John Glen
Main Page: John Glen (Conservative - Salisbury)Department Debates - View all John Glen's debates with the HM Treasury
(2 days ago)
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Darren Jones
That is a slightly odd question, but I can definitely confirm that any tax changes, one way or the other, will be announced by the Chancellor at the Dispatch Box in the normal way in the autumn.
As I say, Conservative Members are welcome to come forward with suggestions about how they might pay for the decisions that this Government have taken. Maybe they disagree with our fiscal rules, which are our assurance to the financial markets that we will live within our means and reduce Government debt.
John Glen (Salisbury) (Con)
The right hon. Gentleman is being generous in giving way. One area the Opposition would be looking at is a coherent reform of the welfare system so that, by changing the pathway to entitlement to benefits, we get that whole budget under control, which would make a meaningful difference to the fiscal position that the Government are in.
Darren Jones
As the right hon. Gentleman knows, my colleagues in the Department for Work and Pensions, with the Stephen Timms review and other work, are taking those measures forward.
John Glen (Salisbury) (Con)
A few months ago, I met a former civil servant. He told me that when he was working in government in the run-up to the ’97 election, Ed Balls would come into the Department and say, “Look, this is what our manifesto says, but here is the three-page memo on what we are actually going to do in government.” In fairness to that Government, they achieved quite a lot. In their first two years, of course, they stuck rigidly to the Conservative spending plans, and Tony Blair’s economic adviser, Derek Scott, said that they had a golden economic legacy.
I have listened very carefully this afternoon to the speeches made by Government Members. Of course, I can acknowledge where we were, in terms of the economy, and the fact that the country wanted change; I recognise that. Government Members, however, have failed completely to acknowledge the scale of the once-in-100-years covid experience, what that did to our public finances, and the challenges it gave us in the Treasury—the tough decisions we had to make, and the inevitable scarring to the economy.
John Glen
I shall just finish my point and then I will give way to the hon. Gentleman.
The typical refrain is then to say, “What about Liz Truss?” I was not a member of Liz Truss’s Government, but I am sure that my colleagues who were did the very best that they could. She was in office for seven weeks. I acknowledge that, politically, it was catastrophic for my party, and there are lots of lessons on which we will have time to reflect, but the failure to acknowledge properly the dominant reason for losing that last election, which was related to the scarring of what happened with covid and the fundamental challenges, does not do credit to this House. I shall give way to the hon. Gentleman if he still wants to intervene, presumably on Liz Truss.
Dr Sandher
I thank the right hon. Member for giving way. We sit on the Treasury Committee together and I find him to be an incredibly kind and brilliant Member of Parliament. He has been very kind to me personally as well.
On the experience of coming out of covid, our contention is not just about Liz Truss, but about the fact that we had the highest inflation and the highest energy bills. Natural gas, which we depend on, sets the price 98% of the time. It is also 50% to 75% more expensive than wind and solar, so the lack of investment in clean energy left us with higher inflation and made us poorer.
John Glen
No, I will a bit of progress now. I will give way to the hon. Gentleman later, even though he did not give way to me earlier.
The Chancellor came to the Treasury Committee in November. She said, “We have now set the envelope for spending for this Parliament, and we will not be coming back for more tax increases or, indeed, more borrowing. We now need to live within the means that we have set ourselves in the Budget and in the allocations of those spending totals.” What has happened in a year? Of course, I recognise that events occur, and I have referred to those under the previous Government. They do present challenges, but the Labour party’s fundamental problem is understanding the effect of high burdens of tax on wealth creators and their motivation to employ people and to invest in the productive capacity of the economy—more jobs and more tax revenues from lower rates. This Government are saying that we can do a little bit more on national insurance; that we can just put a few more burdens of regulation; that the long-term capital investment of £190 billion will transform our economy.
However, what I hear from businesses in Salisbury—small or large—is that the motivation to grow a business, to employ more people, and to say that they are determined to do so because there are some rewards from that is rapidly diminishing. What we hear is speculation about which additional taxes will be imposed after the next three months. Today, Government Members have suggested equalisation of capital gains tax, a flat rate of pension relief, a wealth tax, or higher bands of council tax—although they may have been ruled out. The overall effect on top of what we have already had is for businesses to say, “I’m not going to do this anymore.” We have now had two consecutive months of negative growth. That may well continue, which is bad for everyone. It is bad for the capacity that we have as a country to invest in the transformation that we all seek to deliver on—some things we will agree on—and it is not sustainable if the Government do not recognise that businesses will not grow and expand if that tax level rises beyond a certain amount.
Tom Hayes
I thank the right hon. Member for giving way, particularly as I apparently did not give way to him. I did not realise that it was he who was trying to intervene on me, otherwise I would have given way.
I recognise what the right hon. Member is saying about covid. I think that as a country we have not yet come to the terms with the true impact of covid and we will not do so for a long time, because it still feels very near to us. As a new Member of this House, I take the point that we ought to understand the true impacts. The concern for me and perhaps for other colleagues is that by trying to focus only on covid, and not on the economic and fiscal impact of Liz Truss—I know that he was talking about the political impact—we will never learn the lessons of the Liz Truss moment, and we just do not want to lose sight of the lessons that can be learned.
John Glen
Absolutely. [Interruption.] I am told that I ought not to take any more interventions, but I will say that Liz Truss’s insight about the imperative for growth was right; we do need to look for growth. What she did not do was examine the conditions to do that in a way that the market could understand, and it had catastrophic effects.
We now have a Labour Government, and we now have working people being massively affected by tax changes. We have Andrew Bailey, Governor of the Bank of England, saying that as a reaction to the national insurance changes, businesses have made changes to employment—that means firing people—and we have Paul Johnson downgrading growth prospects, alongside virtually every other independent analyst.
The winter fuel payments were an absolute disgrace. The changes to agricultural property relief and business property relief were put on my desk at every fiscal event, but one just has to say no, because they are the wrong thing to do. The political capital that has been lost by the Government and the damage to their reputation for their stewardship of the economy is catastrophic. I say to those on the Labour Benches that we are facing some really tough challenges as we approach the next Budget. The choices that this Government need to make on taxes will define their future. What happened last week was the worst possible situation.
Several times today we have been asked, “What would you do?” What we would have done and what we would do now is take a root-and-branch look at the welfare system to see what the Government should do. We would focus on the most vulnerable and look after them well. We would recognise that one of the legacies of covid is that the pathway into benefits has gone fundamentally wrong and the country cannot afford it. Unless we grip that major driver of costs for this country, we shall see taxes rise and rise to meet those iron-clad fiscal rules, and we will be in a spiral of decline.