Deregulation Bill

Debate between Lord Mann and David Rutley

Monday 3rd February 2014 Commons Chamber

[David Rutley]

I agree with my hon. Friend completely. There has been great determination not only to reduce the deficit, but to build a plan for growth. Deregulation is a fundamental part of that plan, so I praise the work of the Minister for Government Policy and other Ministers who have made invaluable contributions.

The Government have turned their attention to not only the stock of regulations, but the flow of new regulations—the river that is running into the swamp that we are looking to drain. Their progress has been so good that their one in, one out approach has become a one in, two out rule. Ministers must remove twice the cost of any new regulation that they introduce. As we heard from my hon. Friend the Member for Hertford and Stortford (Mr Prisk), who also made an invaluable contribution in this area as a Minister, that is a culture change that will keep us on the path to more jobs and increased growth.

I welcome the fact that hundreds of regulations have been improved, modified or removed by the Government, and that they are being more ambitious still in the Bill by aiming to improve or sweep away thousands more. As the Prime Minister said, this will be

“the first government in modern history that at the end of its parliamentary term has less regulation in place than there was at the beginning.”

That must be an important priority. With the eurozone in a sluggish period of economic growth and an in/out referendum on the cards in the UK following a Conservative victory at the next election, the Bill will hopefully not only help the UK to tackle its own challenges, but provide the impetus for serious deregulatory reform in Europe.

[John Mann]

As co-chair of the all-party group on mountaineering, what is the hon. Gentleman’s view of how clause 1 will apply to mountain guides and those who take people climbing? As he well knows, all mountain guides in this country are self-employed, even though many of them work within organisations and agencies such as the Plas y Brenin centre in north Wales. How will removing the general health and safety responsibility from self-employed mountain guides affect health and safety in that industry?

[David Rutley]

The hon. Gentleman makes an interesting point, and I am sure that he and I will wish to debate it outside the Chamber—

Financial Services (Banking Reform) Bill

Debate between Lord Mann and David Rutley

Tuesday 9th July 2013 Commons Chamber

[John Mann (Bassetlaw) (Lab)]

A vast amount of hard work has been diligently done for such a puny and inadequate set of proposals. Where does it leave us, if we look at the big picture? There is a debate about the Government’s failure to electrify the ring fence, although as I recall, the financial crisis started with Northern Rock and Lehman Brothers, where the ring fence would have made no difference whatever. What are we trying to address?

We have two banks in state ownership that are still in crisis. Clearly, the Government have no idea what to do with RBS, from who is running it and the Government’s cack-handed handling of Mr Hester’s departure, to what its role should be. Should RBS exist? Should it be broken up? How should it be broken up? Can it be broken up? How could competition emanate from breaking it up? We hear the word competition all the time. I was a signatory to the extremely modest bank account portability amendment that, rightly, was tabled. The structure of banking, however, remains pretty much as was. There is significantly less competition than there was 10 years ago. Building societies have been consolidated and about a third have vanished.

Where is the international level? This was not a British crisis, but today, as a consequence of the British LIBOR scandal, we have lost out to New York, which has played its political hand far more astutely than the Government and has grabbed business from this country. Frankfurt and Paris will be lining up to do the same. We are dealing with international banks, and the Government’s insular look at what should be done, presuming that British solutions will add to British competition, is a misnomer. We face problems with transparency in the UK dependencies, which, unlike any other country, we can influence. They remain totally opaque, specifically in relation to banking and subsidiaries—there is nothing there. On international banking agreements, the Government are hiding even from the modest proposals emanating from Brussels, of all places. This is not going to solve our problems. Competition has not moved forward, and there is no evidence that it will. The Government have an aspiration, but no strategy, for competition, so we remain with none. The problem of oligarchies running investment banking worldwide has not changed either; it remains as was—a fundamental weakness in the banking stranglehold over the rest of the economy—and totally unaddressed.

The fundamental issue that some posed at the beginning will remain the Achilles heel of all politicians and whoever is in government in this country from now on: if there is a further banking crisis and individuals—known as voters—are in a panic over their savings, there is no politician in any Government who would not bail out those accounts. No Government, whatever their colour, whatever the economic situation, would survive grabbing the electorate’s savings.

