Oral Answers to Questions
Chris White Excerpts(7 years, 8 months ago)
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Jane Ellison
As the hon. Lady knows, the better care fund, which we have already referred to, adjusts for that. We are responding to the pressures, which we acknowledge, in the social care system in a range of ways.
Chris White (Warwick and Leamington) (Con)
The Chancellor of the Exchequer (Mr Philip Hammond)
We recognise the need to enhance public infrastructure across all regions of the UK. That is why at autumn statement 2016 we committed additional capital to fund new productivity-enhancing economic infrastructure through the national productivity investment fund. We are committed to putting local and regional needs at the heart of the fund. For example, we are spending £1.1 billion on local projects to improve our existing transport networks.
Chris White
As the UK automotive sector continues to embrace new technologies, ensuring the necessary energy supplies are in place is of increasing importance. What support can the Government give to the midlands, so that our region can lead the transformation of the sector, not least with electric vehicles?
Mr Hammond
My hon. Friend is right that the midlands is home to some of the world’s leading automotive manufacturing. It is also home to cutting edge battery technology research, including by the Warwick Manufacturing Group at Warwick University. My hon. Friend is absolutely right. If we are going to electrify the vehicle fleet, we have to ensure that clean, sustainable and reliable supplies of electricity are available to meet the needs of the 21st century economy. Our national infrastructure plan does exactly that.
The Economy and Work
Chris White Excerpts(8 years, 6 months ago)
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Chris White (Warwick and Leamington) (Con)
In the Most Gracious Speech, Her Majesty spoke of the Government’s intention to support the northern powerhouse. I welcome support for the regions and the regeneration of local economies across the country, but I particularly welcome the recognition of the importance of manufacturing to that regeneration. My constituency and the midlands have strong manufacturing traditions, and I look forward to hearing more details about the midlands engine, and not least about the £250 million investment fund. Our region has been significant in the economic recovery, and we have 96,000 more businesses than we had in 2010.
Although the economy has moved in a positive direction in recent years, particularly in terms of falling unemployment, we should not be complacent about the manufacturing sector. In that spirit, I call for the creation of an industrial strategy.
Chris White
Thank you. There is a clear need to boost exports, and the Government’s target to reach £1 trillion-worth of exports by 2020 is ambitious. An industrial strategy would boost confidence for investors through greater stability in the system and clear direction from the Government, as well as allowing the Government to be held to account over the period to which the strategy applies. For a Minister to come to the House annually and to be scrutinised on cross-departmental support for such a vital part of our economy can only be to everyone’s benefit.
I turn to the make-up of the strategy. A central, cohesive and comprehensive document could shape clear objectives for the sector, outlining steps that the Government intend to take to provide a framework for industry to grow. In addition, there could be a clear statement from the Cabinet Office, acting across Departments, along with annual reports to Parliament detailing supportive measures taken in the interests of manufacturing.
This Government, and perhaps any Government, typically respond well to objectives and targets that give clear focus and consistency, such as a target of 3 million new apprenticeship starts by 2020. An industrial strategy would encompass a wide range of policy areas: apprenticeships, higher education, Catapult centres, innovation and the supply chain. We need to ensure that Departments do not operate in silos, and that our whole system works in harmony, so I would add energy policy, smarter procurement, access to finance and infrastructure. Implementing a strategy would be a major step forward, considering that the manufacturing sector is less able than others to respond to circumstances quickly. A long-term vision is, therefore, essential, and it will encourage investment in the UK.
Looking ahead, we will need to compete internationally in innovation. The reshoring of production must be a central aspect of our approach, and I see innovation as key to that aim. We can help innovation to flourish in the UK by supporting through-life engineering services and improving the availability, predictability and reliability of complex engineering products to deliver the lowest possible whole-life cycle cost. Initiatives such as high-value manufacturing catapults, Industry 4.0 and TES were not even on the table in 2010. I would add, however, that no matter how attractive an industrial strategy might be, we must make sure that we start with a long-term economic plan.
Owen Smith (Pontypridd) (Lab)
I am delighted to see that the Chancellor has come back to join us for the close of what has been an excellent debate today, to hear the Opposition’s view that, by any stretch of the imagination, this Queen’s Speech is a desperate missed opportunity. It could have addressed the deep-seated problems in our economy or the poor quality of work experienced by so many under this Conservative Government. Time and time again this afternoon, I have heard right hon. and hon. Members lament those problems, and ask in their different ways where the meat was last week.
Where was the Bill to address the deep-seated problems in our economy, and the yawning inequality that is spreading across Britain? For example, where was the Bill that, as my hon. Friend the Member for Bootle (Peter Dowd) put it, could boost our economy through investment in our public services? What a question to have to ask on a day when the Government have sacked 250 BIS workers in the heart of the northern powerhouse in Sheffield. The Government should reflect on that.
The Government should also reflect on the question asked by my right hon. Friend the Member for Knowsley (Mr Howarth): where was the Bill was to revive manufacturing? My right hon. Friend the Member for Don Valley (Caroline Flint) asked where the Bill on tax transparency was. My hon. Friend the Member for Jarrow (Mr Hepburn)—that mighty place—made a barnstorming speech lambasting the Chancellor and the Government for preparing to flog off the Land Registry as another private sector monopoly.
