Oral Answers to Questions

George Freeman Excerpts

Tuesday 28th January 2014 Commons Chamber

The Chancellor of the Exchequer was asked—

[George Freeman (Mid Norfolk) (Con)]

1. What fiscal steps the Government are taking to support women who want to set up businesses.

[The Chancellor of the Exchequer (Mr George Osborne)]

The most important thing that we can do to support women in business is supporting the economy to grow. Today’s gross domestic product figures show that our economy grew by 0.7% in the last quarter, bringing four-quarter growth up to 2.8%. I am sure that that news will be welcome across the House. These numbers are a boost for the economic security of hard-working people. Growth is broadly based, with manufacturing growing fastest of all. It is more evidence that our long-term economic plan is working, but the job is not done, and it is clear that the biggest risk now to the recovery would be to abandon the plan that is delivering jobs and a brighter economic future.

[George Freeman]

May I congratulate the Chancellor on the appointment of Karren Brady as small business ambassador? Does he agree that our record of 500,000 new businesses started last year, bringing the total to 880,000 now run by women, and accelerating economic growth to 2.8% a year demonstrate that our long-term economic plan for an entrepreneurial recovery is working in the face of the pessimism and bankrupt business credibility of the Opposition?

[Mr Osborne]

My hon. Friend is right to draw attention to the remarkable success story of many women entrepreneurs. Karren is a role model for many of them, and she is helping with a mentoring programme to encourage more women to set up their own business and become entrepreneurs. It is all part of the picture where we now have a record number of women in work, and our proposals to bring in tax-free child care next year will help as well.

Autumn Statement

George Freeman Excerpts

Thursday 5th December 2013 Commons Chamber

[Mr Osborne]

We want a balanced recovery, as the hon. Gentleman says, and if we look at recent GDP data, the good news is that we have growth in manufacturing, construction and services. The forecast is for business investment and exports to increase, but I agree that those remain challenges, particularly because of what has happened to the source of 50% of our exports—the European continent. That is why the Prime Minister’s trade mission and the expansion I announced today of the export finance guarantee scheme will help Britain’s companies go out to emerging markets and ensure that we are connected to some of the fastest-growing parts of the world.

[George Freeman (Mid Norfolk) (Con)]

I welcome the statement and the news that despite the OBR’s calculation that the recession bequeathed to us by the previous Government represented a shocking 7.2% destruction of wealth—the sharpest fall in income since the war—there has in fact been no double dip, and the UK is now the fastest-growing economy in the west. I particularly welcome the creation of three jobs for every one lost in the public sector, the workfare proposals to tackle those not in education, employment or training, and the relief for pensioners and motorists, which will be warmly welcomed in Norfolk. Is not the truth that the tough decisions taken by the Government, and the hard work of the British people in paying off the debts they were left, mean that we are building a sustainable recovery, and that the Opposition’s economic policy has been proven to be—balls?

[Mr Osborne]

I agree with my hon. Friend which, of course, is not very difficult because that is now the general conclusion. Indeed, I have just heard that a source in the office of the Leader of the Opposition says:

“Labour has a very strong economic argument to make. Unfortunately it was not made well in the Chamber today.”

I agree with my hon. Friend about growth in Norfolk and across East Anglia, and there is real commitment to science, which I know is a particular passion of his. As detailed in the document, we intend to set out next year a long-term science strategy so that we can get right the investments in technologies and discoveries that will transform our world.

Oral Answers to Questions

George Freeman Excerpts

Tuesday 5th November 2013 Commons Chamber

[Danny Alexander]

I certainly accept that there is a great deal more that we have to do to get people off benefit and into work, but if the hon. Lady looks at the work experience programme within the Youth Contract, she will see that it is having a significant effect on the number of young people getting off benefit and into work, and at one 20th of the cost of the future jobs fund, which I think is good value for money.

[George Freeman (Mid Norfolk) (Con)]

Is not the single most important measure we can take to tackle youth unemployment the creation of jobs? I therefore welcome the creation of over 1.5 million new jobs and 600,000 new apprenticeships and the news that last year this country had more small businesses than ever before. Does that not show that we have a Government who are seriously tackling youth unemployment, after it rose for 13 years?

[Danny Alexander]

My hon. Friend is right. In fact, there are now more people in work, including more women, than ever before in our country’s history, and there are now more households in which someone works than in any year under the previous Government. There is a lot more to do, but that is a record to be proud of.

