Budget Resolutions and Economic Situation

Tony Baldry Excerpts

Wednesday 20th March 2013 Commons Chamber

[Sir Tony Baldry (Banbury) (Con)]

I welcome the fact that this Budget is a continuation of this Chancellor’s five-year plan and not a rupture. I welcome the fact that the Chancellor has succeeded in reducing public spending, whereas total state spending under Labour rose by an extraordinary 60%. I welcome the fact that, notwithstanding the broader economic challenges, whatever way one looks at the statistics, they tell us that the private sector under this Government has been steadily creating new jobs as fast—indeed, faster—than the public sector has been shedding them. I welcome the fact that under this Government the deficit is down by a third and businesses have created more than 1.25 million new jobs.

I welcome the proposals in the Budget to enhance competitiveness. There is little point in solving today’s problem if one is not preparing for tomorrow’s future. We all have to recognise that Britain is in a global race with countries such as China, Brazil and India and that we have to become more competitive if we wish to remain ahead and among the leaders in the global race—a point very well made in Lord Heseltine’s report “No Stone Unturned”. I welcome the Government’s response to his proposals and his report, which made far-reaching recommendations for stimulating economic growth and engaging the private sector and the spirit of enterprise in the great cities and regions of our countries. As Lord Heseltine put it in the foreword to his report:

“Huge infrastructure demands and hungry institutional funds—link them. Excellence in industry, commerce, academia—extend it. England’s cities pulsing with energy—unleash it.”

I think we would all support that.

May I point out to the House that Lord Heseltine is 80 today? As he was a long-standing and distinguished Oxfordshire Member of Parliament, I am sure the whole House would want to wish him a very happy birthday. If we all have as much energy at 80 as he does, we will be doing very well indeed.

I welcome the Chancellor’s proposals to bring forward infrastructure spending and to spend substantial amounts on speeding up important infrastructure projects. Targeting infrastructure spending, of course, helps boost economic growth. In my constituency, projects such as the east-west rail link, rail electrification, the upgrading of junction 9 of the M40 have already been announced; importantly, an extra £3 billion a year is being invested in infrastructure projects across the country.

I welcome what the Government and the Budget are doing to give support for house builders, for first-time buyers wanting to get mortgages and also for “second steppers” wanting to move up the housing ladder. The news on building construction is extremely important. Housing is key to growth, and builders are not going to build houses unless they can sell them, so I welcome the fact that the Government are allocating more than £3.5 billion to support those who want to get on, or move up, the housing ladder. The Government will provide up to 20% of the equity to help anyone who wants to buy a new-built home, and for three years from January next year, they will also provide a new guarantee to help lenders offer more people 80% to 90% loan-to-value mortgages. All that is good news for house builders, and will help more people to move on to and up the housing ladder.

As I pointed out on Monday to the Secretary of State for Communities and Local Government, in my constituency we want more houses to be built. We want people to be able to build their own homes, we want more social housing, we want more building on the former Ministry of Defence brownfield land at Bicester, and indeed we want Bicester to become a new garden city.

I welcome the support for small and medium-sized businesses. I am glad to say that my constituency is part of a dynamic economy, but it consists largely of successful small and medium-sized businesses. Small companies want to grow, but they often identify their lack of access to finance and long-term capital as a key barrier to their growth. They will benefit not only from the fact that corporation tax is already due to fall to 21% next year—with the result that Britain is now at the top of the list in surveys of desirable places in which to do business—but from today’s announcement that it will fall to 20% in April 2015, which means that the United Kingdom will have a lower business tax rate than any other major economy in the world. That will help to fulfil the commitment to make Britain the most attractive tax regime for business in the G20.

I welcome the fact that the Government are cutting the jobs tax of every business, and the fact that businesses will be able to hire one extra person on a salary of £22,400 or four people working full time on the minimum wage without paying any national insurance. That means that 450,000 small businesses—a third of all employers—will pay no jobs tax at all.

[Mr Jenkin]

What does my hon. Friend make of the fact that Ireland has a 12% corporation tax rate, although it has had to inflict on itself far more austere economic policies than we have had to inflict on ourselves because it is in the euro? Should we not be emulating Ireland?

[Sir Tony Baldry]

I think that we are making very good progress in reducing the burdens on businesses. I hope that my hon. Friend will applaud that, because I believe that it will enhance the UK’s competitiveness.

[Mel Stride]

May I point out, in a slight rejoinder to that last intervention and to be fair to the Chancellor, that corporation tax is 40% in the United States, 31% in France and 29% in Germany? I think that the fact that it is heading down towards 20% represents quite an achievement.

[Sir Tony Baldry]

I have learned over the years not to spend too long “rejoinding” to my hon. Friend the Member for Harwich and North Essex (Mr Jenkin). The whole House knows that he is generally trying to tease. When we can get him on message, the Chancellor will be doing really well.

I welcome the fact that the Chancellor is fast-tracking existing plans to raise the personal allowance of taxable income to £10,000, and that that will now happen next year. It means that 2 million of the lowest earners will not pay tax once the target has been reached, and that is good news for all our lower-paid constituents.

I welcome the scrapping of the fuel duty rise that was scheduled for the autumn, Pump prices will now be 13p per litre lower than they would have been if Labour’s plans had been implemented. I think everyone acknowledges that, while the Chancellor needs to raise some revenue duty, fuel duty is a “tax on everything”, and imposes a significant burden on small business owners and rural families. This is a welcome move for everyone.

I welcome the fact that the Chancellor has scrapped the beer duty escalator which would have increased the price of a pint of beer by 3p next month, and is cutting beer duty by a further 1p. That means that beer will be 4p a pint cheaper than it would have been following the implementation of Labour’s plans. It is excellent news for every village and community pub in my constituency, it is good news for brewers such as Hook Norton, and it is good news for beer drinkers.

We should bear in mind that—quite rightly—the richest 20% in the nation are making the greatest contribution to budget deficit reduction. Indeed, in every year of the current Parliament, the richest will bear a larger share of our nation’s tax revenues than they did in any one of the 13 years of the last Labour Government. So the Chancellor is ensuring that fairness is at the heart of this Budget.

This Budget is intended to help people who want to work hard and to get on. It will rightly continue the painstaking work of getting right what went so badly wrong in the British economy. Obviously, everyone is frustrated that that is taking longer than any of us hoped. Although there are no easy answers, I think every fair-minded person would acknowledge that we are making progress and that this Budget will help to keep Britain on the right tracks.

[Several hon. Members]

rose—