Budget Resolutions and Economic Situation
Debate between Angus Brendan MacNeil and Iain Wright(8 years, 9 months ago)
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Mr Wright
I would suggest that the approach on capital gains tax is contrary to having a long-term economic plan, as it encourages short termism—people do not scale up, but sell out quickly. That is a major structural concern.
To a large extent, the Chancellor has done positive things in this Parliament to encourage investment. In particular, the changes to the annual investment allowances are very welcome and will allow firms to invest with greater certainty. Other countries, however, are doing much more, and Britain risks missing out. Addressing the huge disincentive in business rates for firms wanting to invest in new plant and machinery should have been at the very top of the Chancellor’s list, and although the changes to business rates for small businesses were welcome and constituted the largest tax cut of this Budget, it seems ridiculous that the Chancellor did not resolve the ludicrous situation whereby a firm faces a larger tax bill in the form of higher business rates by choosing to invest in new plant and machinery. For a Government who pledged to do all they can to rebalance the economy towards manufacturing and specifically, in the past six or seven months or so, to help the hard-hit British steel industry, the omission of that single measure from the Budget was a significant blow for industry, particularly the steel industry, which wanted the Government to give a favourable signal to invest.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
It seems that there is only one club in the Conservative golf bag for tackling productivity, and that is tax alone. The Conservatives have to face up to infrastructure, to the low-wage economy and to the lack of housing. Owner occupancy is at a 20-year low and house building is low as well. Workers need houses, and if that growth does not happen, combined with infrastructure, productivity will remain low.
Mr Wright
The hon. Gentleman makes an important point about infrastructure, and there was very little in the Budget to address that. Earlier, I mentioned the possibility of rebalancing. In 2012, we were promised an export-led recovery, and the Government announced proudly a target of £1 trillion of exports by 2020. I am all for ambition and for stretching targets, but given the Government’s limited ability to shift the needle on the value of exports by companies, that ambition seemed at best somewhat misplaced and, at worst, even very foolish.
The OBR stated last week that the Government will miss its target by 36%, which is £357 billion, and that net trade will actually be a drag on economic growth for every single year of this Parliament, but there was nothing in this Budget to boost exports. The word “exports” did not even pass the Chancellor’s lips in his statement on Wednesday and it was not mentioned again this morning. Does that mean that the Government have shelved that target? Will Ministers consider providing assistance and encouragement in the form of export vouchers so that firms from Britain can invest and export?
A further way to boost productivity is by investing in skills, and the flagship skills policy of this Government is the target of 3 million apprenticeships by 2020, funded through the apprenticeships levy. Now, only 2% of larger firms will pay that, so what will happen to the other 98% of firms, as well as the detail of the levy? We were promised by the Minister for Skills in the run-up to the Budget that all would be revealed, including this new shiny model, in the Chancellor’s Budget statement, but for a Budget billed as putting the next generation first, there was precious little detail about how the apprenticeships levy—only 12 months from its start—will operate in practice. As with exports, the word “apprenticeships” was not even mentioned by the Chancellor.
Fisheries
Debate between Angus Brendan MacNeil and Iain Wright(12 years ago)
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Mr Wright
He does. The hon. Gentleman is quite right.
I want to concentrate on the concerns that fishermen in Hartlepool have about the future viability of their industry. My constituency has had a fishing industry for the best part of 800 years. Generations of Hartlepool families have farmed the seas, building up a knowledge of conditions, changes in stock levels and fish movements in the North sea that is second to none. As I think was said by the Chair of the Environment, Food and Rural Affairs Committee, the hon. Member for Thirsk and Malton (Miss McIntosh), that combination of local knowledge—as opposed to top-down bureaucracy—should be used, alongside technology and empirical evidence, to inform fisheries policy.
Hartlepool’s fishing fleet largely comprises vessels of under 10 metres. Fishermen in my constituency are rightly concerned that developments over the past few years are making it even more difficult for them to make a living from the seas. Their concerns are predominantly based on two factors: the specific make-up of their industry, particularly in relation to ownership, and the common fisheries policy, which is hindering the long-term sustainability of a vibrant fishing fleet.
On the make-up of the industry, boats of under 10 metres—as I have said, they comprise virtually the whole fishing fleet in Hartlepool—make up about 75% of the total fleet in the UK, but they are allowed to catch only about 4% of the annual quota. The rest of the quota is given to a small handful of large organisations. As in other industries, such as banking and energy, the actions of larger producers and powerful vested interests are distorting the dynamics of the industry and undermining the ability of Hartlepool fishermen to remain viable. Overfishing of the seas was not caused by the under 10-metre fleet, but the small proportion of the quota allocated to them is having a hugely disproportionate impact.
Hartlepool fishermen play by the rules; they farm the seas sustainably and think of the long term, because their fathers, grandfathers and great grandfathers fished in the North sea before them and they want their sons and daughters, their grandsons and great grandsons to follow them and do the same. They do not want to undermine the industry or the chances of the next generation. None the less, the nature of the industry and the punitive share of the quota allocated to them mean that they are, at the moment, barely scraping a living.
The Minister—who, to his credit, understands the industry—has looked at the matter of increasing the allocation of quotas to the smaller vessels. I appreciate the immense challenges and difficulties of that. For example, how do we take quotas from organisations that may have a legal right to them? That is of huge significance to the fishing fleet in my constituency. On the back of what the Chairman of the Select Committee said in her contribution, I ask the Minister to outline his current thinking on how we will push forward this agenda.
The second element that concerns my fishermen is the commons fisheries policy, which naturally dominates any debate of this nature. From listening to the contributions so far in this debate, I think that there is consensus that there will be no long-term future for our fishing industry if the CFP system continues to be a top-down, bureaucratic, clumsy, blunt and inefficient tool. For a policy that is supposed to stem from a long-term, sustainable view based on scientific evidence, it is remarkably short term in its scope, having the annual rigmarole of quota setting, which does nothing to embed long-term thinking into the industry.
On the back of what has been said about regionalism, on which there again seems to be a consensus, I am interested in the Minister’s view on multi-year agreements in which quotas can be set within a broad framework for a three-year period. Does the Minister agree that that would provide more certainty for the industry rather than this current annual negotiating round, which does not provide a long-term and sustainable view for the industry? Would it not be best for the EU to provide that longer-term objective for the sustainability of our fish stocks while allowing the manner of implementation to be devised and then adapted wherever possible at a regional and local level? Should not that be done at a much more localised level? That would allow people who have strong local knowledge, such as the fishermen in Hartlepool, to take a more flexible and adaptable approach, which in turn would sustain the economics of the industry while being sensitive to the environment and future fish stocks.