Income Tax (Charge)

Wera Hobhouse Excerpts

Thursday 28th October 2021 Commons Chamber

[Edward Miliband]

That is a very important point. The championing of ExcludedUK is a very important issue, and my hon. Friend is right to point it out.

This is about choices. Amazon gets help from the super-deduction, but our energy intensives are left out in the cold. I hope that in his reply, the Business Secretary will tell us where things stand for the energy-intensive industries, because they have been in touch with me saying, “What is going on? What is happening?” There is just complete silence from the Chancellor.

Let me talk about our high street businesses, because they face higher national insurance and business rates. I welcome some of the short-term measures in yesterday’s Budget, but it is not unfair to say that fundamental reform has been ducked yet again. The CBI said this in its Budget response yesterday:

“But the hard truth is that wholesale reform to unlock investment was rejected today. The Government missed the opportunity to truly reform a business rates system that diminishes Britain’s high streets and factories.”

I was quite mystified yesterday, because the Chancellor attacked the idea of fundamental reform of business rates, a system with a genuinely level playing field between traditional high streets and internet businesses. Four successive Tory manifestos have promised precisely that reform: 2010, 2015, 2017 and 2019.

When the Business Secretary was a humble Back Bencher—I think he was writing “Britannia Unchained” at this point—he was pamphleteering. I am not against pamphleteering; I have done some of it myself. He was a Back Bencher with his ideas, and he said we need

“a system that is fair for both traditional and internet companies.”

He is now the Business Secretary. Why does he not deliver it? He knows, because he talks to the business community a lot, that this is a massive issue for our high street businesses. They rightly say, “Look at the burden on us and look at the burden on tech businesses. Look at the unfairness.” That is why my hon. Friend the Member for Leeds West is so right to champion this issue.

The longer-term issue we face is how to create the growing economy that we need. Not for the first time, the Government talk a good game. We have the branding of the Budget. We know that the Chancellor is incredibly keen on branding, and his own personal branding more than anything. The Government are a bit of a sideline. It is more Rishi branding than Government branding, I think it is fair to say. There are some knowing looks from Members on the Government Benches. The Rishi branding of the Budget is the “plan for growth”. I have to say that a plan for growth that has growth of 1.3% at the end of the Parliament is not much of a plan. Growth will be just 1.7% when the economy returns to trend. That is woeful by historical standards. It is the biggest challenge we face as a country. This is an important point, because when people wonder how the Government manage to combine the highest taxes for 60 years and public services that are creaking, the terrible growth performance of our economy is a significant part of the answer.

[Wera Hobhouse (Bath) (LD)]

Did the right hon. Gentleman, like me, also miss any announcement that points to the transformation to the green economy and green jobs?

[Edward Miliband]

The hon. Lady is completely right about that. She anticipates my next point brilliantly; it is a useful segue. If we want to understand why growth is so anaemic, she is right that we need look no further than the Chancellor’s failure to seize the opportunities for green growth. This is an important point: the prudent and responsible economic call—I suspect the Business Secretary agrees—for economic growth is to invest at scale in the transition to a zero-carbon economy. Let us be honest, it is now a completely open secret that the problem is that the Chancellor is not a believer, and it showed yesterday. As we prepare to host the most important international summit ever on climate change, as delegates gather from all around the world, and as the eyes are on Britain, what did he unveil as his flagship measure yesterday? To cut air passenger duty for domestic flights. You literally could not make it up. People want good and affordable rail services, but the plan for rail seems to have been postponed again, and instead there will be 400,000 more domestic flights as a result of that decision. Once again, that shows that the Treasury is not signed up to the agenda.

I am such a nerd that I was reading the OBR report last night and there is an interesting and illuminating bit on, I think, page 176—Members can check—which says, in OBR language:

“the…costs involved in getting the rest of the way”—

to net zero—

“remain significant and their apportionment between businesses, households, and government…remains largely unclear. This leaves the costs associated with the transition to net zero as a major source of longer-term fiscal risk.”

Let me underline that point for the House. The July 2021 OBR report, which for the nerds among us is brilliant, and which I strongly recommend to Members as bedtime reading—Madam Deputy Speaker is laughing at me, or perhaps with me—warned of the danger of not acting on the climate and of debt climbing to eye-watering levels as a result. When my hon. Friend the Member for Leeds West said yesterday that debt would rise to 300%, I noticed a Conservative Member at the back look at his hon. Friend and say, “Oh that can’t be right,” but that is what it says. The interesting thing about that report is that it warns not just about the danger of not acting, but about the danger of delay. It says that delaying action on the climate by a decade will double the cost of the transition as we lock in high-carbon choices.

--- Later in debate ---

[Kwasi Kwarteng]

Let me make some progress. To intervene so soon after an intervention is unusual. I will come back to the hon. Member.

During the pandemic, people and businesses have demonstrated remarkable levels of resilience. I fully agree with the right hon. Member for Doncaster North when he says that business has been heroic and people have been heroic. I am also immensely proud of the work done by the British Business Bank, for which my Department is responsible. Its schemes supported people and our economy to the tune of £80 billion, with Government-backed finance for 1.7 million businesses. That comes to the point made by the hon. Member for Hornsey and Wood Green (Catherine West). When it comes to the fundamentals of the economy, the Government are securing our economy and getting Britain back to work.

Contrary to all the prophecies of doom and gloom that recently came from Opposition Members, the Office for Budget Responsibility now expects our recovery to be quicker and the economy to return to its pre-covid level at the turn of this coming year. As the OECD and the International Monetary Fund show, there is considerable expectation that the UK will rebound strongly. In that context, our task turns to ensuring that our people and our businesses have ability and opportunity. They will not simply look back and complain about the situation that we have come through. They are positive and forward-looking. They believe in their country—unlike many Opposition Members, dare I say. We will achieve a strong rebound not by splashing cash indiscriminately as a number of Labour Chancellors did, dare I say, but by spending taxpayers’ money wisely to foster an environment that encourages innovation and growth.

I turn to the net zero agenda. I fully appreciate that many years ago the right hon. Member for Doncaster North was Secretary of State for Energy and Climate Change—I do not think I was in the House at that time—and I know that he shares the view that net zero is absolutely one of the most important strategic objectives of any Government.

[Wera Hobhouse (Bath) (LD)]

If the climate emergency really is the most important thing for the Government, why did the Budget not mention it once?

[Kwasi Kwarteng]

It did mention a huge amount of investment in the net zero agenda. The hon. Member should know by heart the Prime Minister’s 10-point plan, and that was 100% backed by yesterday’s Budget.