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It’s been a great privilege to be involved in my first Budget as a Treasury Minister. I appreciate that the Chancellor’s set piece speech is a very political event and readers will have a range of views on what was announced, but I do think it’s important to pay tribute to the hard work and dedication of officials. This is especially true when earlier in the week those same civil servants worked through the weekend to ensure that the British arm of struggling Silicon Valley Bank was taken over by HSBC, without using a penny of taxpayers’ money, in a context that could otherwise have led to significant economic disruption.
Of course, as PPS to Rishi Sunak when he was Chancellor during the pandemic, I also saw things from the inside on the day of the famous red box - but it’s very different when you are directly responsible for measures being announced. My portfolio as Exchequer Secretary includes: energy; climate; fuel, tobacco and alcohol duty; infrastructure, growth and productivity; and a whole host of other important areas. Hence, I’ve been pretty busy.
With inflation forecast to fall but people still feeling the pinch, I was delighted that we were able to announce continued support with the cost of living. This included extending the freeze in fuel duty for petrol and diesel vehicles; maintaining the 5p cut and cancelling the planned increase. Whilst we need to support public transport and encourage more ‘active’ travel – i.e., cycling and walking – the reality for most households in South Suffolk is that they depend on a car, and the greater part thereof still use an internal combustion engine.
Whilst energy prices have fallen since the extraordinary peaks caused by Putin’s invasion of Ukraine, it will take a little time for that to filter through to lower domestic energy bills for consumers. Hence, it was also really positive that we extended the Energy Price Guarantee at the generous level of £2,500 for a further three months. It’s worth stressing that total help with cost of living support to the typical household will have averaged £3,000 over this and the next financial year – and much of that has been help with energy bills, including specific funding for those on heating oil worth £200, and additional payments for pensioners and those on benefits.
I was particularly proud that we were able to use the Budget to announce a major new intervention to support pubs. I feel very lucky to live in a village with a thriving pub, the Shoulder of Mutton in Assington, and am keenly aware that life for licensees has not been easy of late – going from a pandemic where we temporarily closed their businesses, to an energy price surge which has threatened to undermine them even further. So it was right that in the Budget we essentially gave our pubs a brand new competitive advantage.
This August we will be introducing a major overhaul of alcohol duties, the most significant for 140 years. Using powers that were not available to us as members of the EU, we are moving to a ‘strength based’ alcohol duty regime that supports public health, with higher duty on stronger ABVs – but crucially, also including a new differential draught duty, originally set at 5% below the equivalent rate for supermarket purchases.
In fact, in this Budget we went further, almost doubling that draught relief to 9.2% so that the duty on a pint of beer or cider in a pub will remain frozen this August when the new reforms kick in. I’ve had a lot of correspondence from constituents concerned about the future of this great British institution, but I hope this shows our Government’s commitment to helping pubs through challenging times.
Yet for all the talk of help with the cost of living, the recent spell of high inflation was caused by an energy crisis, and perhaps the most significant long-term measures in my portfolio concern the future of how we power our homes and businesses. We announced £20bn for Carbon Capture and Storage, a major new clean energy technology, and the creation of ‘Great British Nuclear’, to deliver Small Modular Reactors. When you combine this with our £8bn cut in corporation tax by allowing ‘full expensing’, it shows that we are taking steps to ensure we compete in the global race for green investment.
So, with inflation and debt forecast to fall, and ambitious measures in place to deliver growth, I do think it’s time for cautious optimism about our future prospects.
Published in the Suffolk Free Press.
