Economic Growth

Lindsay Hoyle Excerpts

Wednesday 15th May 2013 Commons Chamber

[Mr Ben Wallace (Wyre and Preston North) (Con)]

People used to say that England’s bread hung by Lancashire’s thread. In this debate, I want to focus on some of the good news on the rebalancing of the economy. The news has not been all bad, and, despite the economic circumstances, my constituents and the people of Lancashire have a good track record of rebuilding and moving forward and of expanding exports and manufacturing.

Manufacturing output rose last month. Today’s figures show that, in my constituency, unemployment dropped again. It dropped compared with last month and with last year. We now have 81,000 more people working in manufacturing than we did in 2011. Despite all the economic troubles, the people of Lancashire live in the real world. They know how the welfare changes have helped to encourage people to get back into work, and they know that the Government’s policy is trying to help businesses large and small to export and grow.

Despite our domestic difficulties on the European Union at the moment, that “real-worldness” of my Lancashire constituents has been demonstrated in the recent local elections. The real story in Lancashire was not the United Kingdom Independence party; it was that the Labour party failed to take back the county that it had run for 26 years. Funnily enough, people are not convinced by the Ed and Ed show, or by Labour’s economic credibility. But let us move away from the European thing. I know that the Opposition would like to focus on it, but I think that it will pass—[Laughter.] Opposition Members might laugh, but there are nine marginal seats in Lancashire, and if Labour cannot win Lancashire county council, it is not going to win a general election fast. Labour knows that.

BAE is one of our local employers, and 19,000 people work in the aerospace industry. Profits are up, orders are up, and it has recently landed a £2.5 billion order from Oman to build Hawks and Typhoons. The Typhoon Eurofighter is made in Samlesbury and Warton. That did not happen by accident, but because of the investment in skills that successive Governments and this Government have put into my constituency. Recently, the Government announced extra funding for Preston further education college, and more is on the way for Myerscough. Building up the skills base is one reason why BAE remains one of the most competitive and leading exporters in the country, training thousands of apprentices every year—some Government funded, some not.

As we speak, the Prime Minister is abroad yet again, trying to make sure that we negotiate a free trade treaty to allow British business to prosper in the American market. Only recently, we had a state visit from the President of United Arab Emirates, which was partly about trying to sell more British and Lancashire-made manufacturing to the middle east. The Prime Minister has taken rebalancing the economy and moving forward on growth seriously.

We have seen investment through the Department for Business, Innovation and Skills, under its Secretary of State—the Liberal Democrat part of our coalition—that has helped to support the Lancashire local enterprise zone in Samlesbury, where we hope to get skills academies and more investment in our young people.

Then, beyond that, are the changes the Chancellor has produced in the Budget—an increase in the use of the R and D tax credit that rewards our investment, for example, and the rolling out of the patent box, which means people who exploit their intellectual property in this country will pay some of the lowest corporation tax in Europe. That is why this country has a future in growing its manufacturing base and is on the right path to rebalancing.

In future, I want the Government to continue to invest in the F-35 joint strike fighter and the new generation of unmanned aerial vehicles. I also look to a city deal for Preston, hopefully worth £300 million—if we can get the Treasury to move along a bit quicker.

Something that is important for the future of the whole country is shale gas, and it is under my feet, in my constituency, that the Bowland shale exists. It is currently valued at 35 billion barrels of oil equivalent of gas—a $200 billion revenue stream, should it be extracted. We need it in Lancashire and in the country more widely for security of supply; we need it as alternative energy; and we need it to make sure that this country benefits from its assets and its mineral wealth.

We in Lancashire have a story to tell. Lancashire’s history is about reinventing itself and building for the future. It is not for nothing that Preston is one of the northern cities that bucked the trend since 1908 and has been one of the most progressive cities. Let us remember for the future that—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order.

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[Sammy Wilson (East Antrim) (DUP)]

It is a pleasure to follow the hon. Member for South Dorset (Richard Drax). The Democratic Unionist party endorses his views on the amendment, which we support. We believe it is important that the people of the United Kingdom should have a say about their relationship with Europe. Some of those who oppose the commitment to a referendum claim that it will somehow leave us with four years of uncertainty and that that will damage investment in the UK, but the genie is out of the bottle as far as renegotiation and a referendum are concerned. Any investor knows what will happen at some stage in the future, so there should be no difficulty in giving the people of the United Kingdom a say on this very important issue. I will concentrate on other issues that relate to economic growth, but I accept that our relationship with Europe impacts on economic growth in this country.

If we are to achieve the objectives in the Queen’s Speech of giving people job opportunities, rewarding hard work and reforming welfare, economic growth is important. If we are to create economic growth, we need proper stimulus. The Chancellor and the Government argue that we cannot borrow more in order to borrow less. That is not true. Good, solid investment in the economy would help us to grow and to pay our debts. That is not the view of those on the extreme left wing; it is the view of the IMF, which is hardly a left-wing organisation. In fact, many of its policies resonate with what is said by the Government. It is also the view of many industry organisations.

More importantly, the evidence of what has been happening in the economy bears out that view. The hon. Member for Wyre and Preston North (Mr Wallace) talked about what is happening in his constituency. Nearly every example that he gave was the result of stimulus through Government borrowing and spending to create infrastructure and produce jobs. I could give stacks of examples from Northern Ireland. There has been investment in our tourism industry. Not so long ago, we got a Barnett consequential as a result of the Government deciding to spend more money on housing. We put it into co-ownership housing, which has brought money down from the banks and has led to almost half of the houses being built in the private sector. Just a small amount of money from the public sector has created construction jobs and allowed people to pay their taxes, which adds to Government revenue and helps to pay off the deficit.

There is a strong case, even from traditional supporters of the Government, for borrowing and spending more money to stimulate the economy. The Chancellor made a big point today about the money markets. Actually, the money markets are quite relaxed about this. They are lending money to the United Kingdom on negative interest rates. There is more demand for Government bonds than supply. If there are sensible investment policies, the money can be made available. The question is whether there is the will or whether the Government have some other motive.

I am disappointed that there is not much detail on what the Government intend to do about banking. According to the figures published by the British Bankers Association, lending by the banks in Northern Ireland has fallen substantially since 2010. We have not dealt with the banking crisis. There is not time in this debate to talk about the detail, but unless the Government grasp the nettle and decide what to do with failing banks that are undercapitalised and unable or unwilling to lend, we will not stimulate growth. I believe that there is great potential and that a Government stimulus could release the billions of pounds of cash assets that are sitting on company balance sheets, which would enable us to get growth and achieve the objectives of—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order.

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[Mr Bailey]

Will the hon. Gentleman give way?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I am sure the hon. Gentleman will give way very shortly after he has made those comments.

[Charlie Elphicke]

I will give way to the hon. Gentleman in a moment.

My constituents feel that 5 million in this country could work but do not. They ought to have more investment and opportunity, and more chances to fulfil their potential. That is why the reforms to welfare to make work pay, the reforms to the skills agenda, the reforms to control migration, and the reforms to control, police and secure our borders are important—they give our fellow citizens more of a chance to do well and succeed in life, and to see their potential unleashed.