Amendment of the Law

Debate between David Heath and Paul Burstow

Thursday 20th March 2014 Commons Chamber

[Mr David Heath (Somerton and Frome) (LD)]

In contrast to the economic amblyopia of the hon. Member for Coventry North West (Mr Robinson), I honestly believe that there are many things to welcome in this Budget. Chief among them is the greatly improved economic situation in which this country now finds itself. I must say that I had my doubts that we would achieve our employment objectives, but we have, and in full measure. Unemployment in my constituency is now at 1.6%, compared with 17% in the mid-1980s. That shows just how far we have gone. I am also enormously encouraged by the 1.5 million new apprenticeships that have been put in place by this Government, because that seems to be at the core of our economic recovery.

There is a strange process in this House by which the Budget is separated from the autumn statement, which is not entirely logical. I find it difficult to talk about the money-raising capacity of the Government without mentioning where that money will be spent. May I give due notice that when we come to the autumn statement, I will expect to see clear commitments to flood alleviation schemes, such as the sluice on the River Parrett, and the long-term changes for sustainable maintenance of our flood systems. I will expect to see the A303 explicitly mentioned as part of the capital programme. I will also expect to see the long-promised improvements in our rail infrastructure in the west country, including the opening of Somerton and Langport stations, which will offer long-term economic benefits to our area.

Let me deal with what is in Budget. I wholeheartedly welcome the increase in the tax threshold, which is a commitment that I made before the election. Not only does that take millions of people out of tax altogether, but it represents, by 2015, an £800 tax cut for people on modest incomes in my constituency and across the country. That is enormously important. From a parochial point of view, I would have welcomed the freeze in cider tax, except that I felt it was slightly undermined by the cut in beer duty, and I felt that perhaps cider drinkers did not have parity with beer drinkers. None the less, the freeze is welcome.

I welcome the changes announced by the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb). We have campaigned for many years for this straitjacket of the annuity-buying system to be released.

I welcome the industrial strategy that the Business Secretary has developed over recent years. I am talking about the encouragement to invest and the support for exports. One sector in which I have had direct involvement is the food and drink sector. That is the biggest manufacturing industry in this country, with a £90 billion turnover and 400,000 workers engaged in it. Exports form a key part of the sector, providing £9.3 billion, which is a 5% increase year on year. None the less, we still have far more to do. There are still many opportunities that need to be realised. The fact that 90% of small and medium-sized enterprises that produce food and drink still do not export suggests that we need to do an awful lot more in the way of encouragement.

[Paul Burstow (Sutton and Cheam) (LD)]

My hon. Friend is absolutely right that investment and exporting are key to our growth. Does he therefore welcome the other announcement that was made yesterday, which is the doubling of the tax allowance when it comes to capital investment, from £250,000 to £500,000?

[Mr Heath]

Absolutely. We are getting an industrial strategy that makes sense for this country. The point was made that we need to offer direct encouragement to firms to export, but what is lacking is aspiration. What we need to do is increase the level of aspiration of many of our smaller firms.

There has been mention of the national minimum wage and the difficulties caused by not uprating it. May I remind the House that there are still abusive employers who do not even pay the national minimum wage and who are not investigated and prosecuted? There are also many abusive contractual relationships, especially in some sectors. That is not to damn every employer in those sectors; a lot of them are very good and conscientious employers. However, it worries me that in the catering and entertainment, care and construction sectors there are still bad employers who need to be brought to book. We already have a model to deal with them. It has been shown to be successful and I used to use it when I worked with the Gangmasters Licensing Authority. I do not believe that the GLA can simply expand into other sectors; that would be beyond its capacity. It also runs the risk of breaking an organisation that is doing a very good job in its sector. We need to replicate that in the other sectors because, for me, avoiding abusive relationships between employers and employees is one of the key issues that remains. Some of the virtually indentured labour that goes on is linked to our work on modern-day slavery. I believe that the Government can and should take action to end it once and for all.

--- Later in debate ---

[Paul Burstow (Sutton and Cheam) (LD)]

I wish to reflect on one or two significant changes that this Budget and the Government’s long-term strategy are delivering, and to look at how they impact on the businesses and the people in my constituency.

