Economic Growth

Bob Russell Excerpts

Wednesday 15th May 2013 Commons Chamber

[Ed Balls]

I am not going to write our Budget for 2015 two years ahead. That would be the wrong thing to do. Right now, if the Chancellor had done what I recommended a year ago, borrowing would be coming down. At the moment, however, it is absolutely flat.

What have we learnt in the last seven days? What have we learnt from today’s Tory amendment about the priority of the Conservative party? What are Conservative Members demanding in their amendment? What are they rebelling on? Accelerated bank reform? Energy market reform? Housing investment? Infrastructure investment? Tough welfare reform through a compulsory jobs guarantee? If they want all that, they can vote for our amendment today. But no, according to the Tory amendment, the No. 1 priority that is so vital that Conservative Members are planning to vote against their own Government’s Queen’s Speech involves enabling legislation to allow Eurosceptic Conservative MPs to try to take Britain out of the European Union.

The Tory amendment states that those Members

“regret that an EU referendum bill was not included in the Gracious Speech.”

Let me tell the House what they should be regretting. They should regret the fact that, after three years of pursuing a failing economic plan, the Chancellor is still ploughing on regardless, even when the IMF is telling him to change course. They should regret the fact that, when calculations based on Institute for Fiscal Studies figures show that families are, on average, £891 worse off this year, the Government have cut taxes for the highest earners, giving a £100,000 tax cut to 13,000 millionaires. They should regret the fact that the Government have refused to use the Queen’s Speech to put in place the long-term reforms necessary for our economic future—reforms that I fear will not be in the spending review, either. The Chancellor and the House should regret, too, the fact that the Conservative party seems to have been hijacked by those within its ranks, including within the Cabinet, who are determined to lead Britain out of the EU regardless of the impact on investment and jobs.

[Sir Bob Russell (Colchester) (LD)]

Will the shadow Chancellor confirm that the number of Labour Members who have signed this Tory amendment on the EU referendum is now in double figures?

[Ed Balls]

I have not seen the figures, but I would be happy to study them—it is when it spreads to the Cabinet that there is a real problem. The hon. Gentleman should regret the 15% rise in long-term youth unemployment in his constituency, which was confirmed today. I have to say that this coalition was really not worth his support.

--- Later in debate ---

[Sir Bob Russell (Colchester) (LD)]

Successive Governments have spoken of localism and sustainable communities, but the reality has not matched the rhetoric in many respects. That is particularly true with regard to the loss of post offices and neighbourhood and village shops, whereby Government policies over the past 30 years have hastened their decline, rather than helped sustain them to the overall benefit of society and the communities that lose them.

Nowhere is Government failure more obvious than in the closure of thousands of neighbourhood and village public houses—the traditional English “local”—and the rise of mega-drinking establishments with wall-to-wall boozing and round-the-clock easy availability of alcohol, aligned with below-cost-price special offers in supermarkets, which has fuelled an explosion in alcohol-related incidents in town and city centres, making many people wary of going to them in the evenings and putting serious extra pressure on our emergency services, including clogging hospital accident and emergency departments.

There is also worrying evidence from health professionals of an increase in drink-related conditions and that this self-inflicted rise in alcohol-induced illnesses is occurring in increasing numbers of young people. All this adds yet further burdens on the national health service and it also, of course, leads to devastation for the individuals concerned and their families. It is therefore a huge disappointment that we have not been presented with a Bill to address the failure of the past 30 years.

Early-day motion 57 supports a campaign group—a coalition of organisations—known as Fair Deal for Your Local, which is calling, as its name suggests, for a fair deal for local public houses. The group comprises the Federation of Small Businesses, the Forum of Private Business, the Campaign for Real Ale, Fair Pint, Licensees Supporting Licensees, Justice for Licensees, Licensees Unite, the Guild of Master Victuallers and the Pubs Advisory Service. That is a worthy list of organisations whose views both the coalition and the Opposition should listen to.

The campaign’s emphasis is on a much-needed reform of the tied model operated by large public owning companies, or pubcos as they are commonly called. Pubcos take more than is fair or sustainable from the sales of drinks, which makes it difficult or impossible for many licensees to make a living. This results in the failure, on a huge scale, of pubs up and down the country, with a closure rate of 20 or more a week and the pubcos selling them as though they were asset-stripping property developers rather than custodians of our nation’s rich social heritage.

The following statement could easily be adapted as a Bill:

“The Fair Deal for Your Local campaign believes that the way to ensure a fair deal for pubs—and to deliver the Government’s clear commitment—is to include in the statutory code an option for tied publicans to only pay a fair, independently assessed market rent to the pub owning company—a ‘market rent only’ option.”

