Budget Resolutions

Stephen Hammond Excerpts

Monday 1st November 2021 Commons Chamber

[Stephen Hammond (Wimbledon) (Con)]

In essence, this Budget contains three themes. The first is restarting the process to ensure that our public finances are put back on a sound footing. Therefore, the two new fiscal rules that underline that public sector net debt as a percentage of GDP must be falling and that the state must borrow only to invest in our future growth and prosperity, with everyday spending paid for by taxation, are undoubtedly correct. May I urge my right hon. Friend, the Chief Secretary to the Treasury not to follow the example of the previous Labour Administration in abandoning rules when they were inconvenient.

The second point is that we are here to deliver stronger public services. As a former Health Minister, I welcome the 40 new hospitals, particularly the plans that could see the refurbishment of St Helier Hospital—those plans are in the Treasury waiting to be rubber-stamped. I also welcome and applaud the changes to business rate revaluation and the new business rates relief, which, undoubtedly, will help a number of businesses in my constituency.

As COP26 starts today, one can only applaud the ambitious net zero strategy, the issuance of green bonds and the incentives for renewable growth. I have long campaigned for the changes that will allow pension funds to invest in long-term projects. All of that is welcome as is the new investment in public services. As my right hon. Friend, the Secretary of State for Levelling Up, Housing and Communities said, it is not only how much we spend, but how we spend it and how we pay for it. It is key, therefore, that the Government do not, in their quest to work out how to pay for investment, become boxed in with the false choice of higher taxes or higher debt. Higher debt leaves the economy open to the ravages of inflation and higher interest rate costs, which only hit the poorest in our society. With experts at the moment predicting inflation to be 4% at the end of the year and possibly rising to 7% next year, any headroom that the Chancellor has created to invest more in public services will be eaten up by debt service payments. Therefore, as my right hon. Friend said earlier, we must attack inflation.

The choice now surely is for us to go for faster and more sustainable growth. Therefore, the third theme in the Budget was the Government starting to support all of those factors that can drive higher economic growth. We must not be left with a low- growth, stagflationary economy. I particularly welcome the tax relief for creative industries, more generous investment in economic infrastructure, and spending on research and development. However, the Government do not have the monopoly on wisdom in those areas and, particularly in the areas of infrastructure and skills, we should be much more open to using the innovation, the initiative and the help that the private sector can provide,

Beyond the measures that were announced in the Budget, may I say that, if we really want to achieve growth, we need to make sure that business succeeds. In terms of regulation, I urge those on the Treasury Front Bench to consider recommitting to the one in, two out —in fact one in, three out—rule. That would send the message to business that this is a Government who have changed their philosophy and mantra from eff business to love business, for we need to love business if we are to grow our way in the post-covid recovery.

Finally, let me say this to those on the Front Bench. Just as my hon. Friend the Member for Southampton, Itchen (Royston Smith) said, levelling up must not be about just geography; it must be about opportunity. Please can we ensure that we do not create a left-out London? Let us not forget that levelling up in one area must not mean levelling down in another, and I hope that the Budget will support that.