Amendment of the Law

Alun Cairns Excerpts

Monday 26th March 2012 Commons Chamber

[Mr Vaizey]

I first need to get the hon. Gentleman an iPad—[Interruption.] He has one. At last he has an iPad! We have given £10 million to north Wales to put in place superfast broadband. As he well knows, we will get superfast broadband to 90% of the country two years before the Labour Government promised. We are not going to impose Labour’s telephone tax, which would have hit consumers and businesses. We will have the best superfast broadband in Europe by 2015—[Interruption.] My colleagues are saying from sedentary positions that that sounds excellent; it is excellent.

Having praised Virgin Media, let me also say that BT is investing £2.5 billion in rolling out broadband. Indeed, it has accelerated its plans so that it will deliver fibre to two thirds of the UK by 2014, a year ahead of schedule. It has already delivered to 7 million premises, and is currently adding an additional 1 million premises—the equivalent of the number in Singapore—every three months.

[Alun Cairns (Vale of Glamorgan) (Con)]

Following the point made by the hon. Member for Wrexham (Ian Lucas), does my hon. Friend the Minister recognise the added complication because of the delays that the Welsh Government have introduced in the roll-out of superfast broadband, despite the money being made available swiftly by the UK Government?

[Mr Vaizey]

My hon. Friend makes a very good point. Because we believe in devolution and localism, the implementation of the plans is down to the Welsh and Scottish Governments. It is therefore up to them to roll them out as quickly as possible. I am sure the hon. Member for Wrexham (Ian Lucas) will send an e-mail from his iPad to the leader of the Welsh Assembly Government to tell him to pull his finger out.

Ten million premises will be covered by BT by the end of the year in one of the largest engineering projects the country has ever seen. Those areas will get speeds of up to 80 megabits a second.

Mobile broadband is becoming increasingly important, with more people purchasing smartphones. Last year, the Chancellor announced an additional £150 million to help with mobile broadband coverage. By 2015, that will extend mobile coverage to 60,000 rural homes that have no mobile connection whatever, including, perhaps, villages in the constituency of the right hon. Member for Stirling (Mrs McGuire), as well as along at least 10 key roads. We will also continue to look at how we can improve coverage on our railways.

At the end of this year, we will auction spectrum that will allow mobile companies significantly to increase their capacity, as well as offer faster speeds to their customers, and we continue to make progress on our plans to release some 500 MHz of the public sector spectrum.

World-leading digital infrastructure is the cornerstone of economic growth in the 21st century. Some estimates show that a 10% increase in broadband penetration can deliver a boost of up to 1.4% of gross domestic product. By the end of this Parliament, at least 90% of the country will have superfast broadband; our great cities will have ultrafast broadband; and 60,000 rural homes and businesses will have mobile coverage for the first time.

As the House knows, the UK has some of the most successful creative industries in the world. I know the whole House will wish to congratulate One Direction on topping the US charts with their debut album—a feat not matched by either the Rolling Stones or the Beatles. Adele’s “21” is the best-selling digital album of all time, and for the first time in 25 years, UK acts were at Nos. 1, 2 and 3 in the US charts. We have the second- biggest music exporting industry in the world, and our UK animation industry has a huge impact worldwide. In 2010, Peppa Pig’s UK licensing and merchandising sales were £200 million alone.

Last year saw the most UK film production activity ever—it grew by 7% to £1.16 billion. UK television formats dominate television schedules all across the globe, accounting for two in every five global programmes, and of course “Downton Abbey” has continued UK success at the Globes. Exports of UK television content are the second highest in the world, worth more than £1.3 billion per year, having grown by more than 20% a year for about the last decade. [Interruption.] The right hon. Member for South Shields (David Miliband) looks astounded by this success. I urge him to get out more and see what some of our successful creative industries are doing.

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[Ms Harman]

But it needs to be implemented now, with a clear timetable and a code of conduct so that notification letters can be issued. We want the Government to show leadership by ensuring that search engines such as Google play their part, and, if there is no agreement, to carry on and legislate in the forthcoming communications Bill.

