Economy: Budget Statement — House of Lords, 2018-11-13
Topic: Macroeconomics
Terence Langley Higgins (Conservative, Centre-right): My Lords, research in the Library reveals the extraordinary fact that I have now spoken 59 times in Budget debates. This will be my 60th. Looking back on that period, there have been many memorable Budgets—by the late Lord Howe of Aberavon, by my noble friends Lord Lawson and Lord Lamont, and so on. This, I think, will not be a particularly memorable Budget, but it is certainly unique in one respect: there has never been so much uncertainty about the overall economic situation as we have today. The Chancellor faces an immensely difficult task and I think that, on the whole, the Budget is the best that can be done at this stage, until we have a little more certainty about the outcome of Brexit I will mention two points of detail. The first is that I certainly welcome the measure the Chancellor has taken to help the high street. I think that it is very important and I am glad that he has taken the opportunity to do it: it may be necessary to do more. There is also rumour in the press that there will be an increase in the charge for probate—but that will not be included in the Budget. Perhaps my noble friend will say how that is to be introduced. I think that all of us know from personal experience that after a death the whole issue of probate and so on is very difficult, and to use this as a form of taxation, rather than simply covering the Government’s costs, seems wrong Looking at the Budget overall, the Institute for Fiscal Studies has pointed out that this is the largest discretionary fiscal loosening that we have seen since 2010. That is remarkable, but it raises the whole question of the end of austerity. I am very strongly of the view that we have had no option in recent years but to adopt the policy of austerity that we have because quite clearly we have not been living within our means, and we have to try to get back to that situation. It is therefore perhaps a little surprising that, instead of continuing, given that he had a certain amount of windfall in that progress, the Chancellor decided to spend the windfall instead on the National Health Service, help with various tax changes, and so on. The overall position is that the Prime Minister and the Chancellor have indicated that this is the end of austerity—but that does not mean that we must not continue to try to live within our means. This really must be reinforced in looking forward, particularly against the very difficult economic situation created by Brexit, which I have just mentioned It is not entirely clear what proposals the Chancellor has, depending on the different ways in which the Brexit problem develops. A lot of problems will be ones that cannot be helped at all by either fiscal or monetary policy. If there is no deal, for example, we are likely to find enormous problems with blockages in the Channel ports and so on. There is nothing the Chancellor can do about that. What he will need to do is make efforts to stimulate the economy if we find that the outcome of the Brexit operation creates problems, as it seems likely to do. I am slightly puzzled by his expression "Brexit dividend". He seems to be saying that if Brexit works all right, we will not have to take the nasty measures we were otherwise going to take. That is a slightly strange interpretation of what is meant by a dividend At all events, we may find ourselves in a number of possible circumstances, ranging from no deal to a deal which is not too bad—although there is some debate on whether that will be Chequers—or one where we decide that we really ought not to leave at all. The reality is that the House of Commons and the House of Lords have had no opportunity to vote on the result of a referendum which was, as I have stressed many times, advisory. We did not legislate in this House or the other place for a mandatory referendum. We should therefore consider—we really have a duty to consider—whether the interests of our people and the economy depend on going ahead with Brexit in one form or another, with no deal or with whatever it may be. The people had a vote when they voted for their Members of Parliament—but their Members of Parliament, instead of being delegates, have been made representatives by the way in which the operation of the system has inhibited them from doing what needs to be done. I am not at all clear what one might do by way of stimulus or as a more stringent approach in the light of the various Brexit changes. However, we have to consider very carefully which of the possible ways in which the situation may unfold needs to be dealt with. Having said that, this Budget seems to be as good as can be done in the circumstances. I thought that my noble friend on the Front Bench set out the Government’s position clearly—perhaps more clearly than the Chancellor, although he did not include any jokes. Be that as it may, this Budget is the best that can be done in the circumstances and we should support the Government.