Economy, House of Lords, Speeches

Budget Statement

Posted by LordSheikh

My Lords, I was able to speak in last year’s post-Budget debate. Twelve months ago, we all hoped that we would now be in a healthier economic position. We have admirably cut our deficit by a third and seen more than 1 million new private sector jobs created. However, the wider global situation, particularly in the eurozone, remains such that full recovery is still some way off and the continued growth downgrades have been inevitable. Above all else, what is important in such times is that we maintain discipline and stick to our course of austerity, particularly in the face of the confused calls from the Opposition for higher borrowing. More borrowing is not the answer to our problems.

It is crucial that we are seen to be taking the right decisions for the right people by helping those who genuinely want to get back into work, by nurturing the talent and innovation of our young people, and by helping businesses in need of assistance, as businesses form the backbone of our economy.

I am very supportive of bringing forward the £10,000 income tax threshold to next year, positively impacting on 24 million people. The more of people’s hard-earned money they are allowed to keep, the more empowered and encouraged they will feel to spend it. That will result in greater revenues to those parts of our economy that so desperately need them and, ultimately, in a healthier all-round cash flow to stimulate growth.

The scrapping of this year’s fuel and beer duty rises is also very welcome. Again, it is a measure that will affect the average person in their day-to-day spending and, I believe, provide that small but foundational level of help that people really do notice.

I should also like to express my support for the very difficult decision to cut further the budgets of some of our government departments. Diverting £3 billion per annum from Whitehall departments to the implementation of major infrastructure projects such as roads, railways and power stations will make more of a difference to the everyday lives of working people and create thousands of new jobs.

I also applaud the proposals concerning home ownership. These will help people to buy houses and will assist housebuilders, generate more business activity and create jobs.

I endorse the decision to protect our health, education and international development budgets, as well as the responsible decision to exempt military personnel from the caps imposed on other public sector pay rises. As someone who is interested in humanitarian matters, I am pleased to learn that we will continue to spend 0.7% of our national income on overseas development.

One area where I hold particularly strong feelings is the erosion of our competitiveness, which has without doubt been one of the fundamental causes of our continued stifled growth. This has been due to the red tape and bureaucracy implemented by the previous Government, coupled with the very challenging shift in global wealth from West to East. In short, when this Government came to power, the UK was no longer an attractive place to start a business. Much of this is already being addressed through the Enterprise and Regulatory Reform Bill, and I was heartened to hear of the Chancellor’s decision once again to reduce corporation tax. We already boast the lowest corporation tax rate in the G7, but we can now proudly say that, based on projections, as of 2015 we will also have the lowest rate in the entire G20.

Perhaps one of the most notable announcements made yesterday was the cut in companies’ national insurance contributions, removing huge barriers for smaller businesses and meaning that a third of all employers will not have to make any further national insurance payments.

I support the Government’s announcement that we will be taking forward the recommendations in the excellent report of my noble friend Lord Heseltine, No Stone Unturned: In Pursuit of Growth. I agree with the Government’s policy of taking robust action and improving our system of training and education, particularly in relation to apprenticeships and vocational training. This will enhance our manufacturing base and help in our recovery.

As someone who is widely travelled and has contributed a great deal on trade issues in your Lordships’ House, I shall now focus my remarks primarily on the export-led recovery. There is no more obvious a way to grow a country out of economic turmoil than by increasing trading links—in particular, levels of exports—with other countries. I have been very heartened by the efforts of UK Trade & Investment since the previous Budget. In particular, earlier this month it announced that its Trade Challenge Partner initiative will be implemented, with 99 partners drawn from trade and other membership organisations, with the aim of getting more of the members exporting overseas and further supporting those that already do.

I welcome the appointment of parliamentary trade envoys, who have the potential to make a real difference. I should like to see an expansion of the role and number of these appointments. There are plans to develop British business support networks in 20 priority high-growth and emerging markets, and I know that my noble friend Lord Green led a conference just last week to announce the establishment of the India trade network. These are exactly the kinds of initiatives that I should like to see more of. Anything that we can do to help SMEs to move into emerging markets must be embraced to the point where it is no longer viewed as a challenge for us to increase our exports but it is naturally accepted that it is in our country’s fibre to be a world leader in selling our products overseas. I hope to see this progress continue to develop as we move forward in rebalancing our economy and refocusing our efforts on what made us such a great and powerful manufacturing and trading nation many years ago.

We need to aspire to raise our game in international markets and to support the most vulnerable in our society as the economy charts a course to recovery. We also have to restore order to our public finances. I welcome the Government’s resolve and commitment; it is now time to deliver.


Related Post