Budget Resolutions

Stephen Hammond Excerpts

Wednesday 31st October 2018 Commons Chamber

[Stephen Hammond (Wimbledon) (Con)]

It is a pleasure to follow the hon. Member for Coventry South (Mr Cunningham) and to make a short contribution to the debate. I was very lucky to attend one of the best state secondary schools in the country. I was taught by inspirational teachers, and I remember two in particular today. My history teacher said, “Remember that there are myths and rewriting of history.” As I listen to Labour Front Benchers today, I note that their economic history is certainly being rewritten.

I was also reminded of my English teacher, who taught us that the great Shakespearean themes are appearance and reality. For many, the appearance of Wimbledon is that it is a leafy suburb where we play a bit of tennis and not much else happens, but the reality is rather different. Like so many places up and down the country, there will be rejoicing on the high streets of Wimbledon Park, Raynes Park and Motspur Park at the news on business rates. High streets and local high streets are at the heart of our community, whether people live in a suburb such as Wimbledon, a smaller town or a rural area, and this is to be welcomed.

[Faisal Rashid]

Will the hon. Gentleman join me in welcoming the Chancellor’s decision to use the Budget to show his support for Labour’s plan for Government by taking on board our long-standing policy to take action to support ailing high streets?

--- Later in debate ---

[Stephen Hammond]

The Labour party had 13 years to enact support for the high streets; this Government and this Chancellor are doing it. Therefore, I will concentrate on what is happening here and now and not on something that will not happen. Labour has not been elected to Government.

The reality of Wimbledon is also that we are a high-performing, small, high-tech, entrepreneurial, start-up suburb, and there is much in this Budget that will be extraordinarily helpful to those firms. The annual increase in the investment allowance will undoubtedly start to provide the certainty and encouragement that businesses need. The commitment to reviewing the taxation of intangible fixed assets and the reduction in the capital allowances special rate are going to start to stimulate the investment that this economy needs, has seen and will continue to see.

Many high-tech businesses are mobile. This means that for many, the choice of where people are located is not just between Wimbledon and anywhere in the UK, but between the UK and anywhere else in the world. A Budget that supports digital infrastructure and high-tech companies is to be welcomed. If a modern industrial strategy is to mean anything, it needs to mean that we support the industries of the future as well as the industries of the past. This is what the Budget does.

It is equally invaluable that we have high-quality infrastructure, whether physical or virtual, and measures in the Budget show the Government’s ambition. The extension of the national productivity investment fund provides the bedrock for those improvements to 2023-24. That is combined with extra funding for broadband, the transforming cities fund and the industrial strategy fund, in which there is £100 million for Made Smarter. That is going to transform hugely manufacturing in digital technologies. I am delighted that that has happened, and I was fortunate recently to visit Print City at Manchester Metropolitan University. This will be one of the industries of the future.

The industrial strategy, however, is not just about physical infrastructure; it clearly has to be about building a workforce who are skilled to face that challenge. The Turing scholarships speak to that need, but we also need an economy that has skills for everyone, if we want everyone to benefit from it. Government Front Benchers will know that the revival of apprenticeships since 2010 has been a life-changing opportunity for so many. During Colleges Week two weeks ago, I was fortunate, like many, to visit young people at Merton College who want to participate in IT apprenticeships. Measures to extend incentives for apprenticeships, and to stimulate the opportunities for small companies to play a huge part—particularly those in the small, high-tech entrepreneurial sector, such as those that I mentioned in Wimbledon—and to take more people on and provide them with a quality life experience will transform the opportunities for many.

However, there are a couple of elements that I hope Government Front Benchers will consider in this Budget. Everyone supports extending choice and opportunity for tertiary education. Despite what my right hon. Friend the Member for Haltemprice and Howden (Mr Davis) said, I believe that student loans have facilitated a huge extension of the numbers of people going to university, but can it really be fair to charge an interest rate of 6.1%? It could become a disincentive, notwithstanding the fact that many loans are not paid back, and I urge the Minister to discuss with the Chancellor whether it can be justified. It would send a huge statement to young people going to university.

No one will quibble either with the Chancellor’s claim that everybody should pay the tax they owe, but HMRC’s application of IR35 rules is often retrospective, unresponsive and unfair. Under modern working arrangements, contractors are often working and employed for longer than they used to be. I understand the need for the rules, but there is an issue with the certainty and consistency of their application. I hope that Ministers and HMRC will reconsider whether it is fair.

As the Chancellor and others have acknowledged, risks lie ahead. The OBR’s growth forecast today is 1 percentage point lower than it was in 2015. There can be no other explanation than the uncertainty surrounding Brexit. If we had continued with the level of growth projected in 2015, not only could we have undertaken the largest fiscal loosening in a generation, providing vital investment for public services, but fiscal Phil could have met his fiscal objectives and balanced the books.

I urge the Minister to bear it in mind that no deal means no transition, uncertainty for British business and trade on worse terms. It is crucial, as the OBR has said, that we see no further disruption from Brexit and get a negotiated settlement that allows British business to prosper and the benefits of the Budget to come through for everyone.