Economic Growth

Danny Alexander Excerpts

Wednesday 15th May 2013 Commons Chamber

[The Chief Secretary to the Treasury (Danny Alexander)]

This has been an interesting and, at times, informed debate. Some very good contributions were made in support of the Queen’s Speech, particularly by the hon. Member for Crawley (Henry Smith), my hon. Friends the Members for Eastleigh (Mike Thornton) and for Redcar (Ian Swales), and the hon. Members for Stourbridge (Margot James) and for Croydon South (Richard Ottaway). They were a pleasure to listen to on my 41st birthday—and I am grateful to the shadow Financial Secretary for his good wishes. Many Opposition Members spoke against the Queen’s Speech, notably the hon. Members for Glasgow North East (Mr Bain), for Huddersfield (Mr Sheerman) and for Birmingham, Erdington (Jack Dromey), who presented their arguments passionately.

The debate was opened by my right hon. Friend the Chancellor of the Exchequer—[Interruption.] Of course it was opened by the shadow Chancellor; the Chancellor opened it on behalf of the Government. How could I forget the “busted flush”?

The Chancellor of the Exchequer referred to the welcome improvements in United Kingdom growth in the first quarter of the year, noting the contrast with today’s very unwelcome first-quarter figures in France and Germany. Labour Members certainly talk a great deal less than they did a year ago about their French connection. Perhaps they are worried about the fact that “FCUK” is now thought to be an anagram of their economic policy.

A few of the shadow Chancellor’s colleagues certainly seem to think that he should move on. One senior figure recently said “Balls is a busted flush when it comes to economic credibility.” Given a cost of £28 billion in extra borrowing, the Opposition’s alternative Queen’s Speech is certainly not economically credible, and I urge the House to reject their amendment.

This Queen’s Speech was motivated by the Government’s wish to create a stronger economy in a fair society, in which everyone can get on in life—

[Karl Turner (Kingston upon Hull East) (Lab)]

rose—

[Danny Alexander]

—including the hon. Gentleman.

[Karl Turner]

I suspect the right hon. Gentleman remembers that he visited my constituency last year to see the plans for a major new facility for Siemens to manufacture offshore wind turbines. Will he advise his Back-Bench Tory colleagues whether he thinks an in/out referendum would encourage Siemens to say yes or no?

[Danny Alexander]

I certainly do remember that visit, and I commend the hon. Gentleman for his work to secure that investment, along with many members of the Government, not least my right hon. Friend the Secretary of State for Energy and Climate Change. The Prime Minister has also worked very closely with Siemens in relation to that. My answer to the question is no, I do not think an in/out referendum or campaigning for Britain to leave the EU is particularly helpful in attracting inward investment of the sort the hon. Gentleman describes.

The Queen’s Speech contained a number of measures that will help people who want to get on, because the best way of increasing employment, increasing output and increasing growth is by creating a system that helps those who want to offer work and those who want to find work. Our new national insurance allowance will reduce the costs of employment for employers, and especially for small businesses looking to hire their first member of staff or expand their work force. We estimate that the £2,000 allowance in the Bill in question will benefit 1.25 million businesses, most of them small businesses. Our new tax-free arrangements on child care will reduce the cost of employment for employees, putting money back into the pockets of hard-working families and ensuring that it makes financial sense for parents to go out and seek work. The continuation of our reforms on trainees and apprenticeships will go a long way towards addressing employers’ concerns that some young people lack the right skills, attitudes or experience when applying for work. Alongside our much-needed welfare reforms through the introduction of the universal credit, these changes demonstrate that we are creating a society where it pays to find work, and where the Government will help all who want to do so.

[Sheila Gilmore (Edinburgh East) (Lab)]

The Chief Secretary and his party leader have chosen to flex their muscles on a couple of issues, including Europe and child care ratios. Can we therefore assume that they support all the other unfair measures on which they have chosen not to flex their muscles, such as the bedroom tax and people losing contributory employment allowance after a year?

[Danny Alexander]

I have to say to the hon. Lady that I think the fact that we inherited a welfare system where for too many people it did not pay to work is one of the greatest scandals of Labour’s time in government, so I make no apology whatever for reforming the welfare system and putting in place a universal credit where everybody on benefits knows they would be better off in work. That is the right thing for the country, and I am happy to support it.

The measures in the Queen’s Speech will also help all those workers who want to get on and plan for their futures. Our changes to the single-tier pension will provide millions of people—particularly women with broken work records, the low paid and the self-employed—with a firm foundation to support their saving for retirement. The single tier will be implemented from April 2016, and I am sure Members will join me in congratulating the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb), on his excellent work in bringing this policy forward to this stage.

