Budget Resolutions and Economic Situation

Debate between Giles Watling and Richard Graham

Wednesday 15th March 2023 Commons Chamber

[Giles Watling (Clacton) (Con)]

It is a pleasure to follow the hon. Member for Brentford and Isleworth (Ruth Cadbury). There are many things in my right hon. Friend the Chancellor’s Budget that I welcome, but I start with two. First, the doubling of the care relief threshold, giving an average tax cut of £450 for qualified carers. That is great news for Clacton, which has an economy that is based on care and tourism, and we need that incentive for care. Secondly, the £200 million for potholes—they are a hole in our budget—will be an enormous help.

One thing I must mention is the extension of tax relief for theatres for another two years, which has made me simply ecstatic. I am the chairman of the all-party parliamentary group for theatre. Given the nature of how they work, theatres were the first to close in the pandemic, and the last to reopen. Their energy bills are soaring and they are struggling to get bums on seats. We cannot give up our great soft power offer that goes across the globe; since the time of Shakespeare, we have exported the English language to the world through theatre, film, television and the performing arts, which we must support. I have travelled the globe taking great theatre to every corner, and it is a soft power that we must not forget. They need help with their energy bills now, and I will shout about that a lot in the future.

We Conservatives pride ourselves on being the party of low tax and high growth, and on our ability to look after taxpayers’ money. It is worth saying again and again that it is not our money, the Government’s money or this House’s money; it is the people’s money—taxpayers’ money. As my right hon. Friend the Chancellor stated earlier in the week, it was due to Conservative fiscal diligence —saving 80% of the finances coming in at the time—that we could afford to deal with the pandemic and not least the incredible furlough scheme that saved people’s jobs. However, people need a break—as much as some people need time off and a good holiday, perhaps visiting the wonderful sunshine coast of Tendring, people need a tax break for growth. With soaring energy bills caused by Putin’s horrific war, and inflation making pay rises ineffective and running a home nearly impossible for many, people need to be paying out less. If we allow the public to hold on to more of their money, what do they do? They spend it. We all know in this place that the economy goes round and round, so that is what we must do.

One area we must tackle is outdated taxes. Business rates and council tax are spectres from the past—decades out of date and not collecting anything resembling the real-life impact. For example, two people in a band D home will pay as much as four people next door, despite representing 50% less service use. A shop can have a far greater tax burden than many online and tech entrepreneurs, who can operate from small spaces. We need to grip these issues, and Governments have not gripped them for decades out of fear of reform.

[Richard Graham (Gloucester) (Con)]

Does my hon. Friend share my enthusiasm for the Government’s tackling of the social injustice whereby those on prepayment tariffs end up paying more than the rest of us? Does he agree that the reduction in prepaid tariffs to the average cost of everybody else’s tariffs, saving those people about £50 a year, is a good step forward?

[Giles Watling]

My hon. Friend makes a good point, and I applaud him for bringing that up in the middle of what I have just been saying on these issues.

What have we done so far with these taxes? We pretend that the current system works by just adding pieces on. We increase corporation tax for the private sector and add additional precepts to local government, all to get around the fact that these outdated taxes no longer represent the reality they are supposed to target. We must not just tinker and tax; as we move forward, we must reform and renovate.

While smaller businesses need the financial assistance of paying less into the state, some companies can afford the opposite treatment. Those companies that profited from the pandemic must contribute to the one third of a trillion pounds in debt that we ran up during that time. They include oil and energy companies, which are making an absolute killing through enormous and unprecedented profits. At the same time, deprivation in parts of my constituency has not changed at all.

I am always resistant to the introduction of new taxes; however, introducing a temporary levy on covid profits would correct an injustice that we have all seen over the last few years. I hope that my right hon. Friend the Chancellor has taken this on board; in our meeting yesterday I banged on about primary care at Clacton and District Hospital and banged on again about the rail links to the east of England—Ely and Haughley, which my hon. Friend the Member for Waveney (Peter Aldous) brought up earlier—and the Chancellor’s ears must now be melting from those attacks that I keep giving him. However, he is very receptive on the whole to the needs of Clacton, and also to those of the country, and I commend his Budget.