Budget Resolutions

Richard Quigley Excerpts

Wednesday 6th November 2024 Commons Chamber

[Danny Kruger (East Wiltshire) (Con)]

I start by congratulating my hon. Friend the Member for Arundel and South Downs (Andrew Griffith) on his role as shadow Secretary of State. I know what a distinguished career he has had in business and how eminently qualified he is for this role. I also enjoyed listening to the Secretary of State; I know he is a very intelligent man and I know by reputation what a decent man he is, but while I was sitting in the Chamber I looked up on Wikipedia what his business experience is and what qualifies him for his role. I am sorry to report that he has about as much business experience as I do, which is precisely none.

I spent my career before my election working in Parliament and in the charity sector—you could mistake me for a Labour MP, Madam Deputy Speaker; I am almost indistinguishable from them and easily mistaken for one. However, I will do my best to disabuse them of that false impression by saying what a very shameful thing it is that the Labour party allowed the public to be so misled in the run-up to the last election. Labour promised not to raise taxes, not to increase borrowing or to change the borrowing rules and certainly not to impose inheritance tax on family farms. All those things they have done in this Budget, and it is a shameful thing.

Leaving aside whether these measures are good or bad for the country, leaving aside the erroneous idea that suddenly Labour understood the public finances after they got into government, when they did not understand them before—even though before the party got into government it said it knew exactly what was in the public finances, and of course it did, because that is what the OBR enables—the fact is that Labour understandably stressed in the run-up to the election that they were standing on a platform of probity, integrity and trust. Those were the words used repeatedly in their election campaigns, and the public responded to that.

In so far as it is possible to say that Labour won public support at the election—of course it did not really; we just lost it—it was on the grounds that—[Interruption.] Labour Members ask why we lost it. We lost it because the public could not trust us and they did not think we had integrity. I know that. I am not stupid. We understand what the public thought and I am not going to disabuse them, but Labour promised to be different, and in this Budget they have absolutely broken their promises on integrity and trust. This is a day of shame for the party after what they have done with this Budget.

In a less partisan spirit, there is much to critique about the economy that the Labour party inherited when it came into government. I recognise that there were things wrong with our economy and deep structural problems. They go back decades—a lot longer than 14 years. In so far as it is possible to critique the Conservative party for failures, those happened for very understandable reasons—not least because of the deficit and the broken economy that we had inherited 14 years previously, as well as other events that took place during our time in power. Our failure was that we did not fix those fundamental structural problems with the economy that we inherited. Those problems were to do with a high-tax, high-borrowing economy that had high levels of public debt caused by high welfare, high and preventable health spending, high rates of private debt, low productivity and low wages. Those are the underlying structural realities of the British economy going back decades; they are the reality of this century so far. It is therefore right that the Chancellor talks often about fixing the foundations. I welcome that because it is absolutely the right framework within which to approach the challenge that the new Government faces on the economy.

The problem is that the Government are leaning into the broken model that we have. They are further damaging the foundations of our economy, which need to be fixed, by pursuing more borrowing, more tax and spend and, as my hon. Friend the Member for Arundel and South Downs said from the Front Bench a little while ago, a plan that will not lead to greater growth in the economy over this Parliament, with only minuscule improvements if the forecasts are correct.

Nevertheless, in the spirit of cross-party consensus, let me hope that we can fix the foundations of the economy, because we do need to fix them. What are those foundations? Classically understood, the foundations of prosperity—the foundations of any economy—are land, labour and capital. Let me look at each briefly in turn.

The fundamental reality of our land economy is the planning system. Work done in the think-tank world by Southwood, Hughes and Bowman called “Foundations” —that is absolutely the right framing—shows that it is impossible to build things in this country, to build them quickly and to build them in the right places. Yes, we need new housing urgently, and I recognise and applaud the Government’s commitment on that, but their approach is entirely wrong. They propose to build houses where they are not needed and not wanted—on our green fields—instead of where they are urgently needed and very much wanted, which is in our cities.

