The Economy

Part of the debate – in the House of Commons at 2:01 pm on 24th October 2019.

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Photo of Mel Stride Mel Stride Chair, Treasury Committee 2:01 pm, 24th October 2019

I agree with my hon. Friend entirely. In fact, one of the prisms through which we should view this Budget is also how well-funded rural communities are compared to urban communities. That is a very important point. Moreover, we need to look at the tax impacts of the measures that come forward in the Budget, not least on those who are the least well-off. Those on the Opposition Front Bench will have heard me tirelessly repeat the mantra that 28% of all income tax is paid by the wealthiest 1%. However, although that is true, it is not the same thing as saying that we should not keep an eagle eye on the bottom quintile and make sure that they are fairly treated.

I also want to consider the issues that my hon. Friend Fiona Bruce has often raised with me about the interaction of the universal credit taper and the income tax regime, and the fact that, for some lower-income families with children, that leads to marginal tax rates of 70% or more. That is unjust and something on which the Committee may wish to focus.

My final point on the Budget is that, as a global economy, we are facing a slowdown. Most projections now have gone from growth of 4% to about 3%. There are corporate debt issues in China, which are weighing down investment globally, and we have a trade war between the United States and China. With regard to our own fiscal numbers, we have had a reclassification of the student loan debt such that some £12 billion has been taken out of the so-called headroom between what we can spend and the meeting of our fiscal mandate in 2020-21. Given all the expenditure commitments that are being made at the moment, the Committee will be looking very carefully at the issue of fiscal prudence and making sure that the new fiscal targets that the Chancellor may come forward with are, first, appropriate and, secondly, actually achievable.

There are some other important issues that I wish to raise. The Chancellor used the expression, I think, that he wants to come forward on the people’s priorities. I call that the Dog and Duck test. What is it that people, when they are down the local pub—if they still have a local pub—talk about and care about? I wish to raise two priorities. One is access to local finance. That was raised very eloquently by Kirsty Blackman and also by way of intervention by Jamie Stone. I call on Barclays to reconsider its decision in relation to the availability of cash over the counter at post offices. I know that my hon. Friend the Economic Secretary had a meeting with the chief executive of Barclays just yesterday and that he is working very hard on this issue. None the less, in many communities, including those in my constituency, where the last bank has gone, it is the Post Office to which we turn. I pay tribute briefly to Stuart Rogers, the postmaster at Ashburton post office and a leading member of the National Federation of SubPostmasters, who has done such brilliant work in this area. I know, in fact, that he is known to many Members in the Chamber for his work up here in Westminster.

In my final 20 seconds, let me say that we need to get fairer taxation internationally for those online businesses, which create value through internet platforms such as search engines in social media and marketplaces. People expect them to be taxed fairly. It is a matter not of avoidance, but of having a tax regime that is fit for the 21st century.