Interest Rate Swap Derivatives

George Freeman Excerpts

Thursday 24th October 2013 Commons Chamber

[George Freeman (Mid Norfolk) (Con)]

I am grateful for the opportunity to speak in this important debate, and I want to add my name to those of other colleagues in paying tribute to my hon. Friend the Member for Aberconwy (Guto Bebb) for his leadership and to the Bully-Banks campaign. I commend my hon. Friend the Member for Wyre Forest (Mark Garnier) for enlightening us all on how these mechanisms work, and I am grateful for the work of the all-party group, of which I am happy to be a member.

I want to speak about the context in which we need to view this issue, based on my own experience. I believe that this is the end of a banking boom-and-bust and bail-out, which speaks volumes about the role of banking in the economic crisis that we face. On the basis of my previous career in small businesses in East Anglia, it seems to me that the big bang, along with all the many good things, triggered a major cultural and financial neglect of the real bread and butter economy on the ground. Over the last 15 or 20 years, Norfolk has certainly seen a wave of bank closures, a “computer says no” culture, and a neglect and undermining of what was traditionally viewed as the backbone of our local economy, but what became in recent years, particularly under the last Government, rather unfashionable and, dare I say it, boring for the bankers of today.

Norfolk now sits on the cusp of a major economic renaissance—in life sciences, in engineering and in energy. I thank the Government for investing in the infrastructure but in that sector the banks have largely been irrelevant, in my experience, to such early-stage companies because they are too risky. Those companies usually rely on venture finance from angels, and corporate venturing from customers.

We thus need to ask ourselves some big questions about the banks’ role as our economy goes forward. Of course the banks play a crucial part. America has 20,000 banks and a new one is started nearly every week, and I believe that our banking sector and our financial services sector is one of our greatest and most innovative sectors. We sometimes talk about the City as if it comprised just four or five big banks; in fact, it is a fabulous crucible of financial innovation that should be celebrated and encouraged. The problem lies with the few big banks at the top that were bailed out by the last Government in such a way as to see them sitting on too many real businesses in the real economy that we need to grow and support.

I am going to speak about three of my constituents who have suffered as a result of the problem we are debating. Mr Andy Keats is a local entrepreneur who built up a number of companies—in this case, a successful 13-year-old company with 30 local employees, which is about to be sold for £3.5 million. When Mr Keats decided that he wanted to move his banking from RBS to Barclays, RBS stopped passing on the sales income from credit and debit card sales in the business. The business went insolvent within six weeks, and for the last four years, he has had to deal with RBS and NatWest and has had to face a series of major issues and challenges, to which I have been party. I have seen at first hand banks not responding and when they do, ignoring previous communications, and passing on debts to debt collection companies.

[Andrew Bridgen]

Does my hon. Friend agree that one explanation for the banks’ lack of enthusiasm to get on and pay out compensation is that if businesses that have gone bankrupt have no access to the redress scheme, there is no incentive for the banks to grasp this nettle, so the Government need to do something to force their hand?

[George Freeman]

My hon. Friend makes an excellent point for which I am very grateful.

Mr Keats has also pointed out that the solicitors acting on behalf of the bank sometimes take court action without serving necessary notice.

I cannot name the second constituent because, like so many in these circumstances, he wishes to remain anonymous. He is a leading local business man and something of a pillar of the community. His business was pushed into accepting interest rate derivative products by unscrupulous bank salesmen. He has filed legal action against his bank so that the statute of limitations does not time out on his claim, which is a very real threat.

The third constituent is Paul Adcock, the managing director of Adcock’s of Watton, a great family business on the high street of a great Norfolk town. He was one of the first campaigners to make a complaint and a key leading light in the Bully-Banks campaign. I want to pass on my thanks, on behalf of my constituent, to my hon. Friend the Member for Aberconwy because the campaign has been a huge help to him. Adcock’s, a major local business and a pillar of the local establishment, racked up £175,000-worth of unscheduled charges. In September this year, Barclays finally settled. I want to put on record my constituent’s thanks for doing so.

This is not just a local issue. It is an enormous issue that runs across our economy. The numbers are eye-watering. The Bully-Banks campaign has estimated that this mis-selling scandal has cost small businesses more than 400,000 jobs in our economy, with £1.7 billion a year lost to the Treasury. It has led directly to the loss of 162,000 jobs, and to the inability of SMEs to create 251,000 jobs that they would have been able to create otherwise. More than 30,000 small businesses still face long delays, and fewer than 7% of claims being considered by Royal Bank of Scotland had reached the redress stage by the end of the month, while nearly five times as many—32%—had reached that stage at Barclays. Just 2% of those whose cases have been deemed eligible for review have accepted offers of redress. The banks have, I believe, set aside £3 billion for redress purposes, and less than £2 billion has been paid to just 32 businesses so far.

