Amendment of the Law
Brian Binley Excerpts(9 years, 8 months ago)
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Ed Balls
People say that empty vessels make the loudest noise. I will set out clearly our approach to deficit reduction, but before I do let us go back to the ineffective right-hand man, who apparently is now standing in front of Downing street holding a yellow Budget box—less reality, more “Midsummer Night’s Dream”. What a shambles! Yesterday we had the Budget, today we had the farce of the alternative Budget from the Chief Secretary, the Liberal Democrats’ new economic spokesman, and now, with the Business Secretary shortly to come to the Dispatch Box, I presume we are to get the alternative alternative Budget from the man the Chief Secretary displaced from the job.
One has to feel sorry for the Business Secretary. He lost a job and still has to turn up to give the speech, sitting there beside one of his Treasury nemeses, with the other outside Downing street. Another Shakespeare quote comes to mind:
“Misery acquaints a man with strange bedfellows.”
How true. Let us not forget that the Business Secretary and the Chief Secretary served with the Chancellor in the Cabinet for five years. Together all three of them voted to put up VAT. The Liberal Democrats voted with the Tories to raise tuition fees to £9,000. They voted with the Tories for the hated and iniquitous bedroom tax. The fault is not in their stars, but in themselves, and the British people will not let them forget it.
Mr Brian Binley (Northampton South) (Con)
Will this ploy of much ado about nothing delivered in a tempest form continue for the whole of the right hon. Gentleman’s soliloquy, or will he come to some points of import shortly?
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
I should like to draw Members’ attention to my entry in the Register of Members’ Financial Interests. I have an interest in housing.
I represent a constituency that is now often described as “achingly cool”, but it is also one of the poorest parts of the country. Those achingly cool young hipsters with their beards and pink hair who populate the coffee bars and watering holes of Hackney and who make the creative industries there the great success that they are—even they face challenges.
In yesterday’s Budget debate, and since then, we have heard so much huff and puff that anyone would think that the Budget had been written by the big bad wolf. In my constituency, that will be its effect on many people. This Government have left a £30 billion bombshell that will hit us after the general election. We know that there will be £12 billion of welfare cuts, and the rest will come from public services, but the Government have so far remained silent on where the axe will fall.
I know for a fact that Hackney council is looking to make £28 million-worth of cuts, and we have already seen 24% cuts to further education colleges, including my own excellent Hackney community college. These public services matter massively in areas such as Hackney, where about 36% of children live in poverty. That is the third highest rate in London. Many of those children live in households that are poor but ambitious. Their parents are working on zero-hours contracts in low-wage jobs while having to meet the costs of child care and high private rents. Many poor families cannot now get housing in the social sector. That means that many of them are trapped on benefits or tax credits. Talking about tax and welfare cuts sounds appealing, but it actually traps people who have the ambition to break out of benefits and into work and to be self-supporting. It stops them in their tracks. The routes to self-advancement are shrinking. Another cut like the 24% cut to FE would have a devastating effect, particularly on women stuck at home who do not speak English and who need English for speakers of other languages courses just to get into the initial job market.
At my surgery, a man came to see me in tears. He was a kitchen porter on minimum wage and had been asked by the jobcentre to seek jobs in zones 5 and 6, which is not an unreasonable request, but his wife had a part-time minimum wage job and they looked after two children between them, and the cost of child care and the extra travel combined meant that even in a council property he could not make ends meet. The Government are once again threatening to squeeze people in Hackney until the pips really squeak. In fact, I am not sure that there are any pips left to squeak for many people in my constituency.
A key issue that was not fully addressed yesterday is housing and I am glad that the hon. Member for South Norfolk (Mr Bacon) has mentioned it. I am fed up with the mantra from the Government about building brownfield land as though that is a great solution, because every experience I have in Hackney and across London shows how empty those words are. Huge publicly owned sites are being sold in my constituency to the highest bidder and not for local affordable homes.
I have some shocking examples. St Leonard’s hospital was taken from the local NHS and is now held by NHS Property Services Ltd, or PropCo. We do not know what will happen to that site but, in a horrible twist of irony, it was formerly Hackney's workhouse. In my view and that of the council and of others locally it should be used for affordable housing for local families when it is eventually redeveloped. That would do more for public health locally than the private housing that is likely to appear there.
Meg Hillier
I do not doubt that some are, but my particular issue is brownfield sites that are owned by the public—the taxpayer. They are part of Government departments and are being sold off to the highest bidder rather than adding value to the local community. With all due respect, I am sure that Northampton is a lovely place to be, but my constituents want to live in Hackney South and Shoreditch and Hoxton and Homerton. They do not want to be living out of London, facing long commutes to work. When people are on the minimum wage, that is just not an option. In fact, even if they are on much more than the minimum wage it is not an option, as commuting costs make it unsustainable.
Kingsland fire station was not only rashly closed by our Tory Mayor of London but has now been sold off for a rumoured £28 million. That clearly cannot be for affordable housing, but the situation is still shrouded in secrecy and we are waiting for final information. Another example, neighbouring my constituency, is the Mount Pleasant sorting office in Islington, which my hon. Friend the Member for Islington South and Finsbury (Emily Thornberry) has rightly championed. That huge publicly owned former sorting office site is being sold mostly for luxury homes. It is time that the Treasury rules changed and, instead of the highest cash bid winning, the welfare and benefits of local people were taken into account.
What do the Government offer on housing? They offer Help to Buy and now the ISA for homebuyers, with up to £3,000 for young savers. They are great for those people, but it fuels the house price increases we have seen in my constituency. Let me give Members the flavour of that. In 2005, the average house price was £269,000. Today, the average house price—it might have gone up since I looked at it this morning—is £606,000. That is a staggering 124.9% increase in 10 years.
Rents are also rising sky high and there is nothing in the Budget for renters. The median private rent in Hackney is £330 a week and median full-time earnings in Hackney are £608 a week. More than half of people’s earnings are going on rent and many are trapped sharing bedrooms with strangers, using living rooms as bedrooms and not having the option of moving. It is impossible to be sure that one can raise a family in most private sector accommodation, as there is no security. I am glad that my Front Benchers are considering this, but we need to go further. Hackney is an example of what will face other parts of the country in future.
I was staggered to hear the Business Secretary defend the bedroom tax. In the Hackney Homes homes alone—the former council properties—2,160 tenants have been hit by the bedroom tax. It sums up the Government’s approach, because it does not work. There are no homes for people to move to and it is costing the taxpayer. Let me give an example. One woman was living in a three-bedroom property. Her teenager moved out and she was temporarily not working, so she was encouraged to move to a smaller two-bedroom property. She did so, but even though it was a social housing property, the rent was higher than that for her three-bedroom property. She faces a terrible struggle to find work that will pay the higher rent and she has lost the home that had been the family home. It is mean-spirited, it undermines the stability of secure tenancies and it is wrong. It must go. No ifs, no buts—if there is a Labour Government, the bedroom tax will be abolished.
