Budget Resolutions

Tim Loughton Excerpts

Wednesday 27th October 2021 Commons Chamber

[Tim Loughton (East Worthing and Shoreham) (Con)]

I do not envy the Chancellor. I do not think anyone else would have wanted to do today’s Budget, which was delivered in one of the most challenging environments of any Budget for many decades. I congratulate him, therefore, on a very skilful, comprehensive and prudent Budget, and on the priorities that he identified. That was possible only because of the prudent measures taken to support jobs and businesses during the pandemic, which proved to be essential and the right thing to do. It also emphasises how important it is that we avoid, at all costs, going back into a lockdown and taking the economy into reverse. The figure of a 6.5% increase in the economy, which is way ahead of the forecast and our competitors, is stunning and we need to safeguard that at all costs.

In the short time available, I will comment on a few specific things that the Chancellor announced and a couple that he did not. I absolutely welcome the end of the public sector pay freeze. Public servants did a sterling job during the pandemic in particular and I am sure we all want to see them rewarded more. I also welcome the increase in the national living wage to a rate above even that being advertised by the Labour party for security people at its party conference earlier this year.

I welcome the masterstroke on universal credit. I was uncomfortable with the ending of the temporary uplift, but the measure will be a practical help to 2 million families. I pay tribute to my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) who made that possible in the first place. If we go back to the first principles of how he envisaged that universal credit would work in practice, it is about making work pay and about fairness. It is a shame that that was not welcomed by the Opposition.

I welcome the focus on skills and productivity, and everything that has been said about the importance of R&D and investment in science. Again, the pandemic showed us that we have world-class academic and research facilities in this country, and we need to make more of them in future if we are to address the productivity gap from which we have suffered for so long. We must upskill our workforce and wean ourselves off the dependency on importing cheap, temporary labour from the EU and abroad without investing in training and the quality jobs that will keep people there and keep improving jobs.

I share the enthusiasm of my long-standing friend, my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom), for the emphasis on vulnerable children. Extraordinarily, that announcement was heckled by the Opposition. It is the vindication of the campaign that my right hon. Friend has undertaken for many years—many of us have banged the same drum—acknowledging the crucial importance of those first 1,001 days. We have made the case for the social benefits of investing in early years: investing in a strong attachment between a baby or toddler and his or her parents; investing in happy mums—and dads, where possible; and making sure that those children are well supported before school.

The situation has been made worse by the pandemic, with challenges for first-time single mums in particular and babies who could not meet other babies for many months. There has been a lot of focus on mental health problems in schools and school-age solutions—that is absolutely right—but we need to go back to where it begins, at conception. The stat that I have used throughout this campaign is that there is a 99% likelihood that the mothers of 15 or 16-year-olds suffering from some form of depression or low-level mental illness at school suffered themselves from some form of low-level mental illness or depression during or around the time of pregnancy. It is interconnected, so why do we not acknowledge that and invest?

Every year, we spend more than £8 billion on perinatal mental health, often for first-time mums. Every year, we spend £15 billion on child neglect, making a total of £23 billion on getting it wrong for mums and for kids at a crucial stage in their upbringing. Today’s announcement is a recognition by the Chancellor of the financial—not just the social—advantages of investing in children and their parents right at the beginning, and I absolutely praise that. I would point out that there is still a £2 billion shortfall in children’s social care for those children whose parents could not take advantage of that early support for whatever reason and who find themselves in care. That still needs to be addressed, because all the focus, I am afraid, has been on adult social care, but there are a lot of children out there who are missing out.

For those who say, “Sure Start was fine—why don’t you just stick with it?”, I should say that the Government measures are complementary; this is not an either/or. Sure Start had shortcomings, and 15% of the most deprived families in the country did not access it. This is not about bricks and mortar; it is about outcomes. Family hubs are much more flexible, offering all sorts of doorways and access points to those vulnerable families at a time when they need that sort of support, as well as the information to know what support they need, as was well articulated by my right hon. Friend the Member for South Northamptonshire. It is all about much better team-working around the family.

