. I look forward to studying his report in more detail, and I will respond more fully in the new year.

Whether through further reforms to planning or securing the future of Help to Buy, we are helping families, communities, buyers and renters in the private and social sectors, both now and in the long term, and in the process we are changing lives. As I have said before, this is not just about building more homes; it is about building stronger communities. Those communities need to know that the right infrastructure, transport links and other essential services are in place to support new developments. It was therefore great to see the Budget boosting the housing infrastructure fund by £500 million, bringing the total funding to £5.5 billion and potentially helping to unlock 650,000 homes. It was also great to see the Budget providing £291 million of grant funding for vital infrastructure on the docklands light railway in east London, which will ease pressure on existing services in the area and generate more than 18,000 homes.

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[Charlie Elphicke (Dover) (Ind)]

The test of any Budget is: does it take us closer to where we want to get to in 10 years’ time? It seems to me that one of the most important things to do over the next few years, and one of the dreams that so many Conservative Members have had for so many years, is the dream of a balanced budget. Once again, this appears to be a little bit like the apple of Tantalus. I am concerned about that because I believe, as the fiscal conservative I have always been, that we need to head towards a balanced budget.

Achieving a balanced budget has been delayed, but I am glad that we are still heading in that direction. The OBR says of the Budget policy decisions:

“Taken together they turn the £3.5 billion surplus…forecast for 2023-24 into a £19.8 billion deficit.”

It also says of the balanced budget objective:

“Had there been no fiscal loosening in the Budget, the objective would have been achieved in 2023-24.”

As it is, achieving that objective by 2025-26, it says, “looks challenging”. That is still an important aim. We must bear in mind that debt interest payments each year are about £52 billion and measures in the Budget will increase those payments by about £1 billion in future years. Opposition Members argue for ever more increases in spending, but I argue that it is better to ensure restraint, continue on our current track and aim for a balanced budget sooner rather than later.

We must also think about the kind of country we want to build. We want to build an enterprise powerhouse and a country that supports enterprise, small businesses and the self-employed. That is why it is important to make things easier for small business people and not to sandbag the self-employed with extra taxes and regulations, instead supporting them and ensuring that their enterprise is backed.

We must be the party of home ownership. Home ownership matters. As I said in an intervention, since about 2001, home ownership among people aged 16 to 34 has halved. We need to increase it. Meanwhile, the number of those renting has gone from about 10% to 20%. We must offer our young people better than a life of renting, and give them the chance to get on the home ownership ladder and build up a stock of wealth in a lower-tax country that ensures that hard work is rewarded.

[Giles Watling]

Does my hon. Friend recognise that the recent reduction in corporation tax oxymoronically produced more tax in the coffers? It is worth reducing the tax.

[Charlie Elphicke]

My hon. Friend is right: if we cut the rate we up the take. We must support small businesses most of all because, since about 2000, small enterprises and businesses have created 4 million new business jobs. Big business has created just 800,000 jobs, so small businesses are the enterprisers and job creators that take our country forward and turbocharge our economy.

If we are to have more public spending, it is important to ensure we have public service reform. We must look at how public services are delivered and ask ourselves whether they can be delivered more efficiently. Are there activities that Government should do more of? Are there activities they should do less of? Why do we not have, alongside the Office for Budget Responsibility, an office of spending responsibility, or even a Budget committee so that the House can consider such matters and press individual Departments to embrace reform and fiscal rectitude?

We also need higher investment. It is all very well having a culture in which we get lots of people with low skills to do low-value-added jobs that lead to no productivity. Why are we not encouraging more investment in more equipment that can be operated by fewer, more highly skilled people who are better paid and drive our productivity forward?

I must take issue with the comments of the right hon. Member for Twickenham (Sir Vince Cable) about how it is all indebted and about the corporate sector—that is absolute rubbish. Some £750 billion on corporate balance sheets has not been spent. There is a conundrum as to why that money is not being invested. We must consider the possibility of time-limited, perhaps very generous, investment allowances to get those corporates to invest in our economy, and to drive the investment and productivity gains that we need.

We need more competition in this country. Why do we put up with Openreach and its appalling service? Why has it not been unbuckled from BT with a strong investment target? Why do we have an oligopoly of banks and of big energy providers, and why have we not taken action on that? We need a bit more trust-busting from the Government and a bit more backing for the consumer interest over the corporate interest.

