Budget Resolutions and Economic Situation

Income Tax (Charge)

That income tax is charged for the tax year 2023-24.

And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

It is a pleasure to open this final day of the Budget debate. It is a particular pleasure to be opposite my old friend, the right hon. Member for Doncaster North (Edward Miliband). It is a pleasure that both of us now—I think I can fairly say as elder statesmen of our respective parties—have a chance to be taken around the parade ring one more time in front of everyone. There is a difference, however, between me and the right hon. Gentleman. I went from rising hope to elder statesman without an intervening period of achievement, whereas he was a very distinguished Energy Secretary and Leader of the Opposition. It is a pleasure to see him in his place.

The fact that we are both in the Chamber today also demonstrates the wisdom of one of the Budget measures. In the Budget, the Chancellor of the Exchequer made it clear that he wanted to bring people who had been dropped from the frontline of the workforce back into the frontline if they still had something to contribute. It is welcome to see not just both of us here, but, within days of the Budget, someone of real talent who had been retired from the frontline coming back: I am referring, of course, to the news that broke just an hour ago that Roy Hodgson has returned as manager of Crystal Palace.

I am conscious that this is not the most significant political or parliamentary event this week. All of us will this week be thinking of another political figure—a blond titan who divides opinion, a figure of undoubted achievement who defied the then Prime Minister over Europe but whose passion for Britain and especially for overlooked and undervalued communities cannot be denied. I am referring, of course, to the former Member for Henley, Lord Heseltine of Thenford, who is 90 today. I hope I speak for the whole House in wishing Lord Heseltine many happy returns. He is a personal hero of mine, although we do disagree on some things. He is that rare thing—a Conservative who has been given the freedom of the city of Liverpool—

He was against Brexit.

He was against Brexit, that is true. We all have our flaws, myself included. I am pleased to say that many people were in favour of Brexit, including well over 70% of the members of the constituency of the right hon. Member for Doncaster North. Brexit has been delivered by this Government, Brexit is a settled fact and we are all committed across this House to making Brexit work.

Lord Heseltine set an example of leadership: pro-enterprise, compassionate and inclusive in the best traditions of one nation conservatism, which are being carried on by my right hon. Friends the Prime Minister and the Chancellor of the Exchequer. Look at what the Prime Minister has already achieved this year. In the early weeks of this year, he issued a section 35 notice with the Secretary of State for Scotland in order to uphold the principle that the Equality Act 2010 should be a shield and not a sword. As a result, women’s rights were protected across the United Kingdom. Shortly after that, he concluded the Windsor framework, which further strengthened our United Kingdom and ensures a closer and more effective relationship, not just within these islands but with our neighbours and friends in the European Union. He then concluded the next stage of the AUKUS defence pact, which means that the waters of the Pacific will be patrolled and democracy will be defended by submarines built here, in Barrow-in-Furness on the shores of the Irish sea, securing jobs and investment for thousands of talented young people for decades to come.

Shortly after that, we had legislation to control illegal migration and a concordat with President Macron, with money being spent in order to ensure that the French police are supported in making sure that illegal people smugglers are dealt with effectively. After that, we had steps to ensure that tech firms were protected in this country from Chinese takeover, and we also had the rescue of the UK branch of Silicon Valley Bank. We also had the establishment of a new Government Department, the Department for Science, Innovation and Technology. That innovation was called for by William Hague and by Tony Blair—remember him?—and it reflects what every world-leading jurisdiction is doing, ensuring that more research and development investment is directed to where we need it.

Before the right hon. Gentleman gets too excited, the Office for Budget Responsibility’s report provides a rather sobering analysis about economic stagnation for the duration of the forecasting period. That is predominantly down to the same old problems, including low productivity—according to the OBR, productivity has halved since 2010. Business investment has stagnated since 2016. Why have successive Governments and Chancellors failed to get a grip on these issues?

The hon. Gentleman raises an important point, which goes to the heart of what the Budget addresses. It is the case that there is a productivity challenge that has bedevilled Governments of different colours for years now in this country. Whether Labour Governments, coalition Governments or Conservative Governments, we have all in different ways recognised that productivity has been too low in too many parts of the economy, particularly the overlooked and undervalued communities of the north, the midlands, and indeed south Wales.

