The Economy

Debate between George Freeman and Nigel Adams

Tuesday 11th December 2012 Commons Chamber

[George Freeman]

No, I have already given way to the right hon. Gentleman.

Of course we are in the process of a long and slow recovery, but the evidence—in terms of new jobs, the data on private sector growth, and the business community’s strong support for this statement and the measures previously announced by the Government—suggests that the policy of rebalancing the economy is right and working. We must have an economy that is led by the private sector. We need to do more to support industry and the knowledge economy, which this Government are doing, and we need to do more to support regional growth outside Greater London and the south-eastern area.

It is an irony of the last Labour Government that, despite preaching the language of regional economics, what it came down to was a vast tax transfer through the regional development agency structure. In my own field, more than £15 billion was spent on business support, but according to the Richard report, only 0.5% of that was received by businesses on the ground floor, as it were. The last Government embarked on a major boom in regional spending, but it was not sustainable. One of the sadnesses of this crisis is that many of the people who were offered jobs during that boom in the public sector are paying the price now. That is not their fault; it is the fault of those who were running the economy at the time, and I for one am waiting for them to say sorry.

The net growth figures are low at present, but that disguises a very important and profoundly positive change. We have rightly taken money out of the public sector in order to rebalance the economy and bring our public finances under control. The fact that the net growth figures are positive is a sign of the profound growth that is beginning to happen in the private sector, and which bodes well for our public finances in the long term.

I welcome the Government’s plan A-plus, which is intended to restore our public finances and get the deficit under control, and I welcome the fact that the annual deficit is now down by 25%, although there is more to be done. The plan is also intended to free up money to be invested in infrastructure. More than £20 billion has been committed to infrastructure projects that are long overdue, and last week £600 million of extra investment in science and the knowledge economy was announced. I shall say more about that in a moment. The truth is that we need a plan A-plus plus plus, but we do not need the plan B espoused by the Opposition. That B stands for borrowing, it stands for the bankruptcy of our public finances, and it stands for Balls.

[Nigel Adams (Selby and Ainsty) (Con)]

My hon. Friend said earlier that he remembered the 1970s. I wonder whether he remembers the late 1960s, when Viv Nicholson, the pools winner, said that she would “Spend, spend, spend.” She eventually went bankrupt. Does my hon. Friend agree that even she would be embarrassed by the Opposition’s approach to spending and debt?

[George Freeman]

My hon. Friend has made an excellent point. One must choose one’s advisers carefully. When taking advice from rock stars, one should listen to the music, but not spend accordingly. “Spend, spend, spend” is exactly what the last Government did, and we are all paying the price now.

I entered the House after a 15-year career starting companies in the life sciences sector—which involves some of the most exciting parts of the country’s economy: medicine, agriculture and the clean technologies—in Cambridge, Norwich, Scotland and some of the northern cities, and in London. I believe that that sector represents a hugely exciting opportunity for the country as we rebalance our trade away from the sclerotic eurozone and towards the faster-growing emerging nations of the world—some of the BRIC economies, and the “next 11” that were identified by Jim O’Neill in his seminal paper.

Those economies are growing at a rate of 7% or 8% a year, which, compounded over 10 years, amounts to 100% growth. They are the vibrant markets of tomorrow, and we have an opportunity to support them with our knowledge economy and our life sciences. Today that means helping them to develop the basics of public health care, such as nutrition, food security and medicine, but tomorrow they will quickly grow and develop much more sophisticated needs and markets.

The life sciences sector is crucial to our economic recovery and to a sustainable model of economic growth, and I strongly welcome the support for it that has come from the Chancellor and his team. Last week a further £600 million was announced for our science base, which is already paying dividends—in the last year alone, more than £1 billion has been invested in early-stage life science ventures funds in this country—and GlaxoSmithKline has announced a £500 million investment in an advanced manufacturing facility. The strategy is working, and I encourage the Government to stick to it.

I am the Member of Parliament for Mid Norfolk, a rural area which, in recent decades, has been viewed as something of a rural backwater, and has received all too little investment. In our region, the dualling of the A11, the investment in the Cambridge-to-Norwich rail link between the two life science clusters and the £90 million announced recently for support for our research and innovation centres have all been extremely welcome, and are already having positive effects locally. I was in Cambridge on Monday with the Prime Minister, launching the new cancer genomics centre.

There is a spirit of optimism afoot in our region. That speaks for the success of this strategy, which I welcome and commend to the House.