The Chancellor talked about tax avoidance, and aggressive tax avoidance must be tackled. As a member of the Public Accounts Committee I have been playing a role, along with the hon. Member for South Norfolk, in ensuring that that happens. We know that uncollected tax has risen by £3 billion under this Government and all parties want to see more investment in HMRC’s ability to tackle companies that are running rings around Revenue officials to pay as little tax as they possibly can. Let us consider businesses up and down the country. Businesses in my constituency tell me that not only is it difficult to borrow money, despite the Government’s raft of lending schemes, but overdrafts are a big issue. I see that the Economic Secretary, who is the Minister responsible for banking, is in her place. Why do we let the high street banks off the hook every time we discuss these issues? They should be lending to local businesses. They are best placed to make a decision about what works for those businesses, but they do not do it.
I am delighted that the Minister is in her place, because I know she has a genuine passion for change in the banking sector. In the Budget and the document “Banking for the 21st Century”, there is no mention of real-time data on credit records. We currently have to wait 30 to 60 days for our data on lending to be available on a credit record. That encourages irresponsible lending. We have had a lot of debate about payday lending, but real-time data on credit records would have ensured that such lending applied only to those who could afford to pay back the loans. If the Minister can give me any indication of the Government's latest thinking on that and how fast they could move towards what seems to me to be a sensible measure, I would very much welcome that.
The Budget does nothing for my constituents. It screws the poorest down into a very difficult situation. They are feeling trapped, unable to escape from a situation that is not of their making. Their incomes have gone down and they are caught in a benefits trap, despite the fact that many of them want to get out of it. The Government are rewarding people they believe will vote for their party but not delivering for my constituents.
Mr Brian Binley (Northampton South) (Con)
As ever, I am most grateful to you, Mr Deputy Speaker. It has been an honour to serve under you. This will be my last speech in a major debate and I am delighted that you are in the Chair.
Let me continue to be nice by telling the Economic Secretary how much I welcome this Budget for growth. It is based on five years of careful management, the provision of affordable services and the gradual reduction of a massive budget deficit. I pay tribute to my hon. Friend and the Chancellor for creating this opportunity for growth, which I believe many businesses and taxpayers up and down the country will welcome enormously.
Some years ago, I said that my grandmother would have told this place, “You have only two options when you’re in financial difficulties: earn more or spend less.” Listening to the Opposition’s arguments, it seems to me that they believe that, while earning more has some merit, spending less has no merit at all. My grandmother would have said that they were foolish. I would not dare say that in this place, but I know that she would have been pleased with the Budget this Government have produced.
It does no harm to recognise the inheritance this Government were dealt by a Labour Government who had themselves inherited a golden legacy that they frittered away. [Interruption.] It certainly was a golden legacy and was said to be so by pretty much every economist in the country, except, of course, for those affiliated to the Labour party. The Labour Government engineered a growing structural deficit from 2002 onwards. That is totally irrefutable. The deficit they left was not, as has been said, £140 billion; in their last Budget, they left a deficit of £163 billion.
If we consider that 1 billion seconds is 32 and a half years, we may get an idea of what £1 billion looks like. What a massive, massive sum.
Debbie Abrahams
The hon. Gentleman is as charming as ever and I am grateful to him for giving way. I want to correct the record. I am sure he will acknowledge that there was a global economic crisis in 2007-08 and that we reduced the deficit from 47% to 37% of GDP.
Mr Binley
The deficit was reduced because you spent more money—of course that would reduce the deficit.
I thank the hon. Lady for her intervention, because it leads me on to the next part of my speech. You failed to mend the roof while the sun was shining. You failed to recognise the fact that there was a global storm approaching. You massively increased borrowing when every business in the land was doing just the opposite—I can tell you that as a business man. Indeed, you almost broke the country.
Mr Deputy Speaker
I think you need to sit down for a second. Once was fine, but I think that was your fifth “you”. I am being accused of a lot of things that I know you will not want me to take responsibility for.
Mr Deputy Speaker
Order. I can assure the hon. Gentleman that there will not be a lax approach. I will allow him to get on with his speech without any more “yous”.
Mr Binley
I am most grateful, Mr Deputy Speaker. I will remember that.
This Government need no lessons from the Opposition, even if they had lessons to give, which I have failed to hear during this Budget debate. The Minister will not be surprised to know that I will again bang the drum for business, as I have in this place for the past 10 years. In many respects, I am sorry that this place does not have more business entrepreneurs, and often fails to appreciate their needs or the sort of economic atmosphere in which they work best. Thankfully, this Chancellor has had a plan. It is a plan that is working, and business confidence continues to rise. The Budget will frame our prosperity for the entirety of the next Parliament. I have no doubt that there will come a time when, if the Opposition ever again assume the seat of government—pray the Lord that it will never happen—they will recognise the reality of the situation, instead of talking in Shakespearian fairy tales, as the shadow Chancellor did.
The Chancellor has introduced Budget measures that business will welcome: the reduction of the rate of corporation tax to 20%; the abolition of national insurance contributions for those employing under-21s, and indeed young apprentices, which will come into effect in April next year; the extension of small business rate relief and the much welcomed employment allowance; and especially the promise of a major review of business rates. Business will be delighted by the abolition of class 2 national insurance contributions for the self-employed, which will follow in the next Parliament, and by the abolition of annual tax returns. On behalf of small businesses up and down the country and of the independent operators—it is so important for this nation that those single men and women plough their own furrow—I thank you.
Chris Heaton-Harris
It will be a great loss not to have my hon. Friend in the House after the general election, because he is a worthy champion of the wealth creators of this country. In his valedictory speech to this place, will he share with us some of his great expertise on why small businesses are the bedrock of British society, and how they employ so many people to the benefit of our tax system?
Mr Binley
I would be delighted to do so. Small businesses are the bedrock of the growth in the number of businesses overall because, first, they welcome the Government’s approach, and secondly, they have the courage to go out, put their own money on the line and add to the number of jobs available in this country. I am delighted to say that that is exactly what I did 25 years ago, and the companies I founded now employ 300 people —that is what entrepreneurialism is about—and to say that that is a part of my record and always has been.
The Chancellor has acknowledged that the success of the Budget will not be calculated by the accumulation of individual measures. I will therefore speak about the economic architecture that will help to achieve his ambitions. I want to comment on how his efforts to rebalance the economy are taking off, something which requires a bold and strong local infrastructure that supports businesses.
In particular, I want to speak about the importance of local enterprise partnerships. I am delighted to say—here is a compliment—that I understand that the Opposition have welcomed LEPs and will continue to use them. That is sensible, and we should give the Opposition credit when they agree with sensible measures. LEPs are critical to the rebalancing of a successful economy in every part of the UK. As some of my colleagues know, I am the vice-chairman of the Northamptonshire LEP. I may be the only Member of the House to be so intimately involved in an LEP. I believe that it is important for hon. Members to take an active interest in their LEPs and be associated with them with a view not to running them or overpowering their potential, but to being involved because they can be a great help. I hope that the Opposition spokesman, the hon. Member for Hartlepool (Mr Wright)—to be fair, he is a great supporter of small business—will take that message on board.
