Budget Resolutions and Economic Situation

Sammy Wilson Excerpts

Wednesday 15th March 2023 Commons Chamber

[Sammy Wilson (East Antrim) (DUP)]

There is much to be welcomed in this Budget, but as we have found time and again, when we delve into the detail after listening to the rosy rhetoric from the Dispatch Box, some of the gloss comes off the picture that has been painted.

Let us look at some of the detail in this Budget. I welcome many of the measures that the Government have indicated, but although they quite rightly say that they want to give people an incentive to get back to work, we find that the personal income tax take over the next two years will be going up by nearly 20% because many people are being dragged into the tax regime—the allowances are not being changed, so they are going into a higher tax bracket. That is hardly an incentive for people to work.

We are told that the Government want to help businesses to invest, so £9 billion will be given in tax allowances to attract investment, yet according to the OBR forecast the increase in corporation tax will be twice as much. The Government want to help small businesses, and there have been announcements about various hon. Members’ high street schemes, yet the take from business rates will increase by 25% over the next two years. Overall tax receipts across the economy will go up by 10% in the next two years, but that is not due to economic growth—in fact, we expect growth to be negative in the first year and to be about 1.8% in the second.

The real tax burden on households, on businesses and on the economy is increasing. The Chancellor made much of the fact that he wants to help firms with energy costs, yet we find that the costs placed on high-energy users by the emissions trading scheme are going up from £1 billion to £6 billion. We already know the result: many businesses in energy-intensive industries are simply going overseas.

The Government cannot tax their way to growth. When we look at the rhetoric and then look at the detail, we find that rather than being a Budget for growth, this is a Budget that will impede growth. If we are to finance public services, get our debt down and finance our debt, and if we are to make people better off, we have to grow the economy, so let us look at the detail before we give a blanket welcome to this Budget.

I happen to belong to a party that believes that low taxation is the best way of growing an economy. It is right that we allow people and businesses to spend their money as they see fit and make the wise decisions that they believe will suit them, rather than the state making those decisions where that can be avoided. Of course, we have to spend money on essential services; for example, at this time of geopolitical turbulence in Ukraine and other parts of the world, I support the increase in defence spending. I think it is right that a country is prepared to defend itself and has the ability to do so.

As a supporter of FairFuelUK, I am pleased that the Chancellor has taken the wise decision to freeze fuel duty again. It is a way of reducing inflation and a way of helping small businesses and consumers who are finding that the increase in the cost of living is hurting their pockets, and, of course, it helps to reduce costs in places such as Northern Ireland which are heavily dependent on supplies being delivered by, for instance, lorries.

I agreed with what was said by the right hon. Member for North East Hampshire (Mr Jayawardena) about the childcare proposals. They will help, and no doubt they will be welcomed by many childcare providers and users, but I know from my experience in Northern Ireland that there are many places where it is not possible to buy in childcare from the bodies that have been set up. In many cases the allowance does not cover the cost, and families find themselves still out of pocket. There is not enough flexibility when the Government finance this, because people are relying on there being a network in the local area.

[Carla Lockhart (Upper Bann) (DUP)]

The proposals are certainly welcome for England, but would it not have been more sensible to introduce a tax-free allowance increase to help families throughout the United Kingdom with children older than between three and five? Childcare does not stop at the age of five.

[Sammy Wilson]

As the hon. Member for North East Hampshire said, a tax-free allowance provides much more flexibility in the system, and I agree that that would have been a better way of dealing with the issue.

[Claire Hanna (Belfast South) (SDLP)]

Will the right hon. Gentleman give way?

[Sammy Wilson]

I will not give way again, because I have spoken for nearly seven minutes, and I want to make one or two points before I finish my speech.

There are many other measures in the Budget that I want to mention, such as the tax-free zones for industry and the changes in the system of licensing for medicines. Has the Chancellor considered whether those measures can apply to Northern Ireland? Given that, even after the Windsor framework, we are still subject to EU law and EU state aid laws in Northern Ireland, I fear that when we try to apply the measures, we will find that the EU is once again able to interfere in the affairs of the United Kingdom by preventing them from benefiting Northern Ireland as a whole.

I had further points that I wanted to make, but as many other Members want to speak, I will make just one last point. Reductions in VAT for the hospitality sector—this also applies to corporation tax—are very important in Northern Ireland, because we have a land boundary with another country where corporation tax and VAT rates are lower. Without changes in those two measures, we are placed at a competitive disadvantage.

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[Mr Deputy Speaker (Mr Nigel Evans)]

I thank the hon. Lady for giving notice of her point of order. Ministers are encouraged to correct any inadvertently incorrect statements made to the House as quickly as possible. Those on the Treasury Bench will have heard her point of order, and I am sure the Secretary of State will correct any mistakes, if any have occurred.

[Sammy Wilson (East Antrim) (DUP)]

On a point of order, Mr Deputy Speaker. I understand that next Wednesday the Government are to bring forward a statutory instrument to the House in relation to the Stormont brake. Can I ask you to investigate the legislative basis on which such an instrument can be brought forward?

[Mr Deputy Speaker (Mr Nigel Evans)]

I thank the right hon. Member for his point of order and for notice of it. While it is not within the power of the Chair to do that in relation to the tabling of legislation in this House, there will be an opportunity tomorrow in business questions for him to ask the Leader of the House directly what the future business will be and under what auspices that statutory instrument would or could be brought forward. If he is unable to do that tomorrow, he could go to the Journal Office and seek further advice.