The Government should also reflect on the powerful speeches by my hon. Friends the Members for Penistone and Stocksbridge (Angela Smith) and for Aberavon (Stephen Kinnock), who are continuing their fight to stand up for steel jobs just 24 hours after the brave steelworkers came to London to petition the Government to save their jobs and protect their pensions.
As my hon. Friend the Member for Makerfield (Yvonne Fovargue) asked, where was the Bill to sort out education and the savings crisis in Britain? My hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) asked where the Bill was that could deal with the rising tide of destitution that is sweeping Britain under the Tories. He reminded us that in the great city of Manchester there is now an emerging tent city. What an unbelievable token of this Government’s failure it is that people are living in tents at the heart of one of our greatest cities. Where were any of the Bills to deal with any of those problems? Where was the Bill to support the self-employed or to support carers? Where was the Bill to reverse the cuts to universal credit or to really deal with devolution?
I have my own question for the Secretary of State for Work and Pensions and the Chancellor: where was the Bill to save the steel industry? Today of all days, when we have had a half-baked announcement by the Work and Pensions Secretary—[Interruption.] I support the fact that there has been a written announcement, but decry and deplore the fact that he did not have the nerve to come to the House to explain what some of the downsides might be, because we have heard scant evidence from the Government on what this situation means for some of the steelworkers. [Interruption.] I have said I support it—he keeps chuntering. I support the production of the consultation document and the fact that he is looking at the issue, but he should have done it a year ago. That is the truth—he should have been addressing it long since.
When the Secretary of State replies to the debate, he will have the opportunity to give us some of the answers that we did not get from his right hon. Friend the Business Secretary today, such as who will definitely disbenefit as a result of the changes? What precedent will be set for other industries? Are we content to see other industries in future take a similar route and shift uprating of pension benefits from being in line with the consumer prices index to being in line with the retail prices index, with workers losing out? He needs to tell the House how he will ring-fence that so that it affects only steelworkers.
Now I come to think of it, where was any sort of industrial strategy in the Queen’s Speech? One of the most telling contributions today was made by the hon. Member for Warwick and Leamington (Chris White). I do not know whether it is just because he looks a bit like me that the brother wants to come over to our side—[Interruption.] He could be a Welshman with an inside leg that length. He sounded like a Labour man when he spoke earlier. He asked, essentially, “Where is the industrial strategy? Wouldn’t it be marvellous if the Tories had one?”
Chris White
I remind the hon. Gentleman that at the end of my speech I said that for an industrial strategy to happen, we need a long-term economic plan.
Owen Smith
I heard it. There was that one soundbite, that one belated effort to draw back from the brink, but we had three and a half minutes of the hon. Gentleman attacking the Chancellor before then, and complaining that there was no industrial strategy.
What do we have in the Queen’s Speech? We have a bit of nonsense about spaceports and electric cars. In Port Talbot where people are worrying about the steelworks, they are not too bothered about spaceports unless the Government are planning to stick one in Aberavon and create 1,000 jobs. This is window dressing. Where on earth is the industrial strategy? Where is the Bill to deal with this country’s productivity crisis, which is greater than just about anywhere else in the western world? Where is the Bill to deal with disabled people who under this Secretary of State are languishing on the scrapheap? Where is the Bill to halt the spiralling of personal debt to record levels? The Chancellor used to talk about the problem of debt, but he never speaks about personal debt or the fact that consumers are the basis on which he is trying to rebuild our economy. Where is the Bill to deal with the fact that our earnings are flatlining in Britain? The Queen’s Speech contains not a sniff of any such Bills. Many Labour Members have suggested that that is because the Government have run out of ideas and the Chancellor has run out of steam, but I do not think he has—I am looking across at him and he is looking as fit as a butcher’s dog. He has his 5:2 diet and a personal trainer on-tap. He looks full of ideas—he is certainly full of it.
The real reason why none of those things were in the Queen’s Speech is because they do not fit with the narrative that says that everything is tickety-boo with our economy. We have the makers marching, jobs for everyone, and the new national living wage: “Nothing to see here, move on, move on. Let’s keep going with where we are”. Of course that is absolute nonsense, because on every measure in every serious analysis of our economy, the Government are missing their targets. The deficit was meant to be cleared long since, but it is £76 billion. The national debt is meant to be falling as a proportion of GDP, but it is now £1.6 trillion— £600 billion more than when Labour left office. The Chancellor used to talk about not bequeathing debts to future generations, but that debt has increased by £600 billion on his watch.
What about business activity? It has gone through the floor. What about corporation tax receipts? We used to be told—I remember it well—that the secret to getting all that extra foreign direct investment, receipts and investment was slashing corporation tax rates, but just this week are told that that figure is down to 5.1%. That is not the mark of an economy that is booming by any stretch, and little wonder, because our trade deficit is at a record high. The gap between our exports and imports is bigger than it has ever been. [Interruption.] It is £13 billion, if the Chancellor wants to quibble about it. That is a big problem for him, and it is happening on his watch and because of him. That is the reality of this country’s economy, and the consequences for working people are significant.
