Jesse Norman, Financial Secretary to the Treasury, responds to the second day of the Budget debate.
The hon. Member for Stalybridge and Hyde (Jonathan Reynolds) was absolutely right to highlight the second day of a Budget debate as a moment when we can discuss these bigger issues. I join him in thanking nearly 50 colleagues for their contributions, but I am afraid I disagree with him on some of his diagnosis; perhaps, in the course of my remarks, I can explain why.
The hon. Gentleman claimed that the Budget had no ambition. You do not have to listen to me or the Chancellor, Madam Deputy Speaker, if you want to know whether the Chancellor’s Budget had ambition; you can simply listen to the Resolution Foundation, which said:
“This was a big, policy focused, budget. It rightly sought to boost the recovery before turning to fix the public finances, in both cases with a large (potentially too large) focus on Britain’s firms.”
That, I think, is pretty clear. It also said:
“Continuing furlough to September will reduce the rise in unemployment ahead, with the Office for Budget Responsibility (OBR) expecting it to peak at just 6.5 per cent (down from 7.5 per cent). If realised, this would be”—
I am quoting—
“by far the lowest unemployment peak in any recent recession, despite this being the deepest downturn for 300 years.”
That would include the Labour recession of 2008. So we can only hope and pray that these measures may have something like that effect, but to suggest that they are short of ambition is quite wrong.
If I may, let me just remind the House of the scale of what we are attempting. There are three great themes to the Budget. The first is the need to support people and businesses through this crisis; the second is the need to begin to fix the public finances; and the third is the need to lay the foundations of our future economy. Those are all big issues. As the hon. Member for Stalybridge and Hyde rightly pointed out, those are big matters which we are grappling with, and gripping, from the Dispatch Box and from the Chancellor’s own Budget.
Let us just touch on those. Supporting businesses and people—that would be extending furlough to the end of September. It would be the further grants we have made to the self-employed: the restart grants, a new set of grants designed to help the retail, hospitality, leisure and personal care businesses—I emphasise personal care businesses, such is the very important role they play in our economy—to get going again. The business rates holiday, which has been extended for three months before tapering for another nine months. Extending the VAT cut to 5% for a further six months before tapering it for another six. Continuing our stamp duty cut. Extending universal credit and working tax credits by six months. More money for apprenticeships. New recovery loans. A large package for the arts, culture and sports.
That is one component of this Budget, but of course, as the Chancellor has rightly emphasised, we must engage with the work of fixing the public finances, and that is why we are asking the largest and most profitable firms to pay more in two years’ time by increasing corporation tax. But of course we are giving at the same time, in the shorter run, a super-deduction. I think that is a very thoughtful policy. What that essentially says to those businesses—something like £100 billion is held on corporate balance sheets at the moment in the UK—is that we need to get away from the patterns of underinvestment by business, and this is a way of attempting to move corporate Britain in that direction. It may succeed, it may fail, but it is a very worthwhile attempt to kick-start that business investment that will be foundational, not just to recovery from the pandemic but to our long-term prosperity. Of course we have taken a variety of other measures to support the public finances and then to build the future economy.
The suggestion was made by some colleagues across this Chamber that the Budget was a piecemeal effort; that could not be further from the truth. Forty-five new town deals. The £150 million community ownership fund. The freeports in England. The infrastructure bank. I have been very closely involved with the infrastructure bank, and I can tell you that it will potentially be a very significant institution. It has, of course, its starting capital, but it also has firepower of up to £40 billion. That is not a trivial amount of money, and placing it in Leeds could not be a more emphatic demonstration of the Government’s commitment to levelling up, as the move by not just the Treasury but other Government Departments—the Department for International Trade, BEIS and the MHCLG—to join in a new campus in Darlington has been. As my hon. Friend the Member for Darlington (Peter Gibson) said, that will transform that town, but it also sends a much wider signal: “By their fruits shall ye know them.”
