Budget Resolutions and Economic Situation

Theresa Villiers Excerpts

Monday 8th March 2021 Commons Chamber

[Theresa Villiers (Chipping Barnet) (Con)]

The Government are delivering the biggest economic intervention in our country’s history, protecting the jobs, businesses and livelihoods of millions of people. It is one of the most comprehensive support schemes anywhere in the world, and of course I warmly welcome the help that it has given to so many of my constituents, but all this comes at a very high cost. The Budget confirms that the Government are due to spend £1,140 billion in this financial year. Borrowing will be £355 billion—some £300 billion more than was forecast in the March 2012 Budget. The perilous state of the economy means that it is not viable or sensible to start the task of repairing the public finances now, but inevitably there will be a day of reckoning—thankfully not today, but it will come. Right now, borrowing costs are at record low levels, but it is not sustainable just to continue to rely on an ever-expanding Bank of England balance sheet. As the economist Liam Halligan put it, this kind of funding is a stop-gap, not a “miracle cure”. We need strong economic growth to fix the nation’s finances and get us back on our feet, and that means supply-side reform and higher productivity as well as improving skills and infrastructure that requires smarter regulation.

Now that we have taken back control over making our laws in this country, we must do more to ensure that our rules and regulations are pro-competition. That does not mean a race to the bottom—of course we must maintain our high standards—but it does mean crafting our regulation so that it treats businesses equally, including start-ups and innovative disrupters, rather than entrenching advantage for market incumbents. We need a regulatory climate that encourages new entrants to markets rather than placing unnecessary barriers in their way. Regulatory rules are a core part of our economic ecosystem, and the OECD is clear that reforming them in a way that encourages innovation and competition can boost GDP and give consumers more choice and lower prices. Finally, if we are to have a truly roaring ’20s with the strong growth that we need, our regulatory system must keep up with new technology, enabling us to turn the scientific genius to which this country is home into the successful cutting-edge high-growth sectors of the future.