We need a speedy and fair process for redress and compensation. I urge the Minister to use all the mechanisms at his disposal to encourage the FCA to accelerate its handling of claims, to ensure that the banks are not allowed to kick them down the road, to separate direct and consequential losses, and to ensure that the settlements are fair. We must be careful not to define consequential losses in such a way as to undermine the potential for future SMEs to raise funds from the banks.

We are lucky enough to have a Minister with a glittering career in finance and small business behind him, and, I do not doubt, a glittering career in politics ahead of him. Our group could not have a more doughty and outspoken campaigner and supporter of our cause on the Front Bench. I urge him to bring to this issue the skill that he has brought to other issues with which he has dealt, and to ensure that it is viewed in the context of the wider banking crisis, whose resolution will enable our economy to recover properly.

Air Passenger Duty

George Freeman Excerpts

Wednesday 23rd October 2013 Commons Chamber

[George Freeman (Mid Norfolk) (Con)]

It is a pleasure to follow the hon. Member for South Down (Ms Ritchie) and her colleague the hon. Member for East Antrim (Sammy Wilson). I welcome the new Economic Secretary to the Front Bench; I have no doubt that she will be a huge asset to the Government and the House.

I declare a slight interest, as I have cousins in Northern Ireland and, in my prior career, I spent far too many hours on internal flights, particularly to Scotland. Like many, I have enjoyed city breaks with my family; I shall spare the House the details of our recent trip to Amsterdam.

The democratisation of air travel in recent years has been a force for good, opening up to millions of families opportunities previously denied them. Millions more people are enjoying the thrill and experience of easy air travel and all that it opens up. Air travel does, of course, have a high carbon footprint, but just as the air industry has achieved stunning breakthroughs in safety through the extraordinary application of private sector expertise, investment, innovation and science, I have no doubt that it will be a force in demonstrating potential for energy-efficient air travel as well.

My principal reason for speaking this afternoon is to discuss the business of air travel and the role of air travel in business and in the economic predicament faced by this country. We are rightly—I commend the Government for it—putting an emphasis on the rebalanced economy and unlocking the power of our regions and cities to drive a new model of innovation-led growth, and air travel is an important part of that.

However, let us turn to the charge sheet that the House is presented with this afternoon and the motion, which calls for air passenger duty to be scrapped. The first charge is that it is a green tax, but, as the hon. Member for East Antrim said, it was not introduced and justified on that basis. However, he explained that even if it were, that would be no reason for not getting rid of it. This country, the western world and the whole world face a challenge in increasing energy efficiency and reducing the carbon footprint. Although that would not be a reason for introducing APD, it is worth bearing it in mind that we need to send a signal that rail travel, car-sharing and other forms of energy-efficient transport are to be encouraged.

The second charge is that the tax is regressive. The data in the ONS publication “The Effects of Taxes and Benefits on Household Income, 2011/12”, which I commend to colleagues, make it clear that it is not regressive; in fact, it is no more so than VAT. I think we would all love to get rid of that too—certainly colleagues in the House today would love it; we would like to get rid of most taxes—but we are not in a position where we can afford that luxury.

The third charge, interestingly, is that the tax is disproportionate. In fact, the Government have limited the rise in APD to inflation in the period 2010-11 to 2013-14, and in this year’s Budget they ensured that the rate will remain constant in real terms. This afternoon I looked online and found an air ticket to Berlin for £80, £13 of which is APD. That does not seem to be a prohibitive level of tax that will put people off.

[Andrew Bridgen (North West Leicestershire) (Con)]

Does my hon. Friend share my sentiment that it is good to be on the Benches of a Government who realise the need for tax competition? We realise the need for competitive corporation tax rates and income tax rates; surely APD is a tax and we need to be competitive on that too. We have the highest APD in Europe. Of the 27 countries in the European Union, only six charge APD, and the Republic of Ireland is going to reduce it to zero in April next year. Should my hon. Friend not bear it in mind that we need to compete?

[George Freeman]

My hon. Friend makes a good point. He must have spotted my notes, because my very next point is that we need to view this in the wider context of business and tax competitiveness. I hugely welcome the fact that the Government have committed to reduce corporation tax from 28% to 23% and, in due course, to 20%, meaning we are constantly cited as one of the top three in the G8 on tax competitiveness, as stated in the 2012 KPMG global survey. That is a strong signal to global businesses that we are open for business, and it supports my hon. Friend’s point that we need to view this in the context of wider support for businesses and tax competitiveness.

