Budget Resolutions — House of Commons, 2020-03-11
Topic: Macroeconomics
Tobias Martin Ellwood (Conservative, Centre-right): It is a pleasure to participate in this important debate. I congratulate the Chancellor on a formidable performance and the Treasury team on putting together an important Budget statement. The Chancellor was right to begin with the response to the coronavirus, given that the World Health Organisation has today declared that it is a global pandemic. The £30 billion stimulus is exactly what is required to make sure our country can continue. It sits next to the initiatives from the Health Secretary to make sure that our health service can cope with the challenge set in front of it. I am pleased to see that £40 million has been put towards vaccine research alone. I also welcome what the Chancellor said about ensuring that both the supply side and the demand side of the economy are looked after. We are obviously going to see disruption in our workforce and supply chains and, on the other side, in spending behaviour. Our spending patterns will understandably be affected by the coronavirus The Government’s response has been formidable: announcements on business rates, changes to statutory sick pay, funding schemes for small and medium-sized businesses, deferment payment initiatives and the provision of loans for those businesses. These initiatives will allow businesses to weather this storm. The coronavirus will put intense financial pressures on businesses up and down the country. It will be short lived, but we must make sure that these businesses get through this difficult period over the next couple of months and survive in the long term. I put this to the Minister: while we recognise that one fifth of the workforce might be affected and have to self-isolate, do we have the capability to test more individuals daily, particularly those in critical services? Surely that might actually be cheaper than the self-isolation of people who might not be ill. I am thinking of, among others, the armed forces on standby to provide support by way of military assistance to civil authorities in the next couple of weeks Despite this, and the global economic slowdown and the fact that we are just emerging from three years of Brexit discussions, the wider UK economic outlook is positive. The UK economy is predicted to grow, long-term productivity is increasing, unemployment remains historically low, wages continue to grow in real terms and inflation is on target. That is very different from the picture outlined by the hon. Member for Warwick and Leamington (Matt Western). The deficit is down from 10%, which it was when we came into office, to 2% today and the national debt has finally been brought under control My constituents in Bournemouth East will welcome much in the Budget: the £79 million in the transforming cities fund for the local council to improve cycleways and roads; the fuel duty freeze; the increase in start-up loans; the increase in the research and development budget, which will be welcomed by our universities in Bournemouth; and the important changes to infrastructure, including the £600 billion over the duration of this Parliament to improve road and rail infrastructure. I hope that some of this money finds its way to Boscombe railway station, which has been hoping to upgrade its lifts for the last decade. I hope the Minister, who used to have this portfolio, will help me make that case. Of course I very much appreciate the long overdue upgrade of the A303, which is a vital arterial route to the south-west Broadband investment is also critical. The roll-out of 5G is paramount if we are to remain ahead of the game in the new era of digital capability. The impact of 5G cannot be overstated, but Parliament gave a powerful message to Government yesterday. I will not revisit the arguments, but it is very clear that Chinese ownership of part of our critical national infrastructure is unacceptable, not just to Parliament but, I think, to the British people, and I look to the Government to find a way to wean us off Huawei and other Chinese companies, which have a very different outlook because they are state-owned and have to provide intelligence to the Chinese authorities Air passenger duty was not mentioned in the Budget. We saw what happened with Flybe last week. I ask the Minister and the Chancellor to reach the right conclusions in their air passenger duty study, which I understand will take place shortly. If airports such as Bournemouth and Southampton are to survive, it is critical that the right decision be made. It is simply wrong that when a person flies to Lanzarote, they pay half the air passenger duty that they would for a return flight to Glasgow. I ask the Minister to hear that plea I am pleased to see that there has been an emphasis on climate change, more funding for flooded areas, a plastic packaging tax, and changes relating to the use of red diesel. I am also pleased that there has been an announcement of funding for veterans’ mental health issues. Sadly, beyond that there was no mention of UK defence; I make no apologies, as Chair of the Defence Committee, for focusing on that in the remainder of the time available for my speech. Perhaps the Chancellor is setting himself up for the integrated defence, security and foreign policy review that is coming along, and for the spending review. The Chancellor spoke of the importance of a growing economy for generating tax receipts, so that the Government can invest in Departments, and in health, education, infrastructure and so forth, but I put it to the Chancellor that our economic security is relevant to, and tied to, our national security. If we lose one, we do not have the other, so in this changing world it is important that we invest. We know that the threats are increasing, but we are ever more reluctant to stand up for our values. On the one hand, we see western nations becoming more isolationist, more risk-averse and more protectionist, and on the other we see nations being far more aggressive in pushing forward their own rules; China is one example of that UK defence can just about cope with today’s threats, but it is overstretched. I invite any hon. Member to visit their local garrison and base. They will find dedicated, professional armed forces—the best in the world—who are paid less than they deserve. Their buildings are in need of improvement, and in many other cases—certainly in the case of land forces—they are using outdated equipment. Our battle tank is 20 years old. Our Warrior tank is even older. It is important that we upgrade as soon as possible Potholes get a mention in the Budget. There is a lesson there for the Ministry of Defence—and, indeed, Parliament. An issue arises; noises are made; the public, MPs and indeed Departments then lobby; and funds are found. If the nation were better informed about the true state of our armed forces and the looming threats we face, man-made and natural, I am sure there would be equally loud calls to rectify our defence posture The character of conflict is changing around us very fast. We are moving away from conventional to economic and political interference, all of it beneath the threshold of war. If we want to defend our economy, we need to get better at understanding how it is being attacked. We need to modernise our capabilities, so that we can effectively defend our economy In conclusion, I very much welcome the important initiatives that will help us manage this difficult period in which we are threatened by coronavirus. I certainly welcome the ambitious plans to advance our economy right across the country, including in the south-west—and, indeed, in Bournemouth East. I look forward with optimism to the Government listening to the growing calls for Britain to play a more active role, with greater investment in our hard power, on the international stage as challenges grow.