Budget Resolutions

Debate between Liam Byrne and Sammy Wilson

Wednesday 11th March 2020 Commons Chamber

[Sammy Wilson (East Antrim) (DUP)]

It is a joy to follow the hon. Member for Grantham and Stamford (Gareth Davies), who has reminded us that his constituency was the home of the man who discovered gravity and of the woman who discovered how to defy political gravity, to rise to the highest office of state in our country and become one of our best known and greatest Prime Ministers.

The Chancellor came to his position at a very difficult time. He had to bring forward a Budget today that would calm many of the concerns of businesses, workers and people across the United Kingdom because of the impact of the coronavirus. He has brought forward measures to make sure that businesses have sufficient cash flow at a time of disruption and to support workers who may well be asked to make a public sacrifice by staying away from work and should not be penalised for it. There is also, of course, the co-ordination with the Bank of England to try to stabilise the situation.

The Chancellor tried to give the impression that it was quite an expansionary Budget, but when we look at terms of it, we can see that it is not really expansionary at all. Much of it was made up of past announcements, and some of it of announcements for the next five years. It is about raising spending to a certain level, rather than by a certain level. When one looks at the overall increase in total managed expenditure of around 1.8%, one can see that, given some of the things that we are facing, it is actually quite a modest Budget, with modest expenditure.

However, I welcome a number of policies that have been introduced in the Budget. I will probably get a lot of criticism now from those who share the climate hysteria that seems to have gripped this House. The pressure was on the Chancellor to impose additional costs on ordinary people who drive their cars, on businesses that rely on fuel, and on consumers who require that their food be delivered to the shops in the cheapest way possible. I am glad that he did not increase fuel duty because, of course, that would have been an imposition on the very people whom some Members of this House today have said they want to defend. They have also said that they do not want to see their standard of living affected, but those kinds of taxes would have had an impact on those people.

I am also pleased that the Chancellor has not increased the tax on red diesel for farmers. I know that many farmers in East Antrim, for whom fuel is a substantial but inescapable cost, will welcome the fact that they will not now have an additional tax imposed on it.

Having said that, this Government will still be dipping into the pockets of the people of the United Kingdom to the tune of £18 billion next year in various green taxes. The carbon tax that the Chancellor proposes to impose on gas will impact severely on energy bills. We still produce a lot of our energy, and people still have to heat their homes using gas. That carbon tax will substantially increase those people’s bills, especially when one remembers that 20% of electricity bills at present are taken up with various green levies and green costs. On top of that, some of the bill is made up of infrastructure costs, which are incurred only because of the move towards more wind energy and so on. The tax on gas will have an impact on many people, especially in places such as Northern Ireland, where we rely heavily on gas for electricity generation.

My second point relates to the Government’s announcement that they want to disperse jobs outside London. We had asked the Government to consider that during the confidence and supply arrangement that we had during the previous Administration. Of course, there has been a degree of centralisation: we have lost jobs from HMRC and the Driver and Vehicle Licensing Agency. If the Government are sincere about levelling up the economic growth across the United Kingdom, it is important that jobs are dispersed from the south-east of England to other parts of the United Kingdom, including to places such as Northern Ireland.

There was no mention in the Budget of air passenger duty—at a time when connectivity is so important and when we had discussions following the Flybe episode. So many airports across the United Kingdom depend on connectivity. We know the cost of air passenger duty on internal connectivity across the United Kingdom. Although I understand that the Chancellor could not have made a decision in this Budget because the review of air passenger duty and aviation taxes is ongoing, I hope that there will be some announcement in the future, so that places such as Northern Ireland that are heavily reliant on air transport see that additional cost—about £4.8 billion a year—reduced and are given some reliefs.

The announcements on infrastructure spending are important. I welcome the expenditure on roads and infrastructure projects across the United Kingdom. The one thing that I have some concern about, though, is that the Government are proposing to spend £110 billion on infrastructure projects by the end of this Parliament, but—as we have seen with the Heathrow expansion decision—these projects are under threat from the challenges we face due to commitments made in the Paris agreement and the Climate Change Act 2008. I believe that those who are determined to prevent the infrastructure developments that are necessary to make this country work will use the courts to try to stop many infrastructure projects that the Government are proposing. That is because all of those projects—roads, housebuilding, airport expansion, railways—will have some impact on CO₂ emissions, through concrete production, steelmaking, the building process and so on.

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

The broad criticism that has been levelled at this Budget is that we surely needed a plan to decarbonise the transport system and it is not yet clear from today’s presentation whether we got that.

[Sammy Wilson]

The right hon. Gentleman has missed my point. All decarbonisation—whether we decarbonise energy, transport or what we eat—has an implication for people’s jobs, living costs and so on, and we have to ask what the country’s priority should be. Do we really want to impose the sort of burdens that those kinds of priorities put on the people of the United Kingdom? We cannot say that we want to protect jobs, to keep standards of living up and costs of living down, and to give people the freedom to go on their holidays and to eat what they want, and at the same time say, “But let’s absorb ourselves in this carbon obsession”, which affects all those things. Members cannot have it both ways. At some stage, we will need to have a discussion about where our priorities ought to lie.

