Income Tax (Charge)

At Prime Minister’s questions, I called on the Prime Minister to deliver investment for skills and infrastructure in the west midlands. The Chancellor certainly delivered. There is investment in transport, with hundreds of millions of pounds for better bus and train services in the west midlands and £54 million to fix potholes. That investment will support our excellent Conservative Mayor Andy Street’s transport plan to transform local public transport into a comprehensive system serving the whole west midlands county. There is investment in housing, with the new £400 million brownfield housing fund, to build the houses we need without threatening our precious green spaces, and £9.5 billion for the affordable homes programme to help to prevent homelessness. There is also investment in skills, through the £3 billion skills fund, to help to gain the skills they need for highly paid jobs and to ensure our firms can have the workforce they need to compete.

Coronavirus poses an immediate economic challenge. I welcome the impressive package the Chancellor announced, as well as making sure that the NHS has all the resources it needs to deal with the consequences. The 12-month business rate holiday for firms in the retail, hospitality and leisure sectors with a rateable value of under £51,000 will for many make the difference between getting through this outbreak or going under. It will save jobs in the constituencies of every Member of this House. Larger businesses in those sectors also face massive challenges: sharp falls in business linked to the outbreak come on top of higher costs from spiralling business rates and pose an existential threat.

In the medium term, perhaps the most significant part of yesterday’s Budget is the fundamental review of business rates at a time when so many town centres are being squeezed. It makes little sense to base local business taxation on notional land values that assume high streets carry a premium. A system of taxation created in the 1960s and based on property taxes introduced by the first Queen Elizabeth is not fit for the needs and characteristics of the 21st century. In the meantime, I hope Treasury Ministers will consider extending support to larger operators in the hospitality sector, who, because they employ large numbers of people in a labour-intensive industry and by their nature need large properties to accommodate guests, fall outside most of the support measures announced yesterday. They will, however, be hit harder than anybody by any lockdown or other restrictions on tourism.

An important part of our local economies are our local pubs. I have spoken many times about the economic, social and cultural contributions of community pubs and British brewing. Ministers have heard that many more times than most, so I will not repeat all that now, but I thank the Chancellor for his generous mention yesterday and even more for the generous support he announced. Increasing the business rate discount for pubs with a rateable value of under £100,000 by 400% to £5,000 is great news. Cancelling the inflationary rise that was due on beer duty, the third freeze in a row, means that beer will be 11 pence per pint less expensive than it would have been had those three rises gone ahead.

The Chancellor also announced a review of the duty system, which is only possible now because we have got Brexit done and will be taking back control at the end of this year. I hope the Treasury will consider how a post-Brexit duty system could better support our community pubs, rather than those who pile the beer high to sell it cheap in our supermarkets or off-licences. Perhaps we could have a system like the one in Australia, where beer sold in large containers such as casks or kegs pay about a third less duty than beer sold in bottles and cans, which are more typically bought from supermarkets. Such a move would help to protect our remaining pubs, secure the jobs that they sustain and encourage people to drink sociably in well regulated, licensed premises rather than drinking alone at home, or elsewhere, where fewer safeguards exist.

Yesterday’s Budget addressed both the immediate challenges of a health crisis, with the coronavirus outbreak, and the longer-term needs of building a framework that will encourage growth and build prosperity in all our communities. That is certainly something to which we should all be able to raise a glass.