Economic Growth

Adrian Bailey Excerpts

Wednesday 15th May 2013 Commons Chamber

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

It is a pleasure to follow the hon. Member for Stroud (Neil Carmichael). I agreed with virtually every word he said—I am sorry if that ruins his future career.

We are now in the fourth year of this Government, and during their time in office we have had flatlining economic growth, a squeeze on family incomes with a reduction of something like £2,000 per family per annum, and mounting debt, borrowing having increased by £245 billion. The growth industries are the payday loan companies or food banks, and in such a situation one might have thought we would have a Queen’s Speech that addressed those problems.

Instead, we have a Queen’s Speech that, as the Prime Minister said, contains as its flagship piece of legislation a Bill on immigration. Since then, an amendment to the speech has demonstrated that the preoccupation of a great majority of Government Back Benchers is with Europe and not issues that directly address the everyday concerns of our constituents. I looked at the Queen’s Speech and at the Prime Minister’s introductory remarks in support of it, and I could not help thinking that although some measures will be beneficial to the economy, the overall tone of its language and the way he introduced it could be profoundly prejudicial to our economic growth.

Let me start with the proposed legislation on immigration. The Prime Minister said:

“Backing aspiration means sorting out our immigration system.”—[Official Report, 8 May 2013; Vol. 563, c. 25.]

I cannot think of a more profound slur on the generation of migrants who came to my area, set up businesses, employed people and promoted economic growth in the black country. It is an insult to people such as the modern Polish worker—that demonised character—in David Manners, the Jaguar Land Rover spares company, which is a small business in my constituency. He uses his ability to speak Russian and Czech to work and find markets abroad for the seller of those parts, and last year he created £200,000 in extra contracts for his local company. The comments are also an insult to other countries and a repudiation of would-be students who want to come to the UK, study and contribute—at least for a limited time—to boost our economy.

We have an expanding world market in bright graduates worldwide. There were more than 4 million in the last academic year, which is increasing by 7% per year. They contribute £8 billion in this country alone. If we really want economic growth, one would think there would be a legislative and market strategy to reinforce the genuine affection that many of those students will have for this country, and their desire to use our first-class education system and research facilities to contribute to universities, local economies and the national economy.

In another quote—I cannot resist this one—the Prime Minister stated that

“from India to Indonesia, from Brazil to China. We must forge new trade deals that will bring new jobs and greater prosperity. We must use our commitment to open economies, open Governments and open societies to support enterprise and growth right across the world.”—[Official Report, 8 May 2013; Vol. 563, c. 22.]

That is at the same time as he introduces immigration legislation with the most inflammatory language, and while his Back Benchers are totally preoccupied with a policy in Europe that will marginalise us in that market.

I would like to go into these issues in more detail, but time prevents me from doing so. The core message, however, is that the headline issue in this Queen’s Speech, and the subsequent reaction of Conservative Back Benchers, is damaging to economic growth, which is the underlying issue that must be addressed to help the people of this country.

[Charlie Elphicke (Dover) (Con)]

It is a pleasure to follow the hon. Member for West Bromwich West (Mr Bailey) who is the true voice of the Labour party, particularly in his refreshing directness—we do not hear enough these days of the Labour party’s belief in open-door, unchecked migration to this country. My constituents in Dover and Deal raise migration on the doorstep time and again and say they are concerned.

[Mr Bailey]

Will the hon. Gentleman give way?

[Charlie Elphicke]

I will give way in a moment. My constituents know that 5 million people in this country could work but do not—

[Mr Bailey]

Will the hon. Gentleman give way?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I am sure the hon. Gentleman will give way very shortly after he has made those comments.

[Charlie Elphicke]

I will give way to the hon. Gentleman in a moment.

My constituents feel that 5 million in this country could work but do not. They ought to have more investment and opportunity, and more chances to fulfil their potential. That is why the reforms to welfare to make work pay, the reforms to the skills agenda, the reforms to control migration, and the reforms to control, police and secure our borders are important—they give our fellow citizens more of a chance to do well and succeed in life, and to see their potential unleashed.

[Mr Bailey]

I thank the hon. Gentleman for belatedly giving way. His response to my speech—he has attempted to put words in my mouth that I did not say—demonstrates the exact problem within the Government. They are prejudicial and damaging to the carefully constructed and reasoned debate on immigration that we need in order to get a policy that suits our economy.

[Charlie Elphicke]

I thank the hon. Gentleman for his intervention. I have set out my concerns on behalf of my constituents, who raise immigration on the doorstep time and again. They simply say to me, “I want my sons and daughters to have a chance. I want to be able to get a job, do well and succeed in life.” The Conservative party is the party of aspiration and success, and the party of realising the potential that each and every one of us has. I support the Government’s reforms.

I also support the Government’s reforms on tax avoidance and evasion. Let us imagine the Labour party’s response if the Government doubled income tax and let “their chums” in big business off the hook. There would be howls of rage, and accusations that the Government are on the side of the rich and attacking the poor—accusations that they are latter-day sheriffs of Nottingham—but that is exactly what happened in 13 years of Labour government. Income tax receipts went up by 81%. The working people of this country were soaked with Labour party taxes. Meanwhile, leaving aside oil duties, corporation taxes went up by only 6%. Such is the legacy of the prawn cocktail offensive, representatives of which are in the Chamber.

The Labour Government sold the pass on fair and open competition for smaller businesses in this country in favour of large multinationals. People who work hard for a living were hit with high income taxes while large businesses were allowed to avoid taxes on an industrial scale. That is the legacy of 13 years of Labour. I am delighted that the Chancellor and the Queen’s Speech rightly take action on that.

YouGov polls show that 62% of the public consider legal tax avoidance—it is all perfectly legal, is it not?—to be unacceptable. A ComRes poll has found that 84% agree that the Government should crack down on tax avoidance by businesses operating in the UK. Indeed, 60% are prepared to call the bluff of every large corporation that threatens to disinvest from the rich, highly vibrant and successful UK market, saying that the Government should crack down on business tax avoidance even if it caused unemployment and caused some companies to leave the UK.

That is how strongly the British people feel. I feel strongly, and I was delighted to hear that my hon. Friend the Member for Redcar (Ian Swales) does, too. The Government are right to deal with the legacy of tax avoidance on an industrial scale. They are right to tackle the problem as an international problem, requiring international action. I therefore welcome the Chancellor’s use of the UK presidency of the G8 to take collective action to deal with tax avoidance and evasion.

In particular, we need to reform tax presence. The idea that Amazon is based in Luxembourg defies reality to the ordinary person. They look askance at Amazon warehouses from the motorway and just do not buy the idea that Amazon is based in Luxembourg. The rules need to be updated to cope with the globalised, competitive, internet-enabled world in which we live.