The Economy

Debate between Glyn Davies and Edward Leigh

Tuesday 6th December 2011 Commons Chamber

[Mr Leigh]

That is absolutely right. We do not know what is going on in a lot of areas. Many EU countries, including Greece and Spain, tax their economies less than might be thought.

I apologise to Opposition Members for having to say this, but much of the blame lies with the previous Government. They increased Government spending by more than 55% in real terms and, contrary to all the political argument here today, we are cutting that by just 3%. The Government must decide whether they want to be liked or to deliver long-term prosperity and growth. As we have also heard today, we are still borrowing £141 billion every year. The cost of servicing that debt is £43 billion every year, more than we spend on defence. This is a staggering burden. I want to hear more of an intellectual case for smaller government. Big government leads to big waste. Sir Philip Green calculated in his study that £700 million could be saved on the Government telephone bill alone.

People are hit with a double whammy by all this Government spending. Like a black hole, it sucks in enterprise, and it inflates prices and taxes people of all their spare income so they have less to spend on their families and themselves. As a result, the economy deflates.

Governments say in such circumstances that more must be done and propose a fiscal stimulus, usually through public works, but those works are often driven by politics not the marketplace. A better way to deliver stimulus is to cut taxes.

[Glyn Davies (Montgomeryshire) (Con)]

I have a lot of sympathy with the case my hon. Friend is making, but can he point to any international examples of countries or organisations that recommend going further and more quickly in terms of austerity measures?

[Mr Leigh]

I can point to successful economies in the world that have the taken the view that the way to get out of the problem of a flatlining economy is to release more money back into the economy through the stimulus of lower taxation. I have referred to one tax that raises little money but acts as a tremendous disincentive to enterprise: the 50% tax rate. I would abolish that, as it achieves very little apart from bearing down on enterprise.

We still have the longest tax code in the world; indeed, it is longer than the tax code in India. The Centre for Policy Studies estimates that the marginal tax rate on poor people is as much as 96%, while the marginal tax rate on higher earners is 57%. There is a greater imperative than ever before for Government to be the facilitator, not the central planner. They can, by all means, deliver some public works, but they must not be fantasy or vanity projects such as high-speed railway lines. Instead, they must be works such as the third runway at Heathrow, which the market is prepared to build for us because the market wants it. By all means, let us have public works, but they must make sense in terms of the marketplace, and let us also have tax cuts. I support the Liberal proposal to take the lower paid out of tax, because that also delivers incentives and cuts the marginal tax rate on the lower paid. I want us to have a much flatter overall tax system, too.

Despite all that we have tried to do, Great Britain ranks as the 72nd country in the world for Government wastefulness, which is lower than Tajikistan and Ethiopia. The House may not accept all my arguments, but I hope Members will accept that an intellectual case must at least be made for a smaller and leaner Government who tax people less and deliver more vitality and entrepreneurship back into the economy. That is the only way we will fight our way out of this recession.

Intensive Dairy Farming

Debate between Glyn Davies and Edward Leigh

Tuesday 14th December 2010 Westminster Hall

[Glyn Davies]

Several issues are probably involved, so I want to make my second point, which is that we might want to resist the development on welfare grounds. We can include housing for 365 days a year as a welfare issue. Even with a seven-cow herd, the animals were indoors for six months of the year. Being indoors is not particularly unusual. I think that the application for a 1,000-cow unit in my constituency proposes that the animals should be indoors for almost two thirds of the year. I suspect that the application for the 7,000-cow unit proposed having the animals indoors, apart from the followers, for 12 months of the year. What we have to keep at the core of our thinking is high welfare standards, and we must be guided by science or we shall lose the argument in the end.

[Mr Edward Leigh in the Chair]

I do not accept that it is necessarily more difficult to meet welfare standards with a large herd than with a small herd. I know that some people will disagree, but I just do not think that the large size of a herd is a proven reason for that. In fact, we can argue a little bit the other way, because for a large herd, there will almost certainly be professionally trained staff, and a large unit will be able to afford to keep them professionally trained. It will be able to do the training that smaller units cannot. A large dairy unit will almost certainly have an ongoing relationship with a veterinary surgeon, who will call in regularly. The smaller units do not have that. Most farmers with herds the size of mine considered themselves to be veterinary surgeons. We were not willing to pay what I thought were excessive bills at the time—we did it ourselves. I think that we shall find that the welfare standards in large units will be very impressive, and if they are not, they will not get permission.

There are many other, environmental reasons why one might want to refuse an application for a large unit, and I think that planning authorities should be willing to turn down applications, unless they meet their exacting standards. The application in my constituency is within view of Powis castle. The local planning authority will have to consider that issue. The Environment Agency will have to examine all the implications for the environmental impact. All such issues will have to be considered by a planning authority before approval is secured.

I want to deal now with the public resistance element. During my eight years in the National Assembly for Wales, I was a huge enthusiast for organic farming and farmers’ markets. We should continue with that, but we have to persuade people to come and buy from these units. The reality is that most customers—consumers—will buy where the price is cheapest. The supermarkets will drive down the price, and unless British farmers produce the product, they will import it. My hon. Friend the Member for North Thanet (Mr Gale) made a very good point about exporting a problem. That is exactly what might happen in the dairy industry unless we deal with the matter. In relation to public resistance, we need a balanced and open mind and a view based on scientific knowledge.

I want to appeal not only to my hon. Friend the Minister but to everyone who participates in the debate—because it will be an ongoing debate; the issue will not be dealt with in the short term—not to take an instinctive view. Mine might be one of antipathy. We must examine the science, because in the end that is what will rule the decision. If we in this House are to have an impact on the issue, we have to present the facts and have an influence, we hope, on the purchasers, which are mostly supermarkets. Only the Government can do that now, because supermarkets have reached such a state of dominance in the market. By taking a balanced approach, we may well have some influence and, while not necessarily returning to the image of my childhood, staying rather closer to it.

[Mr Edward Leigh (in the Chair)]

Order. I want to allow time for the winding-up speeches, so I will call Neil Parish now, but he must finish his speech, please, within five minutes.