This week it was the Conservatives’ turn to have their Party Conference. I was unable to go because of commitments with the Department of International Trade. It was very important as Minister for Exports to use the opportunity to speak to the leaders of our trade advisory teams throughout the UK who were meeting in Belfast, including those from the devolved administrations, to establish good relationships and promote the UK wide resources we can bring to bear to help businesses sell overseas from every part of the UK, much as I missed the excellent hospitality and traditional warm welcome from activists outside the party Conference arena.
The backdrop to Conference was a huge package of measures to help with energy bills and to increase our competitiveness and productivity including the energy price guarantee, reversing the planned National Insurance rise, cutting the basic rate of income tax to 19% from April 2023, raising the Stamp Duty threshold and scrapping the planned rise in UK Corporation tax.
However removing the 45% income tax rate got all the attention. I have no doubt that this would have sucked capital and talent in from overseas and ended up with HMRC collecting far more in tax than foregone at that rate. There are many cases where cutting the top rate has increased revenue overall. In 2013 George Osborne cut the top rate from 50% to 45% and revenue went up by £8billion the following year. Labour introduced the top rate in 2010 when it seemed certain to lose the following election. It was always about politics rather than economics.
Despite the disagreements over this I am generally encouraged by the focus on non-inflationary growth and the need not to just continue with the status quo. Inflation is at 17% in the Netherlands, 10% in Germany and 9.5% in Italy, and leading indicators in most places signal recession. It’s a global problem and we need bold policies to avoid years of stagnation and anti-competitive political navel gazing. We also need to stop being negative about our financial services industry. It’s not only a huge creator of wealth and tax revenue but part of the UK’s proud heritage with a mass of ancillary services provided to it and it is key to the global offer we make to the world.
The Rugby World Cup kicks off in New Zealand on Saturday. Support for the women’s game has come a huge way in terms of support and popularity in the last few years and the England team have a good chance. Crewkerne Ladies RFC are one local club looking to recruit new players from beginners upwards and I am happy to pass on their message. It’s a great way to get fit and I am assured comes with a great social life too.
Finally well done to the organisers of the Catch the Bus Day who, along with Somerset Bus Partnership, are encouraging more people to use local buses to make sure the routes remain sustainable, along with helping the environment and putting less pressure on parking spaces. The operators keep routes under review and work to cover as much ground as possible but we need to use these services to keep them going.