Budget Resolutions

Jeremy Lefroy Excerpts

Monday 13th March 2017 Commons Chamber

[James Morris (Halesowen and Rowley Regis) (Con)]

I totally agree with the Foreign Secretary that today—at this moment—we are presented with a massive opportunity to create a new form of global Britain. I particularly agree with his points about Britain’s soft power. Just to clarify the point about the British Council, the figures actually show that there will be a 43% rise in FCO funding by 2020, reflecting the seriousness with which we take the opportunities for Britain’s soft power.

The opportunities for global Britain are of particular importance to my constituents and to people in the Black country part of the west midlands. The announcement of the midlands engine strategy in the Budget is a significant moment for the people of the Black country. The Budget sets aside £55 million of new investment for the area, building on the significant investment made in the previous Parliament when, through the city deals, £1 million was invested in an advanced science, technology and engineering centre at Halesowen College. Significant progress has already been made in investment in the Black country, and the area is one of the UK’s fastest growing sub-regions, with more jobs and better skills, but we need to do more.

As we build the global Britain that the Foreign Secretary talked about, areas such as the Black country face five key challenges. The first is skills. Even though the number of young people not in education or training in the Black country is below the national average—we have made significant progress—skills gaps still exist in the area that I represent. I welcome the £7 million of new capital investment for further education that was announced in the Budget as part of the midlands engine strategy, but more is needed for investment in technical skills and to tackle historical levels of educational underperformance in the Black country and the wider west midlands. Skills gaps hold the Black country back as we seek to develop this global Britain.

The second challenge is transport and infrastructure, where historical under-investment is also holding the west midlands back. I welcome the announcement of £25 million to tackle congestion as part of the midlands engine, and we need a longer-term focus on the potential benefits of HS2, the development of Birmingham airport, and our rail and road network across the Black country and the west midlands.

The third big challenge addressed in the Budget, and one that we need to consider in the long term, is innovation rates. The Black country is becoming a world leader in, for example, the automotive, aerospace and advanced manufacturing sectors, with products such as Bugatti brakes and even the chairs used on “Match of the Day” being produced in the area, which is developing a worldwide reputation for design and product manufacturing.

The fourth challenge, which is a cumulative impact of the others, is relatively low productivity. It is a puzzle that we are yet to solve, and we need to tackle it by approaching it from all angles: improving skills, improving education at primary and secondary levels, and investing in transport infrastructure and the wider social realm.

The fifth challenge for the Black country is exporting, inward investment, and the potential opportunities of Brexit. With a 49% increase in exports since 2010, the west midlands’ export performance has been excellent in recent times and better than many other UK regions. We must be positive about the future and position the west midlands front and centre in our global trade plans to take advantage of the opportunities presented by Brexit. That is why I welcome, as part of the midlands engine strategy, the move towards the creation of a midlands trade and investment programme to develop markets to which the west midlands does not currently export. It has a good record in China and the United States, but we have the opportunity to open up and exploit new markets in many other countries.

[Jeremy Lefroy (Stafford) (Con)]

Does my hon. Friend agree that foreign language skills are one of the most important things that we lack? That is intimately associated with our relatively poor export performance in the past, and we need better learning and teaching of foreign languages in order to penetrate those new markets.

[James Morris]

My hon. Friend is absolutely right. Foreign languages are one key component, but the challenge in areas such as the Black country is to raise education performance levels more broadly. Standards need improving at primary and secondary levels, and we need to focus on technical education. The west midlands must face outwards and take advantage of the global opportunities that are currently presented.

Critically, the Black country and the west midlands are too often talked about as though they are a relic of Britain’s industrial past, but that is wrong. The Black country is increasingly in the vanguard of our industrial future. It is a leading player in high-tech manufacturing and has an increasingly competitive, productive economy. We do not need to focus on managing decline. The Black country is not some kind of industrial museum to look back on with fondness as part of Britain’s industrial greatness. The area is becoming a world leader in critical parts of our economic future.