It is estimated that this would bring down the cost of a pint in pubco-owned pubs—around a third of all British public houses—allowing many pubs to survive and thrive. It would also lead to fairer access to public houses for small brewers, which would boost their businesses and increase choice at the bar. I would have thought that the coalition welcomed such measures. It must be stressed that all family brewers would be excluded, because the code would apply only to companies that own more than 500 pubs. This relates to pubco public houses, but legislative help would also benefit other neighbourhood public houses.

In commending the Fair Deal for Your Local campaign, I congratulate the excellent work of my hon. Friend the Member for Leeds North West (Greg Mulholland), who tabled early-day motion 57. I also remind the House of what I have said on this subject in previous debates. In November I said:

“We need to amend the tax levy on beer sold in our traditional public houses. We should have a tax-neutral approach to keep the Treasury happy and bring huge social benefits, including job retention and creation, rather than there being the loss of jobs that we continue to witness in the sector.

Most publicans of neighbourhood and village public houses run responsible establishments. Their customers should be rewarded, not financially penalised because of the irresponsible marketing carried out by supermarkets and mega-drinking establishments.”—[Official Report, 1 November 2012; Vol. 552, c. 429.]

I returned to this theme in the Budget debate in March, when I observed that

“there are mixed messages on alcohol tax and the coalition Government’s desire to tackle binge drinking and improve the health of the nation.”

I described the confusion caused by having a debate on whether there should be minimum unit pricing alcohol when the Chancellor was knocking 1p off the price of a pint of beer, and added:

“We need a variable price structure to help traditional, community and village public houses, which would fit well with the coalition Government’s localism agenda and the last Government’s sustainable communities legislation.”—[Official Report, 25 March 2013; Vol. 560, c. 1362.]

Time prevents me from mentioning other Bills that I would have liked to be included, such as one on building council houses. The lack of council house building over the past 30 years under the policies of the Tory Governments led by Thatcher, Major and Blair has led to a housing crisis.

Unlike some, I will loyally support the Queen’s Speech this evening.

--- Later in debate ---

[Mr Jenkin]

I am grateful to my hon. Friend for that intervention. I will not debate at length the quality or timing of an EU referendum, although I think that those who voted for UKIP and are likely to do so in next year’s European elections will not be impressed unless we make every effort to hold a referendum as soon as possible, rather than when it suits the three main political parties for whatever reasons we have to continue putting it off.

I wanted to say to my hon. Friend the Member for Croydon South that I have the figures from the House of Commons Library, and our total earnings from abroad constitute 44% of our GDP. We are a global trading nation and trade a higher proportion of our GDP than any other major European state. Trade with the EU comprises 19% of GDP, and 25% with the rest of the world. The rest of the world is the growing proportion; the EU is the declining proportion. Manufacturing is the only part that would be excluded, by virtue of the tariffs that were mentioned earlier by my hon. Friend, and manufacturing exports to the EU comprise 10% of GDP, and 10% to the rest of the world—a substantial and important part of our economic activity.

The point is that there is no evidence that we would not continue to trade that proportion of our manufactures with the European Union—incidentally, the figures are inflated by what we know as the Rotterdam-Antwerp effect because a lot of what we export to the EU is instantly exported to the rest of the world. We are regulating our entire economy and burdening our taxpayers with the costs of the contribution—rising to £19 billion gross—with our membership of the European Union. One hundred per cent. of our economic activity is burdened with those regulatory costs for the sake of less than 10% of our overall GDP.

[Sir Bob Russell]

May I ask my neighbour and parliamentary colleague whether anything he has just said could not have been said by a member of UKIP?

[Mr Jenkin]

I totally agree. The irony of this debate is that a lot of people in UKIP are saying things that are similar to what is felt by a lot of people who would like to vote Conservative at the next election. There is a majority in this country, and I think the Prime Minister was right to say that he wants a different relationship—a new relationship with our European partners.

This entire debate is conducted on the premise that membership of the single market is indispensable to our national interest, is it not? Those who say we must remain in the EU come what may believe that the single market is indispensable to our national interest, but here are the facts. I have already mentioned how little of our GDP that we export in goods would be subject to tariffs were we not to have a free trade arrangement with the EU—probably around 8.7% of GDP. The idea that 3 million jobs are dependent on exports to the EU and that we would lose them if we left is a myth. There is no substantial evidence that we would lose any jobs. On the contrary, if we had a freer and less regulated economy, we would probably create more jobs by trading more easily with the rest of the world.

The EU is in long-term structural decline and our non-EU markets are expanding. The UK enjoys a trading surplus with the rest of the world—with which we trade much more effectively—and we have a £70 billion trade deficit with the EU. The rest of the EU would therefore not want a trade war with the UK; it would not be in its interest. The idea that Ireland, or even Germany, would enter a trade war with the UK is absolutely ridiculous.

By the Commission’s own admission, EU red tape costs 4% of the EU’s GDP. The single market does not reduce the costs of doing business in the EU; it is a regulatory burden on trading in the EU.