But that is what this Budget addresses directly, through a series of labour market and supply-side interventions that are explicitly designed to raise the trend rate of growth of the British economy. We have welfare reform to support those who have been disengaged from the labour market. My right hon. Friend the Secretary of State for Work and Pensions has introduced a groundbreaking White Paper to help those people—they may be struggling with mental health or other difficulties—who need to be re-engaged with care and thought, so that they can again contribute to the economy and enjoy pride and purpose in their lives, as well as contribute to growth.

It is also the case that my right hon. Friend the Secretary of State for Education and the Minister for Children and Families, my hon. Friend the Member for East Surrey (Claire Coutinho), have brought in groundbreaking childcare reforms. These reforms are a win-win-win. They ensure that men and women can return to the workforce at an earlier stage to contribute economically, they ensure that children can have the best care and support, so that they can arrive at school ready to learn, and they contribute to making sure that we are both family-friendly and pro-growth. These are exactly the sort of supply-side interventions that will contribute to not just a growing economy, but a fairer society.

Like the two gentlemen on the Front Benches, I was also the future once. The point that the Secretary of State makes about labour market reforms is extremely important; in the lakes and dales of Cumbria, 63% of our employers are operating below capacity because there are not enough workers in the area. The big problem for us, which I know the Secretary of State is seeking to tackle, is the collapse of the long-term private rented sector into Airbnb. Could he give me some assurance of when this Government will change planning law to allow communities such as mine to control our housing stock, so that there are enough homes affordable and available for local families and local workers?

The hon. Gentleman makes a very good point: whatever our other disagreements, he is absolutely right to focus on that issue, as so many others have done. Of course we want to have a labour market that works, and of course we want to have a tourism sector that works, but there is a problem in the private rented sector, particularly in beautiful parts of our country such as those he represents, where homes are being turned into Airbnbs and holiday lets in a way that impedes the capacity of young workers to find a place where they can stay in the locale that they love and contribute to the economy of which they wish to be part. We will be bringing forward some planning changes to the Levelling-up and Regeneration Bill, which are intended to ensure that we have restrictions on the way in which dwelling homes can be turned into Airbnbs. I look forward to working with the hon. Gentleman and other colleagues, including my hon. Friends the Members for North Cornwall (Scott Mann) and for North Devon (Selaine Saxby), to make sure that those reforms will work.

The Secretary of State talks about childcare measures, but when it comes to people with caring responsibilities, childcare measures are not enough in themselves. Some 1.7 million people are economically inactive because of caring responsibilities, and there was no support for unpaid family carers in the Budget. Caring responsibilities are a major reason for people not being able to work or having to cut back their hours, and this Budget was a massive disappointment to those people.

I appreciate the point that the hon. Lady makes, and she is right to draw attention to and thank those who exercise caring responsibilities. The family is the foundation of our welfare society, even before the creation of the welfare state, and we need to work in partnership with carers everywhere. I know that she and others—including, if I may say so, the leader of the Liberal Democrats, the right hon. Member for Kingston and Surbiton (Ed Davey)—have come forward with proposals to ensure that we can better support carers. It is the mission of the Secretaries of State at the DWP and the Department of Health and Social Care to see what more can be done, particularly in the wake of the covid pandemic, which has placed particular pressures on some of the most vulnerable in our society.

Where families make a choice that one parent will remain at home for full-time childcare, their tax treatment is much, much less eligible than for couples where both parents work. If we are to have true freedom of choice in childcare arrangements, there is an agenda on taxation that we need to address.

I know that my right hon. Friend and other Members of this House, including my hon. Friend the Member for Penistone and Stocksbridge (Miriam Cates), have raised interesting questions about how we can better support families overall. Both the Prime Minister and the Chancellor of the Exchequer are absolutely determined to explore what more we can do, but tax changes are, and always have been, above my pay grade. They are a matter for the Chancellor of the Exchequer in consultation with the Chief Secretary to the Treasury, and I know better—particularly after recent weeks—than to try to guide their hands.

Will the Secretary of State give way?

I am very happy to.