It is all very well talking about these things. Those towns and areas could have been supported by the Labour party over decades and they were not. This Government are stepping forward to make that difference. Of course, the difference will not be just in the investment—the pounds, shillings and pence that are spent there. It will be in the lifting of expectations, the career opportunities, and the possibility of framing a new narrative based on different assumptions about how the world works than just those to be found in London. That is profoundly exciting and important.
Of course, we are talking also about the levelling-up fund, Help to Grow, and a very important development on future breakthrough. I love the fact that we will support not just levelling up but our green investment through the UK infrastructure bank. That will be a very important part of the picture. Let me turn to some of the comments made by colleagues, because they were very well taken. There are many areas where I am not sure that I always agree with my right hon. Friend the Member for Wokingham (John Redwood), but when he said, “Go for growth,” he was absolutely right to emphasise the growth aspects of the Budget.
My hon. Friend the Member for East Devon (Simon Jupp) pointed out, rightly, that the Budget delivered for Devon. He was absolutely spot on about that. I disagreed with my hon. Friend the Member for Christchurch (Sir Christopher Chope) about corporation tax. He needs to understand, if I may say so, that the rise in corporation tax was the result of many aspects of things. What is noticeable about it, though, is that it did not trigger an enormous increase in business investment. That is one of the reasons why we have adopted this slightly different approach.
I agree very much with the words of my hon. Friend the Member for Bolsover (Mark Fletcher), who pointed out the importance of the start-up grants that will support beauty and personal care businesses. He was absolutely right about that. He mentioned the town deal and the east midlands freeport, and rightly so. I agree with the hon. Member for Leeds North East (Fabian Hamilton), who said he was pro our UK infrastructure bank being located in Leeds. He was right to say that. That was not by any means the picture taken by the hon. Member for Leeds East (Richard Burgon), who also spoke, but I think that the hon. Member for Leeds North East was right in saying that.
The point that my hon. Friend the Member for South West Hertfordshire (Mr Mohindra) made in praising the Chancellor’s honesty and directness when engaging with us struck a chord with me. I think it strikes a chord with many people across the House and in the wider public. My hon. Friend the Member for Loughborough (Jane Hunt) pointed out the importance of skills—absolutely right. My hon. Friend the Member for Sedgefield (Paul Howell) pointed out the value of the super-deduction plan. Again, I thoroughly agree with him.
It was nice to hear my great friend, my hon. Friend the Member for Thurrock (Jackie Doyle-Price), talk about the importance of her Thames freeport. That is right.
I was surprised that the hon. Member for Liverpool, Wavertree (Paula Barker) did not welcome the Liverpool city region freeport, which I think will be a tremendous boost to that area. I think she was wrong to say that. I think it will be widely welcomed, particularly as it gets up and running. I share the view of my hon. Friend the Member for Thurrock on that.
I respected very much the hon. Member for Croydon Central (Sarah Jones) as she sang the glories of Croydon. That was a beautiful moment in our debate. I very much liked the possibility that you, Madam Deputy Speaker, might, as my hon. Friend the Member for Watford (Dean Russell) invited you, teach the world to sing. I look forward to that very much. Perhaps in a future debate we can be treated to a yodelling intro in the style of the late New Seekers—or am I betraying my age?
My hon. Friend the Member for Ipswich (Tom Hunt) was absolutely right. He pointed to the town deal that existed for Ipswich. He pointed to Freeport East, and said, or implied—I am sure he would say—that this is a Government who do what they say. I am very pleased that, in that regard at least, we have been able to deliver for him in a way that we have delivered for many other places across the country that historically have been ignored.
Let me end by thanking hon. Members for their comments. We are trying to do something big here. We are trying to respond to the big issues that the hon. Member for Stalybridge and Hyde rightly flagged. He is wrong about what he claims are cliff edges. There is, in each of the cases I have described, a tapering effect in the major reliefs, which is designed to return us to something akin to normality if we can follow the road map and get out of the position we are in. The fact of the matter is that, as the Resolution Foundation pointed out, we are in the worst crisis, the deepest downturn, for 300 years. That is not a fact we can ignore, and it is a fact that it is incumbent on us, across the House and in this Government, to address.