Finance (No. 2) Bill

Sarah Olney Excerpts

2nd reading
Tuesday 13th April 2021 Commons Chamber

[Sarah Olney (Richmond Park) (LD)]

This Bill is a catalogue of hard choices unconfronted, challenges ducked and emergency measures to deal with the pandemic used as a fig leaf for the failure to face up to long-term challenges.

We have heard a great deal in recent months about the Government’s approach to public procurement—how personal friends of Ministers get to jump the queue when contracts are being handed out. We have heard a great deal in the past few days about how friends of the former Prime Minister get preferential access to Treasury officials to make the case for financial support.

In keeping with that theme, the Chancellor presented a Budget for selected beneficiaries. Carefully handpicked groups are going to do well, but it was clearly not a Budget for the nation as a whole. We could have had, for example, a bold move on business rates. Real reform in this area to level the playing field between high street and digital retail has been long overdue. I was delighted to see retail and hospitality reopen across my constituency yesterday and I hope that predictions of a retail boom, funded by savings built up during the pandemic, will materialise to the benefit of our small businesses, but consumer behaviour is changing and that change has been accelerated by the pandemic. What is the long-term future for our town centres? How will our communities thrive without the retail businesses that traditionally provide the heart of our towns?

We need to lower the barriers to entry to retail and other town centre businesses, and invite new entrepreneurs to try new ideas. However, instead of business rates reform or devolution of power to local authorities, which could have allowed for real change across the whole country, a select few high streets, mostly in Tory-supporting constituencies, get a cash bung. What is the long-term plan for the retail sector and for small businesses in our high streets? These businesses support our communities, providing flexible and well-paid jobs. They support entrepreneurship at all levels and in particular provide opportunities for women.

Small businesses of all kinds will have breathed a sigh of relief at the Government’s announcement that they plan to continue furlough and business rates holidays until the end of September, but what will happen then? I worry that there will be a huge spike in unemployment when furlough ends and I see nothing in the Budget that will address that. The Liberal Democrats are calling for the Government to cut national insurance contributions for small businesses in order to boost employment in this sector.

We have also seen very little action for those groups that have been excluded from financial support during the pandemic. What frustrates me is that so many of the sectors that have been hardest hit are the very same that we should be investing in as key strategic industries that can provide future growth for the economy as we move out of the pandemic. In particular, the cultural sector, the travel sector and the live events and exhibitions sector have been left scrabbling for support, with many of their contractors and freelancers excluded from help. The continuing failure of the Government to help those individuals is completely baffling. When the cultural sector is reopened, it will struggle to find skilled staff as so many will have been forced out of the sector by financial necessity and will find it extremely difficult to come back.

I would like to take this opportunity to mention again that many people who were excluded from help were contractors moving between pay-as-you-earn contracts, which they were forced to take on because of the IR35 regulations that the Government are still insisting on introducing. Had they been able to continue as self-employed, they might have qualified for help.

The biggest opportunity missed, however, is the fight against climate change. We have heard many warm words on global warming from this Government. They appear to have grasped the magnitude and immediacy of the crisis we face, yet they have no plans for action. The 10-point plan for a green industrial revolution, released before Christmas, announced a wide range of aspirations, but no concrete policies or spending commitments. The Budget continues that trend. Liberal Democrats welcome the new direction to the Bank of England to take account of climate change, but that is a small drop in an ever-deepening ocean of what needs to happen if we are to take the necessary action.

The Government have shown with this Budget and Finance Bill that they are not serious about achieving net zero and creating a green recovery. They have gone as far as scrapping the industrial strategy, leaving businesses in the dark about how the UK will tackle climate change and achieve green growth in the years to come. The Budget promised to re-establish a new infrastructure bank, which merely replaces the green investment bank established by the Liberal Democrats in 2010 and sold off by the Tories in 2016. There was nothing on extending the green homes grant scheme, which could have tackled fuel poverty and cut energy bills for millions of homeowners while cutting emissions—and since then the Government have scrapped the scheme altogether. The Government even failed to cut VAT on home insulation products to encourage people to invest in their home themselves. There was nothing on increasing incentives on electric vehicles, including VAT cuts or new grants. There was nothing on investing in more public transport or new walking and cycling infrastructure. Liberal Democrats wanted a Budget to kickstart the green recovery, but the Conservatives have failed to deliver. We must see a bold green recovery plan that will invest £150 billion in the next three years to tackle climate change, create new green jobs and help us to grow our way out of this crisis.

What is the Chancellor’s plan for investing in sectors that will create jobs? It is freeports in selected sites, yet there is little evidence that they increase economic activity rather than displace it. Again, we see the benefits concentrated in preferred areas of the country, rather than a strategy for the country as a whole. The one advantage of freeports, of course, is that they can avoid the customs duties and paperwork currently creating such a barrier to trading, thanks to the Government’s terrible deal with the EU. I find it extraordinary that the Chancellor has made no mention of how he plans to offset the OBR’s projected 4% hit to the UK’s GDP as a result of leaving the EU. He is bringing forward planned economic activity or concentrating it in specific areas of the country, rather than investing in new sources of wealth and future jobs. This Budget ignores the real needs of our economy, both for the immediate challenges of the pandemic and for its long-term future.