Amendment of the Law

Chloe Smith Excerpts

Thursday 20th March 2014 Commons Chamber

[Chloe Smith (Norwich North) (Con)]

I hope that the House will excuse my slightly husky voice and cough, which I hope to get past in making my comments.

I welcome this Budget. The Chancellor is right to be focused on getting Britain to

“out-compete, out-smart and out-do the rest of the world.”—[Official Report, 19 March 2014; Vol. 577, c. 789.]

I, too, want the best for Britain and for Norwich in that sense. That kind of ambition is the only way to get economic security, and the single biggest risk to it would be to abandon the plan and listen to Labour’s calls to borrow more, spend more and put up taxes. That would, of course, land hardest of all on the next generation, who would only have to pay back those debts that Labour wants to dodge. This Budget is great news for businesses in Norwich. Those who are looking to invest and export will welcome measures to cut energy bills, to double the tax allowance for investing and to boost support for exporters. I know from my work in leading a project called Norwich for Jobs that businesses do want to invest and to grow. I hope this Budget will help them to do that and make the Norwich economy more resilient. I hope that that translates into more jobs locally, because that is one thing that economic security is all about. I also welcome the previously announced measure, coming into effect next month, of the employment allowance, which will particularly help small businesses.

I welcome the increase in the personal allowance, because it leaves more of people’s money in their pocket as they go out to work. It is worth up to £800 for more than 80,000 people in Norwich. I am a Conservative for that very reason: I believe that people are individual, responsible and free to spend their own money in line with their best decisions. I also support the Help to Buy scheme and running that for longer until 2020 could mean that many more families in Norwich get on the housing ladder. I strongly support the tax-free child care scheme that has been announced. Importantly, that scheme will particularly help basic rate taxpayers, who often find that the cost of child care outweighs the financial benefits of both parents working. It is important to give families greater stability and the flexibility to make their own choices. The Budget is also good news for pensioners, providing the flexibility and reward that has been discussed in this Chamber earlier today, and for the 24 million people who hold individual savings accounts.

Let me make two further constituency points before addressing a slightly more meaty topic. It is particularly good news for my constituency that the Chancellor is going to slash the tax on bingo by half. Mecca Bingo and all its employees and customers on Aylsham road in Norwich were celebrating that overnight. I also welcome the removal of VAT on fuel for air ambulances, as the East Anglian air ambulance has its headquarters in my constituency.

I wish to add my support for the nearly 12,000 workers in my constituency who are struggling in work on rates a little above the national minimum wage. The Chancellor has been right to call for a higher minimum wage, and I support that. This Budget statement has shown that the economy is recovering; jobs are up—1.3 million more people are in work now than there were in 2010. People are also looking to have more money in their pocket. On that point, I have dealt with the personal allowance. I mentioned my work on Norwich for Jobs, which helps to get young people into jobs and apprenticeships, and that helps more families get security, too. The project has helped nearly 600 18 to 24-year-olds in work over a year. We set ourselves the goal of halving Norwich’s youth unemployment in two years. We can see the effects directly in the employment figures, and I am sad only that the shadow Chancellor is not here to hear this. We set out to halve Norwich’s youth unemployment from 2,000 to 1,000. It has come down by 670 since we began the project, and every one of those figures is a young person taking home a pay packet and gaining experience. That is thanks to the local firms that have pledged to help them.

I give that example to show that firms want to employ great people, but it is also in the interests of a business to retain them, and paying the living wage can help to do that. As hon. Members will know, the living wage campaign asks for a voluntary commitment from employing organisations. Some would like Norwich to declare itself a living wage city. Norwich has demonstrated, through the firms that are pledged to Norwich for Jobs, that it is a city that cares. It is a city with a sense of pride. It will achieve things for its young people and for its strong industry.

Whether those same firms are all in the position of being able to pay more, as the living wage campaign asks, is for them to decide in respect of whether they can retain those jobs. Small firms are wary of being placed in an impossible competitive situation against larger firms that can absorb costs. The Federation of Small Businesses reports that more than two thirds of staff in an average small business are paid at or above the living wage already, but it believes that that should remain a voluntary decision for employers, and I support that view. My hon. Friend the Member for Hexham (Guy Opperman), a keen supporter of the living wage, has noted that there is a “lack of detailed analysis” behind it. The argument for the blanket rise does need more explanation. In broad terms, I support the campaign—I only wish I had more time to discuss it.

