Amendment of the Law

Richard Drax Excerpts

Wednesday 21st March 2012 Commons Chamber

[Richard Drax (South Dorset) (Con)]

Perhaps it is appropriate that I should follow the right hon. Member for Tottenham (Mr Lammy). He certainly made a thought-provoking speech. I would just make the point that what we need to do, surely, is to create the environment for jobs, so that that large percentage of his constituents, the black population, can get a job. Until we create the right environment for jobs to be created, there will not be jobs for anyone in this country, whatever colour they are.

I congratulate the Chancellor on his Budget, which was delivered in quite trying circumstances. It has been pointed out that a lot of it was leaked before his statement in the Chamber. It has been delivered in circumstances in which, due to Labour’s undoubted profligacy and the world banking collapse—which I accept played a part—there is little room for manoeuvre. There is still less room for manoeuvre because we are constrained to a certain degree, whether we like it or not, by our coalition partners.

I therefore warmly welcome the good news. I welcome the reduction in corporation tax and the higher personal tax allowance. I welcome the reduction in the top rate of income tax from 50p to 45p. I particularly welcome the extra investment in our armed forces, and especially in their accommodation. Having served myself, I well recall the abysmal standard of much of the accommodation in the 1980s. I am also mightily relieved that we have left our beleaguered pension system alone. It would have been madness to tread on that particular nest at the moment. The right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) did so, and we all remember the consequences.

The 50p rate has engendered a lot of heat, and I can understand where that heat is coming from. I remind the House, however, that it was introduced in the dying throes of the Labour Government as a political move. It was, in effect, an elephant trap; it was well laid, politically, and it is a nightmare to climb out of. We had hoped to come into power as a Conservative Government, but that did not happen. We need to be bold, and I wish that we had gone further and reduced the top rate in the emergency Budget, but we did not. Yes, everyone should pay their fair share of tax, but the top 1% in this country already pay 28% of all income tax, and the top half pay 90%. Milking them of their rewards for all their hard work and aspiration will hardly encourage endeavour, and spending the money that we take from them on a bloated, runaway welfare state is sheer madness. This is the politics of envy. The Institute for Fiscal Studies estimates that, by the next election, one in four of us will be paying tax at 40%. Not so long ago, that figure was one in 20.

As Tories, we must remember what we stand for: less state, less red tape, less taxation, less government, less public spending, more enterprise, more wealth creation and more support for business. We remain deeply in the red, thanks in large part to Labour. Public sector debt is still at £1 trillion, and borrowing will be £120 billion this year. We need that

“forensic, relentless focus on growth”

promised by our Prime Minister. We must encourage that. We should not only cut taxes but slash them. We must release business from all its constraints. We often proclaim that we are open for business but, as Willie Walsh writes in The Daily Telegraph today, the Chinese laugh when they hear that.

The Federation of Small Businesses in the south-west came to see me recently, and begged for more help from the Government. Small businesses are struggling with high fuel costs, as other hon. Members have mentioned, and I regret that we cannot go much, much further in cutting fuel taxes. Small businesses are also struggling with high business rates, with a lack of infrastructure and with banks that are refusing to lend. We have heard those stories repeatedly in the House. The national loan guarantee scheme for small businesses that was announced yesterday will provide credit at a lower rate of interest, but access to that credit is as difficult as it has always been. Indeed, the FSB said yesterday that the scheme is not a “game changer”, yet that is exactly what we need now. We need really radical policies. We must be brave; we simply cannot go on tinkering at the edges.

Most of all, we need to cut state spending; many inroads into it have been made, but in my view we have not gone far enough. We need to take the state out of people’s lives. This is a Conservative philosophy, and, I believe, a right one. The public sector as it currently stands is unaffordable.

I regret that we have made changes to child benefit. At whatever level the “cliff edge”, as it has been called, is set, many hard-pressed, hard-working families will be worse off. I heard my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley) saying—on “Newsnight”, if I recall correctly—that he looked at that from every angle some years ago, but could not see how to alter it. What I say, however, is that it is disingenuous to suggest that poorer families were or are subsidised by the better-off, because the better-off pay a higher rate of tax. There must be other ways to give families with children some help—without the unintended consequences. Perhaps a system of tax allowances rather than benefits could be examined.

We must also admit that much of the pressure on public expenditure is ultimately due to immigration. Immigration in this country is at an unacceptably high level, putting huge pressures on this country and her services, and we are struggling to keep our roads and rails going and to provide enough housing. In the longer term, it is unsustainable. A sudden increase in birth rates means, I am told, that we will need 540,000 new primary places by 2018.

Finally, I cannot leave the European Union out of my speech, because it is inflicting a high price on business in this country. We can say a lot here and we can have aspirations here to release our business and let it fly, but we will never get what we want or the jobs and wealth we need to generate until we are free of the red tape from Brussels. Only then can we break free from the shackle of deficit that hangs around our neck. When we have, the important thing to do is to spend only what we earn.