Budget Resolutions and Economic Situation

George Eustice Excerpts

Friday 23rd March 2012 Commons Chamber

[George Eustice (Camborne and Redruth) (Con)]

I welcome in particular the Budget’s emphasis on business and enterprise, because we have to be clear that there are no short cuts out of the financial mess left by the previous Government. We need new businesses to set up, and existing businesses to expand and export more products, in order to create the jobs of the future.

The hon. Member for Clwyd South (Susan Elan Jones) said that there are no jobs for public sector people to go to, and that those who have been in the public sector cannot get jobs in the private sector, but we need those public sector employees to set up their own businesses, because I see a lot of talent in the public sector workers whom I meet in Cornwall. Many have experience of managing large projects, managing large teams of people, planning ahead and dealing with the public. They have many of the skills that they need to set up their own business and to create jobs for other people if they only had the confidence to do so.

I should also like to discuss the importance of supporting young people in setting up in business. I remember talking about 10 years ago to a businessman who said, “There is never a better time to start to run your own business than when you are young, when you have just left university. You should never put it off and think, ‘Well I will start up my own business later in life’; you should get on with it early.” It is therefore particularly important that we encourage enterprise at schools and get schools to engage in the various existing entrepreneurship schemes.

The announcement in the Budget to develop the idea of enterprise loans was particularly welcome, as it builds on the good work that the Government have already started with the enterprise allowances to help small businesses to set up.

Before the Budget I visited a large manufacturer in my constituency, or as large as they come in my constituency, called Teagle Machinery, based just outside Redruth. It is a fantastic success story in Cornwall: more than half of everything it produces is exported; the number of its employees has more than doubled over the past 10 years; it is winning orders in markets from Japan through to eastern Europe; and it is even now attempting to break into the market in Russia. It is an extraordinary success story, almost like Cornwall’s answer to JCB and proof that this country can still do traditional, high-quality manufacturing and engineering, and that we can be world beaters in that sector.

There are several measures in the Budget that companies such as Teagle in my constituency will welcome. There is the reduction in corporation tax, which my hon. Friend the Member for Wyre Forest (Mark Garnier) touched on. It is important that we have a business-friendly tax system here and encourage businesses that want to invest in Europe to choose the UK, and the reduction to 24% and the further planned reductions to 22% by 2014 will be incredibly welcome.

The planned national loan guarantee scheme will be a major support for smaller businesses. We all have many businesses coming to us saying that they have difficulty accessing finance at the moment, and that scheme will bring into the market £20 billion of funding that will be affordable for small businesses and give lenders the safeguards they need to make the money available. That, too, is going to be incredibly welcome.

I particularly welcome also the efforts being made to increase export finance and the funding available for it, because Teagle specifically raised that issue with me. It gets some support from UK Trade and Investment to take part in trade fairs, but it would like to do more, and this country is quite successful with exports at the moment. In the past year, our exports to India have risen by 30% and to China by 15%, and our overall exports during the past couple of years have risen by 30%. We have to build on that, because it is through exports, manufacturing and creating wealth that we will get our economy back on its feet.

The Secretary of State for Transport touched on many transport issues, and the Government’s decision to maintain investment in infrastructure is especially welcome. In my area, in particular, there is a new link between Camborne and Redruth, which will unlock the potential of derelict mining land and create 6,000 new jobs over the next 20 years, half of them in the next five years. Projects like that will also help to get our businesses back on their feet and moving forward again.

A speech about Cornwall would be incomplete if it did not touch on fuel tax. I have argued consistently, and continue to do so, that fuel tax can be a regressive tax and that it hits peripheral areas particularly hard because their products have to be transported much further. What the Government have done so far on that is particularly welcome. We must remember, as my hon. Friend the Member for Dover (Charlie Elphicke) pointed out, that fuel tax is currently 10p lower than it would have been under the Labour party’s plans, which is very welcome. I am particularly encouraged to see what has been done to take forward the idea of a fuel price stabiliser and the pilots that have continued to be rolled out in rural areas with the rural rebate, which is particularly important to areas like Cornwall.

Finally, I want to talk a little about the tax thresholds, because the increase in the threshold to £9,200 a year is a major boost to areas such as Cornwall where a large number of people are on low incomes. It will take more than 20,000 people in Cornwall out of tax altogether and 24 million people across the country will benefit. There has been some discussion about the genesis of the proposal and which party came up with the idea first. My hon. Friend the Member for Peterborough (Mr Jackson) touched on that, but I can vouch for the fact that in 2004, when I was working on policy ideas in the Conservative party, it was in fact Lord Saatchi who strongly pushed the idea of having a £10,000 threshold and taking people out of tax altogether. It is a Conservative proposal and always has been, and I am delighted that our Liberal Democrat colleagues have come around to our way of thinking.