The fourth charge is that the tax is bad for Northern Ireland. In this respect, I have some sympathy with the case made by colleagues from the Province. The fact that the Republic has cut APD creates a particularly difficult situation in Northern Ireland. The Minister said, encouragingly, that the Northern Ireland economy is not showing signs of suffering as a result, with very high growth and new jobs being created. That is a testament to the creativity and entrepreneurialism of the people of Northern Ireland. The changes made to the tax in November 2011, which reduced long-haul rates to the same as those for short-haul, and the devolution of the matter to the Assembly are important and welcome measures. However, I have a lot of sympathy with the argument that locally, given the situation in the Republic, there is a particular problem that the Government will need to look at.

The truth—an inconvenient truth, to borrow a phrase—consists of three points. As a generation, a Parliament and a Government, we face, and have to deal with, the most massive crisis in our public finances. We inherited from the previous Government £1.2 trillion of debt—£5,000 for every man, woman and child in the country. Debt interest alone is now the fourth biggest item of Government expenditure, and it is set to rise, if the coalition has not acted, to £76 billion a year in interest payments. We have a structural crisis in the public finances—in pensions, in welfare, in health and in debt interest.

Despite the very best efforts of the Government to contain the crisis and make sure that they do not trigger a downward spiral in public confidence in the economy, we still face a huge challenge to restore our public finances. We do not have money to spare. There is no such thing as a free tax cut; the closest thing is a tax cut on wealth creation. That is why I support the steps that the Treasury has taken on corporation tax to put in place a competitive tax environment for our businesses and why, in particular, I support a new deal for start-up businesses—the people who are at the coal face of creating new jobs. The truth is that APD is not a tax on business creation; it is a tax on air travel, which is not the same thing.

Finally, this tax raises £2.8 billion a year, and that figure is set to rise to £3.8 billion in 2016. That is a significant amount of money. Interestingly, it is nearly the same amount as that which the Government have given away in a fuel duty cut, which has caused huge reductions in income at the Exchequer and has a relatively low impact on people’s pockets. Abolishing APD would have a small impact on GDP and hard-working families, but it would lead to a major £4 billion cut in our deficit credibility. I hope Ministers resist it.

Oral Answers to Questions

George Freeman Excerpts

Tuesday 10th September 2013 Commons Chamber

[Sajid Javid]

The hon. Lady knows all about unemployment, because she is probably thinking about the record rise in unemployment that took place in her constituency during the last term of the Labour Government. That record rise included men and women. In all categories it has fallen under this Government, and today more people, including more women, are employed in Britain than at any time in our history.

[George Freeman (Mid Norfolk) (Con)]

Does my hon. Friend agree that the single most important contribution to household earnings is having a job? Has he seen the latest data that show that the claimant count is now lower than in May 2010, that there are 500,000 vacancies, and that five jobs are being created in the private sector for every one lost in the public sector, leading the ManpowerGroup to say that this is a “game-changing year” for the UK jobs market? Is it not the truth that plan A is working and plan B is redundant?

[Sajid Javid]

As always, my hon. Friend speaks the truth very eloquently. The economy is growing. Of course there is a lot more work to do, but there is plenty of evidence that we have turned a corner.

Investing in Britain’s Future

George Freeman Excerpts

Thursday 27th June 2013 Commons Chamber

[Danny Alexander]

The OBR will publish a new growth forecast at the time of the autumn statement. At the Budget this year we allocated an additional £3 billion of capital in 2015-16 and for the remaining years of the decade, and the announcements today are partly about how we will use that money.

[George Freeman (Mid Norfolk) (Con)]

I welcome this major package of investment, which contrasts with the record of gridlock under the previous Government. I particularly welcome the investment in science and research and development infrastructure, the investment in broadband for the rural economy, and the A14, which will help to unlock Britain’s fastest-growing city, Cambridge. With respect to the eastern region, may I ask that priority be given to the A47, which is a strategic artery linking east-west and linking the offshore energy cluster and the life science cluster with Cambridge? What reassurance can my right hon. Friend give us that in this £28 billion roads package, the A47 may yet be able to receive funding?

[Danny Alexander]

I am grateful for the welcome and I will certainly pass on the point about the A47 to the Secretary of State for Transport.

Oral Answers to Questions

George Freeman Excerpts

Tuesday 25th June 2013 Commons Chamber

[Sheryll Murray (South East Cornwall) (Con)]

3. What recent fiscal steps he has taken to support small businesses.

[George Freeman (Mid Norfolk) (Con)]

8. What recent fiscal steps he has taken to support small businesses.

--- Later in debate ---

[Mr Osborne]

I thank my hon. Friend for her work on the Finance Bill, which she put huge effort into. I know she is passionate about her constituents and the businesses of Cornwall. The Department for Environment, Food and Rural Affairs has already given £7 million in rural development grants to her constituency. She has raised some specific cases; a company that makes Cornish Blue has been waiting for what I think is an unacceptable period for an answer from another Government Department about a grant. I will personally look into this matter and see if we can speed the award.