I welcome the additional money for the Northern Ireland Executive, but I repeat that there has been an increase in expenditure in this Budget of 1.8%, which the Executive will find difficult to live with given the commitments that were made in the agreement that was put in place to get the Assembly back up and running. The Executive are going to have to set priorities.

I agree with the right hon. Member for Maidenhead (Mrs May) that if money is being given to devolved Parliaments to ensure the spread of prosperity across the United Kingdom, the approach has to be co-ordinated and there needs to be some oversight of how that money is spent. I was a Member of the Northern Ireland Assembly for a long time, and of course people jealously guard their freedom to make those kinds of choices, but it is important that the money is delivered not simply as part of a block grant for Administrations to spend on whatever happens to be the priority that week, rather than on the long-term prosperity of the country.

Overall, I welcome the Budget, although it is a modest one. It appears to spend an awful lot more money, but it represents only a 1.8% increase in overall Government expenditure. The Chancellor has made a decision to live within his resources, but there will be some consequences.

Living Standards

Debate between Liam Byrne and Sammy Wilson

Wednesday 30th November 2011 Commons Chamber

[Mr Byrne]

That underlines an extremely important point, and I hope that in the Secretary of State’s response he will say a little more about how he reconciles the “Budget” that we heard yesterday with his own honourable intention to ensure that work pays. Right now, in my constituency, I have working parents, especially women, coming to me and saying that they are now giving up work—because the Government are cutting benefits, meaning that it is no longer economic to work. Surely that cannot be right.

[Sammy Wilson (East Antrim) (DUP)]

Does the shadow Minister not find it strange that the Government argue that if we were to borrow to stimulate the economy the money markets would go mad and put up interest rates, yet the markets seem to have no problem in lending us money to pay for unemployment?

[Mr Byrne]

And this is a Government, of course, who have brought forward plans to borrow another £158 billion —a bill that, ultimately, will be paid by the rest of us. It is a bill for economic failure.

Finance Bill

Debate between Liam Byrne and Sammy Wilson

Tuesday 20th July 2010 Commons Chamber

[Mr Byrne]

No. I am saying that the country’s investors now have so little confidence in the economic plan that they would rather save their money than dare to invest it in productive capacity and growth for the future.

Let us look at some of the measures that show the decline in confidence. The Bank of England says that mortgage approvals fell in June; last month, the consumer confidence index fell for the first time in a long time; and yesterday, Rightmove told us that house prices have been cut for the first time this year. The Budget and the Bill are putting Britain’s recovery in the slow lane. The greatest irony of all is that we must all pay more as a consequence.

[Sammy Wilson (East Antrim) (DUP)]

The right hon. Gentleman mentioned two aspects of aggregate demand—consumer spending and Government spending—but is he also concerned that the Government are depending partly on an increase in exports, because all the indications are that the markets in Europe and America will not be as buoyant as was assumed? Therefore, all three major areas of aggregate demand will be subject to downward pressure.

[Mr Byrne]

The hon. Gentleman makes an extremely good point. The evidence on that is mixed. The CBI industrial production survey, which was published earlier this afternoon, shows that manufacturers reported that the second quarter of this year was good and that they have a degree of confidence in exports. However, the problem is that the OBR is projecting a £100 billion increase in exports over the next four or five years. That is the equivalent of our exports to America tripling, our exports to China going up by something like 20 times, and our exports to India going up by something like 40 times. That may well come to pass, but it is safe to say that very few people would bet on it. That is why the Opposition believe that the Government should do a little more to nurture both domestic business investment and domestic demand.

The alternatives for reducing the deficit that we have rehearsed in the past couple of weeks bear a final word this afternoon. I want to return to the explanation of the difference between the scorecard projections for tax growth and what the OBR said would come through the door, which the Exchequer Secretary struggled with earlier. The point centres on how much growth will contribute to paying down the deficit over the next four years. The Labour Government’s deficit reduction plan projected that the deficit would be reduced by something of the order of £78 billion over the next four years, and the OBR inconveniently told the Chancellor that we were on course to deliver that. That plan involved £57 billion-worth of discretionary action, which was set out in detail in chapter 6 of the March Budget—£19 billion in tax increases and £38 billion of spending cuts. However, £21 billion of the deficit was projected to be closed by the economy returning to growth, with higher tax receipts and lower benefit bills.

The June Budget appears to hit growth so hard that £9 billion of extra tax is necessary to make good the effect of lower growth. That is the price of slowing the recovery. The Liberal Democrats are awfully pleased that they got an increase in income tax thresholds, and I congratulate them on securing that concession, but the truth is that they have been sold a pup. They could have had the increase in the threshold they originally wanted if we did not have to pay for the cost of lost growth.

The Budget scorecard on page 40 of the Red Book says that by rights, the Chancellor’s decision ought to bring in an extra £8.2 billion in tax by 2014-15, but the OBR says that only £3.1 billion will actually come through the door, because growth will be depressed so much by the Budget. The Red Book goes on to say—on page 97, table C9—that something like £9 billion in extra taxes and spending cuts are necessary because of this go-slow Budget. In other words, the Government have almost halved the contribution of growth to closing the deficit. It is now quite clear to the House that although the Government may have lost their monetarists, they have certainly not lost their masochists.