The Economy

Eric Ollerenshaw Excerpts

Tuesday 6th December 2011 Commons Chamber

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

It is great to follow such passion from the north-east, but I would say to the hon. Member for Blaydon (Mr Anderson) that the problem is that my electorate remember 13 years when they were promised that there would be an end to boom and bust, and they are still waiting for an answer from his party as to what went wrong.

I want to make a few observations about what is happening in my constituency and generally in the north-west, and perhaps to have the temerity to suggest something to the Treasury, but we will see how I get on with that. The key focus for my area is on growth and how we get through this crisis. My electorate accept that the deficit reduction programme is delivering low interest rates for businesses, mortgage holders and many others, and that is seen as a good thing. They also see what is happening in other countries across the world and recognise that this Government are delivering by keeping us out of the mess that there has been in Ireland and in Greece.

Many hon. Members constantly see the kinds of businesses that I see in the north-west that have the potential for growth and have the orders, but cannot manage to bridge the gap and buy the extra machine or the extra shed that they need to get things moving. That is why I, like my hon. Friend the Member for Amber Valley (Nigel Mills), am behind the Chancellor’s support for infrastructure, the national loan guarantee scheme of £20 billion and the business finance partnership. I was pleased that earlier in Treasury questions, the Chancellor said that he hopes to get that up and running in January. That will be vital for small businesses.

[Sammy Wilson]

The hon. Gentleman has given a list of reasons why businesses are not investing. Does he also accept that one reason is that businesses lack confidence because they see an economic policy being pursued that will not release the kind of growth that is needed to sell the goods once they have made the investment?

[Eric Ollerenshaw]

I am grateful for the intervention. I was going to go on to say that some of these things are actually working.

One of the biggest employers in Lancaster, Northern Tissue Group, is halfway down the line of achieving extra support from the regional growth fund. That will lead to extra jobs. Oaktec, a small company that is developing innovative energy recovery from vehicles, has just got a grant from the Technology Strategy Board to take that innovation further. Those are small beginnings, but the innovation is there.

I want to suggest how we can develop that through the local enterprise partnerships and the new enterprise zones that hon. Members have talked about. One problem that my part of the north-west has had with all Governments is that every time they look at the north-west, they look at Greater Manchester or Merseyside. Although I welcome Lord Heseltine’s intervention, or should I say re-intervention, in the north-south divide and his talk of city hubs, which we are all behind, my part of the north-west also has businesses that have potential, as you will understand, Mr Deputy Speaker. With a bit of extra investment, which I hope is coming following the Chancellor’s announcements in the autumn statement, those businesses could provide a good return. I have cited two small examples—Northern Tissue and Oaktec—but there are many other possibilities in the area.

My area also has two universities, Lancaster university and the university of Cumbria, and Lancaster university does a great deal in terms of innovation. My suggestion draws on two developments that we already have. The first is technology innovation centres, which are planned for Warwick, Strathclyde, Bristol, Rotherham and Sedgefield. In 13 years, the Labour Government delivered none of them. At least we are now getting five. Germany has 59 of them. Their mission is to bridge

“the gap between research findings and outputs, and their development into commercial propositions”.

The second development is enterprise zones, the mission of which is

“to support genuinely additional growth and create new businesses and new jobs”.

The original concept envisaged only one zone per local enterprise partnership. Perhaps that idea was developed by some Treasury mandarin who had to calculate the hypothetical loss in taxes due to the hypothetical creation of the new businesses and jobs. As they will be new, I am yet to understand how they can calculate that. Obviously, I am just a simpleton when it comes to the Treasury.

In a nutshell, my suggestion is that we should allow all universities to bid to designate mini-enterprise zones on their campuses. Perhaps not all universities would take that up, but it might fulfil the other Government objective of ensuring that there are more direct outcomes for the economy from universities. It seems to me that there is nothing in the practical definition of an enterprise zone that most universities cannot fulfil.