Northamptonshire had the vision to create the Northamptonshire enterprise partnership before LEPs were mooted. I pay tribute to the leaders of the county council for their foresight. The pressures on local government funding will increasingly restrict the ability of local authorities to sustain their support for LEPs. If we are to make them work, they need to be owned by the entirety of the local economic community, and not just by one sector.
Why has the performance of LEPs across the country been so patchy? I believe that it is because many of them, particularly many of the smaller ones, are not in receipt of the support that they need to create the sort of administration that will produce the growth that we are seeking. The original design for LEPs envisaged local businesses as the main source of income for the administrative costs. However, in areas where small businesses are the main engine of economic growth, that is an optimistic expectation. In Northamptonshire, some 94% of those working in the private sector work in SMEs. SMEs simply do not have the spare cash fully to support the LEPs in the way the Government originally envisaged.
I would like to see a system whereby a proportion of the finance that is available for the projects that LEPs handle is allocated to sustain their administration. I hope that the Economic Secretary will recognise that I am not asking for more money, but for some of the money that is devoted to local growth to be redirected to the administration of LEPs so that they can achieve the objective of growth.
This Budget must be seen as the prelude to prosperity in the next five years. Frankly, the Chancellor will need the support of LEPs after the election. That support will have to be strong and sensible. Consequently, the Government will have to give careful thought to how best to organise and manage the structure of LEPs. I appeal to the Economic Secretary to recognise that, in view of the Government’s policies that were expressed by the Chancellor, LEPs will need a little more financial help if they are to do their job correctly on behalf of the Government.
I am happy to offer an exemplar for what can be achieved by a LEP. I refer to my own LEP in Northamptonshire —there’s nothing like blowing your own trumpet! The economy in Northamptonshire is recovering well from the great recession. The food and drink sector is the largest sector in our county in terms of employment and turnover. We are building a new food and drink academy at one of the important colleges just outside Northampton. More than 40,000 people are employed in the auto sport and aerospace industry. They are grateful for the help that has been given to the industry, but they want it to continue. Our craft industry, which makes the best boots and shoes in the world, has received help from the LEP. Church’s, which is one of the best-known brands, has had help to extend its manufacturing facility. Northamptonshire’s enterprise zone has created more than 1,000 jobs.
Finally, Northamptonshire’s Challenge 2016 project, which aimed to achieve a massive reduction in youth unemployment, has far exceeded our expectations. Two years ago, we had more than 5,600 young people not in education, employment or training; there are now a little under 1,500. That is the success of this Government—giving people opportunity and aspiration. I say to those who tell me that young people do not have aspiration that it is amazing how aspirational young people become when they have a job.
If we are to put ourselves in the premier league of economic growth, the measures in the Budget must be combined with an effective local economic framework. I am confident that Northamptonshire will continue to provide an example of how best to drive regeneration and economic growth, but it will need more help, as will many LEPs across the country. I beg that you consider that factor—you being the Economic Secretary, Mr Deputy Speaker—
Mr Wright
As the shadow Chancellor says, the only way is up. We have just won two games on the trot, which is unusual for us. We are only four points away from the next team up, so we have everything to play for.
My hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) told us that this Government’s tax and benefit changes mean that families are on average £1,127 a year worse off. She has been a fantastic champion of the NHS, and she mentioned how A and E and the rest of the NHS is at breaking point. She said that Oldham never had a food bank until 2012, which is very similar to my experience in Hartlepool and to the experience elsewhere around the country. I particularly pay tribute to her for being a champion in tackling late payments to contractors, which can be a blight on small businesses trying to pay their way in the economy.
Several hon. Members who spoke are leaving the House voluntarily; I imagine that several others will leave involuntarily. I pay tribute to the hon. Members for Dudley South (Chris Kelly) and for North Warwickshire (Dan Byles). I am genuinely sorry that they have decided not to stand again, but I look forward to welcoming the excellent Natasha Millward to the House, and to Mike O’Brien coming back. I also pay tribute to the right hon. Member for Mid Dorset and North Poole (Annette Brooke), who has been a fantastic champion for park homes, on which we have worked closely together.
I want to single out the hon. Member for Northampton South (Mr Binley), who has just walked into the Chamber. I consider him a real friend to me and to business in this country, as he is very knowledgeable. Before he leaves this place, I hope that we can have a pint and celebrate the great work that he has done, and the great work he will continue to do.
Mr Wright
It’s a date—and perhaps I can bring along the hon. Gentleman’s successor in his seat, Kevin McKeever.
The hon. Member for North Dorset (Mr Walter) made a weak joke, frankly, about how the Leader of the Opposition’s kitchen must be a butler’s pantry. That was particularly welcome from the hon. Gentleman, who I know has serious and relevant credentials for talking about the experiences of ordinary working families in this country. As an alumnus of Warminster boarding school, a former international banker and a freeman of the City of London, his comments were very relevant.
The Chancellor should have focused on the country’s long-term prosperity and competitiveness, using the Budget to do more to strengthen productivity, investment and trade, yet that did not happen. Today’s Financial Times stated:
“This was a Budget that offered little to business”.
It was revealing that the Chancellor did not once utter the word “productivity” in his statement, but tackling the productivity gap is the single biggest means by which Britain can improve competitiveness, raise living standards for all and ensure that the deficit is brought down. UK output per hour has fallen to 17% below the rest of the G7, the largest gap since 1991. It takes British workers until the end of Friday to produce what a German or American worker has produced by Thursday. The OBR reports that actual growth in productivity per hour has again been weaker than expected, with a fall in the final quarter of 2014. It states that productivity growth
“remains the most important and uncertain judgement in our forecast”.
Failing to act on productivity during the next Parliament will make the difference between the austerity well into the future that the Conservatives will provide and the better plan for business and rising living standards that Labour is preparing. We need to restore the link between economic growth and higher living standards for all. To do that, our economy needs more high-skill, high-pay jobs in the high-productivity sectors in which Britain has an advantage. That will require a proper, co-ordinated and focused industrial strategy, but Ernst and Young said yesterday that the Chancellor’s “scatter-gun approach” to UK industry will not help to deliver a proper industrial strategy, or to achieve the 300,000 additional jobs that a sector-focused strategy could produce.
Higher productivity would be boosted by higher investment, but spending on infrastructure has fallen by a third under this Government. The Red Book shows that there will be a planned reduction in capital spending over the five years to 2019-20. The OBR has said that business investment fell by 1.4% in the last quarter of 2014, following a fall of 1.2% in the third quarter. The failure of the Chancellor to announce future plans for the annual investment allowance disappointed business, has increased uncertainty and delay, and almost certainly postponed investment in new equipment and jobs.
