Amendment of the Law

Brandon Lewis Excerpts

Wednesday 21st March 2012 Commons Chamber

[Derek Twigg]

We are here to discuss the Chancellor’s Budget. He is suggesting that it is a fair Budget that helps particularly low-paid people, but, as we have seen, it helps the richest, not least some on his own Benches. Let us be clear about that.

Again, on personal allowances, we need to look at the detail. Let us consider the cuts to working family tax credits and the loss of child benefit. On the latter, by the way, the Chancellor used the phrase “cliff edge”, but we are still on the cliff edge—it is just a bit more complicated to get to it. That is the big change. Then there is the cost of living—energy prices, food prices and, interestingly, petrol prices. The Chancellor used to attack Labour over petrol prices when we were in government. I remember the fuel tax demonstrations. We have not seen many of them recently but the Chancellor has done nothing to ease the burden. We know what he did for VAT. That is what added to the cost of petrol and fuel for the people of this country. But the Chancellor did nothing. Many of my constituents have written to me asking that the Chancellor do something about it, so they will be bitterly disappointed today.

[Brandon Lewis (Great Yarmouth) (Con)]

Does the hon. Gentleman not agree that the Chancellor has done something about fuel duty by cutting the increases proposed by the previous Government?

[Derek Twigg]

We can go back to the fuel escalator and see who introduced that in the first place. The fact is that the Chancellor put VAT up, and that has been a major problem for people having to pay the extra, but of course the Chancellor has ignored that and done nothing.

The Budget does nothing for growth. We need growth in the economy to provide jobs and investment in businesses around the country. Someone said that all politics is local, and I will return in a minute to the specific issue and how it affects my constituency. Borrowing is £158 billion more than planned, and today we see that the February borrowing figures are much higher than expected, despite some of the spin beforehand.

Let me turn to unemployment, which is a crucial issue for my constituents. Unemployment has increased in my constituency, with a significant increase in the latest figures, not least in youth unemployment. Many hundreds of young people are not being given the chance for employment in my constituency, because the Government have no growth policy. Their policies are not having an impact in my constituency in terms of providing the additional jobs and growth that are needed. I have had more and more people come to me personally to ask specifically what the Government are doing—and what I am doing, as well—to help young people who are unemployed. I had a mother come to my surgery a couple of months ago who has two young sons who are unemployed and who are desperately trying to get jobs. It is all very well for the Chancellor and the Prime Minister to talk about how we should clamp down on the benefits system to encourage work, but people cannot find work in many instances. That is an important point that we should bear in mind.

Small businesses have been mentioned already. I have raised this issue on a number of occasions with the Chancellor; indeed, he was even gracious enough to say that he had listened to some of the points that I had made in announcing today’s initiative to help bank lending to small businesses. However, let me give hon. Members two examples of problems in my constituency. One company was unfortunately left with a large debt after the larger contractor it was working for went out of business. The company still had a full order book, but the bank refused to lend it money—a scandalous situation. Another example, which is just as scandalous, is that of a business person in my constituency who needed an overdraft for one day because of a short-term problem. However, the banks refused to grant it.

We shall see whether the Chancellor’s initiative will work in getting banks to give more help to small businesses, but my worry is that although those businesses that are able, much more established and probably in a stronger position may be able to get the money quite easily, the businesses that are struggling—the ones that are riskier to lend to—are the ones that we should be helping in particular. We will wait and see whether the Chancellor’s initiatives today will help those businesses. With the right help, a lot of those businesses can survive and maintain or increase employment. The message that I have been receiving from small businesses in my area is that they have not been getting help from the banks. I hope that the Chancellor’s initiative today will make a positive impact. However, I remain sceptical because of his previous announcements on trying to address the problem. When I mentioned it to the Business Secretary even last week, he said, “Yes, it is a problem.” That was his answer. We need real energy from the Government on helping small businesses. I therefore look forward to seeing whether this initiative works in the way the Chancellor has outlined today, although I remain sceptical.