I suggest that there would be savings to the taxpayer, because universities would not need all the investment that is required for the planned enterprise zones. By their nature, the zones would be incubators for new start-ups that would eventually have to move off campus on reaching a certain size. A mini-enterprise zone on a university campus would therefore create a quicker turnover than the planned enterprise zones. The hypothetical loss in taxes calculated by the Treasury mandarin would therefore be far less, because once a business on a campus got to a certain size, it would feel restricted and would have to move off quicker than those in the planned enterprise zones.

[Matthew Hancock]

I am interested by my hon. Friend’s proposal. Does he recognise that it is similar in structure to what happened at Stanford in the United States from the 1960s onwards, where the cheap start-up costs for IT firms led to the creation of Google and many other world-beating companies?

[Eric Ollerenshaw]

I thank my hon. Friend for that intervention. My suggestion is a hybrid scheme for which universities could bid. As part of a technology strategy, the universities could make some money out of the start-up companies through joint ventures with them, which could then be reinvested. I believe that it would cost the taxpayer less in the long run if we just let such zones happen.

To use Lancaster as an example, I can think of two or three innovative businesses on campus that are struggling to find extra funds, but that had to start paying taxes straight away. Just a little bit extra would allow them to move. By the nature of a university campus, the businesses will not be there for ever. By definition, they will have to move on and there will be a swifter turnover.

To put it simply, let 100 university zones bloom. The hon. Member for Blaydon is not in his place, but he would have liked that phrase. There is potential for growth and for new jobs. This could apply to most universities. It would be a simple thing to do, provided that we could get it through the Treasury mandarin.

Jobs and Growth

Eric Ollerenshaw Excerpts

Wednesday 12th October 2011 Commons Chamber

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

I am pleased to speak at this late stage and it is a joy to follow a Welshman who spoke, in all his eloquence, about unemployment. I should like to let him know that Government Members understand the devastation that a single extra person becoming unemployed can cause to families. Many Government Members have been through that, but the problem for us in voting for the motion is this: how can we go back to our electorate and say that we voted for a motion that talks about “sustainable” deficit reduction without mentioning any figures or its implications? The motion talks about “a steadier deficit plan”, but I should have thought that the Chancellor was pretty steady about the deficit reduction plan and that we were pretty steadily behind that plan. At least we are prepared to say where it is and what the figures are.

The Opposition talk about a credible strategy for growth. In some senses, I want to follow the hon. Member for Bassetlaw (John Mann) and others who have tried to introduce a degree of practicality into the debate and provide some suggestions about dealing with the difficulties we are facing. Let me outline my problems with the five-point plan for growth. I will not be churlish by suggesting that it is only five points and not six. There had to be only five points on those little cards that we used to have at election time, because six or seven was too many.

Let us look at the detail of the five-point plan. We can see that Opposition Front Benchers have moved somewhat on the VAT issue and are now talking about a temporary cut. I have always thought, in terms of economics, that temporary proposals sound a bit suspicious both to me and to my voters as we do not think that they will have any real impact.

This Government are acting to promote long-standing infrastructure growth, as other hon. Members, such as my hon. Friends the Members for South West Norfolk (Elizabeth Truss) and for West Suffolk (Matthew Hancock), have said. They pointed to the dualling of the A11 and I shall point to the M6 Lancaster-Heysham link in Lancashire, which has been on the stocks since 1948. It has taken this coalition Government to put money into that, but it is actually happening.

The proposal for a one-year national tax break for small firms taking on extra workers seems suspiciously like the coalition’s proposal for a national insurance holiday for new companies, except those in the south-east and the east, for up to 10 workers. That is where Opposition Front Benchers have missed a trick because nothing in their proposal would help us regionally in the north. At least the coalition Government have recognised the mistakes of the previous Government in that London and the south-east did not need an extra regional development agency or the other additions. This is about the balance between the north and the south, but the Opposition’s proposal completely ignores that and wipes it away. That is a mistake.

The Opposition are following along the right lines of our proposals, but their proposals are a mistake. That is why I want to get to the bottom of the five-point plan, which does not help what the right hon. Member for Edinburgh South West (Mr Darling) and Government Members have said is the key to this issue—small business. In my constituency, every two weeks I see a small business that has the potential for orders, and that needs that an extra shed or machine to meet those orders, or that could take on an extra few people, but cannot get the capital. The Federation of Small Businesses has said that 30% of small businesses are in that position—they are missing out on capturing growth because of a lack of capital investment. That is why I welcome the coalition’s plan for credit easing in the autumn statement. That is vital.