Where is the action on young people and skills in the creative industries? The future of our creative economy is built on our young people—young people who are consumers, and many of whom want to work in those industries. We must ensure that there are opportunities for creative development from primary school to the workplace, but the signs are not good. Creativity is being stifled in schools, and since last year the number of applications for degree courses in creative arts and design has fallen by 27%. We all know why that is: it is because of the Liberal Democrats’ shameful betrayal on tuition fees. The Liberal Democrats were meant to be a brake on the Government—remember that?—but it is obvious that they have zero influence on policy. Perhaps they just did not have enough money to buy dinner with the Prime Minister.

Where is the action on access to finance for the creative industries? London is a global financial capital and Britain’s creative industries are world leaders, yet they struggle to obtain the finance they need to grow. Most creative businesses are small or medium-sized, and they need the banks to lend to them to help them get started and grow. However, as has been pointed out by the British Chambers of Commerce, credit easing

“will not help the smaller, younger, and high-growth firms that have trouble getting credit in the first place.”

Operation Merlin figures show that banks are still failing to meet their lending targets. Net lending to small businesses fell by £10 billion last year. Banks must start lending to creative businesses rather than throwing money away in bankers’ bonuses, and the Government must start making that happen rather than throwing money away on tax cuts for rich bankers.

[Alun Cairns (Vale of Glamorgan) (Con)]

The right hon. and learned Lady says that creative industries are struggling to gain access to capital. Will she give us a specific example?

[Ms Harman]

There are many. We need only listen to all the arguments throughout the industry, whether they concern films, video games or music. If the hon. Gentleman does not realise that small and medium-sized businesses are having trouble obtaining loans so that they can start up and grow, he does not realise what is going on in the real world.

Where is the regional strategy that supports the creative industries all over the country, not just in London? The Government have abolished the regional development agencies, they have cut local government, and they have squeezed the BBC, which is bound to hit the independent sector that it supports. The Culture Secretary says that philanthropy will make up for his cuts. If that is his policy, how does it accord with the announcement in the Budget of a cap on tax relief for charitable donations? Was the Secretary of State consulted? Did he even know about it?

There is even more bad news for the arts. Not only have the Government cut the Arts Council’s budget by 29%, but they have now sacked its chair, Liz Forgan. That was a petty political act, and I am disappointed that the Minister did not take the opportunity to pay tribute to Liz Forgan. Those in the arts sector feel that she was doing a tremendous job for them, particularly in managing incredibly difficult cuts, and I want to pay tribute to her today.

Key to a regional strategy is a truly national broadband infrastructure. A digital economy needs digital infrastructure—

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[Alun Cairns (Vale of Glamorgan) (Con)]

It is a pleasure to follow the right hon. Member for Stirling (Mrs McGuire) and, I hope, to support my hon. Friends in introducing an element of reality, bearing in mind the financial situation we face. I pay tribute to the Chancellor and to the Treasury team, and to the Under-Secretary of State for Culture, Olympics, Media and Sport, my hon. Friend the Member for Wantage (Mr Vaizey), for the way in which he introduced the debate. I shall come to the Budget’s focus on the creative industries shortly.

The starting point of such a debate must be the state of the nation’s finances. We must consider the debt of the nation and the deficit of the nation, as well as the structural deficit and the interest on that debt. As we know, £120 million a day is paid from the public purse to service the nation’s debt. I have heard the groans that come from the Labour Benches when we repeat these figures time after time, but they are still true, and that is the context in which the Chancellor and the Treasury team have to work. It has been said before and needs to be said again that the financial position is unprecedented, and any tax cuts in any Budget have to be funded. It is simply not an option to continue to borrow money time after time as the previous Administration did.

[Karl Turner (Kingston upon Hull East) (Lab)]

If the hon. Gentleman believes that his Government’s policy is working, why has the Chancellor borrowed a further £147 billion?