As we take a forward view of global Britain, it is important not to focus just on London and the south-east; part of our long-term strategy should be the rebalancing of the economy. It is taking a long time, but we have made a lot of progress towards achieving that rebalancing. We must redouble that effort, invest in the appropriate skills and in the future of the businesses in the west midlands, and take away the barriers to growth, which include our transport infrastructure. It is simply too hard to get around the Black country and the wider west midlands, and the evidence is that transport bottlenecks make it increasingly difficult for the west midlands to realise its economic potential and achieve productive growth. As I said, we are not managing decline or nostalgically looking back to a mythical golden age; we seek to embrace the future of the Black country and of our young people in a global Britain.

--- Later in debate ---

[Jeremy Lefroy (Stafford) (Con)]

It is a real honour to follow the right hon. Member for Doncaster Central (Dame Rosie Winterton), who made some extremely important points, particularly about those who are self-employed.

I believe the Budget was extremely balanced and very sensible, not trying to do too much, but trying to do the right things and, by and large, succeeding. The concentration on technical skills—the T-levels—on infrastructure and on living within our means was welcome. We saw money put into the right places, including business rate relief, addressing a problem for a number of companies in my constituency and, no doubt, in the constituencies of all right hon. and hon. Members.

There was also a substantial increase in the investment in social care. I believe this is just the start; we need to see a radical revamp of the financing of health and social care. In announcing a Green Paper on social care, the Chancellor took a first and firm step in that direction, and it needs to be followed by others, but I very much welcome the increased investment in social care.

Of course, there has been some discussion about the ways in which the additional revenue was found, but let us not forget that this was a balanced Budget: the Chancellor did not seek to increase borrowing—absolutely rightly—and nor did he seek to cut spending any further than was already planned in some Departments. He sought to raise the revenue to pay for the additional investment in social care. That is absolutely the right way to go about it, and I commend him and his team for that.

Raising the revenue through national insurance contributions was absolutely understandable given the constraints, but I welcome the fact that there will be a closer look at this whole area. As the right hon. Lady said, self-employment will be with us increasingly in the coming years, and more and more people are becoming self-employed. That is something to be welcomed, and I have been self-employed in the past. As my hon. Friend the Member for Erewash (Maggie Throup) said, it is something we should encourage, but, at the same time, we have to recognise the risks involved.

In future, as we look to raise additional revenue, we ought to look at some of the reliefs available to the higher paid, whether that is reliefs on national insurance and pensions, or reliefs available through schemes that have perhaps outlived their usefulness and that relate only to people at the higher end of the income scale.

That brings me to an important point. As a Parliament and a nation, we have to decide what level of income—what percentage of our GDP—we will raise in taxation and what percentage we will spend. We tend to raise approximately 37% of GDP in taxation, and that will continue through to 2020-21. We spent 40% in 2015-16, and that will go down to about 37% at the end of this Parliament. If we are to maintain the kind of commitments in all areas that we, and the Government, wish to, whether on defence, international development, looking after the elderly through social care, increasing investment in health or increased pension costs, we will find it very difficult to stick to a level of 37% of GDP in terms of both income and expenditure—it will be nearer 40%. That is still well below almost all our fellow European countries, certainly France and Germany. However, we have to take this seriously. It is not legitimate for us to stand here and advocate the kind of investment that, rightly, we want to see, while retaining our footprint as global Britain, and not be prepared to pay for it.

I serve on the International Development Committee, and a couple of weeks ago was privileged to see the work that DFID-supported organisations do in Tanzania with some of the poorest people on this planet in supporting them in their education. We have seen many other such schemes around the world. In Congo last year, we saw DFID working in a place where pretty much nobody else was working—apart from the Congolese people and Government themselves—to bring water schemes to people for the first time.

I was there with the hon. Member for Ealing, Southall (Mr Sharma). I think he will remember that visit, where we washed our hands together having drawn water from a pump that had just been put into a village—the first water that those people had not drawn directly from the river. This work supported by DFID is absolutely priceless. As the Foreign Secretary said, it gives Britain a global presence. However, the point made by another speaker about funding for the Foreign and Commonwealth Office is also valid. We have to remember that as we withdraw from the EU there are many Foreign Office missions around the world where we do not have a DFID presence and yet a lot of British development is going on through the European Union. That will now have to be picked up by the Foreign Office. We need to look very carefully at the funding for that.

I would like to say many other things, but time is limited. I make just one plea. The British Council does fine work, as we saw in Tanzania. It wants to teach people English and there is huge demand for that, so we need to give it the necessary resources.