The Government continually point to the jobs market as the one bright spot, and Labour Members welcome those new jobs. [Interruption.] I welcome those jobs, as I welcome every new job. We believe that people in this country are better off if they are working, but that will not stop me asking what people are earning. What if they are taking home less than they used to, and their wallets are getting thinner at the end of the month as a result of the poor quality jobs that Britain is now generating? What if the Secretary of State for Work and Pensions is compounding those ills by cutting work allowances under universal credit?
I was at the Elephant and Castle jobcentre earlier this week, and I heard what a great problem low wages are. The Chancellor is making his savings, and the Government are going gangbusters as people move from Labour’s better resourced, more generous tax credits over to the less generous, universal credit under his Government. He will hit the £10 billion of savings that he wants, but on the backs of working people in this country. They are the people who are paying the price for this failing economy and this failing Chancellor. He looks at me across the Dispatch Box. I simply wonder when his Back Benchers are going to realise that he is failing them, as well as failing the country. If we look at the record it tells its own story: he is the third-worst-performing Tory Chancellor on growth in the past 60 years and he is the worst-performing Tory Chancellor on the economy bar none. We need to get rid of this Chancellor. We need a vote against the Queen’s Speech tonight. We need to vote for Labour.
Budget Resolutions and Economic Situation
Chris White Excerpts(8 years, 8 months ago)
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Chris White (Warwick and Leamington) (Con)
A number of measures in this Budget will have a positive impact on smaller businesses, and it is absolutely right that we continue to stimulate growth in the size and number of small and medium-sized enterprises as they have undoubtedly been a key contributor to a strengthening economy, both locally and nationally.
The midlands is vital to our economy, and I am pleased that the Government—
Chris White
And Opposition Front Benchers are generous enough to recognise it as such.
Some 96,000 more businesses have been formed in the midlands since 2010, which amounts to about 52 a day. The announcement of the midlands engine investment fund, which will see more than £250 million invested in smaller businesses across our region, will be a boost for the local economy and will go some way to ensuring that the progress made in recent years is built upon.
It is worth recognising the tremendous impact that the reform of business rates will have. As the Chancellor outlined on Wednesday, it will mean that 600,000 businesses will pay no business rates at all. The Federation of Small Businesses has said that its members welcome this as an “important step”, and I echo that sentiment. The further cut in corporation tax to 17% by 2020, the freeze on fuel duty, and the action on VAT on overseas firms to create a more level playing field are all welcome measures.
We must not lose focus, however, on enterprise policy and the idea of the “march of the makers”, which is particularly relevant. Manufacturing is key to the midlands and an important aspect of rebalancing our economy. As co-chair of the all-party group on manufacturing and a member of the Business, Innovation and Skills Committee, I have worked closely with industry to discuss and hear about some of the challenges that it faces. High-value manufacturing catapult centres have been a revelation, and I am pleased that the Government continue to back them, with more than £200 million of investment since 2011 and an increase in financial support in the latest autumn statement. Fostering an environment in which innovation thrives has to be a priority when thinking long-term, and these catapult centres, which bridge the gap between businesses, academia and some of the UK’s world-class research centres, are instrumental in achieving that. However, such action must be matched by a supply of skills, and apprenticeships are of huge significance. In my constituency, Warwick Trident College works with industry—it partners with industry—and is providing hundreds of students with the necessary skills to succeed. Empowering further education colleges to extend the provision of tailored courses should be an important part of the Government’s future apprenticeship agenda.
Another underestimated sector is video games, which contributes a huge amount to our economy, not least in my constituency. There is no doubt about the value of the games industry to the economy: we are talking about £1.4 billion in gross value added, support for 23,900 jobs nationally and the generation of £429 million in tax receipts. We must continue to support this very important sector.
Oral Answers to Questions
Chris White Excerpts(8 years, 11 months ago)
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Chloe Smith (Norwich North) (Con)
3. What plans he has to improve co-operation between Government Departments on the use of digital technology.
Chris White (Warwick and Leamington) (Con)
9. What plans he has to improve co-operation between Government Departments on the use of digital technology.
The Minister for the Cabinet Office and Paymaster General (Matthew Hancock)
The UK has made great strides in digital government, but there is much more to do if we are to remain world beating. We set aside a total of almost £2 billion in the spending review for work to be led by the Government Digital Service to make this happen.
Matthew Hancock
Alongside digital transformation, it is vital that we have secure online activity, and our almost doubling of the budget for cyber-security over the Parliament will be a vital part of protecting not only Government services but the whole of the UK to ensure that people are safe online.
Chris White
The social value portal is an innovative way to provide advice and insight for communities, public bodies and business about the best way to achieve social value. Will the Minister outline how his Department is encouraging other Departments to take advantage of digital initiatives, such as the social value portal, to ensure greater implementation of the Public Services (Social Value) Act 2012?
Matthew Hancock
Digital transformation can not only improve government and the economy but strengthen civil society, and the social value portal is a good example of working across Government to deliver some of the changes in the Public Services (Social Value) Act. There are eight funded projects, and I look forward to working with my hon. Friend and others to make them happen.
