Budget Resolutions and Economic Situation

Mel Stride Excerpts

Wednesday 20th March 2013 Commons Chamber

[Angela Smith (Penistone and Stocksbridge) (Lab)]

It is a pleasure to follow the hon. Member for Dover (Charlie Elphicke).

We heard a lot in today’s Budget statement about the “aspiration nation”, but back in 2010 we were told that we could judge the Chancellor by his record and his economic tests. I agree with the Chancellor: we should judge him by his own economic tests, especially now that he has been in his job for three long years. Back in 2010, he told us that he would ensure macro-economic stability by maintaining the UK’s triple A rating. Well, we all know what happened to that, with Moody’s downgrading the Government’s status last month. Back in 2010, he also told us that he would rebalance the economy, creating the conditions for higher exports. A quick look at the statistics shows exports falling in monetary terms and the balance of trade deficit increasing as a percentage of GDP. Quite clearly the UK’s trade with the rest of the world is no success story, despite the 25% devaluation of sterling.

Another promise was that the Chancellor would get people working and reduce youth unemployment. Unfortunately for the blighted lives of the young, he has completely failed on that, too. There are now almost 75,000 extra young people out of work compared with 2010. Worse still, although the Government make a virtue out of the fact that overall unemployment remains static, they need to consider the fact that, without growth, it means that more people are creating less wealth and the country is becoming less productive.

[Mel Stride (Central Devon) (Con)]

The hon. Lady is quite right to focus on employment. Will she congratulate the Government on arriving at a position where we now have around 30 million people in employment, which is the largest number on record?

[Angela Smith]

But the country is becoming less productive. In fact, productivity has declined by 2.4% over the last year, storing up massive problems for the future.

On borrowing, the Chancellor told us that national debt would be falling as a percentage of GDP by 2015-16 and that he would bring down the deficit. It is no secret now that he will miss the first target by a mile, with the OBR saying that debt will not start falling as a share of GDP until at least 2017-18. As for borrowing, it was 6.6% higher for the first 10 months of the 2012-13 financial year than for the same period in 2011-12.

--- Later in debate ---

[Sir Tony Baldry]

I think that we are making very good progress in reducing the burdens on businesses. I hope that my hon. Friend will applaud that, because I believe that it will enhance the UK’s competitiveness.

[Mel Stride]

May I point out, in a slight rejoinder to that last intervention and to be fair to the Chancellor, that corporation tax is 40% in the United States, 31% in France and 29% in Germany? I think that the fact that it is heading down towards 20% represents quite an achievement.

[Sir Tony Baldry]

I have learned over the years not to spend too long “rejoinding” to my hon. Friend the Member for Harwich and North Essex (Mr Jenkin). The whole House knows that he is generally trying to tease. When we can get him on message, the Chancellor will be doing really well.

I welcome the fact that the Chancellor is fast-tracking existing plans to raise the personal allowance of taxable income to £10,000, and that that will now happen next year. It means that 2 million of the lowest earners will not pay tax once the target has been reached, and that is good news for all our lower-paid constituents.

I welcome the scrapping of the fuel duty rise that was scheduled for the autumn, Pump prices will now be 13p per litre lower than they would have been if Labour’s plans had been implemented. I think everyone acknowledges that, while the Chancellor needs to raise some revenue duty, fuel duty is a “tax on everything”, and imposes a significant burden on small business owners and rural families. This is a welcome move for everyone.

I welcome the fact that the Chancellor has scrapped the beer duty escalator which would have increased the price of a pint of beer by 3p next month, and is cutting beer duty by a further 1p. That means that beer will be 4p a pint cheaper than it would have been following the implementation of Labour’s plans. It is excellent news for every village and community pub in my constituency, it is good news for brewers such as Hook Norton, and it is good news for beer drinkers.

We should bear in mind that—quite rightly—the richest 20% in the nation are making the greatest contribution to budget deficit reduction. Indeed, in every year of the current Parliament, the richest will bear a larger share of our nation’s tax revenues than they did in any one of the 13 years of the last Labour Government. So the Chancellor is ensuring that fairness is at the heart of this Budget.

This Budget is intended to help people who want to work hard and to get on. It will rightly continue the painstaking work of getting right what went so badly wrong in the British economy. Obviously, everyone is frustrated that that is taking longer than any of us hoped. Although there are no easy answers, I think every fair-minded person would acknowledge that we are making progress and that this Budget will help to keep Britain on the right tracks.