Budget Resolutions — House of Commons, 2021-10-27
Topic: Macroeconomics
Robert Andrew Raymond Syms (Conservative, Centre-right): Like my right hon. Friend the Member for Bexleyheath and Crayford (Sir David Evennett), I was pleased with the Chancellor’s optimistic Budget for our country today. We faced a major difficulty with the pandemic and have had to intervene in the economy more than any Government since the second world war, introducing schemes that were massive in their scale to protect people, jobs and businesses. The amazing thing is that that was delivered seamlessly and successfully. We used our fiscal position, whereby we had relatively low national debt, to get through this crisis. The fact that the OBR has reduced its estimate of scarring of the economy, and that the Bank of England has reduced it to only 1%—I suspect it may be reduced further—shows that the economy has got through a major crisis and emerged the other side in much better shape than one had any reason to suspect We have 1 million vacancies and an economy estimated by the OBR to grow by more than 6% this year, and it could be higher. We therefore have an economy that is growing and recovering extremely fast. I think that is a good thing. The fact that we have come through this with a growing economy is great. We also look like we will have rapid growth next year and growth in future years. The Government are now in quite a good position. They have a rising growth rate and rising tax income Two things concern me. First, I do not like raising taxes. I will only raise taxes if I feel that money is being spent well. We have increased spending in this Budget, and it is beholden on the Government to justify that it is being well spent in the NHS and through other Departments. I have to say that some of the examples—things such as Test and Trace—do not exactly fill one with enthusiasm that some of this money is being well spent. I call on the Government to look at that organisation and perhaps to start to reduce its size and the amount of money it is spending. Some £20 billion-odd a year is a lot of money—twice what we got from putting up national insurance on many people who are low paid. There are still many areas where the Government could save money I was pleased by the optimistic tone of what the Chancellor said today. What he has done with many taxes and charges, generally speaking, is just to let things flow on and not to put up inflation by raising things such as fuel duty and alcohol duty. The changes to business rates are welcome and will be helpful. In particular, I think the change of the taper rate in universal credit, so that people can earn more if they work more, is vital. It has always struck me that there is a barrier there. Many people working 16 hours a week, if they are asked to do overtime, say, "No, it’s not worth my while." It must be right that those who are partly supported by the state and work for employers have flexible enough employment that they can take up more work and earn more when asked. That and many other measures should add flexibility to the British economy I welcome what my right hon. Friend the Member for Tunbridge Wells (Greg Clark) said about science. If any of us needed a lesson about the importance of science, the pandemic brought that home. We are a science superpower, but sometimes the proceeds of science are not turned into jobs, factories and other things At the beginning of the pandemic, we had world-class people to develop vaccines, but only two vaccine manufacturers for animals rather than people. Now we have factories and the capacity. Even the person who drives the van with vaccines in it from the factory to the delivery point is a job created in the United Kingdom. With any kind of science policy, we have to ensure not only that we have world-class science, but that that is turned into jobs in this country, which has always been our weak point One of big lessons of the past 12 months is that we have been living in a just-in-time world, so many businesses are finding higher freight rates and disruption due to the pandemic very difficult. We must have a more resilient economy, which may mean that the Government have to look at storemen and storing strategic materials. I was pleased to read in the newspapers that we are in discussions about increasing our gas capacity and bringing back some of the British Gas capacity. As an economy, the biggest challenge ahead is ensuring that we have the raw materials and the resources to get ahead. Relying on other people to build things is not as sustainable and sensible as it used to be Over the past 20 years, we have imported a lot from nice China, but we now find that it is more aggressive, so we have to look at where we source things from. There is nothing better than sourcing something at or near to home, which would make a big difference. Clearly, freight rates will make a big difference to the world economy. The economics change substantially if we can import a container of cheap products from the far east for £1,500 compared with £8,000 a container. That is why some British companies are busy filling a new market The essential lessons for the Government are to get the national debt and the deficit falling, which the Budget does; invest in the things that are worth investing in, such as decent infrastructure and science, where we can win; structure our economy so that we produce more at home; and plan for the fact that the free-flowing world-trading economy that we have known over the past 20 years may not be there in future. We have to be more resilient and more careful in how we proceed.