Budget Statement — House of Lords, 2015-03-25
Topic: Macroeconomics
Peter Brooke (Conservative, Centre-right): My Lords, it is a real privilege to follow the noble Lord, Lord Rooker. I am junior to him in entry to the Houses of Parliament, but it is always a pleasure to participate in a debate with him. The noble Lord, Lord Davies, must be very grateful to him. I shall stay mainly in Britain, although I have visited all the states in the United States except North Dakota and Nebraska, and I have been told that if I have done South Dakota in depth I do not need to hurry back The late Ian Wallace, the singer, had a party trick, much in demand at Christmas Day Matins, of singing the carol "The First Noel" to the tune of "On Ilkla Moor Baht ’at". To borrow the cliché about singing off the same hymn sheet, which always reassures one that the Church of England is still alive, both sides in the Budget debate are doing this but one of them has the hymn sheet upside-down, and the Treasury never does that. As Paul Johnson of the Institute of Fiscal Studies characterised it, there is much truth in the numbers both sides are using but Mr Miliband is quoting gross earnings, whereas the Chancellor is quoting net income, which enables them to have a dialogue about the outcome. In Mr Miliband’s case, a top rate of tax down from 50% to 45% and tuition fees of £6,000 sound good but are in fact doing more for the rich than the poor Kipling did not write until 1906 his romantic poem, "A Smuggler’s Song": "Five and twenty ponies, Trotting through the dark— Brandy for the Parson, ’Baccy for the Clerk; Laces for a lady, letters for a spy, And watch the wall, my darling, while the Gentlemen go by!", but Pitt the Younger had lanced the Revenue’s excise boil in the 1780s by slashing the customs duties and in the process, in 1787, sustaining his newly launched Consolidated Fund with the duties that consequentially emerged in profusion from the shadows. In column 782 of Hansard for 18 March, Mr Miliband poses the rhetorical question, "What about hedge funds?", and since then his special adviser on private health funds has helpfully revealed that he must have been talking to himself. Mr Miliband implies constancy in policy but practises vacillation, although I agree that he does not go as far as UKIP, which has used a single saving in expenditure to fund a double-figure flood of new expenditure projects. The White Knight in Alice, who once invented a pudding during the meat course, would be a good candidate to be UKIP’s policy director. Finally, Mr Miliband said that the Chancellor of the Exchequer had not acted on tax havens, but the diverted profits tax was promised in the Budget Statement for legislation this week, to be brought into effect next month On another front, 2015 has seen a marked increase in the number of sightseers in the Royal Gallery, looking at Maclise’s painting of Wellington and Blücher on the evening of Waterloo. I am not yet clear whether, when the Chancellor gave public largesse towards repairing the buildings at Hougoumont on the field of Waterloo, where the Brigade of Guards saw out Waterloo’s "livelong day", he was aware that his own namesake, George Osborne, had been the lead figure in the first half of Thackeray’s "Vanity Fair" until his fictional death on the field of Waterloo in June 1815 As it has just been announced that the living quarters at Hougoumont, which are suitable for four people, are to be managed as a holiday let by the Landmark Trust, this brings us neatly to one of the pressing questions of the hour; namely, the supply of new housing, where there is still a chronic shortage. The demand side does not currently need encouragement, which might even be counterproductive. Of course, the creation of the first 20 housing zones is encouraging on the supply side but they are not the total answer and we still sigh for the 300,000 houses, mentioned by the noble Lord, Lord McFall, which Harold Macmillan and Percy Mills orchestrated annually in the 1951 Administration. But there were bomb sites to build on then and by now we are the second most highly populated member state of the European Union after Malta The dilemma of new space for building adds ironic exacerbation to the issue of the contribution of immigrants within the construction industry. Immigration strains education and health provision in the community but, ironically, it adds to housing demand as well—although working in the industry, they have to have homes themselves. There are no easy answers and UKIP’s responses are unreal as well as unreliable. Happily, and not least because of the presence of the particular Treasury Minister on the Front Bench this evening, infrastructure has been a persuasive magnet in forward planning for the next five years, not only in the comprehensive strategy for the north but in south Wales and the south-west I will conclude with a final issue that has not been given front-page billing by either side in the overall argument—the crux of productivity growth, which is always the joker in the pack but is also a hidden complication when even greater employment than the current figures, which Martin Wolf rightly described in the Financial Times as "stunning", is still looked for. I served my last Parliament in the Commons during Gordon Brown’s first Parliament as Chancellor. I knew that productivity growth, like higher education, was one of his favourite feeding pastures and in consequence I used to put the subject down as a monthly item for Treasury Questions, which incidentally provoked him from time to time into contradicting whoever was his Chief Secretary at the time. But I hope that in the next Parliament it will soon receive more attention. I imagine that what the Budget Statement calls, "the biggest increase ever in the apprentice rate",—[Official Report, Commons, 18/3/15; col. 768.] will make a step in the right direction and a modest contribution to productivity growth, but I have not yet embraced the specifications of what is called the "new national energy catapult" announced in Birmingham, which sounds as though it would have pleased Boulton & Watt To end on a similarly appreciative personal note, the House of Lords Library has done its habitual miracle by distilling in a comprehensible form the raw Treasury data into a Library briefing pack for this debate. We are all in its debt.