Budget Resolutions and Economic Situation — Amendment of the Law

Part of Ways and Means – in the House of Commons at 1:54 pm on 18 March 2015.

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Photo of Andrew Tyrie Andrew Tyrie Chair, Treasury Sub-Committee, Chair, Treasury Committee, Chair, Parliamentary Commission on Banking Standards (Joint Committee), Chair, Treasury Committee 1:54, 18 March 2015

We will be looking at such issues. I was not trying to make that case, or if I was, I was also pointing out that, in the early stages of the recession created by the financial crisis, almost every sector of society had borne some of the burden. I think that the Hansard record will show that I made that point.

We have to rely on conflicting survey data from the Office for National Statistics. The Bank of England has complained about the quality of data, and a heap of other people have said that the data need to be improved. The Treasury Committee ought to look at that in the next Parliament. Some data suggest that the man in the middle is not much better off even in nominal terms—the point was made by the Leader of the Opposition—which is based on the annual survey of hours and earnings. However, another ONS annual survey shows that the man or woman in the middle who has been in continuous employment has done well since 2010, both in nominal and real terms. Those data need to be considered very carefully, because the overwhelming majority of people in work have been in continuous or near continuous employment for the past five years. The data look quite persuasive as an overall picture of living standards. In answer to the hon. Lady’s intervention, the Treasury Committee will certainly consider that matter.

Whoever wins the next election—I hope the whole House will understand that I am very biased about who I think will win—all these tricky issues will need to be considered carefully. The Committee will need to set to work on further research into some of the points and policies covered in this Budget and over this Parliament. Competition in lending and banking has already been mentioned, and we must find a way of getting much greater competition in the banking sector. In relation to doing more to encourage long-term savings, the measures announced today are only a start, because something has been seriously wrong with the savings culture in this country for a long time. The Committee has already said a good deal about reforming and simplifying the tax system, and more needs to be done. The fact that some parts of the tax system are still hopelessly complex provides an opportunity for tax avoidance and evasion, reduces the yield and is bad for overall economic performance. There are also the economic effects—by no means all good—of current energy policy, among many other important energy issues, its reliefs, allowances and public spending subsidies.

What matters most are the measures that will succeed in releasing the energies of the British people. That used to travel under the name of Supply side reform. The next Parliament, with the next Government inheriting a more stable economy, will be an opportunity to get more Supply side reforms under way. I have a clear view, as do many other Members, about how to accomplish that, but it is absolutely essential to move on from the deficit reduction task to that of ensuring we improve the overall economic performance of the British economy in the long run.