Budget Resolutions and Economic Situation

Lord Elliott of Ballinamallard Excerpts

Thursday 9th July 2015 Commons Chamber

[Tom Elliott (Fermanagh and South Tyrone) (UUP)]

It is a privilege to be able to speak in the Budget debate. It would be remiss of me not to accept that a number of good points have been made today and I do not want to demean them. One point clearly relates to the Ulster Unionist party policy on the living wage, which the Conservatives have adopted. That will be extremely helpful, but I have concerns about how it will be implemented. There needs to be support for employers and businesses along the way, particularly small and medium-sized businesses. It may have the effect of SMEs employing fewer people to meet that living wage, so I hope the Government have a plan in place to bring forward definitive proposals to help those small and medium-sized businesses.

Secondly, I am extremely positive about the reduction in corporation tax. I come from Northern Ireland, to which the Government have helpfully promised to devolve corporation tax. The reduction here will make our 12.5% much more realistic and help make us competitive with our neighbours in the Irish Republic. We have a land border with another EU state, so I welcome the reduction set out in the Budget, which will make it much easier for us to implement our reduction. Thirdly, I also welcome the 2% year-on-year increase in the defence budget, which is helpful and will leave the UK right at the centre of world defence.

A lot of today’s debate has been taken up with tax credits. I note that 164,100 families in Northern Ireland are in receipt of tax credits and that almost 70% of them are working families. In recent months, one of the huge difficulties in our constituencies has concerned the HMRC helplines available to people making inquiries about their tax credits, and that is only going to get worse after the reduction. I therefore appeal to the Government to invest more resources to help constituents who are worried they might lose some or all of their tax credits. It is a worrying time for them. It is difficult even for us, their elected representatives, to get answers. HMRC needs to do a major job of work to provide that assistance and support mechanism. I feel that there is going to be a huge reduction in the tax credit element, which will create particular issues in areas such as Northern Ireland, where we have a lower wage base. These families, many of whom are working, cannot afford to spend up to 60 minutes on the phone waiting for answers to their tax credit queries, but that is what is happening.

I am also concerned about the effect on the Barnett formula and the Northern Ireland Executive budget. The Government will know of the difficulties around the welfare reform proposals in Northern Ireland. I noted in yesterday’s statement the reference to the Stormont House talks. I want to make it clear that there was no agreement around those talks, as we have now realised, because some parties are now reneging on the proposals. We want to ensure that the £90 million agreed for welfare reform, to be taken from other budgets, can be implemented, because it is important for those suffering in our communities, such as the most deprived and the severely disabled. It is important they have the help and support they require, so I am looking to hear from the Government how we can ensure that the people most in need can be assisted.

The Budget is a curate’s egg: there are some good parts, but there are also some difficult issues to deal with, particularly around tax credits.