[George Freeman]

In the £50 billion UK life science industry, the Chancellor’s support for the patent box, the research and development tax credits and a globally competitive corporation tax rate are helping to secure global companies here, as evidenced by Johnson & Johnson’s recent announcement of a global innovation centre here in the UK. Does he also agree that we need to support insurgent small and medium-sized enterprises emerging into the sector? I would like to highlight the role of the biomedical catalyst fund in securing over 50 projects for the UK and £1 billion in venture capital funding.

[Mr Osborne]

My hon. Friend’s knowledge in this area is well known, and he has applied it as a Member of Parliament to promoting schemes that help the life sciences industry—and not just the big companies, although we welcome the Johnson & Johnson announcement, but the small companies, too. The biomedical catalyst fund has been very successful at supporting small businesses in this sector. Without giving too much away about tomorrow’s announcements, I can tell him that we will go on funding this scheme.

Oral Answers to Questions

George Freeman Excerpts

Tuesday 14th May 2013 Commons Chamber

[Sajid Javid]

In the last decade of the previous Government, youth unemployment rocketed by more than 70%, so the hon. Lady is in no position to lecture this Government on jobs. In three years, 1.25 million private sector jobs have been created, more people are now employed in the private sector than at any other time in our history and we had a faster rate of job growth last year than the rest of the G7.

[George Freeman (Mid Norfolk) (Con)]

I congratulate the Government on having created six private sector jobs for every public sector job loss. Has the Minister seen the latest news from the CBI, which this week shows trend growth for this year running at 1.8%, and has he seen this quote from the CBI’s director of economics:

“We continue to expect UK economic growth to strengthen and become more broad-based over this year and next”?

[Sajid Javid]

I have seen the report to which my hon. Friend refers. I have also seen similar reports—for example, from the National Institute of Economic and Social Research—which also show encouraging signs. Together, all those reports show that this Government’s policies are working.

--- Later in debate ---

[Greg Clark]

The first requirement is to assess the risk that the hon. Lady has described, and it is for the Bank of England to consider the systemic consequences. Should the Financial Policy Committee of the Bank of England conclude that investment in high-carbon assets poses a risk, it would have to report and explain that risk in its financial stability report.

[George Freeman (Mid Norfolk) (Con)]

Our banking sector is suffering the consequences of a state-sponsored boom in bad loans under the last Government. Has the Minister seen the news of the Co-op’s bad debts, including to the Labour party, and noted the withdrawal of Labour party funding from Lord Sainsbury? Does he agree that nothing better exemplifies the risks of Labour’s addiction to borrowing and trade union funding?

[Greg Clark]

I understand that the Co-op has lent more than £3 million to the Labour party. I would assess that as not being a particularly good credit risk; the Labour party has a toxic credit rating, and the experience has been that when it starts to borrow, it never pays the money back.

Budget Resolutions and Economic Situation

George Freeman Excerpts

Thursday 21st March 2013 Commons Chamber

[Ed Balls]

The OBR document is very interesting. It sets out the unusual underspend Department by Department. I do not think that we have yet heard the full truth about what has been going on in the Treasury: the pressure applied in one year to cut spending or to move it to the next year just to fiddle the borrowing figures. I think that we will discover the truth in the coming weeks. For a Government who attack businesses and make late payments to small business, they are the late payment Government.

Has the Chancellor learned nothing over the past 12 months? He used to say that he was sticking to his plan in order to secure the recovery, but then we had the double-dip recession. He used to say that he was sticking to his plan to get the deficit down, but his spending cuts and tax rises have choked off the recovery. As the OBR revealed yesterday, the deficit was basically unchanged last year and will remain unchanged this year and next. Then all he could say was that he had to stick to his plan in order to keep his treasured triple A credit rating, but he has even lost that. The only reason he will not now change course is to avoid his own political humiliation, and that is no reason to stick to a failing plan.

[George Freeman (Mid Norfolk) (Con)]

The right hon. Gentleman alleges that the Government have increased the deficit. I have checked the figures from the Institute for Fiscal Studies and the OBR. Will he confirm that when the Government came to power the deficit was 11.2% of GDP and that it is now 7.4%? Is that a rise?

[Ed Balls]

The Government inherited a deficit reduction plan from the previous Government, but the Chancellor is wildly off track from our plan, which he used to call irresponsible. He is borrowing pretty much a quarter of a trillion pounds more. He said that he would get the deficit down, but the deficit reduction plan has stalled.