We heard nothing about local government in the Budget. We have talked about fairness, so let me give some examples of unfairness in the way local government is funded—a crucial area that impacts on jobs, investment, planning and other issues. In Halton, for instance, we will be losing £44 a head in the next financial year because of the cuts. That compares with £28 a head for the much more prosperous Cheshire West and the city of Chester, and a loss of £19.32 for Cheshire East. Guess who is one of the MPs in Cheshire East? Surprise, surprise: the Chancellor. The 27th most deprived borough will face the largest cut in local government expenditure among those authorities. I am amazed—although I should not be amazed, really—that the Liberal Democrats are going along with this deliberate attempt by the Tories to push money out to Tory authorities at the expense of the most deprived areas in the country.

Why is this issue important? It is important not just so that local authorities can maintain crucial services such as education, social services, development and so on—many people on low incomes are particularly affected by cuts to those services—but so that local authorities such as Halton can regenerate and attract businesses to their areas. Indeed, Halton borough council has been particularly good at attracting development—it was mentioned the other day in a BBC report—whether in shopping and retail facilities, or development by other businesses, such as Stobart and Tesco, which opened up a chilled warehouse that is a large employer. Halton has been particularly good, including on planning and trying to encourage business.

The Chancellor talked about trying to reform the planning system to ensure that local authorities do more to secure investment and attract businesses to this country, and, of course, to their localities. We have fantastic opportunities in Halton, not only in our retail facilities or the developments by Stobart, but in business development, in areas such as the Heath business park, which is one of the foremost business parks in the region, and Daresbury laboratory, which Labour saved from closure and invested in and, I am pleased to say, whose science and business development the current Government are continuing to invest in. Our local authority has been able to achieve much in difficult times. A lot of that was put in place thanks to investment by the last Government. However, the cuts made by this Government are having a negative impact and will cause councils around the country a great deal of problems.

Interestingly again, there was no mention of the NHS in the Budget. That is no surprise. The Liberal Democrats have now supported the Health and Social Care Bill, which we have heard so much about. I have to say to them that every other month we get new recruits joining the Halton Labour party from their party, because they are fed up with the Liberal Democrats’ support for the policies of this Tory Government. In fact, people can no longer see the difference between Tories and Liberal Democrats, which is why—I am guessing—Liberal Democrats in my constituency are saying that what they are doing is a disgrace.

I want to say a couple of things about infrastructure. I agree with the Government that investment in infrastructure is crucial to give the economy a boost and attract more investment, not least from overseas. With the Olympic games, Crossrail and so forth, we have seen massive investment in London and the south-east. That will of course benefit certain parts of the country, but it will not deliver major benefits to areas in the north-west such as Halton. On the credit side for the Government, they have given the go-ahead to the Mersey Gateway bridge in Halton—a scheme, by the way, that was started under Labour and supported by Labour, and signed off by the coalition some 18 months in government. The project will help to provide up to 4,000 to 5,000 jobs in the Merseyside and Cheshire areas. We have all-party support for the scheme, which will be crucial for encouraging investment in my area, as well as the wider Merseyside and Cheshire areas. However, it will also provide hundreds of construction jobs, which will be important, as we have a particular difficulty with the construction industry at the moment.

At the same time, however, the Government are taking the lion’s share of any toll revenue over and above what is projected, as well as any savings on the project, and they are also limiting the discounts that the council can give to local people. It is important that local people, who use the current crossing for free, should get big discounts or pay nothing at all. I have already written to the Government, but we cannot get a proper answer to why they are doing that. Why should they take the lion’s share of any additional income or savings? They should be ploughed back into Halton, so that local people can be given bigger discounts.

