Budget Resolutions and Economic Situation

John Hayes Excerpts

Thursday 17th March 2016 Commons Chamber

[Sir Edward Leigh (Gainsborough) (Con)]

Compared with the hon. Member for Huddersfield (Mr Sheerman), I am a mere callow youth in the House, having sat through only 35 Budgets, I think, and spoken in most of them. I sometimes feel I am constantly repeating the same theme, but generally in this place, unless one stays with a personal theme and keeps repeating it, one will probably not get anywhere.

Over those 35 Budgets, I have argued constantly for tax simplification. For instance, the cut in corporation tax is no doubt greatly welcomed by our larger companies, which have been the biggest cheerleaders for our remaining in the UK, but whatever they save from these modest cuts in corporation tax has been clawed back in other parts of the Budget. Unless we can achieve tax simplification and move gradually towards a flatter tax system, instead of having one of the longest tax codes in the developed world—as long as India’s—we will never make progress on tax avoidance.

[The Minister for Security (Mr John Hayes)]

My hon. Friend’s consistency and sagacity are well established in the House, and I take his point about tax simplification, but would he not agree that the best form of simplification is to take people out of the higher tax band and out of tax altogether? Is that not the ultimate simplification and precisely what the Chancellor has done—once again—in this Budget?

[Sir Edward Leigh]

Yes, of course I acknowledge that, and I congratulate the Chancellor, the Government and my right hon. Friend the Minister on creating an economy in which more people are in work than ever before and more people are being taken out of tax than ever before. We are returning to the historical position of actually making work pay for people at the bottom of the heap. Helping people at the bottom of the heap and taking them out of tax is what the Government should be doing. So everything he says is absolutely right.

If I make a few suggestions or criticisms in the few minutes allowed to me, I do not want it to take away from the Government’s achievement in their macroeconomic management of the economy, and nor do I want to resile from my criticism of Labour Members, who must learn from history and become a credible Opposition. It is not good enough for the shadow Chancellor to come to the House today and refuse to answer any questions about his borrowing plans. There is no point just repeating a generalised mantra about borrowing to invest. It is fair enough to say that—it is the old golden rule of Gordon Brown, and we know how that was broken—but one must be prepared to provide concrete facts and figures. Would the shadow Chancellor borrow more than the present Government?

I repeat, however, that I am in favour of a much-simplified, flatter tax system, and in that context, I recognise that the Chancellor is at last—I have been campaigning for this for years—indexing the higher 40p tax band.