Backing Business to Create Economic Growth

Debate between George Freeman and John Hayes

Monday 18th May 2026 Commons Chamber

[George Freeman (Mid Norfolk) (Con)]

There is no more important issue for the country than the stubbornly low growth rate and the structural barriers to the growth, productivity, enterprise, innovation and investment that this country so desperately needs, solutions to which have defied successive Governments since the coalition and the political crisis that Brexit unleashed in 2016. It gives me no pleasure to highlight that, for my constituents in Mid Norfolk, the King’s Speech is irrelevant without real delivery on the ground. In Mid Norfolk, the small businesses on which we rely are shedding jobs; disposable incomes are falling; high streets in market towns such as Dereham, Watton and Attleborough are struggling; pubs are closing; farmers are moving away from farming food to take the Government incentives for solar panels and commuter housing estates; and public services are being overwhelmed by rising demand from new housing and an ageing population.

This is fuelling a surge in political anger, which explains a lot of the election results last week. Across Suffolk, Norfolk and the fens of Cambridgeshire and Lincolnshire, rural deprivation, rural poverty and the disproportionate impact of high energy prices on the rural economy—where, according to Treasury figures, every cup of coffee, schoolbook, pencil, lesson and journey costs 20% more than in cities, yet rural areas are underfunded—are driving real anger, based on real grievances. People are now paying European levels of tax for American levels of public services, and they are fed up. Unless we—this Government, this Parliament, this media, this Whitehall—respect and understand the grievance and set out a truly bold plan to deal with it, I fear that the rich will continue to leave this country, that the middle classes, the engine of growth, will conclude that it is no longer worth putting the work in, and that the poor will turn to the black market and crime.

[Sir John Hayes]

For that to happen, Governments and Parliament must take back control, and successive Governments have divested themselves of that control by, as Simon Case said when he left office, giving more power to unelected and unaccountable bodies of all kinds and types. For the Government to act, they need levers to pull to make the kind of difference that my hon. Friend described, and Governments have less and less ability to do that, yet the King’s Speech does not address that fundamental need for a change of direction.

[George Freeman]

My right hon. Friend makes an important point. The King’s speech that my constituents loved was the King’s speech in Washington, in which he spoke for the very best of this country. My point is that it is in all our interests—I say this as a friend of mainstream politics and democracy—that we tackle this challenge more boldly.

I welcome the speed with which newly elected Labour MPs have realised the scale and urgency of the problem of public and voter anger, stubbornly slow growth, rising unemployment and demand for public services exceeding capacity, but they are in danger of going for the wrong prescription. What we need is a renaissance of enterprise and innovation across the public and private sectors. Convenient though it may be for my party politically, the idea that the answer is a regicidal political infighting crisis and a leadership contest in office is for the birds. Take it from me: my party has tested that idea to destruction, and we have all paid the price. We do not need a Labour party beauty contest. We need a Parliament and a Government that get more urgent about the many laudable things they have set out to do, but we do not have 10 years to deliver it—we have a couple of years.

If the Labour party knifes this Prime Minister, he will be the seventh who will have been got rid of because of the structural deficit. I remember, when I first arrived here in 2010, the brilliant Paul Johnson of the Institute for Fiscal Studies explaining what the structural deficit is, and it is worth repeating. The normal deficit is when a Government do not earn as much as they are spending; because the economy has taken a downturn, they borrow a bit to keep spending and then pay it back. The structural deficit is that bit of the deficit that goes up every year even when the economy is growing, and it is driven by four things. In 2010, it was being driven by welfare, public sector pensions, and—the big one—health, and debt interest was remarkably low. After the coalition, we had capped off the rise in public sector pensions, incredibly painfully, and we had capped off the rise in welfare, incredibly painfully. Health has continued to defy reform, and it is bankrupting the public sector. We are now spending more than 50% on health, welfare and social support. That is simply not affordable.

We cannot cut, borrow or tax our way out of this. The only way out is to grow, not through dumping cheap housing across the countryside, but by backing the industries of tomorrow.

[Sir John Hayes]

I might press my hon. Friend a little further. The other way of dealing with that is to improve productivity, as I said earlier. He is right, of course, that the cost burden is fundamentally important, but it can be made better through greater efficiency. Indeed, the Government themselves have said that, as successive Governments have, but we must put in place measures—very often, tough measures—to deliver that kind of productivity.

