Budget Resolutions and Economic Situation

Sammy Wilson Excerpts

Wednesday 18th March 2015 Commons Chamber

[Sammy Wilson (East Antrim) (DUP)]

Let me begin by making it clear that my party has no political axe to grind when it comes to whether one party performs better than the other, although the hon. Member for Reigate (Crispin Blunt) has been on local radio in Northern Ireland telling people to vote for anyone but the DUP. We will not hold that against the Conservative party. We want the United Kingdom to succeed, and we want its economy to succeed. I think it is in the interests of all my constituents that the Government of the day—whoever they happen to be—get the policy right, because that means that people will have jobs, a good standard of living, and good public services.

The Chancellor began his speech today by saying that Britain was now walking tall, and he quoted some impressive figures. We had better growth than the rest of Europe and the other G7 countries, we had lower unemployment, we had rising living standards, and we were selling shares in banks that were bankrupt six years ago. However, while we may be walking tall in some respects, there are still people in the United Kingdom economy who are not walking tall, but are stooped under the burden of parts of the economy which are ailing. The growth that the Chancellor has talked about has not been universal. He cited impressive rates of growth in northern areas, although I note that he did not mention Northern Ireland. As I often used to say to economics students, “Look at the base from which you are starting.” Which areas were hit most by the recession? It was the northern areas, including the north-east and the north-west.

[Mr Redwood]

What Northern Ireland clearly needs is more private sector industry and activity. Does the hon. Gentleman not think that a good way of promoting that would be a much lower rate of corporation tax, which is just what the Government are giving him?

[Sammy Wilson]

I shall come to that point. I am not suggesting that everything that the Chancellor has done is wrong. What I am trying to do is paint a picture of a country in which not every region and not every individual is walking tall. Not only some regions, but some groups of people, are still suffering and stooped under the burden of an ailing economy. Young people in my constituency are suffering as a result of youth unemployment; other people are in the lower wage brackets, or are in jobs in which there is uncertainty or the effect of the economic downturn has depressed wages the most. Those people are not experiencing the improved living standards that the Chancellor has described today.

I welcome the fact that, as of the last year, 542 fewer people are on the dole or on welfare in my constituency. Nearly every week, however, people come and talk to me about the effects of the recession and the way in which it has changed employment practices, Many are uncertain about their incomes. Some are earning the minimum wage, some have jobs that are insecure, and some are not always paid because of the nature of their contracts. The Chancellor has said today that the minimum wage will be lifted and that some people will be lifted out of taxation; nevertheless, that has to be set against the fact that, for many people, those gains by Government action are depressed by employment practices that are becoming more prevalent in parts of the economy. Banks may be selling shares, but some of that growth and improvement—this is certainly the case in Northern Ireland—is being achieved by banks quickly foreclosing on those to whom they recklessly lent and by suppressing businesses instead of giving them the chance to grow.

Although the economy may be walking tall in the Chancellor’s eyes, there are many obstacles along the road that could cause us yet to stumble. I hope we avoid them, but let us look at some of the information even in the Red Book. Productivity growth is weak, which of course makes it difficult for real living standards to increase—if productivity does not increase, there is not the same chance for wage increases. Exports have not been growing in the way that the Government anticipated; indeed, the fact that the balance of payments deficit is 6% of GDP will have a deflating impact on the economy. Despite what the Chancellor has said, his own figures show that he is still dependent for future growth primarily on consumer spending. In other words, we are still dependent on people taking on the very debt that we have said brought about some of the problems we are now experiencing.

At the same time, growth in investment is weak. Growth in private sector investment is going to go up. That is quite right; however, according to the OBR forecasts, over the period of the next Budget, public sector infrastructure investment will be reduced by 17% as a percentage of GDP. That is one of the problems I have with the current policy. While I understand and, in fact, probably have more sympathy with the arguments put by Government Members—about getting the deficit down and making sure that we do not have huge debt interest, that we have confidence in money markets and that we do not have to pay more for the debt we undertake—there are ways that the Government can stimulate the economy. One way that can be done is through infrastructure investment.

I cannot understand why the money markets are more confident about lending us money to pay for welfare benefits than they are about lending it to pay for infrastructure development. There have been infrastructure developments in my constituency, such as the new road from Carrickfergus to Belfast. The improved travel times have led to investment by companies already in the town, which was isolated because of the difficult roads. The return to the Northern Ireland economy from the Titanic project in Belfast, with £90 million of investment and the return in tourist numbers—nearly 1 million in the first year and a half, with the impact that has on local pubs, hotels, restaurants and so on—has been terrific. At a time when we need to stimulate the economy, I cannot understand why the Government are planning to reduce infrastructure investment, which could produce real returns.

[Jim Shannon (Strangford) (DUP)]

One way of helping, which was announced by the Chancellor today, is the plan for farmers to spread their profits and losses over five years. As my hon. Friend will know, in Northern Ireland the dairy industry in particular is having a difficult time. It had to reinvest because of the EU regulations on slurry retention and disposal and also deal with a clear problem with the price of milk. The Chancellor’s announcement will enable the farming industry at least to balance its books over a five-year period. Does my hon. Friend welcome that as a way forward for the farming industry in Northern Ireland and for those in my constituency and, indeed, his own?

[Sammy Wilson]

I do not want to be churlish about this Budget, because there are a number of things—my hon. Friend has led me on to them—that I welcome. Given the way that farming income changes, it is important that farmers should have the ability to look at their income and spread their profits and losses, and the tax they pay on them, over a five-year period rather than a two-year period. I welcome the announcement of a requirement to have a universal service obligation for broadband, although I see that there is no timing for it, so maybe the Minister can give us some indication of that. I know that in my constituency smaller businesses that want to set up in rural areas are held back because they do not have that easy means of communication.

[Ms Margaret Ritchie (South Down) (SDLP)]

The hon. Gentleman is making a compelling argument about the need for investment in infrastructure, part of which is this whole area of investment in broadband. Does he agree not only that the time scale to be specified is an important consideration, but that we have to see geographical locations? He, like me, will have talked to constituents, particularly those in rural areas, who cannot get access for topographical reasons.

[Sammy Wilson]

Hopefully, a universal service obligation will mean exactly that and the investment in the infrastructure will include all parts, regardless of how difficult they are—I notice that one of the things that will help is satellite broadband where fixed line broadband cannot be used.

I also welcome the Government’s promise to improve incentives for people to save for the deposit for their first home—especially given the number of young people who come to me looking for ways to get their first home—and to give additional support of up to 20% for those savings. As one who supports the fair fuel campaign and represents a rural constituency where many people do not have the opportunity of using public transport, I also welcome today’s announcements on fuel duty.

I suppose the fears we have for the future, especially in Northern Ireland, are these. I welcome the fact that the Government have made available to us the devolution of corporation tax and the impact that I believe it can have on our economy. Nevertheless, as we seek to rebalance the economy, that must not be counterbalanced by serious public sector expenditure cuts, especially for an area that is still dependent on the public sector. It must not be offset by huge cuts in infrastructure. We have already suffered a 40% reduction in public infrastructure investment in Northern Ireland, with devastating effects on the ability to deliver on many of the things that we wanted to deliver on. I hope that the optimism that the Chancellor has expressed today comes to fruition, but I believe there are obstacles. They are highlighted in the Red Book and in the speech today. Some of them are in the Government’s control and some are outside it. I hope we will walk tall and not find that there are many people and many areas of the United Kingdom still stooped under an economic policy that is not doing its best for Britain.