After almost 40 years of reporting on virtually every budget, mini-budget, emergency budget and autumn statement, I have finally been asked by the New European to write my own version for delivery from the dispatch box. About time too. So here we go:
“Madam Deputy Speaker, we are in a deep hole that is getting deeper. This hole is the result of years of economic illiteracy, ideological pipe dreams and a great number of heads deeply buried in the sand.
“We are in a recession, living standards are terrible, savings appallingly low, debt high, real wages frozen for years, productivity a joke, the growth rate even in a good year anaemic. Child poverty and food banks are on the rise, NHS waiting times increasing, defence terrifyingly weak.
“Madness is doing the same thing time and time again and expecting a different result. I intend to do things differently.
“Productivity is the key. We must become more productive and then almost everything else will follow. We know very well that productivity is held back by three things: lack of investment, bad training, and bad management. I intend to deal with all three.
“But first, the tax system needs radical reform and simplifying. Huge sources of wealth are barely taxed at all and employment is overtaxed. Housing wealth, capital gains and large savings need to be taxed at the same level as wages – after all, this is what Nigel Lawson did to capital gains in 1988. Such a change would bring in £50bn over four years. Pension tax breaks are a subsidy for the rich; now there will be one, lower tax benefit for all pension contributions no matter what you earn.
“With the money those changes will bring in, we will simplify income tax and NI contributions, unify rates and tax allowances, remove anomalies, and restore child benefits for all, helping the lowest-paid and encouraging both parents to stay at work.
“Loopholes in inheritance tax that only benefit the very wealthy need to be closed, including no tax on gifts given seven years or more before death, that loophole closed today as I stood up.
“Billions are thrown at tax breaks with little or no analysis of whether they work and even if the money is correctly targeted. This will end today. All loopholes will now be assessed, and removed or improved if not working efficiently. Company taxation is even worse, a complete mess of tax breaks, exemptions and loopholes. We will scrap the lot, except for encouraging investment. UK rates of business investment are among the lowest in the developed world, that will change. All so-called freeports and special economic zones are now abolished; again this will save billions.
“We can then use some of the money saved and raised to extend all investment allowances permanently and create an industrial strategy. More encouragement and support for green industries, research, development, better infrastructure and high-tech industries.
“Training also encourages growth, the scandalous fall-off in apprenticeships because of the last government’s incompetence ends now. The number of apprenticeships will rise by 100,000 per year minimum – the money for this is already there, raised by the Apprenticeship Levy, but it is not being spent.
“Money will also be made available for better management. God knows they need it. You just don’t get graduates of ancient Greek running engineering firms, let alone governments, in any sane country.
“All companies will have to pay a living wage. That means taxpayer-financed subsidies to companies in the form of universal credit for their underpaid staff can then be removed, saving billions a year.
“We believe in a free market economy, not low wages permanently subsidised by the taxpayer, doesn’t the party opposite?
“Universities will be funded to expand, especially in Stem subjects and languages. Erasmus will be rejoined, private schools taxed, universities taking disproportionate numbers of privately educated candidates will be financially penalised.
“We want the best and the brightest to succeed, doesn’t the party opposite?
“We will create a housebuilding boom. Cheap, freely available housing increases productivity. We aim to nullify Nimbyism. Council and government land will be sold for private and public housing, at a profit. Money from council house sales, which will now be at 95% of market value, will have to be re-invested in more social housing.
“There is space for one million new homes on otherwise useless wasteland within the green belt and near public transport links; now they will be built. There will be far better protection for renters, and an end to no-fault eviction. House price inflation is a bane, not a benefit, we will build enough property until it ends. There will be much tougher environmental targets for new build and old.
“We want to end fuel poverty, doesn’t the party opposite?
“Tax dodgers and tax tourists are going to suffer. The current 30 days that British citizens who pay tax abroad can spend in the UK every year will be cut by two-thirds, by ending the loophole that means days spent travelling are not counted. That and non-dom tax status ends at midnight tonight. Also, anyone leaving the country for a tax haven will lose any and all honours automatically, from the lowliest MBE to membership of the House of Lords.
