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Budget Resolutions and Economic Situation

The preamble to the Budget was brilliantly set out by the Business Secretary, the right hon. Member for Twickenham (Vince Cable), when he suggested that the Government have no ““compelling vision”” and no plans for a strategy for growth. Last week, in a remarkable sign of joined-up government, the Chancellor sought to lay out the absence of a compelling vision. We know from the growth projections set out by the Office for Budget Responsibility, which has an unfortunate habit of being optimistic, that this is the slowest economic recovery on record. In terms of recovering our pre-crash levels of output, it is slower even than the great depression of the 1930s. We have heard much about the Budget being fiscally neutral, but I suggest that it is also a growth-neutral Budget, for we have a clear post-Budget forecast, also provided by the OBR. Its verdict is a paltry revision upward of 1%—[Hon. Members: ““0.1%””] That is even worse—one tenth. The contrast with countries taking the challenge of recession seriously could not be starker. In America, employment and business confidence is up, with the economy growing at twice the rate of our own, thanks to the interventions of the Obama Government. We know that the Prime Minister likes to be tucked up tight on Air Force One, but I suggest that he should also ask for a bedtime story from the President on how to grow an economy out of recession. Instead, we have the fiscal stimulus of a cut in the 50p top rate of tax, based on some dodgy assumptions about economic behaviour and incentives. While millionaires and dining companions of the Prime Minister will get a £40,000 tax cut—““Bosh””, as Mr Peter Cruddas might put it—hard-pressed families will be pushed into poverty. In Stoke-on-Trent there are 1,220 hard-working families who, in less than a fortnight, stand to lose all their working tax credit if they cannot extend their hours from 16 to 24, and that is before we get on to the raid on pensioners. Like the previous Labour Chancellor, I am not wedded to the 50p tax rate. Governments generally should not be in the business of taking half the earnings of their citizens, but now is not the time to make this cut. It is the wrong choice at the wrong moment. The Budget also fails to help our manufacturing base. What manufacturers in my constituency need now is support for investment, capital allowances for energy-efficient technologies and support for co-fund technology demonstrators. We are still waiting for details from the autumn statement on the package of measures for energy-intensive industries. We must ensure that our leading manufacturers, such as ceramics firms in my constituency, are not driven out of the UK. I have a few last points. First, I welcome the decision on place-of-consumption reforms for internet gambling. This is big news for Stoke-on-Trent and we are happy to host Bet365.com, which pays its taxes in the UK rather than going offshore. However, there is no need for this reform to wait until December 2014; it should come in earlier. On the negative side, the decision to remove the zero rate of VAT on approved alterations to listed buildings is a real error. When that is combined with forthcoming planning reforms, it speaks of a Government with little feel for the natural and historic environment of this country. What we needed was a pro-growth plan, not a growth-neutral Budget, and the Government failed to deliver it.