The Conservative party should be the party of small enterprise and investment. It should be the party that champions the consumer interest and is tough on corporatism and tough on the causes of corporatism. We also need to be the green and environmental party, which is why in the spending review we need a step change in investment in electric car charging points because it is not good enough. Only when we get that straight will big corporate car fleet buyers start to buy the cars that would then go into the second-hand market, so that this country can have the electric future on our roads that it should have.

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[Giles Watling (Clacton) (Con)]

It looks like our economy is once again defying the naysayers. UK growth has an inexorably upward direction, which is to be encouraged, and debt as a percentage of GDP is down, thanks to the hard work and perseverance of the British people. The deficit is at its lowest level since 2001, and productivity growth has accelerated and is now running ahead of the forecasts made in the spring statement. It is growing at its fastest rate since 2016. In spite of this, however, productivity is still below the average seen in the financial crisis.

We all know that infrastructure is vital to supporting jobs and economic growth and to improving people’s quality of life. That is why I am delighted that this Budget sets aside £28.8 billion for the biggest ever strategic investment in roads, and I want to see our share of that coming to Clacton-on-Sea. This is in addition to the £740 million for the nationwide roll-out of digital infrastructure, which means that by 2021 the Government will be investing £9 billion a year more in infrastructure than they were in 2015. The old saying, “Down good roads wealth flows” still holds true even when those roads are increasingly electronic. While celebrating that achievement, however, I am concerned that there was no new money in the Budget for rail. That is disappointing, because one of the most pressing issues in Clacton is the dreadful rail service there. My constituents want to see a service that is regular, quick and clean.

Let me move on to some of the other issues that the residents of the constituency of Clacton raised with me before the Budget. The introduction of the digital services tax, which I support, has been a prominent issue. As a member of the Digital, Culture, Media and Sport Committee, I know that these huge corporations make massive profits, and it is right that they should pay a fair share for our public services. It is wrong that previous Governments did not get a grip on this.

I thank the Chancellor for the ongoing freeze on beer duty—I am probably not alone in that—but I am somewhat disappointed, having joined my constituents in campaigning for a cut in the duty. I recognise that a freeze is better than an increase, but I will continue to lobby for a reduction, in order to protect pubs as vital community centres.

It should be borne in mind that the pub is part of the great British way of life, and a great place to share and enjoy company. Loneliness is one of the burgeoning issues that we face today, and I would argue that the demise of so many of our treasured village pubs across the country has contributed to this blight. People do not have to drink alcohol when they go to pubs—they can drink anything they like—but they are a place to go to. A problem shared is a problem halved. The pubs in Clacton receive plenty of support from me personally, but one man can only do so much! There is certainly much greater scope for the Government to intervene in this sector.

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[Mike Wood (Dudley South) (Con)]

This Budget is good for communities and families in the west midlands. On top of the £250 million that the county has already received from the transforming cities fund, it will get another £72 million to boost prosperity and spread wealth across the region by increasing productivity. Families will also have extra money in their pockets at the end of every single month thanks to the introduction, a full year ahead of schedule, of the changes to income tax thresholds and personal allowances that were promised in our manifesto last year.

In the limited time available, I want to focus on our pubs, which was touched on by my hon. Friend the Member for Clapham—[Hon. Members: “Clacton.”] Of course, I mean my hon. Friend the Member for Clacton (Giles Watling). Despite mentioning pubs, I have not had a drink so far today; that was purely an end-of-the-week brain melt. For too long, British beer and British pubs were seen purely as part of the problem, whereas there is now an increasing recognition of their economic input. Pubs contribute £26 billion to our economy every year, and pubs across the country employ nearly 1 million people, almost half of whom are under 25. As I am sure the Chancellor will be all too aware, the sector generates £13 billion in tax.

However, the sector has been under enormous pressure. The years after Gordon Brown introduced the hated beer duty escalator saw an even higher than trend rate of pub closures and a reduction in the number of people drinking beer in pubs, rather than buying it in supermarkets.

[Giles Watling]

Will my hon. Friend give way?

[Mike Wood]

I have only a few seconds.

The measures announced on Monday—a freeze in beer duty and a third off business rates—are expected to help up to 19,000 pubs to be between £3,000 and £8,000 a year better off. The British Beer and Pub Association reckons that will safeguard 3,000 jobs in the sector, which in turn means that more people will be earning an income and paying taxes—this will almost certainly cover the costs. This is a good Budget for beer, a good Budget for pubs and a good Budget for Britain.