What we need all across the country, including in rural areas such as the one I represent in east Wiltshire, is more business space. We need space for industrial use, and we need office space. We urgently need to enable our entrepreneurs to create businesses and to grow them in the places where they want to do that. I am very conscious of the challenge we have in Wiltshire with the lack of affordable and available land for business.

Like others, I should also quickly mention the absolute crime of proposing to tax family farms and to insist that farmers sell up when farms are passing from one generation to the next. That is another flagrant abuse of trust by this Government.

The second foundation is the labour market. I have not heard the Government address this so far in the Budget or in this Budget debate, but the crucial challenge for our economy is that it is so dependent on high rates of low-skilled migration, which depresses wages, increases welfare and inhibits productivity—crucially, because it disincentivises employers from investing in people, in machinery or in technology that boosts growth and productivity. We have to cap migration and shift spending into the skills economy and into our own people to support them to gain the skills they need in order to do the jobs that need doing.

The third foundation is capital itself. We have heard a lot from Ministers about the need for investment, but what they mean is public investment and public spending. What is fundamentally needed is private investment, but we hear nothing about that and do not see much sign of it. We have a broken capital market. Again, I recognise that a lot of this goes back many years—to well before this Government—but it is difficult for businesses to find the capital they need to start and, crucially, to scale. All the incentives are towards rushing to private equity or to an initial public offering and cashing out as soon as possible. We heard from my hon. Friend the Member for Mid Norfolk (George Freeman) during Prime Minister’s questions earlier about the failure of the London capital market to direct capital into UK businesses. That is a perennial challenge with our finance sector, and it needs addressing.

I echo the point made by the Liberal Democrat spokesman, the hon. Member for St Albans (Daisy Cooper), who was absolutely right about the importance of investing in UK resilience. We need money—crucially, private money—to go into small and medium-sized enterprises and the key growth sectors that will be needed in the turbulent times to come. We need to use the incentives in the tax and regulation systems to direct finance towards British businesses. Crucially, we also need to make British businesses more competitive.

That brings me to the national insurance increase. This huge jobs tax has been imposed on the country with no warning and, in fact, in direct breach of promises made by the Labour party.

[Mr Richard Quigley (Isle of Wight West) (Lab)]

As a business owner who is pleased to see more money in the pockets of not just my team but my customers, can I ask the hon. Member whether he agrees that the Conservatives are very good with their own money, but absolutely appalling with the country’s finances?

[Danny Kruger]

I am delighted to hear that there is, in fact, a businessman on the Labour Benches; that is tremendous, and I hope that he and his business prosper under the Government that he is supporting. The fact is that the OBR itself said in its commentary on the Budget that payroll tax rises are “passed through” into lower wages. The direct effect is that the Government are taxing workers to fund their spending commitments. Those spending commitments go partly towards what they call investment capital projects, but also towards public services’ running costs. As we have heard today, the bulk of that money will be front-loaded at the start of this Parliament, in what one would have thought was direct contravention of good fiscal management. However, more importantly and more worryingly, as we heard, the effect will be largely circular, because the additional spending will simply be taken in tax through the NIC increases.

On behalf of my constituents, I would quickly add that the one spending area where I have particular regrets is the cutting of the transport budget. The Government talk about increasing investment in the public sector, but they have cut the transport budget overall and, particularly to the regret of constituents in Wiltshire, scrapped the plan to upgrade the A303 and divert all that horrendous traffic around Stonehenge. I deeply regret that, and I am sorry that we have yet to hear any plans from the Department for Transport or the Treasury to alleviate our chronic traffic problems.

Let me finish by saying how much I regret the missed opportunities that this Budget represents. We need growth and productivity, which, fundamentally, will come only from the private sector. We need to see more savings in the public sector, so that we can fund proper deficit reduction, but we are not going to see that. We also need meaningful tax cuts, so that we can get the economy going. One area where we urgently need more spending is defence, which is the one area we really have not heard about. When will we hear about the timetable to get to 2.5%?