Budget Resolutions

Mike Amesbury Excerpts

1st reading: House of Commons
Tuesday 28th November 2017 Commons Chamber

[Mr Clarke]

In its period of office, the Labour party was so out of control and so wrong in its reaction to events that early on it almost started to repay the national debt at the time of the dotcom boom, which boosted tax revenues to an extraordinary extent. The Labour Government found that their tax revenues had been boosted for reasons that they did not properly analyse, and they just carried on borrowing on top of that. The figures looked quite respectable until suddenly the floor fell away. There was the credit crunch. Down went the tax revenues. They were left exposed, with an accumulation of errors that led to the soaring deficit and the soaring debt that are a burden on us now and will be a burden for our children.

[Mike Amesbury (Weaver Vale) (Lab)]

rose—

[Mr Clarke]

No. I said that I am not going to re-fight the politics of the 2000s and I am not.

This was a strong and sober Budget that I am glad to welcome, just as I welcome the industrial strategy of my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy. It was not dramatic. Some Budgets have plenty of glittering prizes and dramatic changes. This was not exactly a non-event, but it contained quiet, small and valuable measures. That was what we needed. Indeed, it was a sign that the Chancellor of the Exchequer resisted some of the ridiculous lobbying he faced from all sides of the public sector and some of the ridiculous advice he was getting from those who wanted him to buy political popularity or to believe that reckless spending can solve all economic problems. This was the Budget of a competent Chancellor of the kind that this country very much needs at this difficult time.

Luckily for the Chancellor, the background to the Budget was made a little more gloomy by the OBR’s choosing this Budget to change the forecasts that it had, unfortunately, got wrong, and most people did not realise it. There were not many people who pointed out at the time that the OBR was going to be wrong, but the OBR took on a more sensible productivity projection, which gives us considerable problems for the years ahead. The Chancellor has also delivered a Budget at a time when growth has slowed because of the initial impact of the Brexit vote: devaluation and the effect of that on consumer demand.

The background is also one in which monetary policy is not of much assistance. Because of the actions the independent Bank of England had to take after the crisis, we are still being sustained by the aftermath of quantitative easing and quite artificially low interest rates, with the Governor having little opportunity to move rapidly to get back to something like normality. Those interest rates are actually having a distorting effect on some aspects of the markets inside this country. Consumer borrowing is rising to worrying levels and we are now beginning to see demand ease because of the effect of inflation on prices and on the ordinary customer, so it was hardly the kind of Budget that one would envy the Chancellor’s being faced with giving. He faces a lot of problems, and he had also to deal with the uncertainty over the next two or three years.

Uncertainty extends beyond our domestic obsessions: there is great uncertainty globally. We could be threatened if oil prices continue to rise—that has had a dramatic effect on our economy in the past. We are currently being helped by rapid growth in some of our most important markets. The US and eurozone economies are growing at strong rates, and they are important markets to us, particularly the second. Both look fragile, though, and I do not think anybody would guarantee that that growth is going to be sustained for the next two or three years.

The Chancellor and the Government must be careful because, quite plainly and indisputably, the reality is that we do not yet know what form our exit from the European Union will take—this is not the day for debating that—and we do not know what kind of trading deal we will have in a couple of years. As the Governor of the Bank of England confirmed yesterday, if, by mistake, we have a hard Brexit, or a deal-free Brexit—I am talking about mistakes on both sides of the channel because no sensible person would want that —it will be quite a serious shock to the economy of the western world and to this country in particular. Therefore, a prudent Budget was what was required.

Nevertheless, the Chancellor was able to relax fiscal discipline a little—it was rather more than one expected, but he did not lose control. He resisted all the lobbies that were piling in from every public service, with some really quite distinguished public servants giving dramatic descriptions, as they quite often do before a Budget, of the effect on their services. Tens, if not hundreds, of billions will be put in. He was able to ease some of the financial pressures on the national health service within a reasonable level. He rightly found some resources for housing, because we have a dysfunctional housing market. However, he would have been extremely reckless and irresponsible had he gone any further than the slight fiscal easing that he carried out.

