Local MP, Huw Merriman, welcomed the Chancellor's Budget in the House of Commons on Wednesday. His speech focused on three key themes: supporting re-start, recovery and repayment.
In welcoming today's Budget, I wish to focus on three themes. Firstly, supporting restart.
The Chancellor is right to ensure that the workforce and businesses are supported as we open up our economy once again. The continuation of furlough, help for the self-employed, business rate relief and extending temporary VAT reduction will give business the confidence to reopen and plough on.
We now really have to encourage people to turn their backs on the lockdown, to get back to their offices, back to hospitality and leisure venues and do their bit for the nation's economy as we unlock, in the same way that they did for the nation's health when they locked down.
Secondly, recovery. The Chancellor is right to invest in our recovery by supporting capital projects, which will deliver a yield to UK PLC. Over half of the infrastructure spend is devoted to transport. It's vital that this spend goes on projects which deliver the biggest bang for the buck, not white or green elephants.
Thirdly, repayment. The pandemic has seen a government fiscal injection of £407 billion. Much of this has been supported across this House. As the Chancellor said, this is comparable only to the borrowing from world wars one and two. National debt now stands at two trillion - £30,000 for every man, woman and child. We have a record peacetime deficit. To those who talk of low levels of government borrowing, can I just remind them that an increase of just one percentage point across all interest rates will add an extra 25 billion a year to the government's cost of servicing the national debt - money that could otherwise be spent on investing in education or delivering infrastructure.
So with regret, I understand the need for a five-year personal tax allowance freeze, corporation tax increases to 25% from 2023 and other tax raising measures. The OBR has stated that these tax rises will take the overall tax take and burden to the highest level since the 1960s. In addition to increasing the tax yield, we also need to reduce the levels of public spending. This means cuts across the board.
I'm deeply disappointed that we are reducing our international aid spending, but I cannot just expect spending cuts to apply to those areas less close to my heart. It was 40 years ago that Margaret Thatcher was taking questions from the media on the 1981 Budget. She said this and it applies as much today ‘what really gets me is this; that it is very ironic that those who are most critical of the extra tax are those who are most vociferous in demanding the extra expenditure, and what gets me even more, is that having demanded that extra expenditure, they are not prepared to face the consequences of their own action and stand by the necessity to get some of the tax to pay for it.’ She concluded ‘I wish some of them had more guts and courage than they have.’
The Chancellor has shown today he has the guts and courage. It's now down to those of us who similarly believe in fiscal responsibility, and in not dumping the next generation into an ever-increasing pool of debt, to be true to the Conservative Party’s philosophy and make that same case.
