Budget Resolutions and Economic Situation - Income Tax (Charge)

Part of the debate – in the House of Commons at 5:52 pm on 21 March 2023.

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Photo of Ben Lake Ben Lake Shadow PC Spokesperson (Treasury), Shadow PC Spokesperson (Environment, Food and Rural Affairs), Shadow PC Spokesperson (Education), Shadow PC Spokesperson (Digital, Culture, Media & Sport), Shadow PC Spokesperson (Health and Social Care), Shadow PC Spokesperson (Housing, Communities & Local Government), Shadow PC Spokesperson (The Constitution and Welsh Affairs) 5:52, 21 March 2023

It is a pleasure to follow Janet Daby.

With living standards falling at a record rate and incomes in real terms set to remain below pre-pandemic levels until 2028, it is impossible to deny that the Budget is set against severe economic headwinds. But given the impact that rising living costs are having on households across the UK, it is disappointing that the Budget failed to take advantage of the opportunity to ease the burden of higher fuel costs. Four in 10 homes in Wales are thought to be switching off their heating because of the cost, and typical energy bills are expected to remain at historically high levels for some time to come. Additional support could be delivered immediately by extending the energy bills support scheme and guaranteeing off-grid homes an additional round of the alternative fuels payment.

It is staggering that small businesses have been left without additional support for their energy costs. I am worried that many will be forced to close when support is reduced in April if the parameters of the energy bills discount scheme are not expanded. Off-grid businesses have had to endure the rise in alternative fuel costs with paltry Government support. I should like to know how the Government justify the comparative lack of support for off-grid businesses, many of which are located in rural parts of the country such as Ceredigion. Their omission from meaningful support schemes has placed them at a competitive disadvantage to those companies located in more urban areas, which surely goes against the levelling-up agenda, about which we have heard so much from the Government.

If we are concerned about addressing the productivity problems of this country, we need to look at some of the structural issues in the way the UK economy has operated for some decades. There is no better way, in the short term at least, to address some of those structural problems and the productivity issue in rural areas than by investing in digital connectivity improvements.

Gigabit connectivity in Ceredigion stands at 27% of premises, compared with the UK average of 68%. Far too many places in my constituency, and in rural areas in general, suffer from poor connectivity and that hampers their economic development. As the Digital, Culture, Media and Sport Committee noted, the decision to allocate only 25% of the funding for Project Gigabit so far risks undermining the ambition to improve the connectivity of hard-to-reach premises in a timely manner and prevent them from falling even further behind other parts of the UK. I would therefore like the Minister, in summing up, to explain when the UK Government will release the rest of the funding. Will they commit to accelerating the timescales for the roll-out of gigabit broadband in very hard-to-reach areas, many of which often lack both fast broadband and 4G signal?

On HS2, the Chancellor could also have used the Budget to release the £1 billion or so owed to Wales in consequential funding from the £20 billion expenditure already allocated to HS2. Over the project’s lifetime, Wales could receive up to £5 billion in consequential funding to spend on improving our creaking public transport infrastructure. That sum could be transformational for areas in rural mid-Wales such as Ceredigion. Sadly, it does not seem to be coming our way.

The success of any Budget is measured in the way it addresses the immediate challenges facing the economy and whether it paves the way for future prosperity. For rural areas, this Budget sadly falls short on both counts.