I have urged the Chancellor to change course, as in recent months have the International Monetary Fund, The Economist, the Mayor of London, the Business Secretary and the Home Secretary. They have all cast doubt on his plan. But yesterday we got more of the same. How did he describe the Budget? He described it as a “steady-as-she-goes Budget.” Steady as she goes? What kind of ship does he think he is on: the Titanic; the Mary Celeste?

There were some welcome measures. We have consistently called for a tax break for small firms taking on extra workers. The Government are now set to introduce a similar scheme, three years after the shadow Business Secretary and I urged them to. That is a welcome step forward. The Chancellor has finally joined Twitter, five years after I did. Maybe he will find out that his plan is going to fail five years after I worked it out, although by then he will be on the Opposition side of the House.

Yesterday there was no proper plan to kick-start our economy, no bank bonus tax to fund a youth jobs guarantee, no real action to get lending going to small firms, no proper investment in affordable homes and no return of the 10p starting rate to help millions of people, paid for by a mansions tax. Despite the welcome small change of 1p off a pint of beer—buy 320 pints and get one free, which might even be too much for the Foreign Secretary—and even after the increase in the personal allowance, an important point for the Liberal Democrats, families will still be worse off next year compared with this year because of the Chancellor’s tax and benefit changes.

--- Later in debate ---

[Vince Cable]

I answered the hon. Gentleman’s point in Business, Innovation and Skills questions. Some of the increases in capital spending have already taken place. There was a significant increase in the capital outlay on universities, which my colleague the Minister for Universities and Science is seeing through at the moment in the establishment of R and D centres. After the fiasco of further education college building under the previous Government, the current Government are, in a systematic way, restoring the infrastructure of the FE sector.

[George Freeman]

This week, AstraZeneca announced a global restructuring, in which it committed its advanced manufacturing facility to Macclesfield in Cheshire, and moved its global R and D to Cambridge, with £300 million investment and 2,000 employees. The Government have moved quickly to set up a taskforce to help with the changeover of the old site to an incubator. AstraZeneca has congratulated the Government on their life sciences strategy. May I congratulate the Secretary of State and Lord Heseltine, whose birthday is today, on the leadership that the Conservative and Liberal coalition is giving on a modern industrial policy for new businesses?

[Vince Cable]

I accept the hon. Gentleman’s congratulations. Life sciences are a key area. It is a difficult sector, because the business model of pharmaceutical companies is changing—they are taking much of their R and D to spin-off companies rather than having it at their headquarters. That has been painful, but my colleague the Chancellor of the Exchequer intervened to help to make the process in his constituency less painful than it otherwise would have been. However, the decision of that large company to have its headquarters and R and D centre in the UK in East Anglia is a vote of confidence in Britain.

I want to make one more point on the industrial strategy. Apart from supporting successful sectors, we must reinforce those elements of the economy that drive long-term growth—meaning, basically, innovation and skills. That is why I and the Under-Secretary of State for Skills who is responsible for apprenticeships are driving enormous growth in apprenticeships, particularly in key areas such as advanced manufacturing skills. It is also why we must invest significantly in innovation. We have therefore established the chain of catapults, and we have the excellent proposal that my colleague the Chancellor made yesterday for the small business research initiative for small business innovation.

--- Later in debate ---

[David Rutley (Macclesfield) (Con)]

I am sorry to disappoint the House, but I will not be speaking about beer—[Hon. Members: “Oh!] I said I was sorry. I will not be speaking about spirits either, but I will—

[George Freeman]

Lift our spirits!

[David Rutley]

I will indeed lift our spirits. Given the co-operation of my hon. Friend, I will also say a little about life sciences. Let me begin, however, by joining other Government Members in welcoming a Budget which has delivered a positive response that recognises the needs of hard-working people, and which, as others have pointed out, has clearly demonstrated that the doors of British business are firmly open.

It is sometimes wondered whether “To intervene, or not to intervene” is the question when it comes to industrial policy. I believe that in normal free, competitive markets intervention should be minimal, but that, given the burden of regulation that was imposed on the British economy for 13 years by the Labour Government, the question needs to change from whether there should be intervention to how that intervention can take place effectively. For me, the answer to that question is simple: we need to flatten the barriers to growth, which is exactly what Government Members are determined to do.

We need only consider the recent experience of our northern neighbours to see how that can be achieved. Sweden has enjoyed tremendous success since the mid-1990s with an ethos of deregulation across the economy. Estonia had 2,000 enterprises in 1992; by the end of 1994, the figure had ballooned to 70,000. By 2003, an economic basket case with inflation of 1,000% in 1992 had spawned the invention of Skype. There are clear lessons to be learnt from those northern neighbours, the most fundamental being that if industrial policy is to work, there needs to be a broadly “horizontal” approach. That does not mean being laid back, but it does mean having a more laissez-faire confidence in the ability of businesses to identify and satisfy customer demand—as they are best placed to do—and providing the right foundation for enterprise to flourish across the board, rather than backing policies in the sense of picking winners. That is the course the Government have charted, and I am delighted they are sticking to it.

