Budget Resolutions and Economic Situation — House of Commons, 2015-07-08
Topic: Macroeconomics
Chris Ian Brian Mynott Philp (Conservative, Centre-right): I thank the hon. Gentleman for raising that point. I am afraid I disagree with his concerns and I will address these matters in more detail shortly I was endorsing the Chancellor’s plan to continue deficit reduction and to eliminate the deficit by the end of this Parliament. If this country is to have a stable economic future, and if we are to be in a position where we can weather anything the future throws at us—there may well be further economic turbulence from overseas in the years ahead—it is essential that we have a balanced budget, and the Chancellor is right to aim to achieve that I note, however, that the Red Book tables C.3 and C.5 forecast significant increases in tax revenue over the next five years, which are essential if we are going to balance the books. Revenue over the next five years is forecast to increase by £168 billion, an increase of 26% from today. At the same time, expenditure is going to increase by £69 billion, an increase of 9% from today. If for any reason that 26% increase in revenue does not materialise, the Government will have to look again at their expenditure plans. I am sure Members will watch very carefully to make sure that those revenue assumptions do indeed come to pass over the coming five years I commend the Chancellor for his work on fairness over the past five years and in this Budget. He has taken action to make sure that the wealthiest in our society pay their fair share and the poorest are given the most help. The top 1% of earners pay as much into the system as the 9 million poorest people in our society. If any Member suggests that the richest are getting an easy ride, they are quite wrong; the richest are indeed paying their fair share. Measures were announced today to clamp down on corporate tax avoidance, which have been welcomed from all parts of this House, and to limit the scope of people using non-dom status to avoid paying their fair share of taxes. I am sure Members on both sides of the House will be quick to welcome that, too There has also been a continuation of measures designed to help the poorest in our society, such as further increases in tax allowances, which disproportionately benefit the poorest; and one of the heaviest taxes of all, the tax on fuel, which bears down proportionately most heavily on small businesses and people on low incomes, has once again been frozen. Had that freeze not started some years ago and been continued, each time we filled up our car the petrol tax would be about £10 to £11 higher. We should thank the Chancellor for alleviating that heavy burden that falls on the shoulders of those who can least afford it. This is therefore a Budget that has fairness at its heart, with the richest paying their fair share while those on lower incomes are protected, which is right I shall now turn to the issue raised in the last intervention: the reform of benefits, and in particular the reductions in tax credits. We had an Opposition day debate yesterday on tax credits, when many Conservative Members pointed out how staggeringly expensive tax credits are, at a cost of £30 billion a year, and how they often serve to— [Interruption.] Sorry, my voice is going a bit; I was cheering so loudly earlier that it is not as clear as normal—I hope the Chief Secretary’s Parliamentary Private Secretary takes note of that Tax credits reduce incentives to work, so it was right that the Chancellor today moved to reduce the cost of tax credits to the Exchequer, but it was equally important that that reduction was accompanied by such a significant increase in the minimum wage, introducing the new concept of a living wage—it will rise to £7.20 an hour next April and will continue up to £9 an hour by 2020.