[George Freeman]

My right hon. Friend makes an important point. I will make a slightly different point, which is that there are huge opportunities for good growth in this country. Speaking as someone who has had a 16-year career backing the industries of tomorrow, whether it is in fusion, SMR nuclear technologies, agritech, bioscience, the bioeconomy on Teesside, or the satellite economy in Glasgow, we have an opportunity to turn these into the industries of tomorrow. I welcome the Government’s industrial strategy commitment to do it, but it is at 50,000 feet; we need to drop down to some more tangible and bolder policies to back those industries.

I know the Secretary of State gave a tub-thumping speech about the 1980s, but the truth is we have made a lot of progress over the last 20 years. I was doing my work as the Minister for Life Sciences, for agritech and for Science and Technology following in the footsteps of Paul Drayson and David Sainsbury. In life science, fusion, AI and quantum, we have built an unbelievably competitive economy, but other countries are moving fast. Our competitors are more agile. We are terrible at adopting technology in the public services. Our scale-ups are not getting the finance they need in the city. Kate Bingham in The Times today is right.

How do we unlock this? I want to suggest a ten-point plan for renewal. I support the Government’s ambition. I say this because if all of us fail, the Benches to my left of pub populists who are promising everything will win, and we will see even deeper disillusionment. I am calling in this speech for, first, real honesty of a 1979 scale about the extent of the emergency; secondly, bold devolution to the people, cities and mayors who know how to do it better—frankly, they could not do worse than Whitehall—thirdly, serious Whitehall reforms, so that we end the juvenile process of His Majesty’s Treasury playing Departments off against each other for funding, which in the end comes very late and is taken back; and fourthly, a serious backing for the innovation economy. I welcome the £20 billion of R&D, but how we allocate it is key. We need to allocate it in a way that attracts private investment. Fifthly, we need a bold revolution of tax incentives for enterprises—a new deal for new business. There should be no national insurance or VAT for a couple of years for someone starting a company and growing it. Sixthly, we need regulation for innovation. That is not just cutting regulations, but leading in setting the regulation. I welcome the Government’s work in setting up the Regulatory Innovation Office. We then have skills and patriotic capitalism. I do not think it is communism to get the city investing in British business. Boldness—

Immigration and Home Affairs

Debate between George Freeman and John Hayes

Tuesday 23rd July 2024 Commons Chamber

[George Freeman (Mid Norfolk) (Con)]

Does my right hon. Friend agree that there are different types of crimes and different types of prisoners, and that many people in our prison system at the moment, particularly those responsible for relatively low-level, non-violent antisocial behaviour, could powerfully serve much better and more rehabilitative community sentences? I do not want chain gangs in Norfolk and Lincolnshire, but good community service, where people can see that they are actually putting something back into society, would ease a lot of pressure on the system.

[Sir John Hayes]

Community sentences can play a part, that is true, but my hon. Friend will recall that the problem I described earlier of misunderstanding crime as an illness to be treated has its roots in thinking that stretches right back to the 1960s. You will perhaps know, Mr Deputy Speaker, that the Children and Young Persons Act 1969 began intermediate treatment orders, which essentially rewarded young people who had committed crimes with the kind of community activities that my hon. Friend describes. People were sent to the Brecon Beacons when their law-abiding neighbours had to make do with a week in Clacton. I mean no disrespect to Clacton or its representative, I hasten to add. [Laughter.] That is not the kind of response to crime that the vast majority of my constituents—or, I suspect, those of my hon. Friend—expect. Yes, community sentences can play a part, but they must not in any way distract us from the fundamental truth—I think it was Grotius who said it, Mr Deputy Speaker—that criminal justice has to have at its heart the idea of an ill suffered for an ill inflicted. I hope that the new Government will recognise that to crack down on crime, they really do have to restore public faith in the fact that, as I said, justice will be done.

It is fact that 10% of convicted criminals are responsible for half of all convictions. It is true, too, that those individuals are known and can be identified and must not be released in the way that has been suggested. Yet, disturbingly, the new Prisons Minister is on the record as saying:

“We’re addicted to sentencing, we’re addicted to punishment. So many people who are in prison, in my view, shouldn’t be there.”

That is both the opposite of the truth and anything but what most people think.

I welcome the attention given in the King’s Speech to shoplifting, but again I fear that the Government’s approach amounts to little more than wishful thinking. We have a shoplifting epidemic in Britain. Police forces do not respond to almost nine out of 10 serious incidents and UK retailers already spend around £1 billion each year on trying to deal with a problem with which they struggle to cope. Many offenders persistently commit crimes and get away with it.

So let us, in this debate and in the programme that follows it, not simply rely on wishful thinking but face up to the profound truths which seem to have escaped the notice of Labour Governments forever and, too often, of Conservative Governments too: reflecting the sentiments of the vast majority of law-abiding people means the guilty must be punished and the innocent must be protected.