Mr Letwin
I am sorry that the hon. Lady did not take in what I said in my earlier answer. The funding for the voluntary and community sector increased significantly in the autumn statement. I pay tribute to officials in the Office for Civil Society, which answers to my hon. Friend the Minister for Civil Society. In my experience, those officials are among the finest in Whitehall. They will continue their work, and with that increased budget, they will be able to do more, not less.
Chris White (Warwick and Leamington) (Con)
T1. If he will make a statement on his departmental responsibilities.
The Chancellor of the Duchy of Lancaster (Mr Oliver Letwin)
The Cabinet Office is responsible for increasing the efficiency of government and for delivering the Government’s agenda. I am happy to say that, with the help of the fine civil servants to whom I just referred, we are doing just that.
Chris White
Will the Minister outline the steps that the Government are taking to promote social enterprise, which is one of the fastest growing sectors in the economy?
Mr Letwin
My hon. Friend is absolutely right. The Government are totally committed to the social enterprise sector. That is partly about leading by example, which is why, in common with many of my hon. Friends, I serve in my village community shop—we all undertake these things. More than that, however, it is about creating the framework within which social enterprise can flourish. That comes back to the point made earlier by my hon. Friend the Member for Enfield, Southgate (Mr Burrowes) that social impact bonds offer a whole new future for the social enterprise sector.
The Economy
Chris White Excerpts(9 years, 5 months ago)
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Chris White (Warwick and Leamington) (Con)
Thank you, Mr Speaker—not least for putting me higher up the list than you intended to yesterday.
I congratulate my hon. Friend the Member for Bexhill and Battle (Huw Merriman) on a fabulous maiden speech. I hope that, like me, he will grow to cherish the double-barrelled nature of his constituency.
I am grateful for the opportunity to support the Queen’s Speech, and, in particular, the measures that will build on the work done in the last Parliament to secure the continued growth of our economy. Whether we are talking about big manufacturing brands and household names such as Aga Rangemaster, Dennis Eagle and National Grid, or the new and exciting creative industries and companies such as Freestyle Games and Radiant Worlds, Warwick and Leamington is clearly a good place in which to do business. I also welcome Tata Technologies, which has unveiled plans to build its new European headquarters in my constituency next year.
I am delighted that the Government have announced plans to continue our economic growth by supporting business and encouraging job creation, with the ambition of achieving full employment. We have a fantastic record, on which we continue to build. In Warwick and Leamington, for example, the number of jobseeker’s allowance claimants has fallen by 74% over the last five years, and the number of youth claimants has fallen by an astonishing 82%. Tribute must be paid to employers and employees for that achievement..
Warwick and Leamington is part of a region that has a tremendous manufacturing heritage. During the last Parliament, we saw a renewed and extremely welcome focus on manufacturing and the re-shoring of that vital sector of the economy—in the words of the Chancellor,
“the march of the makers”.
Manufacturing is growing in the United Kingdom, and in the midlands in particular. It makes up 54% of UK exports, and directly employs 2.6 million people. Growth has been positive in recent years. In 2014, sales in the UK car industry in the UK were the best for nearly 10 years, which was a particularly encouraging development. In manufacturing overall, there is an average productivity increase of 3.6% a year.
I believe that the Government must ensure that the United Kingdom continues to be a place where things are designed and made. That means supporting businesses, large and small, particularly those in the supply chains. We must also address the skills shortage, and focus on training young people to be equipped for the workforce. One way of supporting businesses is to create an environment in which we can foster collaboration and support between businesses. We are already seeing examples of that in the establishment of local enterprise partnerships and the growth of city deals throughout the country. The all-party parliamentary manufacturing group, of which I am co-chair, recently published a report about skills I am delighted to see that the other co-chair, the hon. Member for Huddersfield (Mr Sheerman), is in the Chamber.
Mr Cunningham
The hon. Gentleman’s constituency abuts mine. We share an interest in research and development, and in both small businesses and major companies such as Jaguar Land Rover. Does he not welcome this development?
Chris White
I welcome it very much. I also recognise that the hon. Gentleman and I share a university. The students live largely in my constituency, but the University of Warwick is based in his. It is celebrating its 50th anniversary this year.
The Royal Academy of Engineering has reported that the country will need an additional 800,000 graduates in the science, technology, engineering and mathematics—STEM—sectors by 2020. Encouraging students—boys and girls—to study STEM subjects at school and providing clear career advice to students from a young age will help to address this serious skills gap. We must ensure that our technical and further education colleges are given the recognition and assistance they need to achieve this.
We are particularly fortunate in Warwick and Leamington to have Warwickshire College, one of the best further education institutions in the country. We are also home to many students from Warwick University which, after only 50 years, is already one of the top 100 universities in the world. I have been privileged to see the quality of the training and education that both those institutions provide. Over many years now, this has reinforced for me the importance of tertiary and further education in providing the skills and training that young people need to succeed.
In terms of further education, Warwickshire College has entered into partnerships with local employers such as Rolls-Royce and Jaguar Land Rover to provide work experience and ensure that students are exposed to the workplace throughout their education. This collaborative approach provides the best of both worlds for students. I would like to take this opportunity to welcome the new principal of Warwickshire College, Angela Joyce, to her post. I would like to reiterate the importance of support for our economy to create an environment that supports job creation and business growth. Additionally, giving our young people the skills that they need to get those jobs is just as vital, not least as we see existing and new sectors develop and grow.
