Budget Resolutions

Richard Drax Excerpts

Tuesday 12th March 2024 Commons Chamber

[Richard Drax (South Dorset) (Con)]

I refer the House to my entry in the Register of Members’ Financial Interests.

It is a pleasure to contribute to the Budget debate. Before I talk about a few specific issues, I promised a constituent—a victim of the infected blood scandal—that I would raise the question of compensation if it was not mentioned in the Budget speech. As far as I am aware, it was not, so I ask the Minister to let my constituent know in the wind-ups when compensation will be paid. I understand that the recommendations for that to happen were made 10 months ago, so my constituent and I—and, I am sure, many others—will be grateful for an answer.

I regretfully say that it comes to a pretty pass when a Conservative Government have to plunder the Opposition’s policies in a Budget. I am talking about scrapping the non-dom tax status and extending the windfall tax on oil and gas companies. The latter is especially nonsensical for a number of reasons, not least because we want to reduce our reliance on foreign imports. If I am correct, the tax amounts to about 70%. Which company is going to bid for a licence when it is simply punished for providing the country’s energy? All this when only today the Government announced that they are to build new gas power stations in order to keep the lights on. Net zero is an admirable aim, but it risks impoverishing the country; we need a pragmatic approach to the change.

While I am talking about the country’s essential requirements, let me say that there was also no more money in the Budget for our stretched and depleted armed forces. There was a whisper that defence spending might rise to 2.5% of GDP if and when that was possible, but that is simply not good enough when we live in such dangerous times. I wish we would stop plucking spending targets out of thin air. As I have said before, we should let our three services work out what we need to support and, if necessary, fight alongside NATO; cost it; and then decide what we can afford.

The Chancellor’s key rabbit was a further reduction in national insurance, which has not endeared the Budget to pensioners, who do not pay the tax—although, as my hon. Friend the Member for North West Norfolk (James Wild) said, they do still have the triple lock, which is generous. Instead, pensioners risk paying more tax on income as the threshold at which the higher rate of tax is paid is frozen; freezing thresholds is, in effect, a stealth tax. According to the OBR, which the Government refer to on many occasions, that would see millions of new taxpayers as their income rises above £12,570 a year, nearly 3 million workers being dragged into the higher rate of 40%, and 600,000 taxpayers paying the additional rate of 45% as their income passes £125,140 a year. This is hardly Conservative doctrine.

When I heard the Chancellor speak of the importance of lower taxes and allowing people to keep more of their hard-earned money, I was expecting a bombshell of an announcement during his speech—for example abolishing inheritance tax; lowering income tax, which I would have personally chosen, not national insurance; lowering corporation tax to encourage growth; simplifying the tax system; less state and less regulation; reforming business rates; and curbing many of these bloated quangos, if not scrapping them all together, and returning control to elected Ministers.

With our party staring down the barrel of a gun, it was time to be bold and courageous. I totally accept that the Chancellor is dealing with unprecedented times. No doubt disease, wars, a vast debt and an increasingly unstable word all played a part in his cautious approach, but where have we made the savings? Why do we think—like the Opposition—that the state has all the answers? The key to a successful economy and growth is a thriving private sector, whose taxes pay for the public sector. The more bloated the latter, the more punitive the Government have to be on the wealth creators, the risk takers, the innovators and our very future.

The Budget has its good points, but they are tinkering at the edges. Even the small reduction in property capital gains tax and the tiny rise in the VAT registration threshold will neither ignite the property market nor boost small and medium-sized businesses. After 14 years in this place, I find it remarkable that Labour is quiet on its spending priorities. I ask why, and I fear it is because if Labour wins the election, it will simply endorse ours.

What we needed was crystal-clear blue water from the Budget. Instead, we are pursuing the socialist way and punishing those who earn more by working hard for their families, all to pay for a bigger state that is both unaffordable and runs contrary to every single Conservative value.