Why did the Government not set up an independent national infrastructure commission to stop long-term decisions about the performance of our economy being kicked into the long grass? Why did the Chancellor not announce a boost to the investment in low-carbon technologies? Why did he not ensure that Britain is a world leader in green technology? The Business Secretary mentioned in passing, almost in embarrassment, changes to the green investment bank. Will the Economic Secretary put a little more meat on the bones of that proposal? The Chancellor put in place measures that will increase the demand for homes, but there was nothing to help the construction industry and the supply of new homes—things that are vital for the future of this country. Why did he not introduce a long-term innovation strategy for science and research, with a stable and secure funding framework, to improve the UK’s record on R and D?
Throughout his time in office, the Chancellor has made much of an export-led recovery. He said yesterday:
“Out of the red and into the black—Britain is back paying its way in the world today.”—[Official Report, 18 March 2015; Vol. 594, c. 770.]
He sounded less like Shakespeare and more like an episode of “Bullseye”. What he said was simply untrue. He will not achieve his objective of doubling exports by 2020. He is certainly not going to win Bully’s special prize of the keys to No. 10. I can hear the voice of Jim Bowen talking to the Chancellor: “Look at what you could’ve won.”
The OBR said yesterday:
“The current account deficit remains wide by historical standards.”
In the third quarter of 2014, the deficit was at 6% of GDP, which it said was
“the second largest quarterly deficit in National Accounts data stretching back to 1955.”
The contribution to GDP growth that is made by Britain selling things around the world is falling. Page 108 of the Red Book shows that in every one of the six years from 2014 to 2019, the percentage growth in imports of goods and services will exceed that in exports of goods and services. Our trade position is forecast to worsen in every single year. The Chancellor has failed to produce an export-led recovery.
In a very complacent and out-of-touch speech that was soaked in hubris and arrogance, the Chancellor said that people have never had it so good. After five years, he has failed. He has failed on debt, he has failed on deficit reduction and he has failed working families, who are on average £1,600 a year worse off. The Budget has shown what a further five years of Conservative rule would inflict on this country: a sharp acceleration in the cuts to public spending; a rollercoaster approach to managing the public finances; threats to our NHS and other valued aspects of British life; uncertainty for business that will lead to reduced investment; and, ultimately, poorer living standards for all. The British people will deliver their verdict on this Government in 48 days’ time. They deserve a better plan for Britain’s future, and that can be achieved only with a Labour Government.
Banking
Brian Binley Excerpts(10 years, 10 months ago)
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Mr Brian Binley (Northampton South) (Con)
I congratulate the hon. Member for Wrexham (Ian Lucas) on a thoughtful speech. At least it ranged wider than the speech of the shadow Chief Secretary, for whom I have great respect but who surprised me by concentrating quite so much on bonuses, when this whole matter is of much wider import, quite frankly. Indeed, bonuses are an infinitesimal part of our banks’ throughput and lending power, which is what I want to concentrate on. I welcome this debate and the thought that a successful banking sector is critical to our future policy.
We can argue about the reasons for the financial crash—I am sure we shall do so for the next 10 years—but there is no doubt that it undermined the fundamentals of our economy. I praise the Government and welcome their attempt to rebalance our economy by strengthening the contribution of other sectors and of regions beyond the City of London. I believe that the Government are trying to do that, and the hon. Member for Wrexham spoke about it.
It is easy to resort to banker bashing—I have done my fair share of it in the Chamber over the past three years—but we must not forget that banks play a fundamental role in our economy. We need to avoid the traps created by simple solutions and, indeed, sometimes by European interference. I am fearful of the transactions tax, which will harm the City enormously, and I hope that hon. Members on both sides of the House will fight hard to ensure that it does not hit us in the way that a number of people in Europe hope that it will.
Banks are needed first and foremost to maintain the supply of credit to enable the economy to flourish. The financial crash restricted the supply of credit to the economy, in terms of mortgage approvals and business lending. I recognise the fact that, following the excessive use of collateralised debt obligations, banks needed to improve their balance sheets to lessen the risk of a further crash, but the consequence of the response to the crash has had an impact on the wider economy and our path to recovery.
There are welcome signs that the general economy is recovering and that our macro-economic situation is improving. Business and consumer confidence is returning, which is critical. Growth is gaining momentum, and the labour market is improving. Mortgage lending has increased by more than a third during the past year. We have witnessed the fastest growth in demand for mortgages for more than six years, but bank lending to businesses is not so promising.
Despite the general surge in lending, the finance available to businesses from banks has been disappointing. The funding for lending scheme has made only a marginal difference to lending to businesses. In November last year, we saw the biggest drop in business lending for more than two years—more than five times the average monthly drop. I accept that the fall is effected disproportionately by a fall in lending to large businesses, but it reveals a worrying approach to business lending, despite the general optimism in other parts of the economy.
I therefore want to focus on one area for the remainder of my remarks. I recognise the importance of small businesses to the growth of jobs and to the well-being of our nation. Small businesses are crucial to our future prosperity, and the financing of those enterprises is a major issue that we need to get right. They employ more than 14 million people and generate more than £1,500 billion for our economy. Problems with access to finance are indicative of broader difficulties in the economy and have serious consequences, as I know from the businesses in my constituency.
Some people argue that there is no problem with bank lending to small businesses and that the present issue is one of a lack of demand. Perhaps some small businesses are not seeking credit to invest and have constraints on their ambitions to grow. Perhaps a number of small businesses have generated cash surpluses that are available for investment, as confidence continues to grow stronger. The Treasury estimates that amount of money at more than £500 billion.
The funding for lending scheme has, however, failed to meet the aspirations that we were promised it would instigate. I welcome the decision of the Governor of the Bank of England to make business lending the sole beneficiary of the scheme, rather than using it for all loans. Plainly, he feels that more needs to be done in this area, but the position seems fairly clear: funding for lending has made a difference for individuals, but not for small businesses. The Federation of Small Business has argued that many small businesses have been affected by a lack of access to financial support during the recovery and have relied on non-bank lenders to keep them afloat, and that simply is not good enough.
I agree with the Government that business investment needs to increase. The Treasury estimates that a 10% increase in business investment in 2012 would have stimulated gross domestic product by a further £12 billion —almost one percentage point in 2012, when I was calling for more lending. Cash balances in the non-financial sector have grown by £104 billion above the pre-crisis level. Work is needed to translate improved business confidence into investment. Indeed, business investment is more than 25% below its pre-crisis peak. That is not a salutary figure, when we rely on small and medium-sized business to provide the growth and to generate the wealth that we need.
Much needs to be done, especially when we recognise our poor productivity figures. One of the great issues over the next five years will be to increase productivity in our businesses. There is an environment of relatively stable prices and improving confidence, but we need to encourage business to invest for growth. Investment for growth means more jobs, high productivity and improved living standards, so small businesses must have priority. The banks have failed to give them that priority, and I call on the Government to do more to ensure that they get it.
Mr Gauke
Gross lending is up, but one thing that will not help small businesses is if our interest rates rise prematurely because we do not have credibility. We have given this country economic credibility and that has helped to keep interest rates lower for longer.
