Budget Resolutions and Economic Situation

John Penrose Excerpts

Wednesday 3rd March 2021 Commons Chamber

[John Penrose (Weston-super-Mare) (Con) [V]]

I support this excellent Budget for three main reasons. First, the Chancellor said at the start of his speech that he did not want to set out his fiscal rules right now but was committing to a principle of no borrowing for everyday spending, and that is absolutely essential given where we are at the moment—given the huge amount of extremely generous, much-needed help and support over the course of the last 10 or 12 months during the pandemic. It is clear that in the course of the last 10 or 12 years we have had two once-in-a-century events—external economic shocks—and we have only been able to be as generous as we have and have been able to provide the kind of open-handed essential support to keep jobs and businesses alive because we had fiscal firepower and the Treasury could draw on sound money and the sound Government finances that had been built up over many years. It is absolutely essential, therefore, that we go back to that as soon as we can in order to ensure that when, not if, the next one comes we are equally prepared.

Secondly, I am happy to support the Budget because the Chancellor announced the super deduction for business investment. Economists rarely agree on very much, but one thing they all agree on, whether from the political left or right, is that Britain invests too little in its economic growth; we live as a high-rolling economy, basing our economic growth far too much on domestic spending and not on investment. Therefore, measures to try to improve that and change it permanently and forever are absolutely essential. The Chancellor rightly pointed out that we languish down at 30th place in most international tables of business investment. This measure will vault us up in to the top few, perhaps even to the very top spot, in international investment in long-term growth. That is one of the fundamental things that will not just drive economic growth, but make those jobs that I was talking about permanently competitive and safe for the long term. That will ultimately be the only thing that allows us to have an economy that pays for the public services that we all want.

The final reason why I am happy to support this Budget is that it is given by a Chancellor who understands that it is about not just tax and spending, but competitiveness. Why do I know that? Because he, together with the Business Secretary, recently commissioned me to produce a report on competition, competition policy and making our economy more competitive. It is that kind of supply-side reform that we will also need to make sure that we have an economy fit for the future.