Budget Statement — House of Lords, 2015-03-25
Topic: Macroeconomics
Christopher Holmes (Conservative, Centre-right): My Lords, we have heard a great deal of numbers, figures and statistics this evening. Coming in at this stage of the debate, I am happy to say that 95.6% of the numbers I was going to use have already been deployed It is also a pleasure to speak alongside the noble Lord, Lord Bilimoria. The difficulty is that, at this stage of the evening, it makes one very desperate for a Cobra beer, which would be very pleasant. I had the pleasure of growing up in Kidderminster and the noble Lord, Lord Rooker, was a regular in my living room on "Midlands Today". I agree entirely with the noble Lord’s point about the beginning of the crash being the American Dream Downpayment Assistance Act. Nobody can dispute that. That is where it began. It was a well intended, naive piece of legislation which was always going to end in tears Where I depart from the noble Lord, Lord Rooker, is on the impact of the crash on our economy. Rightly, the Iraq war was mentioned. Billions of pounds that could have been spent on public services were deployed on a misadventure which ruined a country and was a massive drain on our economy. Similarly, public spending on the NHS unquestionably increased by 20%, but for only a 2% increase in productivity. Productivity matters—we heard that earlier in the debate. However, if one is going to increase spending by 20% on the NHS but have only a 2% increase in output, that does not make any sense. Although well intended, it cannot be seen as a good use of public money To re-rehearse some of the figures: growth is 2.6%—the highest of any advanced leading economy. Inflation is 0.2%. I agree that it is somewhat Saudi assisted but such a low rate of inflation is still a massive opportunity. Unemployment is 5.3%, a fantastic figure—low unemployment with the highest-ever level of employment. Regarding some of the measures in the Budget, as we have heard, the overall increase in personal allowances by £4,500 is a benefit to many people of £900 in their pockets. Four million people have been taken out of paying basic rate tax completely. The measures on beer duty can be laughed at, but this is the third year running in which it has been reduced. That has a positive impact. The increase in fuel duty planned for this autumn has been cancelled. On savings, and the allowance of £1,000 for those on the basic rate and £500 for those on the higher rate, I should like to ask the Minister: how can these measures and many more not have a positive impact for millions of people from every region and every background across the entire United Kingdom I move to the two "I"s—infrastructure and innovation. It is always best to have two "I"s rather than one. Infrastructure spending in the planned powerhouse of the north-west, with HS3, has to be applauded. This is the way in which to drive our cities, not just London but powerhouses up and down the nation. Similarly, the roads programme will have a massively positive impact. Spades at the ready will come up trumps There is one piece of infrastructure on which we and every Government could do more. It is the whole question of broadband. If we are going to be a competitive nation, we do not have to just acknowledge the digital opportunity but embrace and lead it. We can be at the cutting edge of this. I ask the Minister to consider the report of the Select Committee on Digital Skills, of which I was lucky enough to be a member. We published our report on 17 February; it addressed a number of these issues—not least the pressing need for high-speed, universal broadband access. We could have this today, but years ago we abandoned technology neutrality and said, "Fibre is the only way". Fibre is a fantastic way of delivering high-speed broadband, not least in urban areas, but it is not the solution for all areas. In rural areas, there are already satellite solutions that could solve the problem right now, right here today. We need strongly to consider this, not least for farmers but for all rural businesses to let them play their part, not just in the national economy; with modern digital communications, one can have a global business wherever one happens to be if one has that broadband on which to base one’s business We need to consider broadband as a utility; it is as significant as water, heat and power. Does my noble friend believe that Her Majesty’s Government are doing enough to embrace, understand and commit to the opportunities that digital offers? We entitled our report, Make or Break: The UK’s Digital Future. It is that significant. There will be no "an economy or a digital economy" question; there will be just a digital economy. It is the everythingness of digital that we all need to understand and embrace if we are to go on the front foot and not just compete but be at the forefront globally in a digital future. There is a potential £43 billion at stake here; 35% of jobs are potentially in danger from automation but, by the same token, almost 1 million will be required in the digital sector before the end of this decade In conclusion, I ask my noble friend to consider this: we have had five Budgets from Chancellor Osborne. We have low inflation, the highest levels of employment ever, low unemployment and low interest rates. As a graduate in economics at Trinity College Cambridge, can my noble friend speculate on what the situation would be if we had had five Budgets from Mr Balls?