Budget Resolutions and Economic Situation

Huw Merriman Excerpts

Wednesday 3rd March 2021 Commons Chamber

[Huw Merriman (Bexhill and Battle) (Con)]

In welcoming today’s Budget, I wish to focus on three themes. The first is supporting restart. The Chancellor is right to ensure that the workforce and businesses are supported as we open up our economy once again. The continuation of furlough, help for the self-employed, business rate relief and extending temporary VAT reduction will give business the confidence to reopen and plough on. We now have to encourage people to turn their backs on the lockdown, get back to their offices and back to hospitality and leisure venues and do their bit for the nation’s economy as we unlock, in the same way that they did for the nation’s health when they locked down.

The second is recovery. The Chancellor is right to invest in our recovery by supporting capital projects that will deliver a yield to UK plc. Over half of the infrastructure spend is devoted to transport. It is vital that this spend goes on projects that deliver the biggest bang for the buck, not white or green elephants.

The third is repayment. The pandemic has seen a Government fiscal injection of £407 billion. Much of that has been supported across the House. As the Chancellor said, it is comparable only with the borrowing from world wars one and two. National debt now stands at £2 trillion—£30,000 for every man, woman and child. We have a record peacetime deficit. I remind those who talk of low levels of Government borrowing that an increase of just one percentage point across all interest rates will add an extra £25 billion a year to the Government’s cost of servicing the national debt—money that could otherwise be spent on investing in education or delivering infrastructure.

With regret, I understand the need for a five-year personal tax allowance freeze, a corporation tax increase to 25% from 2023 and other tax-raising measures. The OBR has stated that these tax rises will take the overall tax take and burden to the highest level since the 1960s. In addition to increasing the tax yield, we need to reduce levels of public spending. That means cuts across the board. I am deeply disappointed that we are reducing our international aid spending, but I cannot just expect spending cuts to apply to those areas less close to my heart.

Thirty years ago, Margaret Thatcher was taking questions from the media on the 1981 Budget. She said this, and it applies as much today as it did then:

“Now what really gets me is this: that it is very ironic that those who are most critical of the extra tax are those who were most vociferous in demanding the extra expenditure. And what gets me even more is that having demanded that extra expenditure they are not prepared to face the consequences of their own action and stand by the necessity to get some of the tax to pay for it. And I wish some of them had a bit more guts and courage than they have.”

The Chancellor has shown today that he has the guts and courage. It is now down to those of us who similarly believe in fiscal responsibility and in not dumping the next generation into an ever increasing pool of debt to be true to the Conservative party’s philosophy and make that same case.