Income Tax (Charge)

Kwasi Kwarteng Excerpts

Thursday 28th October 2021 Commons Chamber

[The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)]

It is great to see you in the Chair again, Madam Deputy Speaker. I thank the right hon. Member for Doncaster North (Edward Miliband) for his congratulations on my becoming a father for the first time at the youthful age of—well, I will not say what my age is. I am pleased that that has happened.

I am also pleased to see the right hon. Member, in his usual way, give a comprehensive speech that lasted for nearly half an hour. The downside was that I had heard it all before. I was particularly gratified to see him at Prime Minister’s questions. It was great: a trip down memory lane. I remember being a humble Back Bencher, as he put it, when he did that same thing at PMQs. There was that same litany of doom and gloom, and it will prove no more effectual in 2021 than it did in 2015, when many of my hon. Friends were returned with enhanced majorities.

The Budget was an extremely successful occasion. It demonstrated clearly that there is continuing support for the economy. It demonstrated the immense, unusual and unprecedented interventions in the economy because of the dangers we faced from the global pandemic. The right hon. Member will remember that only a year ago people were prophesising that we would have record unemployment or early-1980s levels of unemployment. What happened? Because of the Chancellor’s interventions, well-crafted policy and the plan for growth, there was no employment disaster. Unemployment is very low by historical standards. The economy is growing faster than it has done for decades, and none other than the OECD says that the UK will be the fastest growing country among the G20 next year.

[Catherine West]

May I congratulate the Secretary of State on the happy news in his family? How many businesses does he think will go out of business this autumn because they owe the Government money from covid loans, cannot pay their energy costs and are worried about the weight that the increase in wages from the national minimum wage and national insurance contributions will put on their 12-month forecasts?

[Kwasi Kwarteng]

I thank the hon. Lady for her congratulations. However, I am surprised that she should express concern about the increase in the national living wage. I never thought I would live to see a Labour MP denigrate and decry that. We want to see a higher-wage, higher-productivity-based economy, and we are working hard to ensure that.

[Ms Karen Buck (Westminster North) (Lab)]

Will the Secretary of State give way?

[Kwasi Kwarteng]

Let me make some progress. To intervene so soon after an intervention is unusual. I will come back to the hon. Member.

During the pandemic, people and businesses have demonstrated remarkable levels of resilience. I fully agree with the right hon. Member for Doncaster North when he says that business has been heroic and people have been heroic. I am also immensely proud of the work done by the British Business Bank, for which my Department is responsible. Its schemes supported people and our economy to the tune of £80 billion, with Government-backed finance for 1.7 million businesses. That comes to the point made by the hon. Member for Hornsey and Wood Green (Catherine West). When it comes to the fundamentals of the economy, the Government are securing our economy and getting Britain back to work.

Contrary to all the prophecies of doom and gloom that recently came from Opposition Members, the Office for Budget Responsibility now expects our recovery to be quicker and the economy to return to its pre-covid level at the turn of this coming year. As the OECD and the International Monetary Fund show, there is considerable expectation that the UK will rebound strongly. In that context, our task turns to ensuring that our people and our businesses have ability and opportunity. They will not simply look back and complain about the situation that we have come through. They are positive and forward-looking. They believe in their country—unlike many Opposition Members, dare I say. We will achieve a strong rebound not by splashing cash indiscriminately as a number of Labour Chancellors did, dare I say, but by spending taxpayers’ money wisely to foster an environment that encourages innovation and growth.

I turn to the net zero agenda. I fully appreciate that many years ago the right hon. Member for Doncaster North was Secretary of State for Energy and Climate Change—I do not think I was in the House at that time—and I know that he shares the view that net zero is absolutely one of the most important strategic objectives of any Government.

[Wera Hobhouse (Bath) (LD)]

If the climate emergency really is the most important thing for the Government, why did the Budget not mention it once?

[Kwasi Kwarteng]

It did mention a huge amount of investment in the net zero agenda. The hon. Member should know by heart the Prime Minister’s 10-point plan, and that was 100% backed by yesterday’s Budget.

[Anna McMorrin (Cardiff North) (Lab)]

Will the Chancellor say in his speech at COP next week that, in his Budget, he made high-carbon domestic flights cheaper?

[Kwasi Kwarteng]

I gently suggest that the hon. Member looks at the work of the Jet Zero Council, which my right hon. Friend the Chancellor and I have been pushing. We want the UK to be the head of very low carbon emission flying. I am very enthusiastic about that. We will be leaders in that technology, and I do not think it makes sense simply to penalise and turn our backs on aviation. We should be trying to enhance aviation and decarbonise it, and that is exactly what we intend to do.

[Rachael Maskell (York Central) (Lab/Co-op)]

Will the Secretary of State give way?

[Kwasi Kwarteng]

I have to make progress. I know that hon. Members are springing up and down because they wish to make interventions, but I am sure they will be making speeches later in the debate.

