Budget Resolutions and Economic Situation

Debate between Jim Shannon and David Rutley

Wednesday 16th March 2016 Commons Chamber

[David Rutley (Macclesfield) (Con)]

It is an honour to follow the hon. Member for East Antrim (Sammy Wilson), who spoke with characteristic passion and commitment to his constituents.

I follow other Members who have welcomed the new sugar levy announced today. I have long campaigned hard to make sure we tackle public health challenges, particularly those facing young people and children. Individuals who get a chance to look at the sugar smart app will see how much sugar is in so many of the products we and our children consume. The levy is a positive step forward.

[Jim Shannon (Strangford) (DUP)]

I am pleased to hear that the hon. Gentleman welcomes the sugar tax, as do I. I have long felt we should introduce it. The Chancellor referred to the next generation and the £27 billion we could save. The levy will bring savings to the NHS, change people’s attitudes and address levels of obesity. Does the hon. Gentleman agree that if ever there was a good reason for a sugar tax, that is it?

[David Rutley]

I completely agree. The hon. Gentleman and I have been involved in numerous debates about promoting outdoor recreation and physical activity—for older people as well as young people—and the levy is a positive step further forward. I pay tribute to the Government for taking forward its sport strategy and to the Under-Secretary of State for Health, my hon. Friend the Member for Battersea (Jane Ellison), for her work in taking forward a very proactive public health agenda.

On other areas of the Budget, I felt that the Chancellor set out a clear, strong package of measures to help go on delivering the long-term economic plan and to make Britain the best place in the world to start up and grow a business. I have long talked about the importance of an enterprise economy. To achieve one, we need to focus on some key groups of people who make that happen: the entrepreneurs, the exporters, the employers and, of course, the employees who help put the pieces of that jigsaw together to create the enterprising economy that we want to see in Macclesfield, Cheshire and right across the country.

In recent years, I have also been campaigning hard on behalf of the self-employed. It is fascinating to see how self-employment is moving forward. I have been working with Demos and the RSA on various policy initiatives in this area, and it is clear that there is a long-term trend towards more self-employment—4.6 million, up from about 4 million in 2010. It is clear from the RSA’s own work that the pull factor is bringing more people into self-employment; there is not just a push factor. On the back of that, it is important that we welcome the Chancellor’s announcement on abolishing class 2 national insurance completely, to simplify the tax system for the self-employed.

The Chancellor also talked a lot about productivity, which the Government are absolutely committed to improving. For decades, the UK’s productivity has lagged behind that of other major economies. We need to address that. As a result of the drag from the financial crisis, the OBR has forecast lower productivity in the UK, as the OECD has done in the vast the majority of countries. That is why the Chancellor is absolutely right to keep an unrelenting focus on productivity and to take the strong action we need to take to bolster our economy now and for the next generation.

Colleagues should turn to page 61 in the Red Book to see the vast array of activity being taken forward to encourage more investment: lower taxes to boost enterprise, investment in infrastructure, as called for by Opposition Members, and a strong focus on science and innovation, which I believe is vital for the country and certainly for Cheshire.

I join the long list of colleagues on the Government side—and, I hope, Opposition Members, too—who welcome the fact that the Chancellor has set out that business rates will be reduced, which will have a huge impact on many small businesses. Capital gains tax has been cut; corporation tax has been further reduced to 17%. Stamp duty is to be reformed, not just in the residential sector, but in the commercial sector. These are vital steps in ensuring that we improve opportunities for investment. When we drive productivity further forward, it means more jobs and more skilled employment, which, when combined with the national living wage, will lead to higher wages, too.

Debate on the Address

Debate between Jim Shannon and David Rutley

Wednesday 27th May 2015 Commons Chamber

[David Rutley]

In Macclesfield alone, unemployment dropped by 50% in the past year, which is a huge step. That has come from an unrelenting focus on what I call the four “e”s in an enterprise economy. The first is entrepreneurs; we have a massive over-index of entrepreneurs and the self-employed in Macclesfield. Then there are employers, exporters and, of course, employees—we must help each of them take the first step on their journey, encouraging them so that they see real success in their careers.