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[Alun Cairns]

I cannot believe that the hon. Gentleman asks that question, bearing in mind the scale of the debt that was left, which is the reason for the borrowing. When this Government came into office, a quarter of all spending—a quarter of every teacher’s, doctor’s and nurse’s salary—was being borrowed. Any individual, business or family knows that one cannot continue to spend and spend when the income is not coming in.

There are also economic uncertainties on the European scale, as the right hon. Member for Edinburgh South West (Mr Darling) underlined, as well as global uncertainties. I fail to understand the logic of Labour Members who have called for tax cuts without saying from where they should be funded. We cannot spend our way out of a debt crisis, which would risk the triple A rating that the Government have managed to maintain and increase the interest rates not only paid by individuals and home owners with mortgages, but that the Government have to pay on the scale of the debt that was inherited. In the next five years, almost £700 billion has to be rescheduled, so the risk to the triple A rating cannot be overstated given the cost that could be added to the nation’s inherited borrowing. Those are the parameters within which the Chancellor has had to work.

Let me turn to some of the specifics in the Budget. Initially, Labour Members focused on the reduction of the top rate of tax from 50p to 45p, and one could ask why they have now changed tack to focus on the age-related allowance. Some might say that they missed it previously, or that they know about their record in that regard. Labour Members are the masters of freezing allowances. The personal allowance was frozen in 2000-01, in 2003-04 and in 2010-11, so the arguments they made last week about the age allowance being frozen would apply to taxation for all workers when the rates were frozen at those times.

Labour Members are showing rank inconsistency. I appreciate that it would be wrong of me to call them hypocritical—I would not be able to do that under the rules of this House—but people outside may well draw their own conclusions. Perhaps the right hon. Member for Edinburgh South West did not mention the age-related allowance because when he was Chancellor of the Exchequer at the time of the last Budget of the previous Administration, he froze the age-related allowance. All Labour Members’ criticisms of the Budget could equally be made against themselves and the right hon. Gentleman. [Interruption.] I will happily take an intervention if any Labour Member wants to make a point about the freezing of the age-related allowance at that time. I think the silence speaks for itself.

In the time remaining to me, I underline and welcome the pro-growth Budget, the pro-growth approach to the creative industries and the allowances that have been introduced. I only wish that there was more time to underline the strong message that has been sent out to the whole world: “Britain is open for business. Britain is a place to invest and to work, and you will be rewarded.”

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[Rachel Reeves]

I said earlier that the big story about the Budget was what was missing from it rather than what was in it. My hon. Friend has identified another thing that is missing, namely an explanation of how the Government will balance the books after the last two years of the current Parliament. We all know that the Government are now borrowing £150 billion more because of the failure of their policies and their decision to cut too far and too fast, which choked off the economic recovery. As a result, deficit reduction will have to continue well into the next Parliament, but we have not heard how.

The Chancellor said that the Budget was about rewarding work. A Budget that takes tax credits from low-paid working couples with children, plunges them into poverty and leaves them better off if they leave their jobs is not a Budget for work, is it? As for the notorious hit on pensioners with modest incomes, springing it on people with no notice and then dressing it up as a simplification was not only ill-judged, but profoundly disrespectful to the millions of pensioners who made sacrifices to save during their working lives.

[Alun Cairns]

Did the hon. Lady make the same protests when her right hon. Friend the Member for Edinburgh South West (Mr Darling) introduced a granny tax in preparation for the financial year 2010-11?

[Rachel Reeves]

This is not just about freezing an allowance; it is about freezing an allowance this year, next year and the year after, and for many years to come. It is also about getting rid of the allowance, because it is disappearing for people who will retire next year. Next year people will receive not a reduced allowance but no additional allowance at all, and as a result they will be £323 worse off because of the choices that this Government have made.

I am sure that in a moment we will hear protestations from the Chief Secretary about his great triumph in raising the personal tax allowance for working-age people, but families with children have already lost £450 on average from the VAT increase, and another £530, starting on 6 April, through cuts to tax credits and the freezing of child benefit. Does the Chief Secretary really expect families to be thankful to be getting less than half this back in 2013? Is it not more likely that they will see this for what it is?