Budget Resolutions and Economic Situation

Debate between Jo Churchill and Angela Crawley

Tuesday 14th July 2015 Commons Chamber

[Jo Churchill (Bury St Edmunds) (Con)]

Some on the Opposition Benches crow that we have stolen some of their policies, but surely, with just a dash of intellectual honesty, they should welcome this Budget. Perhaps if they stole some Conservative policies, one could argue—as I think the right hon. and learned Member for Camberwell and Peckham (Ms Harman) did on Sunday—they might earn the trust of the British people on running the economy. Because if any of those across the Floor of the House want to know what true austerity is, they need look no further than 2008-09. This country was in recession. People found themselves without jobs, without stable incomes and without hope. That is a legacy; that is austerity.

Instead of that, last Wednesday the Chancellor told us that our economy is now the fastest-growing in the G7 and will continue to be so. We have record employment, and the deficit and debt are coming down. May 2015 marked the British people’s belief that we were on the right track; 2010 marked their rejection of “Spend now, ask questions later.” The Budget we heard was what our economy needed and what the election mandated: a Conservative Budget, and I welcome it. Hard-working people across the country welcome it. A gentle nudge to make it more stable—that is what we do when we balance something: we give it confidence and certainty.

Our economy is still too unbalanced; however, I want first to add a few notes of caution to what was said last week, and I would like to ask my right hon. Friend the Chancellor what he is going to do to address these concerns. Our national living wage goes further than the SNP’s pledge to increase the minimum wage to £8.70 by 2020 and further than the Labour party’s pledge of an £8 minimum wage, but a number of my constituents have contacted me and said that such a steep rise will put a strain on their businesses. In particular, small shops and rural post offices will find it difficult. Many argue that the higher costs will not be paid for through redundancy, but through higher prices for the consumer. Many small and medium-sized enterprises are already working with minimal staff, and hope alone will not increase their turnover. My family-run local baker suggests that his wage bill will increase by 2020 by £2,000 a week. He is working—as the hon. Member for Stoke-on-Trent South (Robert Flello) put it, speaking from the back of the Chamber—that 60-hour or 70-hour week. Small business owners run this country and they work hard. [Interruption.] Let me tell the hon. Gentleman that they do pay corporation tax, if they make a profit, and we have helped them by taking it down to 19% and then 18% in 2020.

That family business has also raised concerns, as have many others, about differentials in the wage process. Things will need to be reflective in order to keep staff. It will be challenging to raise wages from £6.50 to £9, and productivity will need to increase, but—I say this to the hon. Member for York Central (Rachael Maskell)—it is those small business owners who will make highly productive, highly well-paid jobs. They do not grow on trees. Those businesses have to start as seed organisations; they have to start from small beginnings. We cannot just magic high-paid jobs out of the air.

A fairer society is a two-way street: fairness to those who have little, but also fairness to those who pay—those who make the jobs and pay the wages. There must be recognition that some SMEs may suffer. It will be challenging to keep people employed, and that leads me to the question: where do we find this extra money and who does it come from? It will be from small business and large businesses; and that is what this Budget did: it encouraged them.

My second area of concern is about the delivery of adult care. Many of my constituents are elderly; indeed, one of my wards has the highest longevity in the country, but a great number of people are required to care for them. Many of these carers are over 25 and occupy some of the lowest-paid jobs in our economy. They will receive the enhanced living wage. The care is essential—it keeps many constituents in their own homes, living independently and not putting a strain on the NHS—but adult social care is feeling the strain, as are private providers, and their ability to absorb costs is challenging. Where statutory obligations place pressure on businesses, adult care and nurseries providing childcare, to name but two—

[Angela Crawley (Lanark and Hamilton East) (SNP)]

Will the hon. Lady give way?

[Jo Churchill]

No, I do not have time.

I welcome this Budget, but I also welcome the fact that its aspiration is to be fairer. We should not forget who creates our jobs and who invests. Business investment is up by 32% since 2010. About 95% of all firms are SMEs, while 90% are micros. I need them to thrive, to take on apprentices and to invest. To encourage more entrepreneurs, we need those businesses to grow, which is just what this Budget will achieve. I ask the Government to keep giving businesses their support.