Our system ensures rigorous scrutiny before someone can have a serious position in a bank. Labour’s system could allow someone like Paul Flowers to become chairman of a bank. While fines went back into the banking system in the past, now they go to support military charities and others.
Mr Binley
May I make the point that I did argue that business lending from the funding for lending scheme was very low indeed, and that is why Mark Carney took the action he did and why I want to see the Government make more sense of lending to small businesses, because that is where growth and well-being are going to come from?
Women and the Cost of Living
Brian Binley Excerpts(11 years ago)
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Tom Blenkinsop
The hon. Gentleman makes an excellent point. I will come to that later.
Women, particularly young women, are more likely to find themselves in low-paid work, such as customer services, retail, care work and the leisure industry—sectors offering fewer progression opportunities and lower pay.
Mr Brian Binley (Northampton South) (Con)
I understand the hon. Gentleman’s point, but he has already admitted that there are considerable differences in the UK—in my constituency, the situation is very much brighter—which suggests a structural imbalance. Would he agree that the last Government did nothing, in any real terms, to address that structural balance, which is one of the reasons for the situation he is describing?
Tom Blenkinsop
I cannot agree with that at all. The structural imbalance—I assume that the hon. Gentleman is referring to the staple industries in the north-east—has had a long-term effect primarily because of his party’s record in the north-east of decimating heavy industry back in the ’80s and ’90s. The increase in female unemployment is unprecedented. I have never before seen these levels of female unemployment. Previously, we had long-term male unemployment in my region. That was difficult, but families still had a working mother. Now, these families have unemployed mothers and fathers, meaning far more significant long-term consequences for my area. That is what I am frightened about.
There is a big gender split in apprenticeships, because young women take a much narrower range of apprenticeships than young men, yet there remains a skill shortage in these new industries. It seems only logical, then, that all the stops should be pulled out to encourage young women seriously to consider these industries as a career. Increasing the number of women working—or at least taking up apprenticeships—in these male-dominated industries would go a long way to stem the flow from short-term to long-term unemployment. We must challenge the stereotypes in careers advice for young women and encourage more girls to take up higher skilled apprenticeships, but that has been made increasingly difficult by a Government who have undermined careers services. One of the Government’s first decisions was to get rid of Connexions, which was a careers advice service in schools giving children guidance on career paths.
On equal pay, the gender pay gap stands at 15%, unchanged on the year before. We know that the reasons for the persistent gap are varied and complex, ranging from occupational segregation to a lack of well-paid part-time work and, even in this day and age, discrimination in the workplace.
In August, the Chartered Management Institute found that women who have reached management positions can expect to earn only three quarters of the pay of their male colleagues. Even more staggering was the finding that the more highly skilled and highly paid the profession, the greater the gap between men and women’s pay. In modern Britain, undervaluing the talents and skills of women is a loss to the whole economy, so the issue of equal pay is a tough nut that needs to be cracked.
Several actions could be taken to help that situation. For example, the introduction of mandatory pay reporting, including the Equality Act 2010, would highlight the differences between what businesses pay their male and females colleagues. We should improve the law on flexible working and do more to encourage businesses to utilise flexible working practices. However, the revelation that up to 50,000 women a year could be losing their jobs while on maternity leave is a shocking one, yet far from doing anything about it, Ministers are making it worse by charging women £1,200 for challenging discrimination at an employment tribunal.
To address the specific barriers that single mothers face, we Labour Members will support women who have to juggle work and child care by restoring breakfast and after-school clubs in primary schools from 6 am to 8 pm for every child, and provide 25 hours of free child care for three and four-year-olds of working parents. Those are simple actions that the Government should seriously consider.
My final point is on the broader issue of the cost of living crisis that women currently face. As we all know, women are struggling as prices continue to rise faster than wages, and the latest figures show that working people are on average £1,600 a year worse off since May 2010.
The Government’s change to the tax credits rules means thousands of families will have lost out on their working tax credits unless they have been able to increase their working hours significantly. Any woman or any couple earning less than about £17,700 will need to increase the number of hours they work from a minimum of 16 to 24 a week—otherwise, they will lose working tax credits of about £3,500 a year. According to the House of Commons Library, this has hit 212,000 low-income families.
Of course, the situation was supposed to have been compensated for by the March 2012 Budget’s introduction of universal credit that was to come into force last month. To a certain extent, it would have restored families to a parity with what was seen with working tax credits under Labour. Due to the ongoing chaos in the Department for Work and Pensions, that has not happened. Some of my hon. Friends have mentioned the Tory Free Enterprise Group and its proposals to increase the price of food and children’s clothes by 15%.
Spending Review
Brian Binley Excerpts(11 years, 4 months ago)
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Mr Osborne
We have drawn on the best economic evidence that the recovery from a banking crisis of the severity that we went through is long and protracted, but we have to de-lever as an economy and try to fix our banking system. That is what I set out at the Mansion House. We also have to have a credible fiscal policy in order to allow monetary policy to be loose. I think that is the best economic approach.
Mr Brian Binley (Northampton South) (Con)
My grandmother taught me that there are only two things people can do when they are in serious financial difficulty: cut spending, and earn more. The Chancellor’s record on cutting spending has been commendable, but more needs to be done on earning more. What will he do to enhance productivity to help this country earn more?
Mr Osborne
My hon. Friend is absolutely right that Britain has got to earn its way in the world, and that is about increasing our earnings as well as dealing with our expenditure. In the Budget, we set out a number of tax changes, such as the new employment allowance, which I know he strongly supports and which will help small firms by wiping out the first £2,000 of national insurance, taking a third of those firms out of national insurance. We have made a series of other tax changes to promote investment, and where we had to make tough spending choices, I have chosen in this spending round to prioritise things that will help businesses to create jobs.
Infrastructure
Brian Binley Excerpts(11 years, 9 months ago)
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Rachel Reeves
I have generously let the hon. Lady have another chance at intervening, but she did not explain why, in the first year of this Parliament, her Government spent £3.2 billion less than the last Labour Government planned to spend, or why, in their second year, her Government spent £2.9 billion less than the amount in the plans they inherited. Nor did she explain why, in the third year of this Parliament, they spent £6.7 billion less than we had planned. When the Chancellor says that he has matched the plans of the last Labour Government, he is just plain wrong.
Mr Brian Binley (Northampton South) (Con)
I thank the hon. Lady for giving way, and I wish her well with her impending delivery. What figure would she place on the capital expenditure budget for this year, if there were a Labour Government at this time?
Rachel Reeves
In the plan set out by the last Labour Government for 2012-13, the amount was £48.4 billion. In the plan set out by this Government, it is £41.7 billion. We had a plan to halve the deficit during the course of this Parliament. This Government wanted to go further and eliminate the structural deficit in that time. The reality is that they are borrowing more than the amounts set out in the plans left by the last Labour Government. They are not borrowing it to invest in infrastructure, either. They are spending £12.8 billion less on infrastructure than the last Labour Government, but they are spending £13 billion more on social security. Why is that? It is because there are more people out of work and more people claiming tax credits as a result of this Government’s failure to get the economy growing again. They are spending £13 billion more than they had planned to on social security. Is that really what they came into power to do? No, but the reality is that their decision to cut as far and as fast as they did has choked off the economic recovery. The result has been an economy that has flatlined for two years.
