Budget Statement

Lord Holmes of Richmond Excerpts

Thursday 27th March 2014 Lords Chamber

[Lord Holmes of Richmond (Con)]

My Lords, I thank the Minister for launching this debate. Indeed, it is difficult to think of a more significant debate. If we want a world-class health service, world-class education and world-class transport, we can get them only if they are founded on a world-class economy.

Last week’s Budget was about jobs, business and Britain, so let us consider the employment figures that were issued that day. They showed that more people in this country are in work than ever before—more people employed in the private sector than ever before, and, best of all, more women in employment than ever before. These are not just figures that we can bandy around or statistics for economists to consider; these are real people’s lives. We have higher employment, lower unemployment and more people on the right path in this country as a result of the measures that have been taken since 2010. But let us not take the words of politicians or pundits, or even the words of economists. Let us trust business.

The day after the Budget, as has been mentioned, Hitachi announced that it was going to base its global—yes, its global—rail business in the country. A few days later, Siemens announced investment that will create more than 1,000 jobs in renewables. Business believes in Britain. We should similarly believe in and back business to invest in this country. To secure jobs is one thing but we should also focus relentlessly on building up skills and talents, particularly in our young people—training them to be able to take up these jobs, not least in engineering and manufacturing. In that, we should all pay tribute to my noble friend Lord Baker of Dorking for his work with university technical colleges. I should mention also the JCB Academy and the work of my noble friend Lord Bamford. These initiatives are making a difference.

If Hitachi and Siemens demonstrate that businesses are coming to Britain and want to base their operations here, we also need to act to ensure that British business gets the best bang abroad. What we saw in the Budget was a real commitment in doubling the funding for exporters to £3 billion and cutting the interest that they will pay by one-third. This is urgent and necessary, and it will make a difference. For too long, we have relied on the European market. Europe takes 40% of our exports but when I studied economics Europe took around two-thirds of our exports. We can see the way that that market is going. However, it is still a significant market and we are focusing on getting our businesses into every corner of it.

We are still so far away from grasping the prize that the BRICS economies and the so-called new MINT economies offer to us. The “Great” campaign from the Foreign and Commonwealth Office and BIS is significant in this area but we are starting from such a low base. When I was in Rio in 2011 with the “Great” campaign, I discovered that we export four times less to Brazil than Italy does. Italy is a fine country but it is one with no language, cultural or historical links to Brazil. Yet through effort and connection it has made that happen. It exports four times more to Brazil than the United Kingdom. The BRICS economies and the MINT economies are there for us. The whole of Africa is there for us to ensure that we put everything in place to enable our businesses to go out there and do the business.

The Budget threw a helpful and necessary light on pensions. In reality, it was seeking to address people’s trust in pensions. Over the past week, reports of the death of the annuity have been greatly exaggerated. The annuity is a fine financial vehicle for delivering certainty, security and a de-risked retirement. I do not believe that the changes introduced in last week’s Budget will mark the death knell of the annuity. It will still be a product into which millions will decide to put their funds but the crucial point is that it gives individuals the choice of when to take a particular financial vehicle, how much to put into it and what to do with their savings, which they have been building up for decades. This is about freedom and choice. Crucially, it is about trusting us all, as individuals and across the country—everyone with a DC pension pot—to do the right thing.

The Budget was about belief in the individual. If the right environment is put in place, people up and down the country—all of us—and businesses will do the right thing. Businesses will invest and back their workforces. They will get out there and build, make, manufacture and export. It was a Budget that believed in Britain, rooted in the reality that we are at our most brilliant and best when we work together and come together. We saw this in 2012 with the Olympic and Paralympic Games, so excellently steered by my noble friend the Minister. We see it across the country, in the smallest economic and social acts and in communities and businesses, from Inverness to St Ives. We are at our best and we are better together. Together, we all need to continue on this journey to try to secure and sustain Britain’s economy. We are on the right road but we have barely begun the journey. It is in everyone’s best interests, whichever corner of the country or perspective you come from, to have a high-employment, low-inflation, high-productivity and low-interest rate United Kingdom economy that is focused on and fit for a national, European and global future.