Syria and the Use of Chemical Weapons

Debate between Graham Stuart and John Redwood

Thursday 29th August 2013 Commons Chamber

[Mr John Redwood (Wokingham) (Con)]

We make no more important decision in this House than to give permission to our armed forces to unleash some of their formidable arsenal. We should only do so if we feel there is democratic consent for the aim and the purpose of the conflict, and we should do so only if it is legal so to do. In my adult lifetime in politics I think that we, as a country, have intervened too often. We have too often asked our armed forces to do things that armed forces alone cannot do. I am not against all intervention. Of course, when we had to liberate Kuwait or the Falkland Islands, they were noble aims. Our armed forces performed with great skill and bravery, and the British public were behind them. We must be very careful, however, not to inject them into a civil war where we do not know the languages, where we have uncertain sympathy for the cultures and the conflicting groups involved, and where the answer in the end has to be a political process in the country itself and not external force.

I therefore welcome strongly the three things the Government have set out. I welcome this debate and the fact that we will do things democratically. It is our job to speak for our constituents and, if there is to be military activity, to ensure that the British public will it—they certainly do not at the moment. I welcome very much the Government’s statement that we will not arm the rebels. That is huge progress and I support that fully.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

Does my right hon. Friend agree that what we would like to hear from the Deputy Prime Minister when he sums up later is a clear statement that the Government believe that in all future cases military action—immediate external assault—will not be entered into unless this House has given its say-so first?

[Mr Redwood]

Of course I agree with that. Any sensible Government would do that, because what Government can commit our armed forces without the implicit or actual support of the House of Commons? That can be tested at any time, so no Government would be so foolish as to try and proceed without it.

Amendment of the Law

Debate between Graham Stuart and John Redwood

Wednesday 23rd March 2011 Commons Chamber

[Mr Redwood]

It is a good point. We have heard figures from the Government indicating that we export less to the BRIC countries combined than we do to Ireland, but we have a close relationship with Ireland and we are close neighbours. It is understandable that we export a lot to Ireland and it to us. That figure conceals one important point, which is that British business has probably been a little more active than it suggests, but for various reasons the larger British companies tend to go into India, Brazil and China and set up joint ventures or factories of their own there to service the local market. It is easier to service those markets in that way, for reasons that we need not go into in detail today, but I agree that it would be good if we exported more, and it would be good if we helped small and medium-sized enterprises that do not have the capability to set up factories on the other side of the world to export in their turn.

The devaluation that happened more than a year ago has given us one nasty result, which is a much higher inflation rate than comparable economies, but it has given us one pleasant result, which is that it is very easy to export out of a British base now because British industry is so much more competitive at the current level of the pound. We should have that on our side. Paradoxically, quite a bit of British business in the manufacturing sector is close to capacity, and those businesses are tending to put the prices up a bit to collect a little more revenue and improve their balance sheets because it is not that easy to expand turnover. That is where the things that the Chancellor is talking about are vital and need to be done speedily.

Britain needs to be able to put up factories more quickly and get them into use more quickly. It needs to define the skilled engineers and the other skilled individuals who want to work in an industrial setting rather than in an advisory or City setting, and then expand the capability of their companies as a result. Modern manufacturing requires a very high degree of skills input, talented people and good management. It does not require so many people to operate machines because really good manufacturing now is highly automated. It needs the precision of expensive machinery. Indeed, the easiest way to compete out of a German or a British base is to have highly automated plant, so labour costs are a rather unimportant part of the total cost. The intellectual property content, the skill content and the plant and equipment content are much higher, but they are affordable with a quality product.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

Further to my right hon. Friend’s points, a director from JCB gave evidence to the Select Committee on Education yesterday and said that he had 57 vacancies for engineers that he cannot fill order to ensure that JCB’s products remain globally competitive, reduce energy usage and so on. That, unfortunately, is a legacy of too many years in which we have not delivered the technical, vocational, practical education that is required. Is my right hon. Friend, like me, enthusiastic about the Government taking forward the programme from the Wolf review and supporting Lord Baker with his university technical colleges?

[Mr Redwood]

I am happy with those proposals. The Government are clearly on the right lines and I hope there will be cross-party agreement that we need to raise our game at skills, training and education, particularly in engineering, pharmaceuticals, chemistry and so forth, where we have an advantage and can have a much bigger advantage if we do more. Yes, we need to review how easy it is to buy or build a factory and how easy it is to equip it. Anything that can be done to lower the effect of tax rate on business will make Britain a much more attractive place to be.

