Budget Resolutions and Economic Situation

Simon Baynes Excerpts

Tuesday 21st March 2023 Commons Chamber

[Simon Baynes (Clwyd South) (Con)]

I warmly welcome this Budget, and I am pleased that it sets out measures to support the Government’s aim of halving inflation, growing the economy and getting debt falling. According to the OBR’s analysis, the Government will meet those targets in the medium term, which is vital for my constituency and the rest of the UK, to ensure long-term economic health.

Inflation is forecast to fall to 2.9% by the end of 2023—a figure that perhaps has not been drawn out so much from the Budget—and to fall to 0.9% in 2024, before rising again to around 2% for the remainder of the forecast period. Debt is forecast to start falling as a percentage of GDP in the medium term and the Government’s other fiscal target—for public sector net borrowing to total less than 3% of GDP by 2027-28—will also be met.

Given the massive economic turmoil that we have seen around the world, caused by the covid pandemic and Putin’s illegal war in Ukraine, these forecasts represent an impressive stabilisation and improvement in our economic prospects. That stabilisation rests, in great part, on the strong base with which the UK economy entered the covid pandemic. My hon. Friend the Member for South Cambridgeshire (Anthony Browne) has drawn out the figures about how the UK economy was 21% bigger in 2022 than in 2010, when the Conservatives came to power. I want to add to that statistic that since 2010 the UK has grown a quarter faster than Germany, nearly 50% faster than France, more than twice as fast as Spain, three times faster than Japan and 19 times faster than Italy, so this is a strong economic base.

I strongly support the broader policies outlined in the Budget. As a Welsh MP, I hope very much that the Welsh Government will match the Chancellor’s policy to extend 30 hours of childcare a week to working parents of children aged nine months to four years. I also warmly welcome the introduction of reforms to the childcare sector, including changes to the staff-to-child ratio for two-year-olds, from 1:4 to 1:5. Likewise, I hope that measure is adopted by the Welsh Government.

I believe the Chancellor got the balance right in focusing help for business by introducing a £25 billion three-year tax cut for business investment through expensing, rather than maintaining lower corporation tax rates. I speak as the Member of Parliament for Clwyd South, where the many small and medium-sized companies make up the vast majority of the business sector of my constituency. This measure to encourage investment in business will help to improve productivity, which is a key aim within the British economy. I strongly support that measure for the benefit of the economy in Clwyd South.

I also strongly support the measures to help people get back to work, particularly the more vulnerable in our society, ranging from establishing a new universal support programme for disabled people and the long-term sick, to abolishing the work capability assessment and increasing the administrative earnings threshold to 18 hours. These are vital reforms that will help many people in my constituency.

In conclusion, this is a bold and imaginative Budget that will help people across the length and breadth of the UK, and provide strength and stability for the economy after a period of great turbulence and uncertainty. Therefore, the Budget commands my full support.