How the Chancellor must have wished to give the traditional first Budget of a new Parliament. A Chancellor facing a new Parliament with a decent parliamentary majority does not set out to do a popular Budget— they do the tough and difficult things. One judges a Budget not by whether it makes good headlines the next week and whether everybody is getting very excited about it, but by its impact on the performance of the British economy and on the daily lives of its citizens in two or three years. Had we had a reasonable majority, the temptation would have been to take some tough and necessary decisions, which would have made it easier to shift into other areas. One day, we will stop a fuel tax freeze. One day, we will address the anomaly whereby self-employed people—if they can get themselves so categorised—pay far less in taxation than people in employment doing similar jobs. However, the idea that we can have a majority for either of those measures in this particular Parliament is, regrettably, an illusion.

Dare I say it, but one day, someone will address some of the happy gifts that I receive from the Government as a man past the ordinary retirement age still in full-time work, earning rather more than the national average income? I have just received my tax-free, cash present before Christmas, with which Mr Gordon Brown tried to buy my vote, and the winter fuel benefit. I get my free bus pass of course. I am receiving a retirement pension, which is protected by the triple lock, so that part of my income is rising much faster than that of most of the people I know. When it comes to paying taxation on my salary, which we all receive in this House, I pay less taxation than most people sitting in this Chamber because I pay absolutely no national insurance. Now that is very nice. If I could remember which party gave my generation all those bribes, I would probably vote for the one that gave me most of them, but I cannot for the life of me remember who put them in various Budgets over the years. I could go on.

There is a serious point. Before we all start making reckless promises for—dare I say it?—the next election that absolutely nothing of that kind will be touched by a future Government, we should remember that there are younger people who are in a less fortunate position than I am who are paying taxation to pay for all that and that there are constraints on the Government who would like to spend some more money—as we all would—on very important public services when the opportunity arises. The generational injustice—to use a rather corny phrase that is now very fashionable, but it sums up the problem—which exists in these affairs in this country will one day have to be addressed.

We are still able to do some adventurous things. The industrial strategy of the Secretary of State for Business, Energy and Industrial Strategy shows that, looking ahead, the right things are being addressed and the right priorities are being chosen. We are seeking to advance those changes that have to take place in our economy that will give the next generations the best prospect of making this country, once again, one of the most rapidly growing and prosperous nations in the world.

I applaud the priorities that have been chosen. Plainly, we must invest more in infrastructure. However, I add, as we all agree that we should spend more on infrastructure, that we should avoid believing that all infrastructure spending is automatically a good thing for the environment. Successive Governments of the past have gone in for prestige projects or politically useful ones in marginal seats and so on. All of them need to be appraised sensibly with the help of the private sector and a good business case, so that we prioritise in our infrastructure spending those things that actually boost the real economy and manufacturing and services in this country.

I welcome all that has been said about continuing to address the kind of education required for a modern economy and about dealing with the productivity problem, which has baffled most people. We are not the only country that has found that productivity—for some unforeseen and, actually, not totally understood reason—has failed to rise in the aftermath of the crash. I think that the two things to concentrate on are education and skills training. We have to be sure, and I am not sure myself, that we are going to have the right human capital for the kind of economy that we wish to develop. I represent an east midlands seat, and it has to be conceded that it is particularly in the midlands and in the north of the country that we need to get our schools’ education standards up to the norm in the more prosperous areas. We also need to get skills training of the quality required to provide attractive employees in the kind of sectors of the economy that the Business Secretary described.

Skills training is probably the biggest problem facing the country, except perhaps housing. I have been here for a long time—as I am occasionally reminded by Mr Speaker when he is in the Chair—and we have known for decades that this country has a skills problem. Successive attempts have been made to tackle it, and we are still talking about the same things. It is the quality of the skills training and the relevance of the skills training to the local employment market that we still have to get right.