This Government are lethargic in the face of a flatlining economy, and inept in the face of long-term challenges. They came in and abandoned Labour projects, such as the plans for 715 schools, in a tranche of ideologically motivated cuts. Then, having at least partly recognised their mistake, they announced a new school building programme in 2012. Progress is painfully slow, however, with work planned to start only sometime in the spring. More delay. It is simply not good enough. This is a Government without a plan for the present and without a vision for the future—[Interruption.] If any Liberal Democrats would like to intervene, I look forward to hearing from them. [Interruption.] If someone just wants to mutter from a sedentary position and does not have the guts to intervene, that is their problem, not mine. Do we have an intervention from the Liberal Democrats?
Greg Clark
I should have thought that in two and a half years the hon. Lady would have learned the lesson from that. The deficit that Labour was running was greater than the deficit in any other G7 country. We needed to sort that out, and to create confidence in our economy. If Labour Members have not learned the lesson after two and a half years, what hope is there for the future?
The economic arguments advanced from the Opposition Benches sometimes purport to draw on the wisdom of John Maynard Keynes, but Keynes recommended that Governments should run a surplus in the good times, enabling spending, especially on infrastructure, to take place in the lean years.
Greg Clark
Our capital revenue spending would have been determined by a visit to the International Monetary Fund if we had followed the course set by the Opposition.
In the years prior to the financial crisis the previous Government ran the biggest structural deficit in the G7. Despite the denials of the shadow Chancellor, that is a matter of record, and the fact that he refuses to acknowledge what has now been made very clear merits an apology.
One of the most enduring mysteries of the 13 years in which Labour was in office is what they did with the money. We would think that 13 years in which they spent, taxed and borrowed like no peacetime Government before would at least have left us with an infrastructure that we could have been proud of and that would have been world-beating.
The Economy
Brian Binley Excerpts(11 years, 11 months ago)
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Mr Brian Binley (Northampton South) (Con)
First, may I apologise for not having been in the Chamber for long?
I urge the hon. Gentleman to pick up on the issue of how schools deal with people who want to be apprentices. The Business, Innovation and Skills Committee has just undertaken a report on the subject, and that theme came up time and again. It is in all our interests to ensure that what has been described does not happen. We had too much elitism in the past, and we do not want it continuing in the future.
Gordon Birtwistle
Once again, I agree with the right hon. Gentleman. It is always a great moment when the right hon. Gentleman rises and speaks in this Chamber—even though he has only just turned up.
Banking Union and Economic and Monetary Union
Brian Binley Excerpts(12 years ago)
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Mr Brian Binley (Northampton South) (Con)
I remember well those long-gone days when we were told that monetary union would bring strength to the EU, be enduring and serve to bring our economies together. By golly, how time does fly, and how truth changes the vision. Recent experience has shown that political ambitions exceeded economic reality, and fault lines were built into the single currency from the start. Structures have been put to the test and, quite frankly, been found wanting.
The problems facing the euro might not have started in financial services, but the crisis has certainly highlighted those fundamental flaws. Sovereign debt might not be limited to the eurozone, but its constraints within the economic and monetary union exacerbated the crisis. Unless Europe gets to grips with those problems, the entire project could disintegrate before our very eyes. That is the situation we are facing. We are debating a desperate attempt to apply sticking plaster to a serious wound. The flaw is inherent; the mistake already made. Membership of the single currency was extended way beyond that initially envisaged, and therein lies the fault, which is not dealt with by any of the measures proposed today. Banking union may sound like a measured response, but the creation of a European banking union is a world away from a co-ordinated international response. President Barroso revealed his agenda in his “State of the Union” speech, raising the issue of banking union in the context of a push towards a federal European state. That is the truth of the matter.
Our first priority must be to resist any financial transaction tax. That is not a new idea; in 1984, Sweden introduced a 0.5% tax on the purchase or sale of shares. By 1990, 30% of all Swedish equity trading had moved offshore—more than half of it to London—and the volume of bond trading had declined by 85%. That is the damage that a financial transactions tax can do to this country. It is vital that the Government have the courage to resist it.
Will the Minister expand on the references to fiscal probity that allow for spending on social fairness? Is that a get-out clause for grossly indebted Governments who want to keep spending they do not have? It sounds very like it to me.
The report on EMU accepts that public opinion is key, but that is another way to justify spending taxpayers’ money on propaganda. Our Government have stopped the money-go-round in local government and quangos. It would be totally inconsistent to allow Eurocrats to deploy hard-earned taxpayers’ money to propagate grand visions that have already proved to be failures.
Earlier comments on the document made it clear that fiscal integration is about a continued movement to a federal Europe. I could quote page after page, but I will not bore the House. The truth of the matter is that we need to be sure that our Government’s promises to us are absolutely watertight, fast and hard-held. If they are not, the House will be doing a massive disservice to our children and grandchildren. That is what this measure is about.
I noticed a slight smile on the face of the Minister when I made a point about social well-being. If he looks into it a little more, he might begin to agree with me. If I had the time, I would explain.
Finally, as my hon. Friend the Member for South Northamptonshire (Andrea Leadsom) said, we need to take this opportunity as a base to renegotiate—
Infrastructure (Financial Assistance) Bill
Brian Binley Excerpts(12 years, 2 months ago)
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Hazel Blears
I understand the hon. Gentleman’s concern about his local green belt. If he can encourage his party’s Front Benchers to invest more in brownfield sites in the north-west, where we can build communities, I will take on his housing allocation tomorrow to ensure that we can house our people.
Mr Brian Binley (Northampton South) (Con)
May I introduce Northampton into the discussion of brownfield sites? We could build between 35,000 and 40,000 houses on brownfield sites there, and I would rather do that than destroy our green belt.
Mr Brian Binley (Northampton South) (Con)
It is a pleasure to follow the hon. Member for Coventry North West (Mr Robinson), whose comments are always thought provoking. Today, they were also rather brave, which is not usually his style, but he is clearly moved by these matters.
I welcome the opportunity to debate this Bill. It aligns with the priorities of the electorate and, thankfully, sends a clear signal that the Government have, I hope, understood the importance of growth. We must accept that our nation’s infrastructure is nowhere near as good as it needs to be. A little more understanding of that point on the part of Labour Members, and of the fact that they did not do their job with regard to infrastructure in their 13 years in government, would not have gone amiss. As many hon. Members have said, infrastructure is vital.
International surveys now paint a gloomy picture, and most parliamentary postbags offer individual testimony to the day-to-day infrastructure inadequacies that hold our constituencies and businesses back, harm our competitiveness and the image we project to inward investors, and act as a drag on commercial development. Congested roads, expensive railways, imperfect utility markets, and vast tracts of the country with relatively poor broadband and other communications connections, all present substantial costs to the economy that impact disproportionately on small business and hold back the quality of life of the people we represent.