Oral Answers to Questions
Chris White Excerpts(10 years, 5 months ago)
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Mr Mark Harper (Forest of Dean) (Con)
1. What recent assessment he has made of the effect on the economy of the level of employment.
Chris White (Warwick and Leamington) (Con)
12. What recent assessment he has made of the effect on the economy of the level of employment.
The Chancellor of the Exchequer (Mr George Osborne)
There are more people in work than ever before, with the latest figures showing the fastest increase in employment since records began. Today we have the very welcome news that Abu Dhabi will be investing £1 billion in building new houses in Manchester. That is a step towards it becoming the northern powerhouse I want to see, and it is a £1 billion vote of confidence in our long-term economic plan.
Mr Osborne
My hon. Friend is absolutely right, and I pay tribute to his contribution in making sure that the jobs that are being created in this recovery are jobs that British people have the skills and incentives to take. It is heartening that three-quarters of these jobs are going to UK citizens, as opposed to the truly staggering record of the last Government, when less than a quarter were taken by British citizens.
Chris White
Is my right hon. Friend aware that there has been a 59.5% fall in the number of jobseeker’s allowance claimants in Warwick and Leamington since April 2010? Also, recent figures show that a record number of companies were formed in Leamington Spa in the first quarter of this year. Will the Chancellor pay tribute to the local council, local chambers of trade and commerce and the local businesses that have made this possible, and will he outline what more can be done to further increase support for businesses in increasing employment?
Mr Osborne
I certainly pay tribute to the local council and local businesses who have worked with the excellent Member of Parliament, my colleague—[Interruption.] Yes, my hon. Friend has done remarkable work in bringing down the number of people claiming JSA by 60% since this Government came to office, and of course we will go on supporting businesses locally with important infrastructure, with the employment allowance and with awards. As I am sure my hon. Friend will be aware, Dennis Eagle, one of the companies in his constituency, has just been awarded a grant under our advanced manufacturing supply chain initiative, so we are backing manufacturing in the midlands, and backing his constituents all the way.
Oral Answers to Questions
Chris White Excerpts(10 years, 11 months ago)
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Nicky Morgan
I do not recognise the hon. Gentleman’s description of the Chief Secretary, who would never say such a thing. Coming from a member of the party that abolished the 10p tax rate, which most benefited low-paid workers, that is a real nerve. I repeat that people on the minimum wage have already seen their income tax halved under this Government. With our policies of free school meals, fuel duty and council tax freezes, and increases in child care allowance and the personal allowance threshold, we are doing all that we can to help people on low incomes. However, the most important thing is to get the economy growing so that wages can rise.
Chris White (Warwick and Leamington) (Con)
15. What steps he has taken to increase youth employment.
The Economic Secretary to the Treasury (Nicky Morgan)
The number of young people receiving jobseeker’s allowance is 93,000 lower than in May 2010, and youth unemployment is falling, although the Government recognise that more can be done. As my right hon. Friend the Chancellor announced last week, we are abolishing employers national insurance contributions for those aged under 21, funding jobcentres to help 16 and 17-year-olds who are not at school to find work with training, and piloting a new mandatory skills scheme for jobseekers aged between 18 and 21 who do not have qualifications in basic maths and English.
Chris White
Is my hon. Friend aware that in Warwick the number of young people who are not in education, employment or training has almost halved in the last three years, from 4.6% in 2010 to 2.8% in 2013? That is a move in the right direction, but what other steps are being taken to reduce the number of NEETs and increase the number of young people in work and training?
Nicky Morgan
I congratulate my hon. Friend. I am sure that the fall is a result of much work in his constituency, doubtless led by him. He is a doughty champion of his constituents.
The Government are also investing in apprenticeships. Over half a million more are being created, including 20,000 more high-level apprenticeships, as was announced last week. The Youth Contract is helping up to half a million young people to take up employment and education opportunities, and in the three months since September the number of 18 to 24-year-olds in employment rose by 46,000. We know that there is more to be done, but things are moving in the right direction.
Multinational Companies and UK Corporation Tax
Chris White Excerpts(11 years, 4 months ago)
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Chris White (Warwick and Leamington) (Con)
I beg to move,
That this House has considered the matter of multinational companies and UK corporation tax.
I am grateful to the Backbench Business Committee for giving the House the opportunity to debate the important issue of corporation tax and the avoidance of tax by multinational corporations. I was keen to see this debate take place, not only because of the gravity of the issue but because of the efforts that two local retailers, Frances and Keith Smith of Warwick and Kenilworth Books, have taken to raise the profile of the matter. They have launched a petition, which has gathered 170,000 signatures, calling on Amazon UK to pay UK corporation tax, and I would like to pay tribute to their public spiritedness and determination in pursuit of this cause. Individuals can make a difference in politics, as I am sure hon. Members would agree, and we should encourage more citizens to take similar action.
