It’s been a good week for PM Rishi Sunak and the government.
On Monday he announced the Windsor Framework, his new deal with Brussels to address some of the worst frictions arising from the EU’s harsh interpretation of the Northern Ireland Protocol.
No solution to the situation in Northern Ireland will be perfect, and Brexiteer MPs like myself are still going through the details to ensure we can exercise our Brexit freedoms to the full – while still providing meaningful protections for Unionists.
But by all fair standards, Rishi’s deal secured important practical relief.
It has exceeded all expectations and he deserves credit for getting the EU to move as it has.
Now our focus is on the March 15 budget.
This is a key moment for Conservatives.
We must show that we are a government that can not only lower the cost of living but also deliver the growth our country needs to raise living standards.
right to hold
Inflation is a silent thief that impoverishes everyone, and the government has rightly been adamant about union demands for wage increases of up to 19 percent.
If we back down here, not only will everyone’s taxes go up, but inflation will stay high longer than necessary.
For now, there’s good reason to believe the government will hit its target of halving inflation this year, helped by the shock of Putin’s war easing as supply chains adjust.
But we need to do more on the growth side of the ledger.
Chancellor Jeremy Hunt is right to want to make this a priority, and recent upbeat data on the economy gives him more leeway than expected to do just that.
There are some low-hanging fruits he should definitely opt for, including extending support for hard-pressed motorists with a fuel tax freeze.
A staggering rise of up to 12p could be slammed into the price of a liter of petrol and diesel if the Chancellor lifts the fuel tax freeze – a White Van Man tax is the last thing we want.
We should also help the self-employed by reversing changes to the IR35 tax legislation made in 2017 and 2021.
If we want more people to start their own business, action here would be very positive.
The scrapping of IR35 was the most popular thing Kwasi Kwarteng had promised in his September budget, but that decision was then reversed the next month.
Treasury totals show this would cost around £1billion in the first year – but there’s good reason to believe it would actually boost tax revenue by encouraging more people to take the plunge.
We could also counter pressure from the NHS by increasing the lifetime allowance for pension savings.
The level this is set at directly lures much-needed GPs into retiring in their mid-fifties, which is totally counterproductive.
Then there’s the big one.
Touch the nettle
Corporate tax is set to rise from 19p to 25p next month.
A corporate tax burden is also a burden for jobs and growth, and we recently saw drug giant AstraZeneca choose Ireland over the UK specifically for higher tax rates on a new facility.
Ireland’s corporate tax rate is 12.5 per cent – it just doesn’t make sense that we have a tax rate twice that of our neighbour.
We still have time to think about this tax increase – even if it means adjusting some of our public spending plans.
We must also question economic models that do not reflect the positive impact of lower tax rates on attracting new investment in the UK.
Looking beyond the budget, government needs to get back to the vital question of how to build the homes we need.
Every 100,000 houses we build add one per cent to our GDP but we have just seen warnings from the Home Builders Federation that house building in England will fall to its lowest level since the Second World War due to changes in planning policy and beyond – strict enforcement of environmental regulations.
We should tackle the EU’s crazy legacies, like the “nutrient neutrality” rules that are preventing up to 100,000 houses – which have already been granted planning permission – from actually being built, across whole areas from Darlington to the Solent.
This is in the name of tackling water pollution – but the main culprits are our water companies and poor farming practices.
Suspending the relevant parts of the Habitats Regulation and bringing forward the deadlines for taking appropriate action on water pollution is the way to break the deadlock.
And we need to come up with a credible plan to actually build more homes.
The government needs to grab the nettles and create positive incentives for communities to welcome new homes—or else house prices and rents will continue to rise out of reach for too many ordinary people.
Together, these measures would provide a package to boost growth and make our entire country better off.
- Simon Clarke is the Conservative MP for Middlesbrough South and East Cleveland and served as Chief Secretary to the Treasury under Boris Johnson and Housing Secretary under Liz Truss.
https://www.the-sun.com/news/7549662/brexit-done-jeremy-hunt-budget-boost-britain/ Yes, Brexit is over. Now Jeremy Hunt needs to give us a budget to boost Britain