Economy: Budget Statement

Lord Bates Excerpts

Thursday 22nd March 2012 Lords Chamber

[Lord Bates]

My Lords, it is a pleasure to speak in this debate and I congratulate the Minister on the way that he introduced it. It is always a pleasure to follow the noble Lord, Lord Myners, but his description of the Budget as boring would not necessarily be borne out by a cursory glance at the headlines in the newspapers this morning. It seems pretty exciting. By nature, people always tend to focus on the negatives rather than the positives. If the House will bear with me, I should like to focus on a bit of good news and on a few of the positives that are coming out of the Budget as far as I am concerned, as well as the positive stories that I hear in my native north-east England. I want to pass on a few of those thoughts.

Sometimes we need to get a balance in this country and I do not think that the media help us in doing that. We had the fantastic news yesterday that the state pension is to be increased by 5.2 per cent. That is a record in recent years. It is going up by about £5.30 a week, which is an extra £250 a year. It would be nice to hear some more news of that nature as well as, rightly, hearing comments about taxation. It would be nice to hear how pensioners are benefiting in other ways through the Government getting inflation down and keeping it down. I am referring to the big picture of retaining confidence in the British economy from international markets. That is hugely important for us.

The north-east is in many ways a good place to look at as a sort of case study or test bed for how this Government’s policies are working. We have heard about the attempt to rebalance the economy away from an overreliance on the public sector to a strengthening of the private sector, and that is a very good thing. I recall a few years ago hearing the devastating news of the closure of the Corus steelworks, the shelving of plans for the Hitachi train order and the huge lay-offs at Nissan. However, the mood music is changing up there. We have heard the announcement of another 2,000 jobs at Nissan and seen the reopening of the Corus steelworks, with the Government giving the go-ahead for the Hitachi train orders, meaning 800 jobs. That is a bit of good news to hear about in the area.

We always observe weaknesses rather than focus on strengths but we should play to our strengths. One strength of the north-east is that it is the only region in the United Kingdom that exports more than it imports. In the last quarter of 2011, its exports hit a new record level. What is more, that is evidence of a resurgence in manufacturing. Just this week, an exhibition was staged here by the energy company Northern Offshore, and I talked to Keith Hunter, who helped to found the organisation. He told me that he is now working with Siemens, which last year recruited 37 apprentices to work on wind turbines in the new developments offshore in the north-east of England. This year, he will recruit another 37 apprentices, and the company intends to create another 35 to 40 new apprenticeships each year for the foreseeable future. That is real evidence of what is happening on the ground.

Today, I had the opportunity to meet Allan Cook of Arlington Real Estate and Neil McMillan of Carillion Developments, who are creating a marvellous development at Durham Gate in Spennymoor. It will be the global research and development centre for Stanley Black & Decker, providing highly skilled jobs in Durham. They are talking about the number of jobs on that site going up from 200 to 2,000. In a sense, it does not matter what I as a politician say about these things; this is what real people creating real jobs are saying. To add to that, I was very interested to discover that half the chemicals in the United Kingdom are manufactured in the north-east of England. When Andrew Witty, chief executive of GlaxoSmithKline, speaks, we all tend to stand to attention and listen. Regarding the Budget, he said that the patent box and fall in corporation tax have,

“really changed the investment decision for us”.

He is referring to the above-line R&D tax credit and the fall in corporation tax. The UK was among the highest corporation tax chargers in the world and is now one of the lowest. That is a real change and it sends out a message. It sets the mood music for decisions to be made, and companies such as GlaxoSmithKline are listening to that. That is very welcome, as is the change to the higher rate of tax.

We need to get away from a politics which is perennially based around arguments of greed and envy, and we need to focus on recognising that wealth creation is a wonderful thing. The more wealth creation we get, the more jobs are created, the more tax revenues come to the Government, and the more we can invest in our public services and care for the poor at home and around the world. That, to me, is what a good society looks like. Therefore, bringing down the higher rate of tax is a very good thing. In fact, I have an endorsement of this. I was reading the report of the debate on the Budget in the other place and came across a quotation from Tony Blair’s latest book. He is quoted as having said:

“I wanted to preserve, in terms of competitive tax rates, the essential Thatcher/Howe/Lawson legacy. I wanted wealthy people to feel at home and welcomed in the UK so that they could bring more business, create jobs and spread some of that wealth around”.

I think that Tony Blair was right, and in essence this Government are trying to build on that.

One thing that the north-east has often suffered from is that it has had far too much faith in governments of all persuasions in Whitehall and far too little faith in itself. People need the self-confidence and belief to say, “We can get out there. We can make a difference”. I was interested in a survey undertaken by the BBC—so it must be 100 per cent accurate—looking at the best places for business champions. Lo and behold, it found that according to the latest research the north-east is ranked first in England in terms of business champions. It said:

“The criteria for these include young, small companies which are less than 10 years old and with fewer than 50 employees, with directors with entrepreneurial appetite and are part of a wider corporate network”.

It is great news to be given top ranking. It is nice to see the BBC give more of a headline to that type of declaration about the north-east rather than perpetually run the region down and tell us about all the problems. We are all too well aware of our problems but we do not talk enough about our successes either as a region or as a country, and I think that that is what this Budget does. It helps us to remember that we have some fantastic businesses and some great entrepreneurs who are creating wealth in this country. We are incredibly proud of them. What they need is not a Government who are on their back but a Government who are on their side.