Budget Resolutions and Economic Situation — Amendment of the Law

Part of the debate – in the House of Commons at 8:23 pm on 25th March 2013.

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Photo of Paul Uppal Paul Uppal Conservative, Wolverhampton South West 8:23 pm, 25th March 2013

No; not 11 years later. [Interruption.] If Labour Members disagree, perhaps they will recall the views of Hamish McRae, the economist who writes for The Independent, who has commented on the issue at length. However, I digress.

The essence of today’s debate concerns housing policy. I am glad that the Government have confirmed that they will make up to £12 billion of guarantees available to support more than £130 billion of mortgages for new-build and existing homes in January for three years. I also welcome the Chancellor’s commitment to realigning the Government’s policy on the private rented sector by increasing the £200 million build to rent fund to more than £1 billion, and providing a £225 million funding boost to support a further 15,000 affordable homes in England by 2015.

Members on both sides of the House have made various points, but it might be wise at this juncture to refer not to politicians, but to housing and property experts. I do not know whether anyone has taken the time to read this week’s edition of Estates Gazette, which is the bible when it comes to real estate and housing issues. According to Richard Threlfall, KPMG’s head of infrastructure, building and construction,

“the Chancellor has thrown the UK house building industry a new lifeline.”

Nick Jopling, executive director of property at Grainger plc and chairman of the Urban Land Institute’s UK Residential Council, added:

“Stimulating the housing market through further mortgage support…will help improve transactions and liquidity in the market, which has for some time been constrained.”

Stewart Baseley, executive chairman of the Home Builders Federation, said:

“A lack of affordable mortgage availability remains the biggest constraint on housing supply”.

He also said:

“Government must be praised for its attempts to stimulate activity”.

Gerry Hughes, senior director at GVA, said:

“We welcome the healthy five fold increase in the Build to Rent fund. This will undoubtedly assist a sector that is struggling severely.”

I will cut my quotations short at this point, but let me emphasise that those are not the views of politicians, but the views of property professionals.

I think that last week’s Budget statement was seminal in many respects, and that the opening line was crucial. The Chancellor said:

“This is a Budget for people who aspire to work hard and get on. It is a Budget for people who realise there are no easy answers to problems built up over many years—just the painstaking work of putting right what went so badly wrong.”—[Hansard, 20 March 2013; Vol. 560, c. 931.]

I believe that blue-collar workers out there, and the general population, understand the challenging economic climate, and agree that we need to tackle the deficit. The Chancellor stated that it had now been cut by one third, not one quarter, and that according to the Office for Budget Responsibility, we are on course to fulfil our fiscal mandate. However, tackling the deficit, although right and necessary, cannot be our only message. We need to reinforce and go further in regard to some of our flagship policies, taking low-paid workers out of tax and freezing fuel duty. Above all, blue-collar workers want to see more money in their wallets at the end of the month, and I believe that we are on course to achieve that. The Budget demonstrates that our priorities—the Government’s priorities—are in the right place.

The Leader of the Opposition often comes to the Dispatch Box and accuses the Government of being “out of touch”. The Budget shows that we are on the side of workers, of families, of people who want to get on and make a better life for themselves. It shows that the Government have their priorities at heart—the right priorities. Our priorities are in the right place when a Budget raises the personal tax allowance to £10,000 from April 2014, which means a tax cut for 24 million people. As a result, some people will pay £700 less in income tax than they did in 2010, and 2.7 million will be taken out of tax altogether. Our priorities are in the right place when fuel duty is being frozen once again, which makes this the longest freeze for over 20 years. Pump prices will be 13p lower than they would have been as a result of Labour’s plans, leaving the average motorist with £170 more in his or her pocket. We are helping the aspirational workers, but we are also helping the entrepreneurs, the risk-takers and the employers. The small businessman has faced, and still faces, numerous challenges. Things are not easy, but, as a Government, we can help to make things easier, and help to make those businesses succeed. The fall in fuel duty will help them, too, but more importantly the package of business reforms will make a real difference in the pockets of businesses up and down the backbone of this country.

We will cut the jobs tax for every business by £2,000 in 2014. We are taking people out of tax: 450,000 small businesses—one third of all employers—will pay no jobs tax at all. I hope the Chancellor takes similar steps to increase the allowance in future Budgets. Taking more small businesses out of paying the jobs tax will provide a greater incentive to take on more workers during the continuing long-term rebalancing of our economy.

In talking about entrepreneurs and employers, I would like to commend the Government for cutting corporation tax even further. Under the previous Government, business taxes were at 28%. Now we have the lowest rate in the G7, and next month it will fall to 23%. When it reaches 20% in April 2015, we will have the lowest rate in the G20. This is great news for people who wish to invest and bring jobs to this country.

This is a Budget for aspiration and ambition and for all those who wish to work hard.