Budget Resolutions — House of Commons, 2017-11-22
Topic: Macroeconomics
Jacob William Rees-Mogg (Conservative, Centre-right): I am grateful to my right hon. Friend, but I do not think that that quite works for the "own resources" figure, because the OBR has made assumptions relating to our net contribution to the European Union and has assumed that those moneys will be spent domestically in the United Kingdom, and that therefore there is no fiscal advantage. However, there is still a £3.5 billion negative income from "own resources". It is hard to think that the OBR would have taken that from other forecasters, because that is a matter on which the Treasury can give an authoritative view, and it would be odd if the Treasury had not explained that "own resources" will end at the point at which we leave the European Union. They have to, because only member states of the European Union can make "own resources" contributions, for obvious reasons, although I have always disliked the term "own resources", and I have always been with Margaret Thatcher in that it is our money and we would quite like to keep it, thank you very much All that ties in with a point made eloquently by the hon. Member for Islwyn (Chris Evans): the key to this Budget has to be Brexit. What we are doing currently is in the context of leaving the European Union, and this Budget is inevitably encompassed by Brexit and by productivity. That is where the challenge lies. The OBR’s gloomy productivity forecasts suggest a reduction in potential output in 2021-22 of 3%. The challenge for the architects of our economic future is how to make Brexit work to ensure that we get a productivity boost That is where I was so encouraged by what the Chancellor had to say about this Government being a free trade Government, and that the real opportunity that comes from Brexit is freely opening up our markets to the rest of the world. We must remember that the customs union, in which the hon. Member for Nottingham East is so keen to stay, is actually a protectionist union that stops people in the United Kingdom from buying the cheapest available goods and that, by and large, it protects industries that the UK does not have. The overwhelming majority of the protections under the customs union are for things such as German coffee processors or Spanish orange growers—the types of things that we are not doing. Our industries receive marginal protection from the customs union, but at a very high cost to British consumers—it is thought that the cost for food is 20%, and that the next highest level of tariffs is on clothing and footwear The opportunity for the poorest in our society to see their standard of living and real wages rise is quite fundamental. Their weekly, monthly and annual expenditure will be reduced and their real incomes will rise, making funds available for other expenditure, or indeed for saving and reinvesting in British industry. Equally, the loss of cosy protectionism means that we will cease to subsidise inefficient continental businesses. It will also ensure that we concentrate on what we are best at. That ought to lead, of itself, to a boost in productivity. Indeed, that is the lesson of history when we move to free trade and remove not only formal tariffs, but non-tariff barriers That, if the correct policies are adopted, is how the £350 million a week can ultimately be provided for the national health service. Figures produced by Professor Patrick Minford and his distinguished team at Cardiff University indicate that there will be a boon of £135 billion between 2020 and 2025, and £40 billion a year after that, which will make it possible to have tax cuts and to fund the health service. It is encouraging that the Chancellor has already started that process and is making more money available for the health service now, because it is important that politicians deliver on the spirit of their promises, as well as on the detailed, pettifogging, nitpicking, small-print elements. It is right that that should be made possible, and having a free trade development of economic policy will be crucial to that, so it was welcome that the Chancellor included it in his Budget statement The other issue of greatest importance to voters is that of housing, and here I would encourage the Chancellor to go further. The Government are absolutely right to be supporting more house building, but the key will be reform of the planning system. The thing that makes housing in this country so expensive is the fact that supply is controlled. As the Chancellor rightly said in his Budget statement, actions to help demand are merely likely to push prices up. What we need is to see prices coming down, at least in relation to incomes, and that means not only increasing supply, but increasing the supply of housing that people want to live in The one question that I will therefore raise on the Budget is this. The Chancellor said that he would look to ensure that the housing was primarily in an urban setting, but when we ask people what housing they want to live in, 80% say that they want to live in houses with gardens, and that means we will have to build on green fields. It would be wise to review the green belt, because some parts of it are not actually essential to life and the pursuit of happiness. What we really want is a succession of Poundburys across the country, because that is the type of housing that people want to live in, and I think that the Conservative party should be on the side of not only the Prince of Wales, but the people.