Budget Resolutions and Economic Situation

Sammy Wilson Excerpts

Wednesday 3rd March 2021 Commons Chamber

[Sammy Wilson (East Antrim) (DUP)]

First, may I welcome the Budget, and welcome the reminder that the Chancellor gave at the very end of his speech that this Budget, and indeed the actions taken by the Government over the past year, demonstrate the value of the Union? We can look at the details in the Budget paper: in Northern Ireland, over a quarter of a million people are having their wages paid through the furlough scheme; 200,000 self-employed people are having their income supported as a result of the scheme; £1.5 billion in loans has been made available to businesses in Northern Ireland; and the Northern Ireland Executive have benefited by over £3 billion in Barnett consequentials, which has enabled them to put in place bespoke schemes in Northern Ireland. For anyone listening, this debate serves as a good reminder that being part of the fifth largest economy in the world has economic benefits, and they are economic benefits which cannot be replaced through any other arrangement.

The second thing I want to say is that I welcome many of the measures in the Budget. It is a difficult time for the Chancellor to present a Budget, but I am glad that many of the measures that we as a party had written and spoken to him about have been reflected in the Budget. The hospitality industry, which is very important in Northern Ireland, lobbied heavily for the 5% VAT rate to be maintained, and I am glad to see that it is being maintained, albeit not for the whole year. I represent a rural constituency, and many of my constituents were concerned about the impact that an increase in fuel duty would have on the cost of living, so I am glad to see that duty has again been frozen. Many businesses looking at their overheads wanted to ensure that they would not be subjected to rates again; the business rates relief is important for them.

However, there are many challenges as to how we pay off the debt, and the Chancellor was upfront about that. He made it clear that some painful choices would have to be made. The Budget papers illustrate how painful some of those choices will be. For example, by freezing the thresholds for income tax, over the next five years the amount of money taken from people across the United Kingdom in income tax will go up by 25%. Some of that will be as a result of the 3% increase in employment, but much of it will be through a stealth increase. As thresholds are not moved up, there are inflationary increases on wages, and people pay more.

Like the last speaker, the right hon. Member for Haltemprice and Howden (Mr Davis), I am worried about the impact of the corporation tax increases. While the Chancellor has indicated that they will not come in immediately, over the period for which we have figures the corporation tax take will increase by 112%. That will have an impact on investment, although we hope that the allowances that have been granted will ensure that some of the profits will be ploughed back.

[Mr David Davis]

Is it not a fact that when you put up corporation tax like that, it does not deliver the arithmetic outcome: you actually get less back and it suppresses your business as well?

--- Later in debate ---

[Sammy Wilson]

That is a real worry. We have had promises that we will become the Singapore of Europe. If we are going to become the Singapore of Europe, it is important that we become a most attractive place for investment, and I believe that low corporation taxes are one of the ways of doing that.

I am also concerned about aviation, which is an important industry for Northern Ireland because of our limited links with the rest of the UK and the importance of international links for Northern Ireland, which is an exporting area. There was no specific mention of the aviation industry today, but I note that, even in the midst of the crisis the aviation industry is facing, the take from air passenger duty is going to go up by 50% over the next year, and by 300% over the period of the Budget figures. If the Chancellor is really aware of the difficulties being faced by the aviation industry, he needs to look again at the whole area of air passenger duty and at how we improve connectivity and improve, sustain and support that industry, which has been one of the hardest hit, after hospitality, by the coronavirus restrictions.

A point I want to make in conclusion is that there are opportunities for tax increases that will not actually hurt businesses or individuals in the United Kingdom. As a result of Brexit, we now have the opportunity to tackle those people who have been avoiding taxes wholesale. I am thinking of the Amazons and the Googles, who use the Irish Republic as a place where they can locate and take all their profits to. They load all their costs into GB and the United Kingdom and then avoid our taxes. I believe that there are important opportunities that the Chancellor needs to take. I am disappointed that, even with the announcement of additional inspections for tax fraud, the amount is so small. We do not just need new inspectors; we need new policies, and we should be getting on with that. But all in all, I think that many people in Northern Ireland will recognise this as a good Budget for the Union, a good Budget for individuals and a good Budget for recovery.