I therefore welcome the Government’s proactive approach, especially to HS2. I should also point out my gratitude for the money that is forthcoming for a new station in my constituency. We are delighted, but we are also leading the way in 15 projects to regenerate our town—recreating the structure and fabric—allied to a programme substantially to increase jobs for those not in education, employment or training.
However, local efforts take us only so far, which is why the national reach of the Bill is fundamental. In that context, the Bill is to be welcomed in principle, but it is easy to spot the problem that needs to be fixed: who will pay to upgrade our infrastructure, which is essential to how we better configure our economy? The Exchequer clearly has a limited appetite and capacity to fund the solution to those problems. There is also a legitimate question about the desirability of the Government being intimately involved. The comprehensive spending review conclusions were clear. Reductions in capital spending were relatively extreme—by 2014, capital spending will be almost a third of what it was in 2010. The arguments on the necessity for the public purse to play a diminished role are well rehearsed, but surely the Government can do better. A 3% reduction in revenue expenditure would enable us to maintain capital spending at 2010 levels throughout the period of the comprehensive spending review. Is that truly impossible?
In the absence of public money, we also need to find ways to attract alternative forms of investment. However, in a failing financial market, that is not easy to accomplish. Previous efforts to find a solution to that dilemma do not have a happy history. Most recently, the private finance initiative has been subject to the robust critique that, under it, the private sector takes the rewards of risks borne by the Exchequer. Originally, PFI was supposed to encourage the private sector to bear risk as well as provide funding, but sadly, that target somehow lost its way. What is the point of the taxpayer funding PFI projects when the Government can borrow in the money markets far more cheaply? Does PFI not just create a very high price, to be borne by future taxpayers, merely so that the Chancellor can pretend he is not borrowing money? That is what we had under the previous Government; if we have it again, it will be just as much of a nonsense.
Infrastructure investment must be seen as enabling growth, but we should moderate the claims that we make about the scheme. It is not a silver bullet. Infrastructure development cannot be delivered quickly. The Bill is a strategic enabler to facilitate the growth needed for decades and generations to come; to position ourselves in a more comfortable place to compete in an ever-more challenging global market; and to strengthen the ability of small businesses to get the access to the market that they so badly need to thrive.
The coalition has not been short of such initiatives, which include the publication of the national infrastructure plan last year. However, that only reaffirms that our approach should be a cautious one. The proposals raise many questions. What will be the impact of the Bill on the programme, cost and timetable for the schemes in the plan? How does the Bill sit alongside the infrastructure costs review programme, which promised potential benefits of between £2 billion and £3 billion? What analysis has the Minister conducted to test the propensity of the market to engage with the type of support that the Bill could provide? If the Bill is to be fast-tracked, what confidence can the Minister give us that the measures will resonate with investors? Perhaps the Minister will answer some of those questions in his summing up, and I wish him well in that task—I believe it is his first visit to the Chamber in his new position.
Even if the Bill delivers—I hope it does—it will need to be accompanied by other measures. Infrastructure measures have relatively long lead times, but growth is needed now. Infrastructure alone is not enough. The Government could adopt a number of measures to stimulate private sector demand, which could deliver results far more quickly. The measures in the Bill provide a modicum of confidence that the medium and long-term predicaments are in the Government’s mind, but we need short-term measures to get consumers spending and small businesses selling.
I and a number of hon. Members have pressed for measures to stimulate private sector demand for some time. Alongside a proactive approach to export potential, that offers the best route out of recession. We have heard encouraging words from the Government of late, but we need action, and we need it quickly.
Whatever the long-term benefits of improved infrastructure delivery—which, I repeat, are vital—if the Government fail to deliver growth, we risk the country being dragged back into the dark days of increased public spending, financed by the reckless borrowing advocated by the Opposition. Let us never forget that the former Chief Secretary to the Treasury left the bill—a little note—saying, “We’ve run out of money.” Government Members know the score. We know that the previous Government borrowed £1 in every £4 spent, and this Government are desperately trying to get it down and have cut the deficit. Let me say this to the Opposition: the vision of another Labour Government is too horrific and expensive to contemplate. That is why we need growth now, so that we do not impose a burden on our children and grandchildren, which, frankly, would be immoral.
Sajid Javid
As always, my hon. Friend is absolutely right. [Interruption.] I must plough on.
On a number of occasions the Opposition suggested that this Government were spending less on infrastructure than they would have if, by some miracle, they had won the last election. Let us look at the facts. After the last election, the right hon. Member for South Shields (David Miliband) said in his leadership hustings bid that they were going to halve the share of national income going into capital spending. Plans presented by Labour to this House at their last Budget, in March 2010, showed net investment falling from £50 billion in 2009 to a projected £23 billion by 2014-15, a figure lower than the one this Government have planned.
We heard from the Opposition about Britain’s growing debt. However, they forget, conveniently, that when this Government came to power, our budget deficit was 11% of GDP, higher than any other nation in the G7. According to the Institute for Fiscal Studies, if the plans of the right hon. Member for Edinburgh South West (Mr Darling) had been implemented, this country’s debt would be £200 billion higher than under the plans of this Government. They just do not get it—more spending, more borrowing, more debt.
Members on both sides of the House have recognised the scale of capital required to realise some major infrastructure investments.
Sajid Javid
I will absolutely be writing to my hon. Friend. The questions he raised were characteristic of him, showing the experience he has brought to this House from the business sector. They were just the right type of thoughtful questions.
Jobs and Growth
Brian Binley Excerpts(12 years, 6 months ago)
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Ed Balls
The hon. Gentleman might need to go back to the drawing board because the Institute for Fiscal Studies has shown that last month’s measures will, as a result of cuts to tax credits, mean tax rises for the average family with children in his constituency—and that is even before taking the rise in VAT into account and it does take the personal allowance rises into account. The fact is that taxes have gone up for low-income families, they are going up for the middle classes, and it is only the highest earners in the hon. Gentleman’s constituency that are getting the tax cuts.
Mr Brian Binley (Northampton South) (Con)
Is it not true—the shadow Chancellor is a straightforward man—that the previous Government set out a trap for this Government, not really wishing for a rise to 50%, but carrying it out just before the last election in a crude attempt to catch this Government out?
Ed Balls
I am always a close student of the hon. Gentleman, and I noted that he did not advocate the reversal of the 50p rate as the right thing to do, so I am not sure what his constituents thought about that. I recently read some of his other remarks. In March, for example, the hon. Gentleman said:
“The Chancellor has been consistently advised of the importance of macro-measures to stimulate growth in the private sector. So why are these not being implemented?”
Why, indeed? He continued by saying that the Prime Minister
“needs to wake up and smell the coffee. This is a major setback for the Conservative party.”
That is quite right.
