Budget Resolutions and Economic Situation

George Kerevan Excerpts

Monday 13th July 2015 Commons Chamber

[Rebecca Pow]

The hon. Lady makes an interesting point, but my statistics still stand. Even when we make these changes, five out of 10 people will still be receiving some kind of benefit or tax credit. We always need to support the people who really need support, and the Conservatives will always do that. I spent Friday afternoon with my local citizens advice bureau, finding out and understanding what is happening and how we can continue to support the people who really need it. That will always happen.

Thanks to a shrewd Chancellor and the hard work of British business and the good people of Britain, Britain is now moving and growing faster than any other major advanced economy. It grew by 3% last year, as we have heard from other Conservative Members, creating 2 million more jobs—far more than the OBR anticipated. My constituency has played a major part in creating those jobs. Many businesses have grown and expanded. Unemployment is down and jobs are up. I will give just one example of a booming business: the Ministry of Cake in Taunton, which the Chancellor himself visited during the election campaign. Indeed, he iced a carrot cake.

The Ministry of Cake has recently secured a huge contract to supply cakes in coffee shops right across Europe, all the way to Moscow. It already supplies more than 1 million slices of cake a week to customers in the food service and the catering trade. It will now be employing another 30 people in Taunton, all of whom will be contributing to the local economy. This is exactly the direction we want the economy to go in. This example proves that it is. I would also like to say that the Chancellor is much, much better at handling the economy than he was at icing the carrot cake.

There is very little youth unemployment in Taunton: it is very low at 1.9% and it is continuing to fall. On Friday, I met a very fine example of the kind of young person who has been given the necessary skills to take our economy forward and is getting to work. Ashleigh Thompson was an apprentice at the local Creech St Michael preschool. For a year, she worked four days a week at the college and one day a week at the preschool. She has done her NVQ stage 3 and has just qualified. She has now got a full-time job at the preschool, because she is offering exactly the qualification and skills it wants.

[George Kerevan (East Lothian) (SNP)]

The hon. Lady mentions exports. The OBR report, published alongside the Budget last week, shows that our export position and current account deficit is forecast to worsen over the next four years. How does she explain that?

[Rebecca Pow]

I gave an example of exactly the opposite of that. Exports, all the way from Taunton, are increasing. That is exactly what we want: companies taking advantage of the opportunities opening up and skilling up their workers.

I would like to reflect on one of the important tools in the Budget box: the welcome introduction of a compulsory new national living wage for all working people aged 25 and over. It will kick in at £7.20 an hour in April next year, rising to £9 by 2020. It will mean a pay rise for half a million people and translates into a cash rise of £5,000 for a full-time worker. It will benefit women especially—we had the equality and gender pay gap debate the other day—and quite a number of women are still in the low paid category. This measure will help them. Of course, it is businesses that will have to shoulder the changes, but the increase in employment allowance and the improvements to corporation tax should help businesses to pay the extra wages. I have consulted widely with businesses in my constituency. They welcome this measure and they agree that we need to raise the living wage.

I welcome the £7.2 million investment in transport infrastructure in the south-west. In particular, I welcome the Prime Minister’s and the Chancellor’s commitment to upgrading the key road in my constituency, the A358, and its junction with the M5. This is the busiest road in Somerset. There will be a new employment site right on the junction, and without the road upgrade we cannot have the business site. We need the business site because we need the new jobs and the new skills to move the economy in the right direction. I therefore applaud all that, and I applaud the £10 million in the Budget to improve broadband in the south-west. It is absolutely imperative that all the rural areas that are missing out can take advantage and get broadband.

In conclusion, I welcome the Budget. It will transform behaviour and move us to a higher-wage and lower-tax and lower-welfare economy. It will cut the deficit and enable us, at last, to live within our means.

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[Mark Pawsey (Rugby) (Con)]

It is a great pleasure to speak in the debate, and to follow the hon. Member for Oldham East and Saddleworth (Debbie Abrahams), who told us in her opening remarks that under this Government, and the coalition before them, our economy had tanked. Well, if growth of 3%, 2 million new jobs, and a fall in borrowing from a staggering and unsustainable £153 billion a year to just half that constitutes an economy that has tanked, I would hate to imagine how she might describe what happened under the Labour Government in the run-up to 2010.

It is also a great pleasure to see the Minister. I look forward to the considered and thoughtful remarks that I know he will make when he winds up the debate.