A couple of other things to mention: I raise a glass to the changes in duty on alcohol, particularly on sparkling wine, which helps the English wine industry in particular. I have been drinking English wine since the 1970s, but it was not very good then. Now it is a world-class, quality product of this country that beats French champagne and other competitors hands down.

The literature that is ready to go out from the Labour party makes the criticism that for the Chancellor it is all about reducing the cost of champagne. By 2040, the sparkling wine industry—the English and Welsh wine industry—is predicted to encompass more than 25,000 jobs, produce 40 million bottles and make over £1 billion in sales, a third of that in exports. It is a major industry, and it was a ridiculous anomaly when sparkling wine, with 11% alcohol, was taxed a third more than still wine, typically with 13% to 14% alcohol. I have been badgering Ministers about that anomaly for many years, and at last this Chancellor has put it right; we should celebrate that, rather than be trying to make cheap party points against a very important quality English and Welsh industry. I welcome, too, the measures on draft beer relief and on ciders.

On a different subject, I absolutely endorse the comments of my hon. Friend the Member for Worthing West (Sir Peter Bottomley): please can we taper back up to 0.7%, rather than just have a big leap back up with the problem that all of a sudden we have to spend large amounts on finding new projects, just as we have had to take away large amounts of money on end-early projects which we were previously financing under the 0.7% international development spend?

In closing, I want to mention a couple of things that were not in the Budget. The Labour party has been calling for VAT on energy bills to be scrapped. That of course could only happen now, after Brexit: the irony of that coming from people who have been banging on about the downsides of Brexit is that it is only possible as we can now dictate our own VAT and other tax rates in this country.

As the fuel poverty charity National Energy Action points out, an across-the-board scrapping of VAT is not necessarily the best way to support those most in need of help with rising fuel bills this winter. I ask the Chancellor to look at using the estimated £100 million additional revenue from the VAT receipts on rising energy prices, and perhaps some of the additional £1 billion the Treasury is gaining from the rising carbon tax revenues due to gas price hikes, to concentrate on a winter fuel payment to vulnerable working-age households, providing direct relief to help with energy bills this winter. We also need to be able to help those who are not working families and who will not benefit from the changes to universal credit.

As part of the green revolution, I want to see zero-rated VAT applied to heat pumps and energy efficient measures as well. It is incongruous for a Government who are strongly and effectively pushing the green agenda to be taxing environmental goods when no longer compelled to do so by the EU.

Finally, the hospitality sector is big in coastal constituencies such as mine. Hospitality businesses took a big hit in the lockdown but were helped by schemes such as eat out to help out—again, masterfully produced by my right hon. Friend the Chancellor last year—and helped hugely by the reduction in VAT from 20% to 5%. It has now just gone back up to 12.5% and is due to go back to 20% next April. I welcome the huge help from that 50% reduction in business rates, which is a big factor for many hospitality businesses, but they have taken a big hit already: a £100 billion reduction in income; permanent closures of over 12,000 establishments, including many pubs, as we heard from my hon. Friend the Member for Dudley South (Mike Wood); and 660,000 job losses.

It is great that we are having this business rate relief, but it is only for a year. My constituency’s hospitality businesses—restaurants, pubs and so forth—say, “We know we’re going to be paying higher wages, and we want to be able to pay those higher wages and to upskill our staff. We’re going to need to do that to keep them in the hospitality sector because the pandemic has meant it’s a buyers’ market, and people are going into higher paid jobs and other jobs that are less onerous and do not have such antisocial hours. If we can keep VAT rates low, we can pay those extra wages.”

That is the deal so, after the year when the business rate relief is no longer in place, please can we look at permanent solutions as well to help those businesses to up the pay of their staff in crucial areas of our economy, help improve the quality of those jobs and upskill the people in those jobs? This sector is a major part of our economy, particularly in coastal constituencies like mine.

I greatly welcome the Budget. It contains some very good practical measures that few would have expected after the economic nightmare we have all been through in this pandemic. I congratulate the Chancellor greatly on the Budget, therefore, and hope that just occasionally the Opposition will give credit where credit is due rather than leap on the bandwagon of saying everything this Government are doing is bad. Today’s Budget shows that actually we are getting things back on track, thank goodness.