--- Later in debate ---

[Christopher Pincher (Tamworth) (Con)]

It is a pleasure to follow the hon. Member for Feltham and Heston (Seema Malhotra) because it gives me an opportunity to let her know that in my constituency, youth unemployment has fallen by 40% in the past 12 months. I am also pleased to speak in this Budget debate on business because as we all know—at least, as we should know—it is business, not the Government, that generates wealth. Wealth generates jobs, and jobs lift people out of despondency and dependency.

[Chloe Smith]

Does my hon. Friend agree that it is also possible for Members of the House to work with businesses in their constituency and do something about unemployment? I gave the example of Norwich for Jobs.

[Christopher Pincher]

I agree with my hon. Friend. I hold an annual jobs fair, and last year 300 to 400 jobs were available to the 176 people who came to look for them. There were more jobs available in my constituency than jobseekers at the job fair, which is an indication of how our economy in the midlands, and particularly in Tamworth, is developing.

I agree with the hon. Member for Feltham and Heston about bingo and the change to gross profits tax. That tax was introduced in 2009 and created an anomaly because it meant that that soft gambling industry was taxed at 20%, compared with most of the rest of the industry at 15%. Added to the fact that bingo operators cannot reclaim VAT on their investment or refurbishment costs, it means that many operators have to carry a cumulative and punitive tax, equivalent to VAT of 32%. That was stifling the industry, with one bingo hall per week going to the wall. The Chancellor’s changes will mean more money for stakes, which is good for punters, and more investment in bingo halls and more jobs—a good thing that will also increase tax yield.

I am very pleased to see the changes to air passenger duty and start-up support for new routes. Birmingham airport, my local airport, will benefit from that. It is currently extending its runway so that it will be able to take long-haul flights to and from major markets in China and India. If the Treasury is listening, it can provide further support by adding Birmingham airport to the regional air connectivity fund list.

I hope the Treasury will work closely with the Department for Transport to consider the Whitacre link, a railway line axed by Dr Beeching. The line runs through Tamworth to Birmingham airport, and new track would reduce travel time from Tamworth to Birmingham airport from 40 minutes to just 18 minutes. That is the sort of local, sensible infrastructure development that business people in my constituency want to see. My hon. Friend the Minister knows my views on HS2. If it goes ahead, it will not be enough for it just to link our major cities. We need to improve the infrastructure around those major cities to realise the potential benefits of HS2. Building the Whitacre link would be one way of doing that.

I welcome the continued drive down of corporation tax. That will help to expand businesses and create jobs. I hope the Chancellor will not see the 20p rate as an end in itself, but as a means to an end: matching the Irish 12.5% rate of corporation tax. If we can get down to such a level, we will attract businesses to Britain that currently go to Ireland, and build a better and stronger economy. That is what business folk in my constituency would like to see.

Despite the rather gloomy concerns of the hon. Member for Rutherglen and Hamilton West (Tom Greatrex), I support and approve of the Government’s determination to drive down the cost of energy on businesses. The carbon price support rate, at £18 per tonne of carbon, is a good move. I think the Liberal Democrats would prefer to see about £30 per tonne by 2020, but capping it at £18 will reduce about £50,000 of cost for small and medium-sized businesses in my constituency.

There is, however, an energy elephant in the room: the huge amount of infrastructure spend we need to undertake in the next 10 years to keep our lights switched on, our water warm and the wheels of industry turning. The big six, which are already highly leveraged, can probably add no more than £70 billion to the £110 billion cost. If we are to get the £40 billion we need from independent players, and not rely on the taxpayer or the consumer to foot the bill, we need to ensure that electricity market reform and the signals to investors are right, otherwise there will be a cash crunch.

In general terms, the Budget was good. It was a Budget for business. In my constituency, businesses are upbeat and they say that they expect to grow. BMW is coming to Tamworth this year with 100 new jobs. Let us have more of the same: let us have more Budgets for business.