Finally, a big gap that we still have to address is retraining. Most people will not have one career for their whole life. Even people in work will want to improve their skills or their education to prepare themselves for the next step.

Finance (No. 2) Bill

Mike Amesbury Excerpts

2nd reading: House of Commons
Monday 11th December 2017 Commons Chamber

[Bill Grant (Ayr, Carrick and Cumnock) (Con)]

I think it only right for me to support a comparatively brief Finance Bill in a comparatively brief speech.

The Bill translates into action the autumn Budget’s excellent provisions for promoting innovation. As a member of the Select Committee on Science and Technology, I was looking for ways in which the Government would seek to promote technological innovation in the Budget, and I was not disappointed. Research and development expenditure credit has been increased slightly—by 1%, to 12%—boosting corporation tax relief for companies that engage in R and D. Encouraging more private sector investment in R and D in that way is a welcome step forward.

The Bill also doubles the annual limit for individuals investing in companies through the enterprise investment scheme from £1 million to £2 million, as long as any amount above the old £1 million threshold is invested in knowledge-intensive companies. That is another great measure to promote innovation, and we can say the same for the doubling to £10 million per annum of the amount that knowledge-intensive companies can source through the enterprise investment scheme and the venture capital trust scheme.

The Government have set the ambitious target of increasing overall R and D funding to 2.4% of GDP within a decade, and they are on course for an eventual 3% figure. That is an unprecedented investment in the future of the United Kingdom, and it represents the forward thinking that we will need if we are to make the most of the technological revolutions that are to come. These provisions are vital to ensuring that the private sector, which is an essential partner, plays its role in achieving our goals.

Alongside the other commitments made in the Budget—the extra £4.7 billion in R and D funding over the next four years is very welcome, for example—there are provisions in the Bill that constitute a great step forward for innovation. The United Kingdom is no stranger to innovation in many respects, but let me select just one. In 1928 the world’s first true antibiotic, penicillin, was discovered by Sir Alexander Fleming, a Scottish physician, biologist and Nobel prize winner, who was born in Darvel, Ayrshire, in 1881. Penicillin has been described as the most important advance ever made in the history of medicine. We await with interest the next generation of innovation.

However, the Bill does more. Having served as a firefighter for 31 years, I am particularly pleased that the Government will mend the muddle of the Scottish Government, namely their poor judgment in surrendering the VAT exemptions for the Scottish fire service and Police Scotland. The Bill creates a special exemption for Scotland’s police and fire services, which lost their exemption despite the SNP in Holyrood receiving the best advice from many sources. My friend the hon. Member for Glasgow Central (Alison Thewliss) shakes her head, but the simple fact is that the SNP Government will never accept advice from the police force, the fire service, the Convention of Scottish Local Authorities and eminent people in Scotland, because of their arrogance and their relentless desire to pursue their centralisation agenda.

[Mike Amesbury (Weaver Vale) (Lab)]

The Bill does nothing to address the shortfall in firefighters, who are essential to my constituency in Cheshire. Since 2010, the number of full-time equivalents has been cut by 160.

[Bill Grant]

I note what the hon. Gentleman says, but how that local authority spends its money on funding the fire service is a matter for the authority itself.

There are innovations in respect of smoke detectors and sprinkler assessments. The Scottish fire service is going through a similar process. It is undergoing a review, with the possibility of the closure of fire stations. We are moving on with a fresh look, and I hope that fire stations will not close, but there is that risk. Having served for 31 years, I know more than most Members in the Chamber about the work that firefighters do. I hope that we can move forward, and that the pay restraints of recent years will be eased.

With the approach of the new year, I hope that we can all raise a glass, in Scotland and elsewhere in the UK, to support the freezing of the duty on spirits such as whisky and gin, and that we will have a joyous and safe new year and enjoy spirits that are mainly produced in Scotland.

The Bill is good for growth, good for technology and innovation, and good for Scotland and the rest of the United Kingdom. I am delighted to lend it my support.