As hon. Members know, I take the view that if we set lower rates, we normally collect a lot more revenue. If we want that kind of growth rate, the lower the realistic rate that we can set, the more revenue growth and the more overall growth we will have. It would be a great tragedy to abort the recovery in certain sectors because the tax rate was too high. I am pleased to see the progress on corporation tax. We need to see the details of some of the individual tax schemes and how the carbon tax rebate would work. If we went ahead as trailblazers in Britain and set a high carbon price, we would price our energy-intensive business out of Britain into a less clean or less acceptable venue. It is important that the rebates and discounts are properly thought through, so that at a time when the Government are trying to promote more industry, they are not taxing it too heavily.

Finance Bill

Debate between Graham Stuart and John Redwood

Thursday 15th July 2010 Commons Chamber

[Mr Redwood]

The hon. Lady is protesting. I know it is in the Government document, but I am suggesting that the Government might be wrong and might have underestimated the number—it is extremely difficult to know how many people might take advantage of the provision. I also think it will not necessarily be only rich people who are affected. I know that Labour never wants any successful people to make money and be able to spend their money sensibly.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

It did a really good job stopping them.

[Mr Redwood]

Indeed, it tried to stop them on many occasions. If we do too much of that, however, we have a poorer country, a smaller tax base and all the rest of it. It is a pity that the Labour party still has such a downer on success, prudence and savers, but it might be surprised—hopefully, pleasantly surprised—in due course to find that people on more modest means take advantage of this flexibility as well. We no longer live in a world in which everybody retires at 65 and does no more work. I see around my constituency many people taking on paid work into their late 60s and early 70s, either because they want to or, in some cases, because they have to in order to supplement their resources. Why should we debar them from this flexibility any more than richer people, if they have savings?

Budget Resolutions and Economic Situation

Debate between Graham Stuart and John Redwood

Tuesday 22nd June 2010 Commons Chamber

[Mr Graham Stuart (Beverley and Holderness) (Con)]

My right hon. Friend has just made the very point that I was going to make. The regulators compounded their failure to regulate at a time when they should have reduced the lending of banks by, during the bust, doing the precise opposite, and compressing lending when the economy desperately needed the banks to lend more. That was a double whammy for the British economy, it was entirely due to the behaviour of the Labour party, and it has left a terrible economic legacy which the Chancellor today set out bravely to put right.

[Mr Redwood]

I think that we now need to be positive, and I want to try to engage the Labour party in the process. I understand that the hon. Member for Leeds West (Rachel Reeves) used to work at the Bank of England, and we may have learnt from her speech why it is a good thing that her advice is no longer available to the Bank; I do not think that she would have helped to get us out of the mess. From now on, however, we need to ask ourselves what we should do about banking regulations, because I do not believe that the current system is right. It is all very well for us to say that it was wrong under the previous Government, as it clearly was, but it is our duty now to try to ensure that we do a better job. Unless we change the system, it will not be much better under the present Government.

I believe, and I think Treasury Ministers believe, that we should now have counter-cyclical rather than pro-cyclical regulation. What does that mean? It means that when times are tough and we are in recession, we should allow banks to lend more money on easier terms, and when times are really good—as in 2006-07—we should rein in the banks and say, “You cannot go on lending like this.” In the immortal words of the Governor of the Bank of England, we should remove the punchbowl before the party has everyone blind drunk. It is a pity that we did not do that in 2007.

Some of my critics say to me, “That is all very well, but how do we know where we are in the cycle?” We can never be sure where we are in the cycle, but I should have thought that it was fairly easy at the moment to agree that we are somewhere near the bottom of it. Heaven help us if this is not the bottom of it. I do not believe that all the figures in the Red Book about growth from this point are wrong, and I do not believe that all the independent forecasters are wrong. I think it quite likely that there will be some growth, but not as much as I would like and not as much as we will need.

The main reason that there will not be enough growth is that we do not have easy enough money for the private sector to refuel the recovery. The overall money supply figures are pretty dire, and we should bear in mind how much of the money is circulated around the system from the Bank of England to the Treasury to the spending Departments. Labour left a perfectly good money machine to put relatively low-cost money into the public sector, but at the cost of the private sector, which—particularly small and medium-sized enterprises—is still shivering in a world in which there is not enough sensible credit.

I do not want to stoke a new unsustainable boom, but there must be a judgment about whether the recovery is too fast or too slow, too hot or too cold. At present, it is most people’s judgment that in the private sector is too cold. It is not going quickly enough, and it is not easy enough. We need to make it easier for ordinary, run-of-the-mill entrepreneurs to succeed. It should not be necessary to be a complete genius who is prepared to take on all the odds in order to establish a company. We want people to be able to do that who have reasonable skills and do not want to have to fight the jungle all the time.

Debate on the Address

Debate between Graham Stuart and John Redwood

Tuesday 25th May 2010 Commons Chamber

[Mr Redwood]

Indeed, and even in this new possible age of austerity, and even with a September sitting, I am sure that it would be possible to fit in a visit to Greece. That is exactly the kind of help that the Greek economy needs, and it would be much more attractive if they had a devaluing drachma—so that we could buy ouzo rather more cheaply. So my hon. Friend’s point is, of course, absolutely correct.