I want to focus on the steps that the Government are taking to grow the economy. As we know, we saw record growth of 3% over the last 12 months. We had become used to seeing “flatlining” gestures from the Opposition Front Bench, but we do not see those any more, not least because the person who used to make them is no longer present in the Chamber. We shall see 2.6% growth over the coming year, and it is important for us to maintain that growth, because the Government are doing two things. As any business, household, council or other organisation would do, they are controlling their expenditure —we have heard a lot in earlier Budget debates about how the Government are doing that—but it is also massively important for them to grow their revenues, and they do that when the economy is growing. That is why it is so important for them to focus on growth.

I want to focus on the measures the Government are introducing to grow the country as a whole through the governance of its cities, and on the more flexible planning system.

[George Kerevan]

I rise to intervene on the hon. Gentleman, as I do on all Conservative Members, in the forlorn hope that he might address the worsening trade picture and the fact that we have to borrow to fund our imports. The Government are shifting the burden of debt from the Treasury on to the private sector, and particularly on to foreign borrowing.

[Mark Pawsey]

I am sure the hon. Gentleman is aware of the principle of reshoring, which is taking place in our economy right now. Manufacturing companies that years ago were offshoring and sending jobs out to other countries are now making products in the UK. In Coventry, which is immediately adjacent to my constituency, I visited a small company that is producing the rechargeable torches that sit in every Range Rover. Until recently they were being imported from China. Now they are being produced in the UK. We are slowly bringing manufacturing back to the UK, which will in time deal with the issue that concerns the hon. Gentleman and which is, of course, a concern for the Government.

[George Kerevan]

Will the hon. Gentleman give way again?

[Mark Pawsey]

No, as I want to talk about rebalancing our economy and ensuring that we get effective growth in the regions outside London, which has a momentum of its own.

The Government are looking closely at what is happening in Manchester, and that is the model they want to see. It is very good news that new combined authorities are coming together across the UK to provide the growth that the country needs, because the cities are of massive importance.

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[Martin Vickers]

My hon. Friend makes an important point. In my constituency I can see the reduction in the number of NEETs and the increase in the number of apprenticeships. Opportunities for younger people are increasing all the time.

Coming as I do from a working-class background, I am keen to see the initiatives in the Budget that boost working-class people—blue collar Conservatives, as we tend to call them. Opposition Members are in total confusion about whether to accept the welfare cuts. No one can say that they were not flagged up during the election campaign, and the people of the United Kingdom voted overwhelmingly for a Government who would implement them, make the welfare system fairer and allow—[Interruption.] I take the point from the Scottish National party Benches, but we are still a United Kingdom, thankfully. Even the Scottish people voted in favour of that. The Budget must be judged as a package. Yes, there are those who will be hit by the changes to tax credits, but that is offset to a considerable extent by, for example, the changes to personal allowances.

On devolution, I have for many years been an advocate of elected mayors, and I am pleased to see that, as things go full circle, the Government are promoting that idea. An elected mayor is a figurehead, another ambassador for our areas, someone who can go out there and sell our constituencies. I would prefer a much more radical devolution and settlement for local government, but the Government have outlined a clear policy. I was at a cross-party meeting last Friday with the Humber MPs, and we can see a consensus emerging among Members. I hope that will be copied—

[George Kerevan]

Will the hon. Gentleman give way?

[Martin Vickers]

I am running short of time so I will not, if the hon. Gentleman does not mind.

The way that local authorities are beginning to come together and recognise the advantages of what is on offer from the Government suggests that they will move towards a system of combined authorities. Personally, I would prefer to see unitary authorities rather than combined authorities and economic authorities, but at least it is a step in the right direction.

I have some reservations—for example, in relation to planning. As we all know, planning is very controversial. It is an issue on which we must take our communities with us. If, as in the case of most of my constituency, which falls in a local authority area where there is no local plan and it is years before we will have one, the people, through the democratic process, must have some sort of opportunity to put their case.

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[Mr Alan Mak (Havant) (Con)]

It is a great pleasure to follow the speeches by my hon. Friends the Members for Rugby (Mark Pawsey) and for Cleethorpes (Martin Vickers). It is also a great pleasure to welcome my fellow Hampshire Member of Parliament, my hon. Friend the Member for East Hampshire (Damian Hinds), as Exchequer Secretary. I congratulate my hon. Friends the Members for Chippenham (Michelle Donelan), for Somerton and Frome (David Warburton) and for Southampton, Itchen (Royston Smith) on their outstanding maiden speeches.