We have an industrial policy with a foundation that encourages enterprise across the board and, in key sectors, focuses on the removal of the roadblocks that prevent growth, rather than the line-by-line, multi-targeting Brownite plan for daily tactical interventions that we have seen in so many parts of the public sector. We want that foundation to consist of low taxes, a high skills base and deregulated, competitive markets, and those are being put in place.

The Government are making good progress. Before the Budget, we were on track to have the lowest corporation tax in the G7; now, as a result of the Budget, we are on track to have the lowest corporation tax in the G20—20%—by 2015. The new £2,000 employment allowance will help to spur growth and build on the Government’s successful record of creating jobs in the private sector: the private sector, not the public sector. In an enterprising constituency such as Macclesfield, where an unusually high proportion of the population are self-employed, reforms like those can tip the balance for sole traders, encouraging them to incorporate themselves in businesses that can grow, and for the self-employed, encouraging them to become regular employers.

Those are positive steps, and the Red Book goes further. It provides an important update on the progress the Government are making with their industrial policy, and demonstrates that they are breaking down barriers in certain sectors of industry and in certain local areas. I welcome the creation of the single local growth fund, which will be devolved to local level through local growth deals.

Some industrial sectors will always have greater prospects for growth than others. The Government’s industrial strategy, announced last autumn, identified 11 broad sectors that the Government want to support, including advanced manufacturing, creative industries and life sciences. That approach is bearing fruit in the case of life sciences. The Government’s “One Year On” review shows that deregulation is helping to reduce the time taken to set up clinical trials from 600 days to a 70-day benchmark. Those are important steps which need to be mirrored in many other sectors.

This week we were given challenging news in AstraZeneca’s restructuring strategy statement. The good news is that, according to its plans, the Macclesfield manufacturing site will be secure, retaining 1,800 jobs which will be safeguarded for years to come. However, AstraZeneca also announced changes in the research and development plant at Alderley Park. The fact that 700 jobs have been safeguarded there is important, but the R and D facilities will move to Cambridge, which has created uncertainty for the employees. I am working with AstraZeneca to ensure that there are plans to provide them with proper careers advice and the support that they need.

The next priority—a vital priority for Alderley Park, for the sub-region, for the north-west and for the UK economy—is to ensure that the site has a vibrant future. The way in which to do that, and the way in which we are committed to doing it, is to provide a bio-science park where other businesses can go to work. We are working with the Government, and I am delighted to say that we have set up a taskforce. Evidence from other sites where the experience has been similar suggests that there will be spin-out operations.

We need to harness that energy, and ensure that we secure money from the regional growth fund on an emergency basis so that we can support this vital part of the UK’s life sciences sector. I am committed to doing that and to working with the Government, and I will knock on every door to make sure we receive the support that is required.

This Budget has been a huge success for British business, and I am sure that it will lead to further successes if we break down barriers, not just in life sciences but in many other sectors.

--- Later in debate ---

[George Freeman (Mid Norfolk) (Con)]

I congratulate the Chancellor and his Treasury team on the work they have done on the historic and disgraceful debt legacy that this generation, this Parliament and this Government are having to deal with. The lack of any apology from Labour in the nearly three years in which I have had the honour to be a Member of this place is deeply shaming—[Interruption.] For the record, the Opposition’s barracking of my point serves simply to highlight their lack of ability to deal with the truth, difficult though it may be.

We are still trying to deal with a legacy of debt that we and future generations inherited from the Labour party—a legacy that hangs over the economy and this country. The Budget has been warmly and widely welcomed by all serious commentators: the International Monetary Fund, the OECD, the Bank of England, the CBI, the Institute of Directors and the British Chambers of Commerce. I urge the Chancellor to stay the course and not to be lured by the siren voices of Opposition Front Benchers calling for more borrowing, or of those calling for borrowing-funded tax cuts.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

Will the hon. Gentleman give way?

[George Freeman]

I will develop my argument a little further, if I may, as time is limited.

We need a credible programme for deficit reduction, a fair burden of taxation and a long-term vision for the British economy, and that is what the Budget delivered. Simon Walker of the Institute of Directors said yesterday:

“We applaud this Budget. The Chancellor has stuck to his guns and held his nerve—which is exactly what we wanted to see. Deficit reduction is not an optional policy, it is an absolute necessity, and he is right to reject the siren calls to abandon it.”