I welcome the decision to give Lancashire an enterprise zone. The problem with enterprise zones in the past was the relocation of existing businesses. I have a suggestion for the Government: I do not see why we do not declare every university campus an enterprise zone. Overnight it would create what we are supposed to be helping to create: new-scale business.

There is a need out there. There are businesses with orders, but we need the credibility that the Government have given to the finances. I look forward to the autumn statement, and to building on what I believe is a sustainable amount of growth, and sustainable support for small business.

Oral Answers to Questions

Eric Ollerenshaw Excerpts

Tuesday 21st June 2011 Commons Chamber

[Danny Alexander]

My hon. Friend is absolutely right. We have to stick to the deficit reduction programme, which is the essential underpinning for future economic growth in this country. We also need to take steps to ensure that that economic growth is balanced across the country, and the regional growth fund and the local enterprise partnership programme are an important part of ensuring that we have growth across the entire United Kingdom.

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

12. What recent assessment he has made of the rate of job creation in the private sector.

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

Last week, the Office for National Statistics published private sector employment numbers for the first quarter of 2011. They showed that private sector employment has risen for five consecutive quarters by 560,000 in total. That is the largest increase recorded over five consecutive quarters since the ONS started to publish the quarterly series of private sector employment in 1999.

[Eric Ollerenshaw]

I welcome those figures, but—like other Members—I constantly meet in Lancaster and Fleetwood small and medium-sized enterprises that have orders and could take on new staff and deal with the unemployment situation, but are being frustrated by the banks. What further support can the Minister offer to those much-needed engines of private sector growth?

[Mr Hoban]

That is why we introduced Project Merlin. We have also taken other measures to encourage funding for small businesses. The banks have set up the business growth fund, which can invest capital in medium-sized businesses to help them grow. We have approved arrangements for business angels to invest more in small and medium-sized businesses. These are the measures we need to take to introduce a range of available finance so that small businesses and private sector employment can continue to grow.

Amendment of the Law

Eric Ollerenshaw Excerpts

Monday 28th March 2011 Commons Chamber

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

I am grateful to follow the hon. Member for Newcastle upon Tyne Central (Chi Onwurah), who was trying to make some positive comments about regulation, as was the hon. Member for Sheffield South East (Mr Betts), who spoke previously. Unfortunately, however, what we have heard from the majority of Opposition Members is this line about how we are cutting too far, too fast. It would really help their presentation to the country, including my electorate—or at least their presentation to us—if they said which cuts they would be prepared to tolerate, because to my electors their position just sounds bogus and false. The Opposition have lost the argument about how we got into this problem, but it would be really useful in the argument about how far we cut to know their position. I can say from my attendance in the Chamber that they have opposed every one of the Government’s proposed cuts. We would therefore love to hear one or two suggestions from the Opposition about where they would be by now.

Like most Members, I suppose, I spent the weekend trying to find out what constituents really feel about this Budget, on the political proviso that we should be careful on the first day, and then see how it sinks in on the following days. We are now five days in, and if I can sum up the general view by quoting one of my electors, he said of the Chancellor—in true Lancashire fashion, of course—that he did not think that the lad had done too badly, given the poor hand that he had been dealt. I have found that to be pretty much the general impression.

As for growth, my hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi) is absolutely right. Indeed, the north and western Lancashire chamber of commerce has said:

“Overall there is a lot in this Budget for Business,”

and specifically mentioned the corporation tax reduction and cuts in fuel duty. From the workings-out that I have seen, the Federation of Small Businesses gives the Chancellor eight and a half out of 10, welcoming the measures on fuel duty, the fair fuel stabiliser, apprenticeships, deregulation, enterprise zones and small business rate relief, and the doubling of entrepreneurs’ relief and the increase in the R and D tax credit for SMEs.

