Budget Resolutions and Economic Situation

Peter Bottomley Excerpts

Wednesday 3rd March 2021 Commons Chamber

[Sir Peter Bottomley (Worthing West) (Con)]

It is tempting to say that I will not waste time on the right hon. Member for Ross, Skye and Lochaber (Ian Blackford), but I think I will. He excited us all by the way in which he put down his beaker of water; we were not sure whether it was going to survive his speech, as he got over-excited. We enjoyed what he read, but he did not have time to look at the Office for Budget Responsibility, whose headline reads:

“Budget extends rescue measures, stokes economic recovery, and begins fiscal repair job”.

It continues:

“The economy is set to rebound thanks to rapid vaccine rollout, getting back to its pre-pandemic peak by the middle of next year. Extending rescue measures takes support for households, businesses, and public services to £344 billion. Generous tax incentives for business investment stoke the recovery over the next two years. Then medium-term tax rises and cuts to spending plans all but balance day-to-day spending with revenues and see underlying debt fall relative to national income. But risks remain from the virus, legacy costs for public services, and future interest rates.”

I think that balances what was said by the right hon. Member for Ross, Skye and Lochaber, the leader of the SNP in this House.

I have not had time to read all the Budget documents, but I think I am right in saying that there is no mention of leasehold, commonhold, cladding, cladding loans or ways of coping with the excess property insurance premiums being faced by leaseholders. There has been no attention yet to the Association of Residential Managing Agents, who asked for a scheme to cover the excess costs. With premiums going up by 400% to 600%, action is needed.

May I just interrupt myself to take an opportunity to pay tribute to Canon Jane Sinclair, the first woman rector of St Margaret’s in Parliament Square, who died in January? She was greatly loved in this House. She worked to re-establish the parliamentary links with the Speaker’s Chaplain, and had a reputation for liveliness, humour and effectiveness. I understand that she was once nominated to be the Rotherham businesswoman of the year. We miss her, and send our sympathy to her partner, Gillian Cooper.

Returning to the Budget, I am glad that the Chair of the Treasury Committee, my right hon. Friend the Member for Central Devon (Mel Stride), spoke about the dangers of inflation. The Chancellor will be aware of this. There are two groups who matter a great deal when considering this, besides the question of who can get jobs.

By the way, it would have been kind if the SNP and the Leader of the Opposition had welcomed the news from the Chancellor that the number of people who were out of work did not rise to the levels predicted at the height of the pandemic. This is in part a reflection of Government measures, but in large part because of the way that people buckled down and got on with life as much as they could, and because of the Government’s courage in keeping things such as the construction industry open, which made a great deal of difference to the supply side as well.

Mortgage holders are one group affected by inflation, and the second are the elderly, many of whom are on fixed incomes. Although their incomes during the pandemic may have kept up, in real terms they will drop if inflation returns, so I hope that we do not get to the 2% inflation that is part of the Government’s instructions to the Bank of England.

Let me turn to leaseholders. I believe that, under the coronavirus powers, the Government should put a temporary stop to forfeiture of residential leaseholds. During that time, they ought to make sure that any substitute arrangements do not let the landlord—or freeholder, as it may be—take the whole of the equity in a forfeited lease.

That is scandalous. It is going back to William I in the worst possible feudal way. If a home or a leasehold has to be repossessed, any excess equity should and must in justice go to the person who is losing their home. I hope that officials will take note of that, discuss it among the Government and take action.

As the right hon. Member for Ross, Skye and Lochaber said, we all recognise that the Government have done more to bring some of the self-employed into the support schemes, but it is not enough. I do not want to use all my time reading out all the points made on the website of ExcludedUK, but I do recommend that website to people.

In the same way, in the hospitality sector, I commend the website of CAMRA, the Campaign for Real Ale, which asked for a number of things that the Chancellor has given in whole or in part, and we are grateful to him for that.

I know that motorists will be grateful for the fact that, with the cost of petrol and diesel going up, the Chancellor is not adding to that with extra taxation at the moment. As someone who drinks—I try not to do it when I am driving—my prediction is that the revenues from spirits, wine and beer are likely to go up. I believe that freezing duty rates is therefore a better way to get in extra revenue.

We ought to pay attention to what the tax rate is as well as what the tax take is. This is one of the curiosities of our national economic discussion. My former supervisor Professor Sir James Mirrlees—I was his worst pupil—did a calculation of what he thought the appropriate tax rate was: when he was young, he thought it was around 27%; by the time he got older, he had become a bit more socialist and thought it was around 33%. We are now running at 38%. Both the level of taxation and the rate of taxation deserve better public discussion, and I hope that the Chancellor can encourage forums for doing that.

One of my constituents suggested that the Chancellor should consider having separate tax codes for different key workers, as a way of recognising their contribution. I said, “You will always have a boundary problem, but then you always have a boundary problem, whatever you do in life.”

On one particular matter, my constituents have been my eyes and ears. A couple who ran a hospitality business on a river had to pay high fees to the Environment Agency for the ability to run their business. They do not pay business rates, but the Environment Agency and the Department for Environment, Food and Rural Affairs have not yet managed to discover who can say that they can have a rebate on the licence fees because they have not been able to use their business for most of the past 12 months. Just because someone does not have a shop front, that does not mean that there are not costs that could be waived by the Government or by Government agencies.

I know that many people want to speak in this debate, so I shall finish by making the point that if we can recognise the contributions that people are making in their enterprises, we are more likely to have a hospitality sector in particular in which landladies and landlords, who have put their hearts into their businesses and broken their hearts by throwing away stocks and gallons of beer twice in the past 12 months, will be able to come back into operation. I ask all my constituents not to have a drink on me but to go out and have a drink, whether alcoholic or not, with their friends when they can and put this country back on its feet in respect of our social lives as well as our business lives.