Most fundamentally, we have failed to create a concept of tiered risk for consumers to give them a choice. It has worked before. The classic example is a simple one, but a real one: the premium bond. When the premium bond was introduced, people knew that it was totally guaranteed; they knew it was not the best way of investing, but they bought them because they were absolutely guaranteed. We do not do that with our savings now. We have not created the options that would let our constituents say, “We’ll put X amount in here, knowing we’ll get a lower return than elsewhere, because the Government will give an absolute guarantee. And we can put Y amount in a middle-risk option, where there are some guarantees to certain levels, and we’ll put Z amount into something with great returns, but explicitly no Government guarantee.”

Our failure to create those options has created a fundamental weakness. I would not even describe that as radical; I would call it a rather conservative, with a small c, and moderate proposal, giving choice, creating markets and trusting people. We have not done that. At some stage, a future Government—not this one or the next one, I hope, or one in our lifetime—will face the dilemma again and will be forced to bail out a bank. There is the danger, however, that it might come more suddenly than that.

[David Rutley]

Does the hon. Gentleman not recognise that there are options for fully guaranteed savings with National Savings & Investment as well as the £85,000 protection? There are those opportunities for people.

[John Mann]

I sit on the Treasury Select Committee; the hon. Gentleman served on it, so we have a modicum more information on these matters, as do other hon. Members, than our constituents. Nothing has changed for them, however. Fundamentally, there has been no segmentation of the market, which is why the new challenger banks are getting no further. Only a tiny, tiny proportion of business is going to them. We have not restructured, even though in RBS and Lloyds TSB we have the perfect opportunity, owing to the crisis, to restructure. Across the world, we see vast numbers of people suffering and Governments of every political persuasion being voted out because of the financial crisis and the decisions they have made. This Government might face the same dilemma. I am not commenting on whether the decisions on the deficit and debt are right or wrong economically, politically or socially—that is a critical debate, but it is a different debate—but the fact that we are in this situation and we are not addressing it for the future in anything but the most micro-management way is part of that weakness.

The Government might want to give themselves plaudits and say, “Well, perhaps we’re doing a little better than the Government of Greece or Spain,” or whichever Government it is. The Americans can slap themselves on the back and say, “Unlike the Brits, we’ve got our act together. We’ve targeted their banks. We’ve portrayed them as the wrongdoers. We’ve managed to shift some of the powers to ourselves,” which is precisely what is going on among the political, banking and business classes in Washington and New York. They are winning that battle.

I will end on this point. This is a world crisis. My research document proves that every one of the top 50 banks in the world, without exception, have been involved in criminality in recent times. That is staggering for any industry. For us to hold that industry together with sticking tape, not even with the most damaged and shattered elements, including those that have had to be nationalised, such as Lloyds TSB—

Finance Bill

Debate between Lord Mann and David Rutley

Monday 1st July 2013 Commons Chamber

[John Mann]

The new clause is so modest and so moderate. How could any reasonable and rational Member of the House possibly not vote for it? I would go much further and give more robustness, including a great wealth of powers to ensure that those overseas territories and Crown dependencies were forced to give economic efficiency, justice and morality in return for the defence and everything else that they get from this country, but I recognise that one needs a majority in the House to do such things. Therefore, I appeal to those decent, sensible, smiling Back Benchers to join us in an historic vote tonight—vote with the Opposition.

[David Rutley (Macclesfield) (Con)]

I understand the real passion that the hon. Gentleman brings to the debate, as he often does, but I have some concerns. It is great to see a politician put his body on the line, wanting to ensure that he serves on the GAAR board, but is this now a bid for him better to represent the British overseas territories in Parliament as well? Has he consulted the residents of Retford and of Worksop to check whether they can spare him, given all the hard work that he is doing in the constituency?

[John Mann]

I fear that due to our expedition next year with injured British soldiers, which I expect to take place via the parliamentary mountaineering group, I will perhaps be too busy to make a big commitment of time other than to that great cause, which the hon. Gentleman and I hope to push forward with other mountaineers and injured servicemen.