Plan A is right for three central reasons. First, it tackles the appalling structural debt legacy that we were bequeathed by the Opposition. Secondly, it does so in a way that is fair in allocating the burden of taxation that must be paid. Thirdly, it is bold in setting out the platform at the base of an industrial policy for a sustainable economic recovery in which future generations—particularly the current young generation, who will have to deal with the debt crisis—can have confidence.

Let me remind the House, particularly Opposition Front Benchers, of the nature of the debt legacy we inherited. We started with the worst debt to GDP ratio of any country in the western world, worse than that of Greece and other economies that have been put into special measures by the IMF. The annual deficit when we started was running at 11% of GDP and is now 7%—that, for the benefit of Opposition Front Benchers, is a reduction.

In the situation we inherited, the interest on our debts was set to rise, if we had not acted, to £76 billion a year. We were spending £1 on interest for every £4 the Government were spending on public services. The national debt was just short of £1 trillion—roughly £15,000 for every man, woman and child in this country. As 1 trillion is a big number and people are baffled by big numbers, let me try to break it down. If it took 11 days to pay off £1 million, how long would it take to pay off £1 billion? Thirty-two years—[Interruption.] Opposition Members might think that it is funny, but I can assure them I do not, my constituents do not and the young people who will have to claw their way out of the crisis do not. If it takes 11 days to pay off £1 million and 32 years to pay off £1 billion, it takes 32,000 years to pay off £1 trillion at the same rate.

The truth is that we inherited not just an annual deficit but a structural deficit. For the benefit of Opposition Members who are not aware of the difference, the structural deficit is that bit of the Budget which, even when the economy is growing, continues to haemorrhage money. The biggest drivers of our structural deficit are pensions, benefits and the NHS. The IFS pre-Budget briefing yesterday, which was made available to all parties, makes it clear that the structural deficit continues to put a black hole at the heart of our public finances. The IFS forecasts that between 2011 and 2018 we will be spending an extra £5 billion on pensions, £20 billion on benefits and £15 billion on the NHS. That is after the sensible and pragmatic reforms we have introduced. It is a legacy the Opposition should be ashamed of.

Plan A sets out three key ways of dealing with that—tackling the deficit, a fair burden of tax and a sustainable long-term platform for growth. We have cut the deficit by 30%, from 11% of GDP to 7%, although the shadow Chancellor seemed unable this morning to accept that that is indeed a reduction. The IFS has made it clear that under the Labour party’s plan B we would incur £201 billion more debt by 2016-17. Who on earth could think that borrowing another £200 billion, given that legacy, is the answer?

On the second part of plan A, the fairness of the burden of taxation, the Opposition have been scaremongering about it and need to understand it. First, the Chancellor has decided, rightly, to pay off 80% of the debt through public spending reductions and 20% through taxation. The burden of taxation is powerfully shifted towards those with the broadest shoulders. I remind the House that 1% of taxpayers in this country pay 25% of all tax, and 50% of our income tax is paid by the top 20%. We have taken 2 million people out of tax altogether. The £130 billion funding to help new homeowners is the largest package of support—far larger than anything the Opposition were asking for. The £6 billion relief on fuel duty is a massive support for hard-working families, and coming from a rural constituency I particularly welcome its effect on the rural economy. The beer duty measure, too, is a substantial one for rural communities where pubs are at the very heart of rural life; substantial help is also being provided with child care.

This is a Budget to help the working poor. Taken alongside the universal credit and the welfare reforms, it will have a substantial impact on those who are striving to get on. In the remaining seconds, I want to pay tribute to the Government’s work in laying the foundations for a sustainable economic recovery. We cannot borrow our way out of this crisis. We will have to trade our way out.

[Richard Fuller]

I would be interested to hear what my hon. Friend thinks should be the foundations of that strategy.

[George Freeman]

I thank my hon. Friend for that intervention. I believe that this country has every reason to be optimistic about our ability to trade our way out of the present crisis. Around the world the emerging nations are growing at a phenomenal rate—7% to 8% for the BRIC nations and the 11+ nations following them. They have extraordinary needs, and in the next 30 years they will go through a revolution in medicine, food, energy, professional services, IT and leisure that we took nearly 200 years to go through. In all the areas where we have a strong and mature offering, these countries will drive phenomenal demand in the years ahead.

I applaud the work the Government have done to lay the foundations in science and research funding, skills and the industrial strategy, on which we heard from colleagues earlier. In my own sector—life sciences, food, medicine and energy, three of the largest markets in the world—today, Astra Zeneca has made a major commitment to this country, investing £300 million in Cambridge and making us its global head of research and development. With this vision, people can be confident that we are tackling the debt crisis in a way that is fair and that will allow their children to be optimistic for a better future.