The issue that I would like to put at the heart of the debate is tax avoidance, rather than tax evasion, which is illegal. I think all Members would strongly condemn any kind of tax evasion. However, tax avoidance, sometimes euphemistically called “tax planning”, is also a matter of serious concern. The case that Frances and Keith have raised illustrates the problem. Amazon made £4.3 billion in sales in the UK last year, but its subsidiary Amazon UK paid only £2.4 million in corporate taxes. It does this by classifying itself as a service provider to its Luxembourg business Amazon EU Sarl in order to reduce its tax bill, yet its UK business employs over 4,200 people, compared with the 380 based in Luxembourg. Given the size of the UK market, it is laughable to believe that Amazon UK is somehow serving the Luxembourg portion of the business, but this is perfectly legal and Amazon UK is not an isolated case.
However, this avoidance is not without its victims. It is businesses such as Warwick Books in my constituency and ordinary people who pick up the bill. Through this creative tax planning, the burden of taxation is shifted on to individuals and businesses that do not have the resources to spend on reducing their tax bill and on hiring expensive accountants to find loopholes in tax law.
I understand that there are some who believe that businesses have a moral duty to pay only the absolute minimum of tax that they are legally obliged to pay, but I cannot believe that that is the case. Businesses, even multinational companies, are still members of society. They benefit from a strong education system, a functioning health care system, decent roads, a transport infrastructure, the police and our armed forces. The reason we raise taxes is in order to produce public goods. We can argue whether the Government spend that money wisely, or whether the Government should provide this or that service, but that is the basic principle behind taxation.
Businesses have a moral responsibility to play a full part in our society, and structuring their businesses in order to avoid taxation and to make it harder for tax authorities to monitor their business is not fulfilling that responsibility. Voluntarily paying tax is not a long-term solution to this issue. What is needed is for multinational companies to take responsibility for their actions and respect the fact that they need to structure their businesses to reflect the way they are operated, rather than merely to avoid that taxation.
If a company is legitimately servicing another company in another country, or needs to pay royalties as part of a franchise or needs to borrow money from its parent abroad, I believe we can all understand that this should be respected in the tax system. We do not wish to crush enterprise, nor do we wish to penalise international businesses that invest in our country, but multinational companies still need to play their part. The endless game of cat and mouse, with tax authorities having to plug gaps and investigate subsidiaries, and multinational companies developing ever more complicated legal structures to avoid paying tax, is simply unsustainable and destructive.
Many of these companies depend on individuals and businesses buying their services, but as they avoid taxation, the Government have to find this revenue from other sources, reducing the profits and incomes of others and leaving them with less to spend on other goods and services. The regulatory arms race between multinational companies and states seeking to raise revenue is also distracting. It is distracting the corporations from focusing on productivity and creativity, and one wonders what marvels or products might have been created if multi- nationals had put the effort they put into avoiding tax into developing new ideas, services and products.
Tax avoidance does not benefit our economy in the long term; that can only come through making our economy more productive and more efficient. We need to encourage businesses to focus on the real economy rather than on trying to enhance their profitability by avoiding taxation.
The sheer mechanics of the situation make it clear that action purely from the Government is unlikely to be the solution to the problem. There are hundreds of thousands of multinational companies, and only a handful of tax regimes capable of monitoring their information. It is always a game of catch-up, and while reforming tax codes and greater enforcement may help, they will not reach the nub of the problem. That is why I believe that we need to focus on the culture in international business, on the structure of these businesses and the codes of conduct they abide by. Fundamentally, businesses are staffed by people, and if we put in place the right frameworks, I believe that we can appeal to the better angels of their nature. This is the only long-term solution.
I am realistic, however, and I appreciate that there will always be corporations that are unwilling to contribute to the public good and wish to shirk their responsibilities. That is why I am pleased that Her Majesty’s Revenue and Customs has been given additional resources in order to clamp down on tax evasion, but HMRC also needs to be more robust in the way it holds these companies to account.
Katy Clark (North Ayrshire and Arran) (Lab)
Will the hon. Gentleman give way?
Chris White
I would like to, but if the hon. Lady does not mind, we are very short of time.
These companies need to be held to account and we need to feel free to investigate fully the accounts of any company that we suspect might be seeking to avoid paying taxation. This highlights another issue, one that is close to my heart and to that of many colleagues— the future of our independent retailers. Warwick and Leamington is full of many excellent independent businesses, which give our community its distinctive character, and not only provide incomes for the owners, but hire local residents and often give young people the chance to get their first experience of work.
Times change, and I do not think any of us would support or even want a situation where multinational companies were prevented from entering the workplace, but I think we all recognise the need for a mixed economy. We need independent, smaller businesses and large multinational companies working together. We need to recognise that in the 21st century, the idea of the capitalist as some profit-making machine, uncaring or unthinking about the effects of its business on wider society is completely outdated. For the most part, I believe that businesses recognise that.
International progress is essential, and the Prime Minister should be applauded for his efforts at the G8 last week and the agreement that he secured. Britain cannot take unilateral action without significantly damaging our economic position, and while changes such as the general anti-abuse rule are welcome, real progress will only come from companies themselves.