The hon. Gentleman gives us a timely reminder of priorities. I give that reminder to those on the Treasury Bench. This is about priorities: their priorities in government, which are the wrong priorities, the failed priorities, letting down the small businesses and the honest taxpayers of Britain. That is who they are letting down tonight and who they have been letting down for three years. Here is a modest opportunity for those who wish to save their seats: join the Opposition, do the right thing—the modest, the moderate thing—and support new clause 12.

Finance (No. 4) Bill

Debate between Lord Mann and David Rutley

Monday 16th April 2012 Commons Chamber

[David Rutley (Macclesfield) (Con)]

It is good to follow the hon. Member for Dumfries and Galloway (Mr Brown), who makes an important point about staycations. I recommend coming to Macclesfield for a staycation. Nestled beneath the Peak district, and enjoying tremendous views over the Cheshire plain, it is a great place to be. It even beats Retford; the hon. Member for Bassetlaw (John Mann) will know that.

[John Mann (Bassetlaw) (Lab)]

But Macclesfield is about to be relegated.

[David Rutley]

Let’s keep football out of this. Coming back to the Finance (No. 4) Bill, it is tremendous to have the opportunity to speak in this important debate. Now that we are nearly halfway through this Parliament, it is important to think about our direction of travel. It is clear that under this Government, Britain has returned to economic credibility, and is laying the foundation for private sector and business-led recovery. Despite views to the contrary among those on the Opposition Benches, my right hon. Friend the Chancellor of the Exchequer has been proved right to chart the course that he did at the beginning of the Parliament. He was right not just to tackle the deficit head on, but to put the private sector at the heart of the growth agenda, where it needs to be. It is a consistent theme that came through loud and clear in the emergency Budget and the 2011 Budget. Now, in the 2012 Finance (No. 4) Bill, it continues to be pivotal, and at the centre of what the Government are trying to achieve.

There are a number of important proposed tax changes, which we have heard discussed by hon. Members, but I want to focus on the measures that have been designed to support British businesses, which are critical to economic recovery. First and foremost, I welcome the Government’s move to accelerate the commitment to having the lowest corporation tax in the G7. It is strange that no Opposition Members took any time to mention that, because that is where we will create new jobs. Having corporation tax at 22% by 2014 will give us real competitive advantage in attracting the investment that we need for sustainable economic growth. This Government’s plans are bold and ambitious, bringing the effective rate of corporation tax to a level below that of developed countries such as France, where it is currently 36.1%, Germany, where the rate is 30% to 33% and Canada, where the rate is 25% to 31%. I understand that even the Republican party in the United States proposes an effective rate of 25%. The measures set out in clause 5 will help us to increase business investment and will help us on our trajectory. I understand that the forecast by the Treasury suggests £3.4 billion of extra investment by British businesses, which is vital for the country.

Through the Finance Bill the Government have recognised the vital roles that innovation will play in helping to strengthen the economy. That is clearly demonstrated by the Government’s corporate tax road map, which came out in November 2010, with the introduction of the patent box, which features in clause 19 and schedule 2, and by the above the line research and development tax credit, both of which will come into effect in April 2012. Such tax measures complement the work that the Government are doing to support vital innovative businesses and industries, such as pharmaceuticals. The recently launched life science strategy will also help industry in the UK to tackle global challenges that are being faced in the pharmaceutical sector and will help us to keep this important skilled work force in the UK, just as I am working with AstraZeneca to do in Macclesfield.

The Budget sets out important steps to help the small and medium-sized enterprise sector. The SMEs will be the vital engines for growth in the sector, as many of us on the Government Benches are aware. The Budget’s £20 billion national loan guarantee scheme will help to reduce the cost of credit for SMEs, which 60% of small firms believe is unaffordable, and will provide an opportunity for small firms to motor ahead. Both the Federation of Small Businesses and the British Chambers of Commerce have welcomed this important and ambitious scheme.