First, I welcome the further steps that have been taken on tax-free personal allowances. Some 39,000 people in my constituency will benefit from the £800 tax cut. In addition, my local council has frozen the council tax for the fifth consecutive year, which is good news for local families. None the less, we still need to go further. In due course, I hope we will be able to align the tax-free personal allowance with the national minimum wage, so that no one on the national minimum wage pays income tax.

Secondly, I want to welcome the pension changes that were announced yesterday. The Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb) has his fingerprints all over those proposals. Pensioner security has been his goal for a very long time. Linking the basic pension to rises in prices or earnings or 2.5% whichever is the higher has delivered an extra £650 to 14,879 pensioners in my constituency. That feature of our pension system should be made permanent. It would help to guarantee the foundation on which individual retirement savings are built. I also welcome what my hon. Friend said in response to me earlier on when he made his statement.

That leads me to the radical change to the way in which people take their pensions. The change is the most radical for nearly a century, giving people greater choice on how to access their defined contribution pension savings. The current arrangements are complicated and leave pensioners feeling short-changed. By lifting restrictions on individuals who have made the right choice to save can empower people to plan for their later life. The changes reflect the longevity revolution that is taking place in our country. As life spans increase and healthy life expectancy rises, we need our pension system to adapt to support people in their third age.

The quality of the guidance available to people when taking decisions will be critical. The fact that this guidance will be free and face to face is good news. I hope Ministers will take the opportunity to join up later life planning. The way in which long-term care is paid for in this country introduces a duty to provide information and advice, including financial advice. It must surely make sense to ensure that people are presented with a rounded picture of their later life needs. We all want to plan for our third age of active retirement, but impartial guidance should also help us to plan for our fourth age of frailty, when we sometimes need support and care. I welcome what my hon. Friend said on that, too.

It is great news that the UK is forecast to grow faster than any other G7 economy in the first half of this year. Sustainable growth will come from a more balanced economy. We want to prosper from what we make and from our ability to translate scientific discovery into jobs and growth for UK plc.

In my constituency, we already have a world leader in the life sciences—the Institute of Cancer Research. The institute discovers more new cancer drugs than any other academic centre in the world, as well as generating more invention income per capita than any other UK higher education institution. My council’s Successful Sutton growth plan, which has already attracted £319 million of inward investment and created many more new jobs, will form the heart of an extraordinary life science campus. What makes that plan so exciting is that the institute shares its Sutton home with the Royal Marsden, which is one of the world’s best cancer hospitals. That ability to translate discoveries from the lab bench to the bedside and to operate a close collaboration between clinicians and scientists provides a huge competitive advantage.

[Mr Heath]

I am interested to hear what my right hon. Friend says about the investment in his constituency. It is exactly what the Science and Technology Committee, on which I serve, is looking for in terms of the correlation between original research and market-ready bioscience and high-tech solutions, which we can use both in this country and abroad.

[Paul Burstow]

My hon. Friend is absolutely right. The two organisations in Sutton have an exceptional working relationship, which makes the site unique in the UK and up there with the best organisations in the world, such as MD Anderson in Houston and Sloan-Kettering in New York. My right hon. Friend the Business Secretary is aware of these emerging plans, and I know that my right hon. Friend the Chief Secretary to the Treasury was very impressed when he visited the Institute of Cancer Research in January. The potential from the site is huge. There is space for life science businesses to cluster; 10,000 direct jobs; a £350 million contribution to the economy; and increased research income. These are huge opportunities and I hope that the Business Secretary and his colleagues in the Department will ensure that his officials fully engage with them so that we can realise the full potential of the project.

Let me end my speech by making some comments about housing. What was announced in the Budget was welcome, but I think it missed an essential ingredient—a focus on the fastest-growing source of demand for housing, people over the age of 65. There is a chronic shortage of the right housing options for people in the second half of their lives. Too often, moves in later life come as a result of a crisis rather than an attempt to fulfil aspirations for a better quality of life. The Help to Buy scheme and the rules governing the community infrastructure levy need to be reviewed to help grow the market for later life housing. The impact on the housing supply chain could be profound, freeing family homes, creating jobs in renovation and helping people to make the most of their third age.

In conclusion, there is more to be done, but the Government have ensured that growth is back, employment is rising, unemployment is falling and inflation is under control. The Government are doing the right thing and providing a sound platform for this country to move forward and that is why I support the Budget.