My final point is about town centres and shopping centres. I did not hear much from the Government about how they are going to encourage the regeneration of town centres. We had a debate in this place a number of weeks ago, and I did not hear much in that either. For various reasons, areas such as Widnes in my constituency have done well at improving their town centres and developing their shopping and leisure facilities. However, as I mentioned in a previous speech, Runcorn is struggling to regenerate its town centre, for various reasons that I do not have time to go into today. Runcorn has potential, not least the attraction of its waterways, but the Government have had nothing to say about that. What we want to hear from them is what they are going to do, in real monetary terms, to help town centres such as Runcorn.

--- Later in debate ---

[Brandon Lewis (Great Yarmouth) (Con)]

I wish to focus primarily on the Budget’s impact on business and growth, but before doing so I wish to touch on one other area: duty stamping on alcohol. The Red Book says that the Treasury will look to move forward with its consultation on duty stamping, and I welcome that important step. The wholesale industry estimates that the revenue lost to the Treasury through the lack of duty stamping on beer alone is about £500 million a year and that the loss might be the same again in respect of wine. We need to consider beer and wine together, because the two products are clearly becoming competitors and we cannot deal with one without looking at the other. Duty stamping on spirits is already in place and it has not affected the sale of spirits or the industry, as spirits sales in this country have increased by 8%. So it is really important to examine this area, in order to plug another hole and get back for the Treasury some of the money that was wasted and spent by the previous Government.

Such an approach will also have a knock-on benefit, as so much of the Budget does, for other Departments and other areas. For example, a benefit to the health industry will result from a lack of the cheap alcohol that can be found in small corner shops in some parts of our country. Such shops do not necessarily buy through the legal market, taking advantage of alcohol for which the duty has not been paid and which is then sold cheaply to young people. We can cut that out, too; this has a big economic impact and a big health impact, and I welcome the move in the Budget.

[Jesse Norman]

My hon. Friend may not be aware that I have just been granted a Westminster Hall debate next Tuesday on precisely this issue, so I am extremely grateful to him for introducing it in the main Chamber.

[Brandon Lewis]

I congratulate my hon. Friend on securing that debate and I look forward to joining him on Tuesday to discuss the issue in more detail.

No Budget stands alone, and what is important about this one is how it builds on what has been done in the past couple of years, particularly for business. When we consider how we want to move forward in having an economy that grows, with more jobs and more prosperity for all, it is important to remember that we need to rebalance our economy and have growth in the private sector. So the moves that have been taken for business are hugely important, and the further lowering of corporation tax and the speeding up of that process is very welcome. It makes it very clear that our door is open for business. When private sector businesses grow, they need more staff and more money. Less is then spent through the welfare state and our whole economy benefits.

The change in the top rate of tax, which gets rid of the 50% rate, is also important. Apart from the economic arguments that have already been rehearsed today, that has a psychological impact. A message goes out to high earners—the people who are business leaders and business owners—that we value the work they do. People who aspire to get to that position see that they can work hard, develop and grow their business, and benefit as well.

[Austin Mitchell (Great Grimsby) (Lab)]

Does the hon. Gentleman accept that as well as giving those people that possible incentive, the change also gives them an incentive to spend more time on the golf course?

[Brandon Lewis]

That shows a lack of understanding of how the business world and business leaders work.

[Andrea Leadsom]

Does my hon. Friend agree that it is astonishing that the Opposition do not seem to realise that it is the private sector, wealth generation and incentives that create the income for the Exchequer that enables us to pay for good, sound public services?

[Brandon Lewis]

I thank my hon. Friend, who makes an important and valid point.

One of the important things that the Government have done is to introduce enterprise zones. I appreciate that I have an interest in that as chairman of the all-party group on enterprise zones and local growth, but they are hugely important. In the New Anglia enterprise zone alone, we are looking at about 2,000 extra jobs in the next couple of years, growing possibly to 15,000 in just one enterprise zone in the East Anglia region that is focused on energy.

