The Economy

John Redwood Excerpts

Tuesday 11th December 2012 Commons Chamber

[Justin Tomlinson (North Swindon) (Con)]

I congratulate the hon. Member for Croydon North (Steve Reed) on a powerful maiden speech—I cast my mind back to the nerves I felt during my first speech—which he delivered in an exceptionally articulate way. It is clear that his local government experience—championing the future of public service, along with understanding and delivering much needed improvements—will be a great asset to this House. I also congratulate the hon. Member for Rotherham (Sarah Champion), whose exceptional experience in children’s services will be a vital asset to us all in Parliament.

Let me turn to a few key messages in the autumn Budget that I picked up on, having spoken to a number of my constituents. On fuel duty, I pay tribute to my hon. Friend the Member for Harlow (Robert Halfon), who has championed the campaign with huge support across the country and among MPs. It was absolutely essential that we froze fuel duty, because it is the most tangible tax there is. We all pay all sorts of taxes, and although people will have a rough idea how much council tax, income tax or national insurance they pay—they will not know exactly—everybody knows exactly what it costs to fill up the car. That impacts on consumer confidence, which is something we desperately need to protect in this country, so this move by the Government was welcome.

I also welcome the further move on the income tax threshold. It is a principle of ours to ensure that work pays, and what better way to incentivise people than to leave more money in their pockets? By the end of the Parliament, those on the minimum wage will be paying half what they were paying in income tax when we came to power. That stands in stark contrast to the 3.9 million workless households we saw under the former Government. Some 24.4 million people will benefit from the changes we have made to the income tax threshold by an average of £247 per person, but I would like to see a further change. Whenever any changes are made to pay-as-you-earn—whether by this Government or future Governments —they should be shown on employees’ payslips. We get excited in these debates about such changes, but more often than not they fly past the public. If we are going to get the public to take ownership of the tax system, those changes should be displayed clearly. I welcome the move to introduce an annual tax statement. I was one of the 10 MPs who supported the private Member’s Bill on that subject. Any notification of changes to PAYE on people’s payslips would make a big difference.

I am also delighted to see further measures to support business. Before I became an MP, I was a small business owner in Swindon. We now have 4.2 million self-employed people in this country, which is a record number. That shows that we are truly open for business. The cut in corporation tax takes it down to the lowest rate in the G7, and the extension of the small business rate will make a huge difference to small traders. I would also urge the Government to continue to look at the principle of the rates system, because to a certain extent the golden goose has been killed. High street businesses in particular are facing further threats from internet companies, which benefit from not having high street rate bills to pay. That is something that we must take into account.

The £250,000 annual investment allowance will also make a huge difference. I know that my hon. Friend the Member for Dudley South (Chris Kelly) has championed that cause for a long time. The need for this measure reflects the fact that businesses are nervous. For the first time in history, businesses are holding more money in their current accounts than they are borrowing. That is partly because of the perception that they will be unable to borrow money, and they want to stay in control. I hope that the increase in the annual investment allowance will open up the coffers, and that the effects of that will filter through to the election.

[Mr John Redwood (Wokingham) (Con)]

Given the warm welcome in the House, particularly on this side, for all tax freezes and reductions, will my hon. Friend urge those on our Front Bench to do more of that, so that we can get the economy growing more quickly?

[Justin Tomlinson]

I thank my right hon. Friend for that important suggestion, which I endorse. We would all welcome such measures being taken whenever possible, given the financial constraints that we inherited.

I also welcome the extra investment in UK Trade & Investment in relation to exports. The Office for Budget Responsibility has recognised the challenges involved in exporting to the eurozone. Honda, the biggest employer in my constituency, has faced challenges in exporting cars to a declining market, although the UK market has experienced an 8.6% increase. We have seen our exports to emerging markets double, however, and the investment through UKTI will make a big difference. I have attended lots of events with the Government and with banks to encourage businesses to consider exporting to those markets, and that extra help to remove barriers will make a big difference.

I want to make a plea for a greater push promoting young entrepreneurs. The Government have launched the £2,500 start-up loans. I have been working with Young Enterprise, Virgin Media Pioneers and the National Association of College and University Entrepreneurs. Even the Scouts have a young entrepreneur’s badge now, and my wife and I had a very enjoyable evening helping to judge that. They even offered us free cake and cups of tea to try to influence our decision. I was the only one of the 350 students studying business at my university who went on to run their own business. I believe that that university education taught any entrepreneurial flair and risk-taking out of us. We need to encourage more young people who have boundless energy and enthusiasm, and enough cheek to question the accepted ways, to find new niche markets.

I have been working with New college and Swindon college in my constituency to try to set up further opportunities for young people. This will involve not only the traditional young enterprise scheme set up in the main foyer in which the students sell to their friends but the opportunity to set up a pitch in the local market. They will have a wooden table and do three days’ trading. If they are not set up by 9 o’clock in the morning, they will lose that day’s trading. Those who are successful will then be offered cheaper pitches in the summer holidays, after they have finished college, and we hope that they will be the next generation of entrepreneurs. Many famous business people, including Lord Sugar, Richard Branson and the founders of Marks & Spencer and the Superdry clothing brand, started on a market stall. If we can get those young people to take that risk, we can create the next wave of jobs, and I encourage the Government to do what they can on that front.

On the banks, we all welcome the fact that we still have record low interest rates. That is due in no small part to the fact that the tough decisions we have taken have protected our triple A credit rating. That has made a huge difference to businesses that are borrowing money and to mortgage holders. However, we still need to do more to encourage access to finance from banks. Whenever I talk to banks, they tell me that they have money and that it is available to borrow. Whenever I talk to businesses, they say that there is no such money. There is clearly a perception problem.

The Government should help to provide information on the funding that is available, whether from the Government, from the banks that say they have money or from the national loans guarantee scheme. I am told time and again that everything possible is being done to communicate such information but that it is difficult to get hold of the businesses that need it. That is not the case, however, because once a year the Government send out a business rates mailer to every business. It might simply say that they do not have to pay anything because the small business rate relief has been extended, but the Government still have to write to them to tell them that. My suggestion is that we should include something in that mailer—we have already paid the postage, so the taxpayer will be no worse off—outlining what funding is available through the banks and through the Government, what opportunities there are to employ and offer opportunities for apprentices and about the business mentor scheme. Some 40,000 business mentors are there to help and I have seen them make a big difference when I met Mentorsme, an organisation that has helped a number of businesses in my constituency. Let us use the business rate mailer to spread the opportunities that are available. Those measures will make a big difference to us all.