“Tax inspector recruitment starts today; we are doubling their numbers. Residents of tax havens will need comprehensive, government-provided health insurance to visit the UK.
“We want to encourage patriotism, doesn’t the party opposite?
“There will be a real and heavy windfall tax on energy companies, and others that benefited from the huge surge in fuel costs. Cash raised from the windfall will be used to kickstart an infrastructure investment fund and re-start HS2.
“We want the country to level up, doesn’t the party opposite?
“Funding of the utility regulators will be doubled. All current heads and board members were invited to resign this morning, and all who refused have been fired. They will be replaced by professional career civil servants. All staff will have to undertake to never work for a regulated company or its advisers. Environmental and accounting standards will be hardened, and regulators will have an unlimited legal budget. Well run, cheap and responsible utility providers are essential to growth; the UK’s are currently cash cows for foreign owners. That stops today.
“We want fresh clean water for everyone, doesn’t the party opposite?
“Auditing, and accountancy standards, and many others like construction and surveying will be subject to a six-month Royal Commission enquiry. The days when companies could go to the wall days after getting a clean bill of health, or a firm could bypass building regulations, are over. If you want to be called a professional, you will need to act ethically and professionally.
“Deliberately breaking the law will be an automatic disqualification from being a company director for life; including knowingly breaking employment law, as P&O got away with recently. Top management in the UK are very well paid; they need to take on the responsibility that comes with those wages.
“Now, spending.
“Three areas of government will get every penny saved and brought in by these reforms – childcare, defence, and the NHS. This is money we know will be spent boosting the economy.
“Primary and secondary schools will be encouraged and paid to run subsidised nurseries for all, and keep any profits. They already have the facilities and the staff. Breakfasts will be included, and free school dinners re-introduced. Sixth-formers who work in such nurseries will be paid and hours worked will count towards the Duke of Edinburgh award and similar schemes. This move will free up hundreds of thousands of workers who find childcare costs mean work does not pay.
“Extra, much-needed defence spending will be mainly in the UK, including in numerous shipyards and aerospace businesses. Ammunition stockpiles will be re-established, and new equipment will be built in the UK but based on foreign designs. We can no longer afford to waste billions providing our troops with second-rate equipment years behind schedule.
“NHS spending will be targeted at reducing waiting times and will mean investing in new buildings and much more medical technology, made in the UK. Healthier workers also improve productivity.
“Finally, I am releasing the Treasury assessment of the damage caused by Brexit which the last government sat on for years. As a result, we are applying today to rejoin the single market, because leaving it has cost almost 5% of GDP. We will reverse that.
“If membership is not possible, we will stay in lockstep with all EU economic regulations. Financial, agricultural, safety, environmental; we will have identical or better standards than our largest market and closest neighbours. We will therefore negotiate the end or a massive reduction in border checks and expensive red tape.
“We want the economy to be 5% bigger, doesn’t the party opposite?
“But perhaps the most important message I have for you today is that the terms of the political and economic debate need to change, and change now.
“Quite simply, you cannot defend this country, run the NHS, look after our pensioners, our young, our vulnerable, and have a low-tax economy. Especially not low taxes for only the wealthiest. We have tried it for decades, we have spent every bit of the North Sea oil windfall, slashed taxes for the rich, deregulated, fallen for the lies about trickle-down economics, and it has all been an abject failure.
“Borrowing will fall as a percentage of GDP as the economy grows, and we will allow a large safety margin to be checked every year by the excellent Office for Budget Responsibility. There will be no pretence that we can afford tax cuts or higher spending now because forecasts predict that in five years’ time there might just be a few billion to spare.
“We will make the state work properly for all and the economy more productive. If after that there is room for tax cuts, they will go to the poorest.
“I commend this statement to the house.”