It was pleasing to hear the Chancellor explain today that one of the industries on which the Government are focused is energy. There are huge opportunities for growth for this country, with £50 billion of business available to companies along the coastline of East Anglia. We have a whole energy offer and proximity to the energy market that are almost unique. We are most often competing with countries overseas for that business, so it is hugely important to companies to understand that the Government are supportive and want that business to be based here in this country.

The moves on corporation tax and capital allowances for enterprise zones are hugely important. I have a couple of asks, to follow on from Prime Minister’s questions today. I make a plea to the Chancellor and the Treasury to look hard at whether we can extend that capital allowance opportunity to all enterprise zones to provide a supercharged boost as they move forward to growth.

[Bob Stewart (Beckenham) (Con)]

Does my hon. Friend share my hope that we can bring corporation tax down again next year? That would really help business. Does my hon. Friend agree?

[Brandon Lewis]

Absolutely. That is why I welcome the Chancellor’s comment today. The further and the faster we can go on that, the more welcoming we will be for business, and therefore jobs and economic growth.

I have one other suggestion for the Treasury to consider in the years ahead—how we deal with regulation. The changes to planning will be a massive advantage to businesses. One of the attractions of the enterprise zones is how they make planning so much easier by freeing it up. We can do more on regulation. One in, one out is a great aspiration, but it depends on what the one coming in is. There is a strong argument for looking at the billions of pounds a year that business has to spend on dealing with regulations, and targeting a value figure to cut the cost of regulations in this country.

I welcome the Chancellor’s statement about creating certainty for decommissioning, particularly for the oil and gas industry. That will be widely welcomed by the industry and I am sure it will be welcome in Great Yarmouth, as we have a huge number of businesses working in that field, developing and investing massively in our country and offering more jobs and more employment. It further builds on the opportunities for the New Anglia enterprise zone.

To see the benefit for business, we need strong, growing, improving infrastructure. I appreciate the work that the Government have done and the announcement last year of the dualling of the A11, which will open up that corridor of economic growth right through East Anglia, particularly in Suffolk and Norfolk. I make a small plea for something on which the Norfolk and Cambridgeshire Members of Parliament are working closely—to open up the spine that the A11 joins, with the full dualling of the A47 from Great Yarmouth through to Peterborough. We will continue to build the case for that and the economic growth that it would bring.

The Budget brings further benefits through the mobile infrastructure fund. The A143 from Great Yarmouth to Haverhill will benefit. The Growing Places fund will put almost £6 million into the New Anglia enterprise zone. Both of those provide more beneficial opportunities for business. As well as unlocking infrastructure growth, we should turn our attention to unlocking growth in the construction industry, which is a huge employer. We need more homes and more infrastructure to be built.

Employees and customers must be able to get from their base to the marketplace, and rail infrastructure can play an enormously important part in that. My hon. Friend the Member for Mid Norfolk (George Freeman) is working hard on some ideas about how to take that forward. He is to be congratulated, and I know he will speak in the House shortly. Through the work being done by the Department for Transport and supported by the Treasury, we have a further opportunity to unlock economic growth. We have just over 2,500 railway stations across the country, many of which we would all like to see regenerated and improved. Dealing with them as real estate rather than just as transport hubs would allow us to unlock up to £27 billion of business for the construction industry.

It is important that that kind of infrastructure develops and grows so that people can get to the marketplace quicker and businesses can transport their goods, products and customers from their bases to where they need to be faster. Broadband will open up communications and be a hugely important part of that, particularly for areas, such as Norfolk, with rural hinterlands where the transport infrastructure is not as good as we would like it to be. Broadband communication could make up for that deficit, so the target of 2015 is very welcome in Norfolk.

We have huge opportunities for growth. This Budget knits together work done by a number of other Departments and the past few Budgets and presents a real opportunity to encourage business to grow. It sends a strong message to business that this country is not only open for business, but clearly working hard to create the infrastructure and environment in which business and business people can flourish, and I welcome that from the Treasury.