Budget Resolutions and Economic Situation

Kevin Hollinrake Excerpts

Wednesday 3rd March 2021 Commons Chamber

[Meg Hillier]

I completely agree: it is absolutely urgent for the people living in those homes whose lives are on hold, but it is also important for the Exchequer. If the Chancellor’s announcements do fuel demand for buying housing, that is stymied by the fact that so many people are stuck in homes that are unsaleable and worth nothing, so they are mortgage prisoners. The whole supply system is not working and the demand system is being fuelled in the wrong direction. We have seen homes in my constituency that were being sold at just below the last threshold for this.

My Committee has looked at the Government’s housing policies over many years now. One million new homes in England were promised between 2015 and 2020 and 500,000 more by the end of 2022. Even taking into account the pandemic, we saw, for example, the starter homes project fail completely after nearly £200 million was spent on land remediation alone, with £2.3 billion in total set aside for that in the 2015 spending review. Yet this did not happen because the Government did not even manage to enact the secondary legislation necessary to get it off the ground. Five years later, they finally announced that it was the end of the starter homes project and introduced First Homes, a discount for first-time buyers, and now we are seeing a loan guarantee on 95% mortgages. It is a very muddled policy. I cannot yet see who will benefit, and we will be looking at this in detail.

On net zero and the environment, the Government are setting big targets, but our detailed work in the Public Accounts Committee raises many concerns. This is on top of failures on the green deal, the privatisation of the green investment bank, three competitions for carbon capture and storage—one more was recently announced, but so far the first three have failed—and real inertia on developing proper, long-term commitments to really tackling climate change.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

rose—

[Meg Hillier]

I will not give way as I have already taken two interventions.

It is easy to make announcements; it is much harder to get the system to deliver on them. There is a will in this House, I think, to deliver on this, but the Government have to stop making cheap headlines.

On jobs, only one in 100 young people aged 16 to 24 is benefiting from kickstart. Again, it is a nice headline, but unless it delivers for our constituents, it is not working. We need to act now on making sure that further education is properly funded so that it can plan ahead as, hopefully, we come out of lockdown and into more normal life, and make sure that people are able to be reskilled.

Finally, I welcome the movement—as far as I have read the detail, which is not in full yet—on visas for tech entrepreneurs. This has been a brake on progress in Shoreditch in my constituency. However, we have young people in this country who were brought up in the UK, for whom it is their home and the only country they know, and they are struggling to buy citizenship at over £1,000 apiece, because families cannot afford it. They may pay for citizenship for the main householder, but not for the family. This is something that I feel is viscerally unjust. We have these talented people in our communities, in our constituencies, in our country, who are essentially British but priced out of citizenship. So if we are going to have visas for tech entrepreneurs at an easy rate, why not do that for the young people already in our country who are willing, able and capable of contributing?

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[Kevin Hollinrake (Thirsk and Malton) (Con)]

I draw the House’s attention to my entry in the Register of Members’ Financial Interests.

As a northern businessperson, I was very pleased with the Budget statement—it was pro-business and pro-north. It was also an honest assessment of where we are today. I was quite astounded—perhaps I should not have been—by the response from the Leader of the Opposition, which reminded me of what Churchill said:

“Some see private enterprise as a predatory target to be shot, others as a cow to be milked, but few are those who see it as a sturdy horse pulling the wagon.”

That is what private enterprise is, yet all the Leader of the Opposition talked about was public services. Important though they are, this Budget was about the recovery from covid, which is critical. We cannot have the public services without the generation of wealth, jobs and taxes. That is how we pay for public services, so it was absolutely right that that was the focus of the Budget.

I am pleased with many of the things in the Budget for the north, including freeports in Teesside, Treasury North in Darlington and the UK investment bank in Leeds, for which my hon. Friend the Member for Grantham and Stamford (Gareth Davies) campaigned for heavily. Also, the ongoing business support is very important to the hospitality businesses of Thirsk and Malton.

We need to be honest, and I know the Chancellor will be when we have got over the covid crisis, about our future spending challenges. Because of this country’s demographics—we have an ageing population and a reducing fertility rate—we are going to see more and more pressure on fewer and fewer taxpayers, particularly to sustain pensions, healthcare and social care. That is true to such an extent that according to the Office for Budget Responsibility our debt to GDP ratio, which is currently 100%, will be 314% by 2060 if we do not do anything about our tax system. In many ways, the Budget was a short-term approach to recovery, which is absolutely the right approach, but we need to think differently about the solutions going forward.

I do not want to see a bigger state or higher taxation, so it is a difficult conundrum. One solution that I would like to see is an adult social care premium, which would tackle one of those cost pressures. It is not a tax any more than motor insurance is a tax; it is a small amount of money that people put aside for a rainy day. It is done on a mandatory basis and will solve one of the key problems.

As my right hon. Friend the Member for Gainsborough (Sir Edward Leigh) said, we need to make sure that we set a fair and level playing field and stable framework for businesses. Because of the threats from Amazon and the like, one way we can do that is to scrap business rates altogether and replace them with a small increase in VAT. That would be a simple solution to the problem and set that fair and level playing field for many SMEs in this country.