Budget Resolutions and Economic Situation

David Rutley Excerpts

Wednesday 18th March 2015 Commons Chamber

[Alison McGovern]

If the right hon. Gentleman had been listening to my speech, he would have heard me say that we need to make the right choices and show our priorities. As I was saying, the right way to close the budget deficit is to focus on taking money through a bank levy on the financial services industry and investing that money in the next generation and in hard-working families in Britain. I am pleased that we have confirmed that the next Labour Government will have no requirement for new debt for our election pledges. That is the right way to go about managing the British economy.

The right investments matter. It matters whether we choose to invest in infrastructure for the long term. I am sorry that the rhetoric about investment is still not matched by the reality on the ground, and is still so heavily focused—as it has been over the past five years—on London and the south-east. Of course steel in the ground matters, but we also need to think about our education system as part of our country’s infrastructure. I am concerned that we have not heard a pledge from the Chancellor to match our commitment to fund education properly and to ring-fence that budget all the way through children’s lives.

While we are talking about the right balance and right investment, I want to talk about the north of England. I am in politics because I grew up on Merseyside in the 1980s and 1990s and I knew that the then Governments did not care very much about families like mine. I wanted to see a future for my friends and family in Wirral South in which they did not have to leave the place that they loved to have a successful career. Under the last Labour Government, that was happening. We had “The Northern Way”, which saw regional development agencies investing in the north. That was the right way to rebalance the economy, and it was working. Labour investment was working.

Today the Chancellor has tried to use rhetoric and spin to talk about a northern powerhouse that nobody in Merseyside believes in for a second. We have been living with the Chancellor’s true political priorities—a level of cuts not seen in the wealthier parts of the country. That is despite historical deprivation and the fact that we are still living with the consequences of a Tory Government who deindustrialised the north and provided no other options. “The Northern Way” and the regional development agencies were working under the last Labour Government, and that was the right way—not soaring rhetoric about northern powerhouses, but actual investment in the north—[Interruption.] If the Under-Secretary of State for Transport, the hon. Member for Devizes (Claire Perry), wants to intervene, she is more than welcome. As she does not seek to do so, I take it that she has nothing to say about the north.

[David Rutley (Macclesfield) (Con)]

I am a Member from the north-west and I have shared platforms with the hon. Lady in the past. Does she not accept that, under the Northwest regional development agency and the infrastructures that her party put in place, the jobs that were created were public sector jobs? We now have a more sustainable platform of private sector growth. From memory, unemployment in her constituency is down by more than 30% in the last year—does not she welcome that?

[Alison McGovern]

I bow to no one in my applause when unemployment falls, but to say that Wirral, Merseyside and the rest of the north-west have not suffered from huge cuts to local government is to ignore the facts. I know that that is an argument that almost everyone in the north-west—perhaps with the exception of members of the Tory party—will recognise.

We need not just the right investment but the right protections. We have seen family budgets hit radically and hard, we have seen child poverty rise and, on the relative measure, we have seen people in the middle of the income distribution fall back towards the bottom. That is not offering families in our country the right protections—

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[Mr Hoban]

I am surprised by what the hon. Gentleman says, because he is a member of the Treasury Committee and has looked at these things very carefully. He will have seen what happened in the eurozone in the first half of this Parliament. The headwinds from the eurozone—the OBR confirmed this—had a negative impact on the UK economy. We cannot ignore the impact of turmoil abroad on the strength of the UK economy. It is surprising that a respected Member fails to recognise the lessons of what has happened over the course of this Parliament.

[David Rutley]

I congratulate my hon. Friend on the powerful speech he is making. Does he also recall that the OBR spelled out very clearly, a year or so after 2010, that it had underestimated the real impact of Labour’s recession?

[Mr Hoban]

My hon. Friend is absolutely right. The problem for Labour Members is that when they are confronted with the facts, they hide. That is the problem they will all face in the course of the next 50 days. They have clearly not developed economic credibility, because their plans and message are confused. They have no idea how they would deal with the economy. All we know about Labour is that it will spend more and borrow more and tax more, the way all Labour Governments have behaved in office.

The final reason we should be moving towards a surplus and reducing the national debt is that if we continue to lock in debt at high rates, we are reducing the capacity of future Governments to withstand future economic shocks. One of the challenges we faced in this Parliament was that the high levels of debt racked up by the previous Government made it increasingly hard to put in place the measures to turn the economy around.

We cannot simply pretend to ignore, or rack up, unfunded spending cuts. We need to work hard to tackle the deficit to ensure debt falls as a proportion of national income, as it will at the end of this Parliament, to get the right messages across. Let us be responsible about how much we spend. Let us be responsible on taxation and spending. Running a surplus in the good times will help the economy when difficult times lie ahead.

