Budget Resolutions and Economic Situation

Lucy Frazer Excerpts

Thursday 9th July 2015 Commons Chamber

[Lucy Frazer (South East Cambridgeshire) (Con)]

It is an honour to speak after the hon. Member for Berwickshire, Roxburgh and Selkirk (Calum Kerr), who spoke eloquently. I was particularly interested to hear how his constituency is similar to mine and faces many of the same issues—it is a rural constituency where rural broadband and transport are key issues. I was also interested and honoured to speak after the hon. Member for Caithness, Sutherland and Easter Ross (Dr Monaghan) who made an equally passionate speech. I look forward to hearing many more speeches from him on similar subjects in the future.

This Conservative Budget is a Budget of core Conservative values—financial security, national security, and making work pay—and I wish to identify three different areas that I think should have cross-party support. The first is preparing our young people and getting them into work. It is about apprenticeships and the first step for our young adults to make their way in life. There can be little criticism of a scheme that helps to provide the foundations of the highly skilled workforce that we need for a competitive British economy. Through the apprenticeship levy, businesses are encouraged to take on and train our next generation, which will benefit from in-work training. We created 2 million apprenticeships in the last Parliament, and are committed to creating 3 million more—an ambition that surely must be welcomed.

The second point is about ensuring that for those in work, work pays, and that is achieved through the introduction of a national living wage. The concept of a living wage has had support from many quarters, including small and large businesses, parties across the political spectrum, and consumers across the country. The previous Government increased work opportunities across the country, and those in work must be paid fairly for the work they do, and be able to support themselves and their families from their own income. The new living wage starts to address that issue.

The living wage will also make headway in closing the gender pay gap. Historically, women have suffered more from low pay than men, and that has been a key factor in the gender pay gap. By increasing the minimum wage to a living wage, women stand to benefit and we take another step towards wage equality. Some have said that the amount the living wage is set at may not go far enough quickly enough. I note, however, that the right hon. Member for Doncaster North (Edward Miliband) called for an £8 minimum wage by 2020. The Chancellor has given us a £9 wage by the same date.

Thirdly, and critically, we must live within our means as a country. We cannot leave unnecessary debts to the next generation. In 2010 many said that it was not the right time to reduce the deficit. We had one of the highest deficits in the western world and we were coming out of recession with high unemployment. However, those who did not support the deficit reduction in 2010 must surely support it now. This year, the economy is predicted to grow by 2.4%, making us the fastest-growing western economy. We have the most competitive corporation tax in the G20. Our businesses have created 2 million more jobs since 2010, and the Office for Budget Responsibility forecasts that 1 million more will be created in the next five years. If now is the not the time to cut the deficit, when is?

The question must not be whether to cut the deficit to bring the country back to a surplus, but how. A Budget that makes efficiency savings, reduces tax avoidance and ensures we have a welfare system that rewards work must be, and is, the fairest way to achieve a stable recovery for all.

[George Kerevan (East Lothian) (SNP)]

The hon. and learned Lady and many others on the Government Benches have referred to the cut in corporation tax and the low and competitive rate of corporation tax in this country as an aid to economic development. I appreciate that we need to maintain competitiveness on corporation tax, but I put it to her that all that has happened in the past eight or nine years is that British companies have used that tax cut to build up something in the region of £550 billion of cash reserves that they are not investing. The weakness in the Budget yesterday is that it did nothing to encourage those companies to invest and raise productivity.

[Lucy Frazer]

In a global economy, where companies can invest in any country they choose and base their operations anywhere around the globe, it is absolutely essential that we get companies to invest in our country. We are ensuring that that happens by setting a competitive rate of corporation tax.

[Jeremy Quin]

Does my hon. Friend, like me, welcome the OBR’s confirmation that business investment grew by 8% last year? It expects business investment to grow this year and next year. I think my hon. Friend has quite a lot of ammunition with which to respond to the hon. Member for East Lothian (George Kerevan).

[Lucy Frazer]

I am very grateful to my hon. Friend for his intervention. Investment in our country is growing, which is why we have an increase in revenues.

For all three reasons, this is a Conservative Budget that is a Budget for all. It is founded on principles that should command cross-party support.