Like Sammy Wilson, I welcome the overall message and direction of the Budget. I would not be so cruel as to say it was a boring Budget; perhaps we could say it was a sensible and cautious Budget. When, between Budgets, we think about what an ideal Budget would look like, most of us think it should basically be a sensible evolution of previous policies, and that we should not have expensive rabbits pulled out of hats for the purposes of political grandstanding, but when we get one of those Budgets, we cannot quite work out what to say about it, so we try to talk about—and moan about—all the things that are not in it.
It is absolutely right for the Government to carry on along the course they have previously set. We know that there will be uncertainty over the next two years while we work out precisely what deal we will get with the EU and its impact, so it would have been totally the wrong time to have made big tax cuts or spent loads of money; we might have found out in a couple of years that that was not the right thing to do.
We should welcome the fact that the Budget statement shows that the growth in the economy is stronger than we thought it would be even only three months ago, at the autumn statement, and that for the coming year it is back up to the 2% mark. Many people doubted that we would get to that mark by next year, so that is a welcome sign. The extra growth will allow the deficit to come back down by the end of the Parliament and fall as a percentage of GDP, which is what we promised.
We should note a couple of things about that trajectory. First, between this financial year and the end of the forecast period, tax receipts will rise by 20% to £802 billion in 2021-22. Given the level of growth and how much can be taken out of it, I suspect that that is an optimistic assumption. Secondly, public spending is set to rise over the same period by only 14.6%—I say only, but that is probably quite a large amount. That is how we close the deficit down: with higher tax receipts from economic growth than the increase in spending.
It is worth noting that the increase in public spending in the coming financial year will be 4%, which is quite high and in excess of inflation by quite a lot. It is pretty hard to say it is an austerity Budget when public spending will increase by 4% next year.
I shall spend the rest of my time talking about measures of particular interest to people in Amber Valley. It is probably easy to gloss over, as perhaps the Chancellor did, important measures such as the increase in the national living wage to £7.50, the rise in the personal allowance and the higher rate tax threshold, and all the childcare measures that are coming in. Those measures are extremely important for people’s everyday income, and contribute to the increase in households’ surplus income that we will see each year. It is welcome that wages are still going to increase at a higher rate than inflation.
I also welcome the various measures to mitigate the business rates revaluation. The official numbers show that business rates in Amber Valley will fall by just over 5% after the revaluation, but it is still right that there are measures to help the businesses with the individual highest rises. I welcome the discretionary fund, and I welcome the measure to support pubs by £1,000 a year. It is a pity that the beer duty freezes of recent years have stopped, but I guess that £1,000 off business rates will help with that.
I welcome the funding for the midlands engine and the potential for increased transport funding. I look forward to hearing how those funds will be spent to help the east midlands in particular. I am always a bit nervous when we talk about the midlands, because I tend to think that the west midlands believes that it is the midlands and that the east midlands is the east midlands. I hope that a fair proportion of that midlands engine funding finds its way to the east side of the midlands. I especially welcome the measures to transform technical education—both the quality of it and the esteem in which it is held. It is really important in places such as Amber Valley that people can get quality technical education and the skills that they need to get a decently paid job. It is right that we do all we can to help people achieve that.
I welcome the increase in social care funding. I agree with the Chair of the Public Accounts Committee that in an ideal world, it would have been done on a long-term basis, but there was a clear and compelling case for some short-term money to get us over the current situation. Ironically, my local county council sent a letter to all Derbyshire MPs during the Budget statement, calling for an increase of £2.3 billion over the rest of this Parliament. I am sure that it will be very glad to have an increase of £2.4 billion over the next three years. I suspect that that will not fix the problem; I am not sure how much money it would take to fix the issues that we have with social care completely, but it is, none the less, a welcome step until we can find a permanent solution.
I welcome the funding for NHS transformation plans. The one in Derbyshire has perhaps not had as much attention as it might have done. That is probably because the issues are quite complicated. There is a clear need for capital funding and for allowing the measures in the Budget to be effective. In the case of Amber Valley, I hope that the money that was promised to allow us to rebuild Heanor memorial hospital so that it could be used for more out-patient appointments can now be found, and that the project can be definitely confirmed. A key part of relieving the pressure on our hospitals is having more work done in the community, rather than in the hospitals themselves.
There is a lot of concern in my constituency about the strategy, “Making tax digital”. I always thought that it should not be applied to those companies operating below the VAT threshold. It may not be easy for businesses that do not regularly account for VAT to get accounting records for use under the strategy. I am not sure whether, in a year’s time, that situation will have changed greatly. I hope that there is some kind of delay while we work out the right solution for that level of business. May I also suggest that if we go ahead, we make the scheme voluntary for those very small businesses? If there really are clear advantages for companies to keeping better records and knowing what their tax bill will be in real time, let them choose to opt in and find those benefits, rather than us trying to make them do it, as that would boost their confidence in the reform. I am not sure how many would choose to opt in, but perhaps it would help if we showed them that the benefits were there.
I have some concern about schools capital funding. I have no ideological objection to grammar schools and selection; if they can help to improve school standards in Amber Valley, let us give them a try. What I am not so sure about are the mechanisms for making that change. Amber Valley has issues with school standards. The league tables last year were pretty disappointing. I am not sure how areas such as mine get those new schools and therefore gain access to that funding. We have to find a plan that works for the areas that need to improve their educational standards and then fund it, rather than hoping that, somewhere, there are parents with enough money and time to do something—I certainly have seen no evidence of that. I look forward to the Government showing us how their plans will work to benefit areas such as mine.
Finally, I have a few remarks on self-employment. Clearly, a tax rise that discourages any kind of activity is not attractive, especially when our economy is quite reliant on self-employment. If we put it in context, though, we see that national insurance for people who are in employment is somewhere just under 26%, if we take into account employees and employers, so a rise to 11% for the self-employed is nothing like levelling out the situation. Although there are advantages that those in self-employment do not get, they do not equate to a gap of that size. None the less, that rise will be unwelcome news to people who are probably struggling and not getting all the rights to which they are entitled.