I am grateful for the opportunity to speak in this debate on the summer Budget. It is a Budget that rewards hard work and aspiration, not just in London but across every region of our great United Kingdom; backs working people by cutting their taxes, boosting their wages, and clamping down on the abuse of the welfare system that they help to pay for; and strengthens our public services while backing our armed forces. I am proud to speak in support of this Budget not just because of those positive attributes but because it is a Budget that builds Britain’s opportunity society.

Although bolstering Britain’s economic growth and giving working people financial security is rightly this Government’s most pressing priority, building the opportunity society must and will be their most distinct legacy. Alongside our long-term plan for a stronger economy, for me this Budget signals our renewed commitment to a long-term plan for a stronger society. That society should be one in which everyone can fulfil their potential, no matter what their starting point in life, because what counts towards their success and prosperity in the opportunity society is how hard they work, the talents they have and the ambitions they hold, not who their parents were, where they grew up or what sort of school they went to.

This Budget gives fair chances to everyone across the entire spectrum of society, young and old, and across every region of our great country, north and south. That is vital, because building an opportunity society gives us not only a stronger, fairer, more prosperous economy at home, but a more competitive economy abroad.

[George Kerevan]

Will the hon. Gentleman explain why, if we are exporting, the OBR has downgraded its forecast for the current account deficit for the next five years?

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[Suella Fernandes (Fareham) (Con)]

I thank the hon. Member for Ilford North (Wes Streeting) for his passionate speech; I do not agree with many of his points, but I admire his passion. I also thank my hon. Friend the Member for Havant (Mr Mak) for a good speech about the opportunity society, and other hon. Members for the excellent maiden speeches we have heard today, in particular that by my hon. Friend the Member for Southampton, Itchen (Royston Smith). I helped him during the campaign and I was thrilled by his victory on 8 May.

At its heart, this Budget is about opportunity, endeavour and responsibility. Those are my core values—the values that make me a Conservative. This Budget is not only about aspiration, but it underpins the truth that the Conservatives are the real party of working people. It aims to create a Britain where everyone has the chance to prosper through earning more, paying less taxation and having free innovation. Those are the kernels of aspiration. The rise in the minimum wage, the increase in the tax-free threshold and the rise in the 40p tax threshold will all contribute to a fairer society, where aspiration is a reality for millions of people. Key to that aspiration, opportunity and growth are productivity and a skilled workforce that are local to the workplace. The need for increased skills will be key to transforming the efficiency and growth in our economy.

My constituency of Fareham on the south coast has an economy of more than £2.5 billion gross value added, 1.3 million people, 50,000 businesses and thriving marine, aviation and aerospace sectors, with high technology and advanced skills and engineering.

[George Kerevan]

The hon. Lady mentions the aerospace industry. Can she name one airliner that this country still builds?

[Suella Fernandes]

I am very proud of the local aviation and aerospace industries. My constituency has Eaton Aerospace and the neighbouring Portsmouth constituency has BAE Systems—key British companies that are exporting and are at the cutting edge of the aviation and aerospace sector, thanks to lots of investment from central Government.

Solent local enterprise partnership, which I met today, benefited from the local growth deal, receiving more than £150 million of Government funding over the last Parliament to boost skills, improve infrastructure and provide better business support. That increase in higher skills has allowed Solent LEP to set a target of increasing GVA by 4%. Key to that target is an increase in the amount of housing. We need houses to accommodate the increase in the workforce and the employment base.

My constituency has a strategic development area called Welborne, which has been controversial. It will consist of 6,000 new homes, create 6,000 new jobs and contain 1 million square feet of employment land, which will enable growth and facilitate enterprise to take flight. It has been approved by the local council and the Planning Inspectorate. It is a huge opportunity for investment. It will be funded by £50 million from the new homes bonus—a great initiative that was brought in by the Conservative-led coalition—and £2 million from Solent LEP. There is currently a £30 million shortfall, but I hope that will be filled by central Government.

The problem with housing is not supply and demand; it is that the market lacks fluidity. Throughout the course of a life, someone might start off in a student flat, want to expand into a family home, get a larger home and then downsize in their old age. We do not currently have that fluidity, but the Budget addresses that.

We need to enable the ownership of housing. Ownership is more than just a name on a contract; it enables people to have a stake in society and, in many cases, something to hand on to their children. A key to that is enabling capital and equity. Those kernels of home ownership, responsibility and a stake in society are at the heart of our robust and bold Budget, which I commend to the House.