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Budget Resolutions and Economic Situation

I congratulate the Under-Secretary of State for Culture, Olympics, Media and Sport, my hon. Friend the Member for Wantage (Mr Vaizey), who is not in his place, on putting growth in the creative industries at the very heart of the Budget. It is a hugely beneficial development. I will speak very much from a Welsh perspective. The Budget that the Chancellor presented to the House is of course concerned with the UK economy, but since devolution and the establishment of Governments in Scotland, Wales and Northern Ireland, differences have emerged. There are differences in our perspective on the Budget and its impact, and I will focus on the three significant announcements on tax, two of which have been wholly welcomed by my constituents, and one, the age-related taxation for pensioners, to which there has been a mixed response. I hope to address that later. First, and in my view most fundamentally in the Budget, there is the raising of the income tax allowance. When this Government came into power, the threshold was below £7,000, and now it is heading towards £10,000. This year we took a massive step towards that, with an increase of about 14%, which is a huge jump and will make a huge difference. The measure is particularly welcome in Wales and, certainly, in rural Wales, the area that I represent, because that is where wages are comparatively low. The impact of raising the tax-free allowance is rather bigger in low-wage areas than in other areas, so it is to be hugely welcomed, and to be welcomed throughout the House. The second fundamental step in the Budget is the one we are taking to make Britain open for business. At its heart is the level of corporation tax, and the Government's strategy throughout this Parliament is to reduce it from 28p to 22p. This year we have accelerated that process with a 2p reduction, and, as my hon. Friend the Member for Dudley South (Chris Kelly) said very clearly, that sends out the message that Britain is open for business. It was terrific to see the GlaxoSmithKline announcement coming so soon after the Budget, and of course there are various reasons why it was made, including 1,000 jobs and £500 million of investment, but one narrative that the company used was the competitiveness that this Government want to introduce to British business.