We on the Government Benches understand what has sadly eluded the grasp of Opposition Members: we must create competition. We must back business and incentivise innovation in a free-market economy, not go back to a state-run, Soviet-style command economy.

The Labour party manifesto has been mentioned. I remember reading it. Like the right hon. Member for Doncaster North, I am somewhat of an insomniac—more so now, I dare say—so sometimes I have to read lots of these things. It said that we should get to net zero by 2030. As my hon. Friend the Member for Crewe and Nantwich (Dr Mullan) observed, even the unions that Labour is supposed to represent and that bankrolled it, rejected that proposal as completely unrealistic and destructive to our economy. That manifesto said not only that we should get to net zero by 2030, which is completely unrealistic, but that the state would own 51% of offshore wind farms. Imagine that. The right hon. Member for Hayes and Harlington (John McDonnell) said that, as Chancellor, he would nationalise 51% of offshore wind. I remember speaking to the industry, and it said, “Why on earth would we want to own 49% of what the right hon. Member for Hayes and Harlington owns 51%?” It was a completely absurd and unrealistic policy. On the green agenda and the net zero agenda, the Government have far more to offer the country than a souped-up, half-heated, Soviet-style approach to solving what is a fundamentally difficult problem.

For one year—so far—businesses in the retail, hospitality and leisure sectors will get a 50% discount on business rates. That is why my right hon. Friend the Chancellor decided that the business rates system should be more responsive and agile, with more frequent revaluations taking place every three years. That is a good, positive step that will give much more flexibility to the system.

I am also delighted to reflect on how the Budget told a great story about innovation. Innovation is a huge driver of productivity and progress, and unleashing innovation is a fundamental duty for my Department and for me as Secretary of State. We have launched Help to Grow, which will drive small and medium-sized enterprise productivity. We have also started a new co-investment venture capital fund that will be used to drive innovation and provide scale-up capital for businesses in need of that. The Budget confirms the eligibility criteria for our new scale-up visa, which all businesses I speak to, and small businesses in particular, say they need help in pursuing. We will unlock greater private sector innovation. We are reforming research and development tax reliefs to support modern research methods and to focus our minds specifically on the problem and challenge of innovation. Increasing R&D investment to £22 billion will confirm the UK as a science and technology superpower. We must make sure our small businesses, which after all are the heart of the British economy, have the support they need, which is why my right hon. Friend the Chancellor strengthened the British Business Bank in yesterday’s Budget, increasing its regional financing programmes to £1.6 billion and expanding its coverage, helping innovative businesses across the country get greater access to the finance that they need.

[Catherine West]

I welcome the British Business Bank and the fact that it has a regional focus, but what advice does the right hon. Gentleman have for businesses that are still in debt due to the covid loans they are struggling to pay back and therefore do not want to take on any more debt?

[Kwasi Kwarteng]

The hon. Lady makes a sensitive point. Nobody engaged in business wants to take on unsustainable levels of debt, but she will appreciate that the credit was offered in totally unusual circumstances; my right hon. Friend the Chancellor had to make decisions very quickly and we used the BBB to distribute that credit. No one is suggesting—not even anyone in the hon. Lady’s party—that the interventions and credit that was provided on good terms should not have been offered to many businesspeople. I am fully aware of the nature of the debt overhang and I am engaged with trying to think of ways of softening that, but the intervention was absolutely the right thing at the time. I must remind the House that many predictions of doom and catastrophe were mercifully avoided thanks to the timely and wise interventions of my right hon. Friend the Chancellor.

As well as supporting businesses, the Budget will protect the health, wealth and livelihoods of the British public. Under this Government, the proportion of people in low-paid work has fallen to its lowest level in 30 years. That is why I was so surprised to hear the hon. Member for Leeds West (Rachel Reeves) suggest that an increase in the national living wage was something to be regretted.

[Stephen Timms (East Ham) (Lab)]

Before the right hon. Gentleman leaves the business part of his speech, will he update the House on the latest provision of support for energy-intensive industries?

[Kwasi Kwarteng]

That is a very direct question and, as I have said, conversations are ongoing. I speak to the CEO of Ofgem on a daily basis and we are always looking at the situation in terms of gas and electricity prices and how we can mitigate those risks.

[Edward Miliband]

The right hon. Gentleman was asked a very direct question, as he said, by my right hon. Friend the Member for East Ham (Stephen Timms). The right hon. Gentleman acknowledged two weeks ago the very difficult situation of the energy-intensive industries and said that he had submitted a formal request to the Treasury. What has happened?

[Hon. Members]

They are ignoring it.

