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Budget Resolutions - Amendment of the Law

Part of the debate – in the House of Commons at 8:41 pm on 13th March 2017.

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Photo of Jeremy Lefroy Jeremy Lefroy Conservative, Stafford 8:41 pm, 13th March 2017

It is a real honour to follow Dame Rosie Winterton, who made some extremely important points, particularly about those who are self-employed.

I believe the Budget was extremely balanced and very sensible, not trying to do too much, but trying to do the right things and, by and large, succeeding. The concentration on technical skills—the T-levels—on infrastructure and on living within our means was welcome. We saw money put into the right places, including business rate relief, addressing a problem for a number of companies in my constituency and, no doubt, in the constituencies of all right hon. and hon. Members.

There was also a substantial increase in the investment in social care. I believe this is just the start; we need to see a radical revamp of the financing of health and social care. In announcing a Green Paper on social care, the Chancellor took a first and firm step in that direction, and it needs to be followed by others, but I very much welcome the increased investment in social care.

Of course, there has been some discussion about the ways in which the additional revenue was found, but let us not forget that this was a balanced Budget: the Chancellor did not seek to increase borrowing—absolutely rightly—and nor did he seek to cut spending any further than was already planned in some Departments. He sought to raise the revenue to pay for the additional investment in social care. That is absolutely the right way to go about it, and I commend him and his team for that.

Raising the revenue through national insurance contributions was absolutely understandable given the constraints, but I welcome the fact that there will be a closer look at this whole area. As the right hon. Lady said, self-employment will be with us increasingly in the coming years, and more and more people are becoming self-employed. That is something to be welcomed, and I have been self-employed in the past. As my hon. Friend Maggie Throup said, it is something we should encourage, but, at the same time, we have to recognise the risks involved.

In future, as we look to raise additional revenue, we ought to look at some of the reliefs available to the higher paid, whether that is reliefs on national insurance and pensions, or reliefs available through schemes that have perhaps outlived their usefulness and that relate only to people at the higher end of the income scale.

That brings me to an important point. As a Parliament and a nation, we have to decide what level of income—what percentage of our GDP—we will raise in taxation and what percentage we will spend. We tend to raise approximately 37% of GDP in taxation, and that will continue through to 2020-21. We spent 40% in 2015-16, and that will go down to about 37% at the end of this Parliament. If we are to maintain the kind of commitments in all areas that we, and the Government, wish to, whether on defence, international development, looking after the elderly through social care, increasing investment in health or increased pension costs, we will find it very difficult to stick to a level of 37% of GDP in terms of both income and expenditure—it will be nearer 40%. That is still well below almost all our fellow European countries, certainly France and Germany. However, we have to take this seriously. It is not legitimate for us to stand here and advocate the kind of investment that, rightly, we want to see, while retaining our footprint as global Britain, and not be prepared to pay for it.

I serve on the International Development Committee, and a couple of weeks ago was privileged to see the work that DFID-supported organisations do in Tanzania with some of the poorest people on this planet in supporting them in their education. We have seen many other such schemes around the world. In Congo last year, we saw DFID working in a place where pretty much nobody else was working—apart from the Congolese people and Government themselves—to bring water schemes to people for the first time.

I was there with Mr Sharma. I think he will remember that visit, where we washed our hands together having drawn water from a pump that had just been put into a village—the first water that those people had not drawn directly from the river. This work supported by DFID is absolutely priceless. As the Foreign Secretary said, it gives Britain a global presence. However, the point made by another speaker about funding for the Foreign and Commonwealth Office is also valid. We have to remember that as we withdraw from the EU there are many Foreign Office missions around the world where we do not have a DFID presence and yet a lot of British development is going on through the European Union. That will now have to be picked up by the Foreign Office. We need to look very carefully at the funding for that.

I would like to say many other things, but time is limited. I make just one plea. The British Council does fine work, as we saw in Tanzania. It wants to teach people English and there is huge demand for that, so we need to give it the necessary resources.