It is important to focus on the fact that more people are moving into self-employment. That tremendous change has taken place in just the past 12 or 14 years. Some 4.5 million people are now involved in self-employment: 14.5% of the total workforce, up from 12% at the start of this century. Anybody who has read the work of the Royal Society of Arts and Demos recently will realise that the trend is here to stay.

The pull of self-employment—the flexibility, freedom and dignity—helps make it an attractive option. In the past, some might have said that the push factors, such as redundancy under Labour’s great recession, were decisive. That has changed now; the issue is about the pull factors. We need to encourage more people to take the step. We should give them the information and support that they need, so that they want to become not only self-employed but first-time employers, helping out with first-time apprenticeships as well. I hope that under the enterprise Bill and other legislation more work will be done to support the self-employed in this country.

We need to ensure that enterprise is about what happens not only in this country, but Europe—particularly the European Union. Reform of the EU is not simply in the UK’s national interest, although that is our first concern, but in the interests of the EU as a whole. The world is changing and the EU must change to embrace it. There are clear opportunities and real challenges in the global economy in the 21st century. There are also compelling organic reasons for the need for reform. Many more eurozone countries want to pull together in ever closer union; I would not want to countenance that, but they are moving in that direction. States such as the UK that are rightly very much outside the eurozone need to make sure that the relationship between countries in and outside the eurozone is better defined. This is an important time for the debate about the renegotiation.

[Jim Shannon]

The hon. Gentleman has raised an important issue. One thing I would like to see in this Parliament—the response has been negative so far—is a reduction in VAT on tourism. That would be an advantage for Northern Ireland, as we could be competitive with the Republic of Ireland. When it comes to creating employment opportunities in tourism, Northern Ireland especially but the whole UK would benefit from a reduction in VAT. Does the hon. Gentleman agree?

[David Rutley]

Obviously VAT can be quite complex and there are EU rules relating to it. I am not fully aware of what is going on in Northern Ireland in that regard, but I know that the devolution of corporation tax powers to Northern Ireland will create huge opportunities. Let us see how that goes and then there might be further opportunities, but VAT is more complicated.

Let me come back to the importance of reform and renegotiation. Having worked as a Parliamentary Private Secretary to the Minister for Europe in the previous Parliament, I know from working with MPs in other Parliaments and with senior civil servants in other countries that there is now an appetite for reform in Europe—there is no doubt about that. We need to tap into that appetite and make sure that we move things on in the interests of our own country and the EU as a whole. I know that the Foreign Secretary, the Minister for Europe and, indeed, the Prime Minister are working hard to ensure that we bring about those changes. The unambitious 20th-century model of a fortress Europe sheltering from the world and rigid in its quest for centralisation cannot survive.

The Government believe that it is absolutely right to focus on reducing the bureaucratic burden and cutting the red tape that needs action both in this country and at European level. Last week, when further details were beginning to emerge about what would be included in the enterprise Bill, it was noticeable that those who represent businesses in the UK came forward to say that it was time for change not only in the UK but, particularly, in Brussels. John Longworth of the British Chambers of Commerce said:

“It is great to see the Government start the Parliament with a real drive to support businesses…To further free companies up from red tape and focus on growth, businesses will now expect to see a similar commitment from Brussels.”

That is absolutely the case. Katja Hall of the CBI said:

“Businesses will welcome the Government getting out of the blocks early by following through on its commitment to cut red tape”—

something that I have been talking about for many years. She went on to say:

“Moving forward, it should use its influence in Brussels to combat…regulation that impacts unfairly on British businesses”.

Our ambition for Britain and for Europe is to ensure that we get in place the fundamental foundations of social stability and economic opportunity on which we can rest a ladder of social mobility that will help to push forward ambition and aspiration so that people can thrive, making sure that the wealth we want gets generated so that those in genuine need can get the support they have so desperately needed. The Queen’s Speech shows a clear direction towards building more opportunities not just in enterprise but in helping to improve educational standards. That is critical, because we want to make sure that there are real opportunities for all children across all economic strata to enable them to get the skills that they need to take forward their talents and ambitions.

The Queen’s Speech sets out a very exciting opportunity for many in this country. It will help the self-employed, help our businesses, help to set out an agenda for young people, and help to reform Europe—all in one go.