Budget Statement — House of Lords, 2017-03-14
Topic: Macroeconomics
James Palumbo (Liberal Democrats, Centre to centre-left): My Lords, if my memory serves me correctly, the noble Baroness used the word "cautious" in the very first sentence of her extremely eloquent opening speech and "prudent" in the second. She then went on to talk about the budget deficit being reduced by two-thirds. With respect, I am not entirely sure that it is apposite to juxtapose what has happened with the budget deficit with the words "prudent" and "cautious" The noble Baroness then went on to say that we were "within sight" of bringing public spending under control. The numbers have already been very well rehearsed, so I will not go into them again, but will make two points. The noble Baroness will no doubt recall her predecessors saying more or less exactly the same thing on numerous occasions, and of course she will also recall that exactly the opposite has happened. Indeed, with Brexit, Europe and other world problems, I am not sure that one can confidently say anything is within sight. The other point, of course, is the difference between balancing the budget and reducing debt The noble Baroness went on to describe the tax hike on the self-employed as "responsible and balanced". Of course, it can be seen as such; alternatively, one could say that the responsible and balanced thing to do is to encourage our army of entrepreneurs as much as possible as we sail into the choppy waters of Brexit. There was then a very helpful section on the treatment of ISAs, dividends and business rates—all welcome relief. The noble Baroness described this tax treatment as "sustainable and fair". Of course, again, it can be seen as such, but an alternative approach might be a wholesale look at our tax code, which the noble Lord, Lord Bilimoria, spoke about very eloquently, with a view to simplifying it and making it easier to do business, especially with Brexit on the horizon The noble Baroness then talked about the welcome £2 billion for local councils to take the pressure off the NHS. She will perhaps recall similar fractional tinkering at the edges of vast budgets—with very similar amounts, as a matter of fact—but somehow problems with welfare and health seem to persist. An alternative approach would be to recognise the need for a wider, more uncomfortable debate on the future of public spending. The noble Baroness went on to talk about the National Productivity Investment Fund, referencing £130 million for traffic pinch points to drive national productivity. The fund is a welcome development, but how it is used and driven is another thing. In reference to housing, which is of course part of infrastructure, the recent White Paper was excellent in its analysis but silent on radical solutions such as authorities selling land with existing consents. One hopes that the very encouraging investment in vocational education will be driven and effective The noble Baroness concluded by saying that the Budget dealt carefully and proportionately with the problems we face. This leads to the point I wish to make. I entirely understand the need for caution and to focus on Brexit. I also acknowledge the Chancellor’s reputation for competence, hard work and decency. But I have also found that sometimes, a slow and steady approach risks creating the every conditions one is seeking to avoid. The Chancellor’s job is not just to manage competently and to let borrowing and other events take their course, but to meet the problems of Brexit, health and welfare funding, and the national debt, with courage and determination, to put forward new ideas which inevitably involve risk while accepting that some will fail, to move the national debate forwards and help change its tone and direction, to show a bold spirit alongside his many other qualities, and to create a culture which allows for fresh thinking and new hope and brave decisions. All of this would be to embrace the challenge of his great office and would allow him to be recognised in years to come as a truly reforming Chancellor. I appeal to the noble Baroness to subtract caution and add a little more boldness to the Chancellor’s thinking.