The Queen’s Speech recognises that if we want our economy to succeed in the 21st century, we need to make significant changes to our business environment. We will not succeed in the 21st century if our businesses are slowed down by regulation, which is why we are taking steps through the deregulation Bill to remove excessive red tape from small businesses and to repeal legislation that no longer serves a practical use.

[Geraint Davies]

Will the right hon. Gentleman give way?

[Danny Alexander]

I want to make some progress, as I have a few further things to say.

We will not succeed in the 21st century if our businesses are slowed down by an outdated infrastructure. That is why we are increasing capital investment plans by £3 billion a year from 2015-16, meaning public investment will be higher on average over this Parliament than it was under our predecessors. That investment will help to improve our digital networks and our road and rail networks. We want to connect our biggest cities in a manner fit for modern business needs, and our investment in High Speed 2 will be a crucial investment for British jobs and prosperity. The hon. Member for North East Derbyshire (Natascha Engel) spoke against HS2 partly on the basis that there had been a decline in wedding bookings at an important venue in her constituency. I hope very much the progress of the equal marriage Bill will help raise demand at that venue.

In a debate focused on jobs and growth, a lot of Members have talked about the subject of Europe, and I have to say that I do not think contemplating British exit from the EU is helpful in supporting jobs and growth in this country. So I would like to remind the House of some of the economic opportunities that we gain from our membership of the European Union. Our EU membership supports UK jobs, prosperity and growth through increased trade, both inside the single market and outside, through free trade agreements. One in 10 jobs in this country—3.5 million jobs—are linked to that trade with the European Union. If we want to win the global race, we need to be part of a strong team.

[Ian Swales]

Is the Minister aware that the number of jobs in the UK has gone up every single year since we joined the EU, except 2009, and went down in eight of the previous 20 years?

[Danny Alexander]

I was not aware of that fact, but the House will remember what happened in 2009 and who was responsible.

The single market helps the UK to attract inward investment. As part of the largest single market in the world—it has 500 million people and is worth £11 trillion —the UK hosts more headquarters of non-EU businesses than France, Germany and the Netherlands combined. UK consumers benefit from EU regulatory standards, and the collective voice of EU member states helps to advance UK interests and influence throughout the world, as the US President said only this week.

[Mr Jenkin]

What evidence is there that the United Kingdom would be unable to negotiate a free trade agreement of its own with the United States if we were not part of the European Union and that we would not be able to negotiate a free trade agreement with the European Union if we were outside it? The treaties say that the EU would have to do that.

[Danny Alexander]

I respect the sincerity of my hon. Friend’s position. He has expressed those views for very many years and has done so coherently. As a politician, I believe, however, in breaking down barriers between peoples, not erecting new barriers, and I was making this point at the Scottish Affairs Committee today on the subject of Scottish independence. So of course it would be possible to strike these agreements, but the net effect on the UK economy of such an approach would be much less advantageous than being part of the largest single market in the world. The collective voice of the EU helps to advance UK interests.

[Mr Bone]

Will my right hon. Friend clear up one point? Are the Liberal Democrats blocking the Conservative party from introducing an EU referendum Bill in Government time?

[Danny Alexander]

I cannot block any Member picking up that Bill in the private Members’ ballot and seeking to advance it. We have already used more than 100 days of Government time to pass an Act that, for the first time in this country, gives our citizens a guarantee that the next time the treaties are changed there will automatically be a referendum. That should be sufficient for anyone.

In the Queen’s Speech, the Government have also sought an international environment in which we tackle tax avoidance—a point made by my hon. Friend the Member for Redcar. We have already taken significant strides in this country, but we are working together to support the development of an international tax environment that is much tougher on tax avoidance, and the Queen’s Speech recognises that. We are making real progress. The Chancellor, through his work in ECOFIN and in the G7, the G8 and the G20, supports free trade and is tackling tax evasion by encouraging greater transparency and accountability. Our efforts in that area represent real progress in creating a fairer international tax environment.

We are also creating a fairer society on UK shores. The Queen’s Speech is packed with radical reforms, a programme that in one year will deliver more long-term changes to pensions, social care, our energy market and employment for small businesses than Labour managed in any Parliament while it was in office. The measures set out in the Queen’s Speech this year will continue this Government’s progress in rebuilding the United Kingdom economy, clearing up the mess that Labour left. Those measures will help us to build a stronger economy and a fairer society, and they will help all of those who want to get on in life. I commend them to the House.

Question put, That the amendment be made.