The reforms of corporation tax and of corporate tax more generally have been welcomed by business. The forecasts suggest that they will save business £6 billion a year by 2015. That is money that will be better invested by businesses in new initiatives, enabling them to get on with the job of creating the work that many of us on both sides of the House are keen to see come to fruition. That is why the Budget has been welcomed by so many business groups and by the business community.

The CBI says that

“by seizing the opportunity to make sure our corporate tax system is more internationally competitive, he”—

the Chancellor—

“has sent a powerful signal to companies to invest, do business and create jobs in the UK.”

The IOD goes further and says:

“The reduction of Corporation Tax faster than planned is a positive step in the right direction”.

These are important signals and key messages from the business community showing support for what the Government are doing in this important area.

Although the debate today is rightly focused primarily on the tax-related aspects of the Budget, I shall spend a few minutes considering the supply-side reforms which will also have important impacts on the economy. That is why it is right to acknowledge the work that is being done by the Government in reducing the regulatory burdens faced by our businesses. As Ronald Reagan once said:

“It’s hard when you’re up to your armpits in alligators to remember you came here to drain the swamp”,

but this Government have not forgotten, and are taking action to drain that swamp.

The UK has more than 21,000 regulations on its books, and the Institute of Directors has calculated that the cost of those regulations is approaching £112 billion a year. These figures clearly demonstrate that we will benefit from an approach to deregulation that is every bit as ambitious as the Government’s deficit reduction initiatives and their tax reform strategies that will create the optimal conditions for growth. That is far better and more constructive than the demands from the Opposition for yet more Government spending.

The size of the prize is huge. Cutting the regulatory burden on businesses by just 10% would save British businesses about £11 billion a year. That is the equivalent of cutting corporation tax and the small profit rate by a staggering eight percentage points. Even by the standards of the benefits provided by the Bill, that is a hugely positive contribution to business. That is why the Government are pressing ahead with their deregulatory agenda. The one-in, one-out rule has helped to stem the flow of new regulations, and the red tape challenge is tackling the stock of old regulations. Reforms of health and safety regulations will help to free British businesses from a culture that is damaging the well-being of our economy.

Churchill once said:

“If you have ten thousand regulations you destroy all respect for the law” ,

and, just as relevant today, destroy a nation’s competitiveness. Working together, the Government and the private sector should continue to seize the opportunity and put the deregulatory agenda in a higher gear. This approach will be critical to complement the important work set out for businesses in the Bill.

Representing the Ribble Valley, Mr Deputy Speaker, you will be aware that many of the pro-business policies in the Bill will help to rebalance the economy in the country and across the regions, including the north-west. We have become too dependent on the public sector to create jobs, and we must change that, as we are doing. Despite much grumbling from the Opposition, there is evidence of success. We see important progress at Jaguar Land Rover, where 1,000 jobs are being created at Halewood by a 24-hour production line, one of the few 24-hour facilities in Europe. BAE Systems has been named a key contractor for the F-35 joint strike fighter, which will bring about £30 billion to the UK economy and safeguard 25,000 jobs, many of which are based in the north-west, near Mr Deputy Speaker’s constituency.

We have seen other positive news in recent weeks. In Crewe, near Macclesfield, thanks to a £3 million regional growth fund investment, Bentley has announced that it will create 500 extra new jobs. All these steps show that private sector jobs are being created. As a result, more employers in the north-west are feeling more optimistic about job creation opportunities. According to a March 2012 Manpower survey, 6% more employers in the north-west say that they intend to hire this quarter than in the last quarter, which is welcome news for the region.

We have heard much from the Opposition about job creation. My concern as I look at their policies is that, yet again, they are calling for more jobs to be created by the public sector, which are not sustainable. The jobs that the Government seek to create are sustainable. They are based on a private sector-led recovery. As I listen to the arguments from the Opposition, it is ever more clear to me that the previous Government were overspent, overdrawn and over-awed by the challenge that they had helped to create. It has been left to this Government to clear up that mess.

As we approach the halfway point in this Parliament, we can take stock of the progress that is being made to back business. Important strides have been taken to tackle the deficit, to address supply-side constraints and in this, as in previous Finance Bills, to create a truly competitive corporate tax environment. Such changes are much needed. That is why I add my support to the Bill today.