A model that we need to look at more closely is that of social enterprises, but a successful 21st century global economy needs to be one that combines equity with entrepreneurship; principles with profit; responsibility with reward. We are taking the first steps forwards by talking about this issue, but I hope that we can move towards action in the years to come.
Chris White
This has been a brief debate, but it was still an important one. I thank all Members who have taken part for the crucial points they made. More importantly, I hope that the debate was watched outside the Chamber by the companies that have been referred to and that they take the necessary responsibility to ensure that some of these things are put right. I applaud the Minister’s comments. The Government are moving in the right direction, but I think that this is still a work in progress.
Question put and agreed to.
Resolved,
That this House has considered the matter of multinational companies and UK corporation tax.
Oral Answers to Questions
Chris White Excerpts(11 years, 5 months ago)
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Mr Osborne
Getting a lesson from the shadow Chancellor on how to balance the books is like getting a lesson from Dracula on how to look after a blood bank. He finds himself in a most extraordinary situation. On Saturday, the Labour leader said that Labour was going to rule out borrowing more. On Sunday, when the shadow Chancellor was asked whether Labour could borrow more, he said, “Yes, yes, of course,” and then, on Monday, the Labour party committed itself to higher welfare spending—it is a complete shambles. On the eve of the spending review, Labour finds itself in the extraordinary situation in which it has completely abandoned the economic argument that it has been making for the past three years, but kept the disastrous economic policy. That is a hopeless position. The shadow Chancellor has led Labour Members up a cul-de-sac and they have to find their way out of it.
Chris White (Warwick and Leamington) (Con)
T4. In the last Budget the Chancellor announced a video games tax relief to help support UK publishers and developers, which was a very welcome step. However, the European Commission has launched an investigation into this tax relief. Will my right hon. Friend join me and industry representatives such as TIGA so that we may make the best case possible for this vital policy?
Coventry and Warwickshire City Deal
Chris White Excerpts(11 years, 9 months ago)
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Chris White (Warwick and Leamington) (Con)
I am grateful to have secured this debate on the Coventry and Warwickshire city deal proposal, which has now been put before the Government. I congratulate the Coventry and Warwickshire local enterprise partnership, the Coventry and Warwickshire chamber of commerce, Warwickshire county council, Warwick district council, Coventry city council and all the local organisations, businesses and authorities—as well as my colleagues in the Chamber this evening—who have contributed to and supported the bid.
I fully support the city deal concept. I believe that devolving power to local communities and the principle of subsidiarity—devolving power to the organisation most capable of taking a decision—should be at the heart of Government policy. The city deal approach is that principle in action. Our city regions can be the engines of growth, and by crafting deals that provide targeted support and resources, we can generate significant economic momentum.
There are three factors in building a good city deal. First, it needs to build on local strengths and expertise. The UK economy is diverse, and city deals therefore have potential.
Mr Marcus Jones (Nuneaton) (Con)
I congratulate my hon. Friend on securing this important debate. He mentioned local priorities. In our area, manufacturing is a local priority. It has been a strength for many years and continues to be so. Does he agree that the city deal will enable us to build on the strength of our manufacturing skills—there could well be a skills gap in the next few years—and thereby of our manufacturing industry?
Chris White
I thank my hon. Friend for attending the debate. The main part of my speech addresses those very issues.
The UK economy is diverse and city deals have potential as they can be tailored to the needs of local economies and build on the infrastructure that already exists. We should not be trying to reinvent the wheel or impose a top-down plan for economic growth on the country, and a good city deal will work with the grain of the local economy.
Mark Pawsey (Rugby) (Con)
I, too, congratulate my hon. Friend on having secured this important debate. The city deal affects the economy of the constituencies of all of us who have participated thus far. Does my hon. Friend agree that one of the most important aspects of the city deal is that industry and business have worked with local authorities of a variety of political complexions in the best interests of the entire area?
Chris White
I do agree.
Secondly, a city deal needs to have wide-ranging private sector support. Too often, we create proposals and then put them to business, and that approach does not generate the best results. A good city deal should be co-produced with small, medium and large local businesses, and should seek to remove their barriers to growth.
Thirdly, a city deal needs to have widespread political buy-in. City deals should try to build as strong a consensus as possible among local authorities, so that businesses get the policy clarity they need and feel the confidence they need to invest in the future.
The Coventry and Warwickshire city deal meets all three criteria, and is an example of how a city deal can make a significant difference to the local economy. The bid focuses on advanced manufacturing and engineering. As co-chair of the associate parliamentary manufacturing group, I am pleased to see this vital part of our local economy recognised and championed.
Coventry and Warwickshire have a great manufacturing heritage, and the area is home to a range of world-beating manufacturing and engineering businesses. Our city deal area has one tenth of all English motor manufacturing jobs and the second highest proportion of employment in advanced manufacturing and digital media by each LEP area. My constituency alone has fantastic companies such as AGA Rangemaster and Dennis Eagle, which are examples of the pioneering businesses to which our area is home. Infrastructure is already in place with our world-class universities, further education colleges such as Warwickshire college and transportation links—and we should use these assets to our best advantage.
