Budget Resolutions — House of Commons, 2018-10-29
Topic: Macroeconomics
Nigel John Mills (Conservative, Centre-right): It is a pleasure to follow the hon. Member for Bassetlaw (John Mann). He spoke of the importance of prefabricated housing. He is welcome to come and see a plant that makes them in Alfreton, in my constituency, if he is keen to do so I came to the House today expecting a bit of a non-event of a Budget, given our present tight fiscal situation. A large amount of NHS spending has already been announced; there is the uncertainty of Brexit; and there will be a spending review next year. There was not much room for the Chancellor to say anything particularly exciting. I was expecting the announcement of a few consultations and a few small spending commitments, important but not, in the scheme of things, very material. However, the Chancellor announced some quite significant amounts of spending. It seemed that what he was trying to do was signal a coming end to austerity. As can be seen in the Red Book, he announced £11 billion of extra spending in 2019-20, and a £4 billion tax cut in the same year. That is an extra £15 billion worth of fiscal loosening in the next financial year, and it will rise to £39 billion by the end of the Red Book period. It constitutes a significant reduction in austerity, and it allows for a fair number of measures that my constituents will probably welcome The rise in the living wage, for instance, will be of great interest to my constituents. The increase in the personal allowance to £12,500 and the rise in the higher-rate allowance to £50,000 next year will mean a £130 tax cut for basic-rate taxpayers and take 1 million people out of the higher tax rate. That is a promise for which I have been campaigning for many years, and one that we made in our last manifesto. Its coming into force in less than six months will send a real signal that we are on the side of those hard-working people, and that they can keep more of the money that they earn. While we are on the subject of taxes, let me say that probably the single biggest issue that is raised when I survey my constituents is tax avoidance and, in particular, the way in which the rich and the large global companies avoid paying the sums that they ought to pay. I therefore give a cautious welcome to the announcement of a digital services tax. However, I share the concern of others about exactly how we can make it work—how we can define income so that we catch the companies that we want to catch, without catching the online sales of high street businesses such as Tesco or John Lewis. I appreciate the commitment not to do that, but I think it is quite hard to get the definitions right and actually get money out of those global businesses. I sense that probably the only way to do it is to try to tax their sales. Computing a profit-equivalent calculation of those sales and taxing that might serve as a compromise. However, I think that the only money that we actually see in the UK is the money that our consumers are paying to buy goods or services from those companies, and trying to secure more tax from that cash flow is probably the only effective method We want to use that money to support our high streets. There are three towns in my constituency, and there are several villages with high streets. They are all showing the standard signs of decline: empty shops, charity shops and bookmakers, for example. Anything that we can do to encourage more retailers, such as the business rate reduction and the money for the future high street, will be hugely welcome. However, we must be realistic. A few more glossy plans drawn up by councils around the country without the money to implement them will not bring about the change that is needed. We must accept the need to redesign some of those high streets fundamentally and to allow more residential development. If we have to move some businesses around to create a viable business area, do some compulsory purchasing and find the funds to bring about regeneration and get building use changed, I think that that is the only way in which we can really halt the decline, and I hope that it is part of the plan that we are expecting I also welcome some of the one-off funding that was announced, such as the funding for schools. In principle, I am not sure that one-off funding that is not sustained is a particularly brilliant way to finance schools, but I think that they will welcome the chance to do the few bits of extra capital spending for which they are struggling to find funds. Any money for potholes must be hugely welcome: concern is often expressed about the state of the roads in Derbyshire Let me, in the last couple of minutes available, commend the Chancellor for the money that he found to put back into universal credit. I have been calling for various measures, but I knew that the fiscal situation was tight, so we would not get everything that we wanted in this single Budget. I think it right to provide an extra £1,000 for the work allowance, which means an extra £630 for families who are in work. The extension to some of the transitional benefits of a couple of weeks for employment and support allowance and jobseeker’s allowance will be very helpful. There has not been any real mention of the reduction in the amount that has to be used from universal credit to pay back debts from 40% to 30%; that will be of huge use as well. This is not everything that needs to be done, but it is a great step forward and will help reassure my constituents that this benefit will work for them Overall, this is a positive Budget that goes further and does more than I hoped it possibly could. I do not think that it is the end of the story, and we will see how much more fiscal room we have next year to set out a future direction for spending and taxation, but I welcome the Budget and look forward to voting for it on Thursday.