[Kwasi Kwarteng]

We are not ignoring anything. We are in active conversations, as we always are, on dealing with the situation. [Interruption.] Absolutely, we are completely as one on this, and we feel that, as my right hon. Friend the Chancellor said, we cannot simply bail out every single company—but we can provide a general context in which risks are mitigated.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (George Freeman)]

We are not going to nationalise anything.

[Kwasi Kwarteng]

We are not going to nationalise anything; that is very true.

[Edward Miliband]

It is hard to follow that response from the Secretary of State; he said, “a general context in which…something, something.” Can he just answer the question: when are we going to know what help is available for energy-intensive industries, if any, and what kind of help is it going to be?

[Kwasi Kwarteng]

All I would say to the right hon. Gentleman is watch this space and let’s see what happens.

[Alex Cunningham]

Jam tomorrow.

[Kwasi Kwarteng]

The hon. Gentleman chunters from a sedentary position. I have visited his constituency—I have seen Teesside—and the picture of gloom, misery and devastation he paints is a total rejection of the optimism, dynamism and enthusiasm I see in Teesside. His negative attitude shows precisely why my friend the Mayor of the Tees Valley got 73% of the vote in the last election. [Interruption.] I am being told I am speaking loudly, but I am outraged that the hon. Gentleman should characterise his constituency in such poor and uninspiring terms; it is a disgrace.

[Alex Cunningham]

rose—

[Kwasi Kwarteng]

As well as supporting the Budget—

[Alex Cunningham]

The right hon. Gentleman makes an attack then will not give way.

[Kwasi Kwarteng]

I give way to the hon. Gentleman.

[Alex Cunningham]

I am grateful to the right hon. Gentleman for giving way. He talks absolute nonsense: I have spent 11 years championing energy-intensive industries in my constituency, trying to ensure people keep their jobs. He knows that, because I have met him and talked about it time and again, and what do I see? I see very little action. It is about time he got on the right horse, got down to Ofgem and started talking seriously about how we can put things right for energy-intensive industries in my constituency.

[Kwasi Kwarteng]

I was not making a personal attack on the hon. Gentleman’s role. If he had listened to what I said, he would know I was not commenting on his record as an MP; I was simply saying that the tone and negativity he expressed in that particular intervention in this debate did a disservice to his constituents. I was making a specific point.

[Richard Fuller]

To bring my right hon. Friend back to what the Opposition spokesperson, the right hon. Member for Doncaster North (Edward Miliband) was saying about the haste with which money can go to support my right hon. Friend’s plan for energy-intensive industries, is this not the same Labour Front Bench that was urging my right hon. Friend to give money to a business that is now under review by the Serious Fraud Office? Is my right hon. Friend’s prudence not therefore wiser than the rashness of the Opposition Front Bench?

[Kwasi Kwarteng]

That is a very good intervention. Labour Front Benchers were urging that £170 million from the UK taxpayer be given to a business that we now know has been recapitalised, has money from private creditors and is still operating. It would have been a disaster to sign away £170 million directly in the way they urged.

In conclusion, the Budget is a blueprint for a stronger Britain: a country where those with innovative ideas will get the support they need to turn them from dream to reality; a country where those whose talent is nurtured and whose skills are honed will get support, ongoing interest and strong engagement from the Government; a country where those who do an honest day’s work will receive a decent wage. We have every right to be confident about our future. We have listened to the litany of woe and despair for too long and, as my right hon. Friend the Chancellor said yesterday, we are optimistic and excited about the future of our country. Only a week ago at the global investment summit, people from across the world were desperate to invest in the UK; they believe in their bones that the UK is a great place to do business.

[Jim Shannon (Strangford) (DUP)]

Minister, my hon. Friend the Member for North Antrim (Ian Paisley) and I hope to have a meeting with you shortly on hydrogen and how it can be used to advance this great United Kingdom. Can you confirm exactly how it will benefit every part of Great Britain and Northern Ireland?

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. I remind the hon. Gentleman that he cannot address the Minister as “Minister”; he has to address him as “the right hon. Gentleman” or say “would the Minister?”, because when he says “Minister” that is second person, vocative case. He cannot say “Minister.” Other Members might know that the hon. Member for Strangford (Jim Shannon) and I have been having this conversation now for several years and it is my ambition that he will get it right, and one day he will.

[Kwasi Kwarteng]

We are very grateful for the long-forgotten grammar lessons administered from the Chair.

Hydrogen is important, and we have had debates on it in Westminster Hall and this place. I look forward to engaging with the hon. Member for Strangford (Jim Shannon) on this; I am due to visit Northern Ireland and I am sure we will have very constructive conversations.

The global investment summit was a huge success, and it was proof that, contrary to the picture of devastation, gloom and pessimism painted by Opposition Members, we are open for business as a country and attracting investment to a degree we have never seen before. It showed in the Budget yesterday that, as we race towards a new and brighter future, the Government will make driving economic recovery through private investment—that is central to this—a top priority. That is something I certainly commend to the House.