We are at the heart of the UK’s manufacturing, and as I and many other hon. Members have said repeatedly in debates in the past, manufacturing has the potential to bring jobs and to rebalance our economy towards a more export-oriented economy. This city deal recognises that the next 10 years are not going to be like the last. That kind of forward thinking is to be applauded. We need proposals that can adapt to the changing economic circumstances—national and international—that we face. I think this city deal does exactly that. The deal has been created in partnership with businesses, and I believe that this shows the thrust of the city deal’s proposals.
We all recognise that the bedrock of a strong manufacturing sector is skills. If we are going to grow advanced manufacturing and engineering in our region, we need to have the skills in place to enable businesses to grow and make the products that are wanted around the world. This city deal cuts right to the heart of this problem, and highlights the skills shortage that is holding back our local economy. According to the latest estimates, there is a shortage of about 18,000 high-level engineers in the west midlands. The Coventry and Warwickshire area is likely to need up to 25,000 level 2 and level 3 engineers to replace our existing work force. If we are not able to meet that demand, businesses will not be able to grow and we will have to spend more income trying to retrain staff or poach them from other businesses, reducing funding for investment, research and development —holding back growth in the long term.
Mark Pawsey
I endorse my hon. Friend’s remarks about the work force in the Coventry and Warwickshire area. I visit businesses in my Rugby constituency, many of which are doing well, growing and supporting the developing motor industry. I see workers there operating skilled machinery who are generally of the same generation as myself—there are few younger people there. Businesses tell me that that they have the business to grow and develop, but that they are struggling to find the youngsters with the skills. That is why the Game Changer proposal that is part of this city deal is so important.
Chris White
I thank my hon. Friend for that intervention. Part of solving a problem is recognising where the gap is. I think that the city deal goes a long way towards solving that particular problem in the local area.
I repeat that the city deal has strong political support from across the region, with Coventry city council, Warwickshire county council, Warwick district council and five other district councils supporting the proposal from across all the political parties. I believe that this will ensure that businesses can feel confident in these proposals and can know that if they invest in skills and training, they will be supported and will find partners in our region if they want to expand and grow their work forces.
The deal has brought various business groups together, such as the local chambers of trade and Coventry and Warwickshire chamber of commerce. In the light of the city deal bid, Coventry and Warwickshire chamber of commerce has today agreed a new partnership with the Manufacturing Advisory Service and EEF, which will provide better services for manufacturers, engineering companies and automated businesses. It is an example of the additional concentration and focus that the bid has been able to provide.
To achieve this, the Coventry and Warwickshire LEP will create a re-engineering skills board, which will bring together businesses, universities, colleges and local authorities to join up supply and demand so that both providers and employers can plan for the future, matching training provision to business cycles rather than fixed academic cycles. The board will work on new courses to meet the specific requirements of local manufacturers, and to build on local successes such as the advanced skills accreditation scheme chaired by Jaguar Land Rover. The proposals sensibly focus on the upskilling of existing engineers and the retraining of unemployed people, which would enable us to use the labour resources currently at our disposal to achieve the maximum impact. All this will come under the heading of the Game Changer skills programme mentioned by my hon. Friend the Member for Rugby (Mark Pawsey), which will be a brand that both local people and businesses can recognise and understand.
The city deal makes four requests. First, it asks the Government to devolve control of skills and apprenticeship funding to deliver the programme. Secondly, it asks them to allow Coventry and Warwickshire to pilot the new traineeships programme and level 6/7 apprenticeships. Thirdly, it asks for local flexibility that would allow it to adapt the Work programme to the proposal, so that those aged 18 to 24 could attend GAME changer skills programme events. Finally, it asks for capital funding to be realised for the development of an advanced manufacturing apprentice resource at the manufacturing technology centre in Ansty.
I believe that these are targeted, sensible proposals which will ensure that we obtain the maximum value for money and build on the programmes and infrastructure that we already possess, but they must be weighed against the expected benefits. I believe that this city deal bid shows great potential for the future of our area. The aim is to deliver 5,000 new engineers to the workplace over the next two years, and to eliminate the city deal area’s engineering skills shortage by 2020, as well as significantly increasing the number of engineering apprenticeships being delivered at intermediate and higher levels.
On the back of that stronger skills base, the city deal could potentially eliminate the productivity gap in Coventry and Warwickshire, adding billions of pounds to our economy and creating the environment for tens of thousands of new jobs. The bid itself estimates that about 30,000 jobs could be created through its skills programme alone. I believe that those are significant benefits which are in line with the Government’s objectives of reducing unemployment, rebalancing our economy towards manufacturing and exports, and reskilling our economy so that we are able to adapt to future and desperate needs.
I recognise that there is competition for wave 2 of the city deals project, and I know that Ministers will be considering a variety of other bids. However, I believe that the Coventry and Warwickshire city deal has fantastic potential for our region and for communities across the west midlands. There is a shared sense of purpose throughout the public, private and independent sectors as a result of the bid, and we have a unique opportunity to capitalise on the momentum that has been generated by this proposal.
I urge the Government to pick the Coventry and Warwickshire city deal bid, and to invest in the skills of local people in an area which has the infrastructure in place to grow. That will not only enhance our competitiveness but, most important, create tens of thousands of jobs.