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[David Rutley (Macclesfield) (Con)]

I wish to add my thanks for the great work that the hon. Member for Taunton Deane (Mr Browne) has done during his service in the House. I worked closely with him in the Home Office and he did an outstanding job as a Minister. His decision to leave the House will be a sad loss to us.

It is a pleasure to speak in this debate, because the Government’s long-term economic plan is working and Britain is back in work with record levels of employment. We accept that further work remains to be done to achieve our aims, and that is our theme—we have achieved much, but there is still further to go. That is the driving force behind the Budget. It is a go-ahead Budget for those who want to get on, whether in Macclesfield or across the country. It includes support for savers, pensioners and hard-working families—and for small businesses, as the hon. Member for Dumfries and Galloway (Mr Brown) pointed out.

In Macclesfield, we have seen unemployment fall by more than 50% since 2010. That is a significant fall that is making a real difference in the lives of many people and I do not want Labour to put that in jeopardy. The Budget shows that we are the optimists. We have realistic plans and we are the party of ideas, leading the agenda that will keep the momentum of the British economy moving forward, with more jobs and greater success. That is particularly important in the north-west—I represent a seat in that area—where gross value added per head has grown by 3.4% per annum according to ONS statistics, a record unsurpassed in other parts of the country. I welcome that. After the disaster of the last Labour Government, and their internationally poor performance, the UK has now got an internationally praised rate of growth—the fastest in the G7, as we heard today. We have improved our position in the important international league of competitiveness, with rates of growth that are sustainable, unlike the unsustainable growth rates that were mentioned earlier.

The Government have delivered, the Budget will deliver more, and the next Conservative Government will deliver more again. No stone has been left unturned by the Government in their attempt to reduce regulatory burdens and enable the financing and growth of British businesses. It is right to continue those important efforts.

Specifically, we need to focus on enabling opportunities in the north-west. Many Members on both sides of the House want to rebalance our economy, which is why we are seeking to create a powerhouse of the north. There will be an extra focus on infrastructure projects in the north, such as the northern hub. We will ensure that there is extra capacity on trans-Pennine rail routes. We will focus on key sectors in the economy, in particular life sciences, which are vital in north-east Cheshire and Macclesfield. It is vital that we transfer power and finances to unleash civic renewal and to take the concept of the powerhouse of the north forward. That will require strong local partnerships. The Government will work not just in word but in deed to take this forward. We saw that today, with the announcement by my right hon. Friend the Chancellor of a new pilot to retain and pool 100% of additional business rates growth between Greater Manchester and Cheshire East council. That is the sort of strategic partnership we want between city and county to drive growth in the north and across the country. That success breeds growth. This is a pro-growth agenda, a pro-north agenda and, importantly, a pro-small business agenda.

Small businesses are the engine of our economy, particularly in terms of creating jobs. Since 2010, the total number of businesses in the UK has grown by a staggering 760,000 to 5.2 million, the highest number ever. The number of employers has increased since 2010 by 52,000—another fantastic achievement. There are surely more of the 4 million or so small businesses currently without employees—76% of all businesses—that could take on an additional member of staff given the right market conditions. We have been working hard to create those conditions. There are signs that this is happening, as the Federation of Small Businesses stated on the publication of its latest “Voice of Small Business Index”.

To ensure that the economy continues to thrive, we need to keep the focus on optimal conditions for the four Es: the entrepreneurs, the employers, the exporters and the employees. We want to keep the focus on people who are new to those roles. We want to help them to move forward and to get ahead, particularly those who do not have family history in these areas. We want to be the party of opportunity and ambition to help them to achieve their dreams.

We have record levels of self-employment, which is to be celebrated, but there is a lot more that can be done to help first-time entrepreneurs. The new enterprise allowance has helped. Today, we heard in the Budget the announcement of the abolition of class 2 national insurance contributions for the self-employed. That, combined with annual tax returns being fundamentally changed, will help more people to achieve their ambitions.

We have done more to help first-time employers. We have to do more to help to signpost the opportunities available and tackle the perceived and real barriers that confront them in taking forward their ambitions.

We want to do more for exporters. We heard about the improving current account deficit. We are on the right track, and I am pleased that the Chancellor announced today that more resources will be available for UK Trade & Investment to support our vital work in China.

We must not forget first-time employees. We have to help more young people in particular to get across the line and get that first job. We have done lots to enable more people to take on apprenticeships and traineeships. We have looked hard at how we can help to improve academic rigour. Real wages are now improving and there have been increases in the minimum wage. A lot is being done, but there is more to do. I hope very much that the voters, not only in Macclesfield but across the country, will recognise the economic achievements of this Parliament and the aims of this Budget, and vote for a Conservative Government to get the job done.