There are these very important differences, therefore, but the message to Britain has to be that we cannot go on printing and devaluing ad infinitum. There comes a point where the markets pull the rug from under us and say, “This is extreme—you cannot do this anymore.” There comes a point where we will be effectively reneging on our debts, because we will be devaluing the currency in which we are repaying them by so much.

That is why I so strongly welcome the clear response of the coalition Government to put at the top of the Queen’s Speech the need to take action to tackle the deficit, and why I think that they are right to have three phases. We saw the first phase on Monday—the down payment of £5.7 billion net—and we will then have the emergency Budget, which I hope will include some guidance on how we are going to get the deficit down in the medium term. We will then have the really important work, in the autumn, when the Government have had time to do the full-scale public spending review that the previous Government ducked out of and declined to do at the appropriate time. We will then be able see the proper trajectory for spending, which will be important for curbing the deficit.

I want to see the euro stabilised. However, it will be difficult to do that, because it was not wise, as many of us said at the time, to include Portugal, Spain, Ireland and Greece in the euro area. The euro works fine for France, Germany, Benelux and Austria, but it is difficult to get it to work for such a diverse grouping. However, the United Kingdom Government have to allow the euroland members to take more direct power over the euroland economies, because a single currency cannot work unless there is a single budgetary policy and controls over the amount that those countries borrow. They are all borrowing in the same currency. It is like sharing a bank account with the neighbours, where we need to control how much the neighbours spend, otherwise there will be an awful shock when we see how they have flexed the credit card and the overdraft. We need to let those countries have such power, so I hope that the Government will offer advice and assistance.

I would like us to get some powers back for ourselves, at the same time that more powers are being taken for the centre. However, it would be quite wrong of Britain to be obstinate and say that the centre should not have those powers. It is in our interests that the euro should work, and the only way that a currency union can work is if there is centrally controlled budgetary discipline and central agreement on how many euros are printed—some more will probably need to be printed now—in order to get out of this mess and get reflation going in those economies.

However, I am, of course, much more concerned about the prosperity of this country. I am conscious that although we need to control the deficit and take the measures that I and others have often argued for, we are not going to get out of this mess unless we have the strong private sector recovery that I and others are now referring to. I would therefore say to the coalition Government that they need to spend as much time on regulation, tax and other matters that affect the rate of growth of the private sector economy as they spend on curbing the spending problems in the public sector. The two need to go together. It is not a good idea simply to cut the public sector, if we do not create the conditions for strong and good growth in the private sector.

Let us take the sensitive issue of tax. I have been doing a little research on the topic of capital gains tax. I share the Liberal Democrat and Conservative coalition Members’ wish to raise more money from capital gains tax. That might come as a shock to many of my parliamentary colleagues, but in this situation we need to tax the rich more. They have more money and we need more money to come into the Treasury; we need to tax the rich more. However, the result of my researches shows that the way to get more money out of capital gains tax is to lower the rate. The figures are quite dramatic, although it is easier to see the effect in the United States of America than in the United Kingdom, because there have not been so many fiddles and changes in the way that capital gains tax is levied there as we have had here. We have had indexation, business relief and all sorts of complications, although the British series, as adjusted, seems to bear out the same case.

In America in the early 1980s, there was a period of cutting capital gains tax rates, down to 20%. Capital gains tax revenues hit a massive high in 1986, on the back of the lower, 20% rate. The Americans spent the next part of the 1980s hiking up capital gains tax, from 20% to, I think, 33%, and the revenues collapsed, but they did not get the idea. However, in the ’90s they returned to a more common-sense policy and the revenues picked up again. By the 2000s, the Americans decided that even 20% was a bit high for maximising the revenue, so they took the rate down to 15%, which is where it is now, and revenue surged. The 15% rate seems to be much nearer the optimum, producing far more tax from the rich in the United States than 20, 28 or 34% produced.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

My right hon. Friend is giving a masterclass in economics that, sadly, the Opposition failed to listen to in all their years of taking us to this current low ebb. Is he sure, however, that when the rates of capital gains tax are lowered, people will not simply manufacture a way of turning income into a capital gain, in order to avoid taxation elsewhere? If that were to happen, the gain might not be entirely real.

[Mr Redwood]

Those periods were also periods of surging income tax receipts, which demonstrates that this is good for enterprise, profits and jobs. We need more profits, more savings, more investment and more jobs. If we tax things more lightly, we get more of them. If we tax them more heavily, we get less of them. The enthusiasts for high taxes in this House have always said, “We must put up the taxes on petrol to stop people driving so much, and we must put up the taxes on smoking to stop people smoking so much.” So, presumably, putting up the taxes on enterprise will stop people being so enterprising. That must be the logic.