In the few minutes remaining, I want to pick up on something that my hon. Friend the Economic Secretary said last week when she talked about regional imbalances. Anyone who goes to the Fleetwood end of my constituency and asks people there what their view is of economic policy over the last 13 years, would simply be told that Fleetwood had been forgotten—a port now without a ferry service; a train line without a train on it. Yet behind all that—to return to the point made by the hon. Member for Newcastle upon Tyne Central—all that small businesses talk about are the regulations that prevent them from taking on more people. I have food processors in my constituency that export all over the world, but they are trapped by regulation. They want to take on more apprentices, and they hope that something will come from the measures in the Budget.

The interesting thing about Labour policy on the regional imbalance over the last 18 years is this. The Office for National Statistics uses a measurement called gross value added, which measures the contribution to the economy of each individual producer, industry and sector. It showed that there was decline in the north every year for the past 13 years as growth in London and the south-east increased. Lancashire’s rate of decline was twice that of the whole of the north over the past 13 years. The figures are consistent for every single year.

What has gone wrong? My right hon. Friend the Secretary of State for Communities and Local Government has suggested that the regional development agencies were not working, and I support that view. I sat on the board of the London Development Agency for four years. I have to be careful what I say, because I see my hon. Friend the Member for Ealing Central and Acton (Angie Bray) in the Chamber, and she was instrumental in getting me on to that board as the lone Conservative. But why did London need such an agency in the first place? It had all the bureaucracy and office-led systems of any other development agency. It also claimed that every person employed across the whole of London was employed as a result of its actions. I could never quite make that connection, because I thought that perhaps the City of London Corporation and the development in the docklands might also have had something to do with people coming to London.

There is a general view in my part of the world that people in London think that the north-west begins and ends with Greater Manchester and Merseyside. I am therefore not surprised that each of those areas is to have one of the new enterprise zones, but I hope that Ministers are listening and will perhaps decide that there will be room for one of the 21 zones announced in the Budget in part of Lancashire.

During my four years on the board of the London Development Agency, I learned that, while it is possible to spend money on all kinds training schemes, as the Opposition have proposed, infrastructure is the key. This Government have made a commitment to major transport improvements. I also hope that the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Bromley and Chislehurst (Robert Neill) will look into the proposal in the Liberal manifesto for regional stock exchanges. Given the problems with banks and investment, they might encourage greater investment by local people in local businesses. The Chancellor should look into that. A great practical step forward would be the announcement of a Lancashire-wide stock exchange based in Lancaster.

Oral Answers to Questions

Eric Ollerenshaw Excerpts

Tuesday 13th July 2010 Commons Chamber

The Chancellor of the Exchequer was asked—

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

1. What steps he plans to take to support economic growth in the north-west.

[Andrew Stephenson (Pendle) (Con)]

14. What steps he plans to take to support economic growth in the north-west.

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

I am delighted to have the opportunity to answer these questions on behalf of the Chancellor, who is at the ECOFIN meeting today.

In order to support private sector enterprise throughout the UK and ensure that all parts of the country, including the north-west, benefit from sustainable economic growth, the Government announced a number of measures in the Budget, such as using the national insurance system to encourage the creation of new businesses and establishing a £1 billion regional growth fund. Later in the summer we will publish a White Paper on a new approach to sub-national growth, including local enterprise partnerships, local incentives and more powers for major cities.

[Eric Ollerenshaw]

I thank my right hon. Friend for that detailed answer. My question relates to the abolition of the Northwest Regional Development Agency. Does he agree with the comments of Councillor Peter Gibson, leader of the excellent Wyre borough council in my constituency, who said last week that its abolition will give us the potential to relieve the bureaucracy on the backs of local authorities and businesses and the potential for a fairer distribution of resources throughout Lancashire?

[Danny Alexander]

I am very grateful for that question. It is precisely because of such concerns that we have chosen to establish local economic partnerships. The Secretaries of State for Communities and Local Government and for Business, Innovation and Skills jointly wrote to local authorities inviting submissions for the establishment of those new bodies, which will be partnerships between local authorities and local businesses. That is the right way to promote economic growth in localities.