Ed Balls
The right thing to do after the financial crisis was to do things in a fair way. That is why the 50p tax rate was right at the time. The reason why the Budget has gone down so badly is that lowering the 50p rate was seen as so unfair. The hon. Gentleman was right just a few days ago when he said in his blog that the Government have a communication problem and are over-confident. He said:
“The manner in which Downing Street fires out policies and expects us to agree and applaud without question certainly smacks of a sense of superiority.”
Quite right again—a very interesting remark.
Mr Brian Binley (Northampton South) (Con)
I welcome the overall thrust of this Queen’s Speech and, in particular, the fact that it concentrates on the need for growth, more jobs and private-sector, wealth-producing buoyancy, which we did not see for a very long time under the watch of the previous Government. I must say that, yes, I do my best to be honest with the people I represent—
Mr Binley
I do—they will tell you that, Sir—as you did when you said that there was no money left. We are both honest men.
I wish that the shadow Chancellor would welcome some of the achievements that the people of this country welcome; it is foolish of him not to do so when there are considerable signs of recovery. It simply lowers the esteem in which all politicians are held, and I urge him, and the Opposition Front Bencher who responds to this debate, to take that into account.
There are welcome signs of recovery. The private sector has created more than 500,000 jobs since the general election; the International Monetary Fund forecasts that the UK will grow at twice the speed of Germany and three times that of France; borrowing costs have fallen, investment has been increasing and only yesterday we saw a drop of 45,000 in the number of unemployed people in the first quarter of this year. All those things are welcome, but it would be refreshing to hear Opposition Front Benchers greet them with some enthusiasm—although I doubt that they will.
The truth of the matter is that consumers and businesses are saying, “To hell with it; we’ve got to get on with life,” and that is one reason why we are seeing some of the green shoots of recovery. Now we need to nurture them and ensure that they continue to grow and bear fruit.
The situation is fragile, and no one would say otherwise. Consequently, I urge the Government and the Chancellor to do more. We will not achieve growth with new laws. The previous Government tried that for 13 years, and we saw what happened. This place does not create the growth; it simply sets the atmosphere and ambience for it. So I appeal to the Chancellor to recognise that we need to change the culture regarding entrepreneurialism and the attitude to small businesses, and indeed serious and important recommendations on doing so are coming forward from various parts of the House.
We must also understand the needs of small businesses, because therein lies our best chance of growing jobs and the well-being of this nation.
Richard Fuller
Does my hon. Friend agree that there is nothing that a small businessman would like to do more than to employ a young, new worker? What would my hon. Friend suggest to the Chancellor can be done with employment regulations, so that we get our businesses employing people more easily?
Mr Binley
I welcome that important point, because I was about to turn to that very area. More can be done, and we do indeed need to reduce the regulatory burden and to strengthen the business environment.
I welcome in the Queen’s Speech the proposed measures to deal with executive pay and employment tribunals, but I still do not understand why the Government are obsessing about maternity and paternity leave, especially for very small businesses. I simply point out that many people meet in the workplace and set up a family life together, and, if a small business employing 10 people loses 20% of its work force for six months, temporary labour cannot be used as a replacement. That simply does not happen.
Kate Green (Stretford and Urmston) (Lab)
One trend in the employment figures over recent months has been that female unemployment has risen faster than male unemployment, and that it is decreasing less quickly. Detaching women from the labour market, as the hon. Gentleman seems to suggest we do by weakening maternity rights, will surely make the situation worse.
Mr Binley
I do not suggest that at all. What I suggest is that we understand the real needs of small businesses. If we want them to grow and create jobs for both men and women, we need to ensure that they are released from much of the burden that they face at the moment. I ask the hon. Lady to consider that burden, because it is a considerable one for small businesses—I have worked in the sector pretty much all my life and founded two such businesses. We need to release small businesses from that burden, so I would particularly welcome their being excluded from the sort of burdens that paternity leave suggests. The Opposition need to get real in that respect.
I turn to the attitude of the banks and financial services.
Mr Binley
No, I am not going to give way. I have given way twice, so the hon. Gentleman will respect the fact that time is of the essence.
Small businesses have not had the support and understanding of the financial services sector. Again and again the banks tell us that 85% of applications for money are met, and of course that is true.
Mr Binley
My time is running out; I know the hon. Gentleman understands.
Yes, 85% of those applications that are finally made are met, but many people go along to the bank and are told before they reach the application stage that they are not going to get the money, so they never apply. The figures are twisted, and we need to understand that.
On regulation, I welcome the Government’s attitude to one-in, one-out, but they could do much more for small businesses by recognising that they would be the great engine of growth if they were only released. They could be excluded from many of the regulations that apply to business generally, and I urge the Chancellor to press that point in Cabinet.
Members will not be surprised that I now turn to my constituency. We are trying to create a new approach to jobs and development by establishing Northampton Alive, a project involving 15 major developments, part of which is the enterprise zone that, thank God, this Government allowed us to create in Northampton—the largest in the country. We have also introduced, however, a forum for the leading 60 to 80 people in the town, so that every six months of this major project, which lasts for 15 years, they get the opportunity to provide their input and to take ownership of their town, the new developments affecting it and the new job opportunities that will ensue.
Finally, local measures matter. We can do more locally, and I encourage the Chancellor to urge local authorities and local people to take up that challenge.
Financial Services Bill
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Ed Balls
The Chancellor does not listen. He wants to play this game so much that he does not hear. I agree with the increase in his powers. He is right to take them, but he cannot use them unless the Governor comes to him and says, “I fear a crisis may be building,” having made a judgment about moral hazard outwith the views of the heads of the PRA, the FCA and the FPC.
In the structure set out in the Bill, the statutory office holders will be formally kept out of the room under the Chancellor’s own memorandum of understanding, which is foolish. I understand why it has happened—it will be easier to negotiate. In all the years when previous Chancellors wanted clarity, it was hard to negotiate. However, negotiating the wrong clarity in a way that keeps information away from the Chancellor is not stabilising and in the public interest but destabilising, opaque and against the public interest. The Chancellor should take some advice from people who have seen that not working and ensure that he hears the views of the people to whom he is giving statutory responsibility in the Bill. That is my very strong advice, and I hope he will listen to it.
Mr Brian Binley (Northampton South) (Con)
The shadow Chancellor is telling us something illuminating—that if a Chancellor does not want to listen, no system will have any impact at all. Under the last Government, siren voices started in 2002, and the then Chancellor refused to listen. We had a systemic deficit problem, and again he did not want to listen. The shadow Chancellor has been through all this, so would he advise the current Chancellor to listen more than the last Chancellor did during the crisis?
Ed Balls
My very clear advice to the Chancellor is that when he gives people a clear statutory responsibility for a particular function and legislates for three deputy governors who are the heads of individual agencies, he should also design his crisis resolution and decision-making procedures so that his experts are in the room and he can hear the array of their views. The idea that it is better for the Chancellor to require the Bank to resolve such issues internally and come to him with one voice—one Governor, one decision maker—is a flawed structure of regulation. The point, however, is that that is not what the Bill intends. It intends for the FCA and PRA to be important institutions, in which case the Chancellor should get them in the room.