Budget Resolutions — House of Commons, 2020-03-11
Topic: Macroeconomics
Theresa Mary May (Conservative, Centre-right): I thank my hon. Friend for her intervention. She is right to refer to the hospitality sector and the various elements of business within it, and the impact that the positive measures that the Chancellor has introduced will have on South Derbyshire, as they will on my constituency and constituencies across the country This was a difficult Budget to deliver, but I commend the Chancellor for his determination to deliver on our manifesto commitments in it. I trust that in the discussions that were held prior to the delivery of the Budget, there was the necessary tension between No. 10 and the Treasury in developing it. Generally speaking, Prime Ministers want to spend money and Chancellors want to manage the public finances prudently—at least Conservative Chancellors want to do that, because that sound management of the public finances has always been one of the unique selling points of the Conservative party. In my time in politics, I have seen, more than once, a Labour Government come in, trash the economy and leave office with more people unemployed than when they came into office and then a Conservative Government having to come in, restore the economy, restore the public finances and save the day. Although spending a lot of money may be popular and may seem the natural thing to do, there is of course that necessity to have a realistic assessment of the longer-term impact of those decisions and of the longer-term consequences. It is also necessary to ensure that we have that restraint and caution that enables us to make the public finances continue to be strong into the future In talking about the public finances, I note that of course the only reason we are able to take the measures we are on coronavirus and the measures my hon. Friend the Member for South Derbyshire (Mrs Wheeler) has mentioned is the sound management of the public finances by the Conservative Governments, so that those finances are in a good position at the moment. We have fiscal rules so that we exercise that restraint on the temptation to take reckless decisions on public spending and borrowing. Every Conservative Member stood on a manifesto of certain fiscal rules, and as was mentioned by my right hon. Friend the Member for Central Devon (Mel Stride), the Treasury Committee Chairman, the Chancellor said that this Budget was being delivered within those fiscal rules. The Chancellor also said that it was a Budget where the predictions and forecasts that have been put forward did not yet fully take account of the impact of coronavirus, and I noted that he said he was going to be reviewing the fiscal framework in which we operated. I merely say, as I have said, that prudent management of the public finances is one of the USPs—unique selling points— of the Conservative party, and it is essential that any Conservative Government maintain that prudent management, because there are two things that we, as Conservatives, know that the Labour party and others never accept. The first is that the Government do not have any money of their own; they are spending other people’s money, and we owe it to them to take only as much as we need and to spend it wisely. The second point is that it is not about the amount of money we spend; it is about how we spend the money available to us I would like to welcome some specific issues in the Budget. On climate change, the money put into carbon capture and storage is important. The technology will be important for our future and delivering on climate change, but it has all too often been swept to one side and not been given the attention it deserves In the details, I note that there is welcome funding for the prevention of domestic abuse, particularly to enable police and crime commissioners and others to support perpetrator programmes such as Drive, which from all accounts is having some success. There is also the money for domestic abuse courts, which will be an important development in helping to address something that people across the House want to be eradicated. I welcome, too, the specific sums for counter-terrorism and intelligence services Underpinning the Budget has been the concept of levelling up—what I describe as "a country that works for everyone". I want to focus particularly on two aspects of that. First, I welcome the emphasis on science and R&D, which is important for our future. I would say this to the Treasury, though: although I am pleased that the increase in the R&D tax credit will take us further down the road to the 2.4% of GDP target, it needs to consider the definition of research and development spending. There is some evidence that the Treasury’s rules are currently too narrow to enable certain expenditure that could genuinely be described as research and development to be incorporated The Budget also puts significant emphasis on infra- structure spending. I welcome the money that will be made available for Bisham junction on the A404; I would like to have seen funding for a third bridge across the Thames as well, but that may be for another time. However, important though infrastructure is, it is not the only thing that delivers a country that works for everyone. What underpins delivering that and levelling up across the country is the industrial strategy. I noted that the Chancellor did not actually mention the words "industrial strategy" in his Budget; he is not the first Chancellor to have found it difficult to use them in a Budget speech, but the industrial strategy sets how we can ensure prosperity across the whole country Some would identify infrastructure spend as saying, "We are now spending as much money in this part of the country as we are in another part." It is not about that; it is about ensuring that the environment is there to deliver the dynamic economy and prosperity that every part of our country deserves. What the industrial strategy does is focus on the other issues that matter—the importance of place, people and ideas. On place, the issue is about working at a local level, with local leaders and others, on delivering the increases in productivity. The city deals and growth deals have been an important element of all that, but that partnership working is very important.