Finance Bill

Margot James Excerpts

Tuesday 20th July 2010 Commons Chamber

[Margot James (Stourbridge) (Con)]

I never cease to be surprised by some of the speeches from the Labour Benches. Some could have been made had the Labour party won the last election, because much of what our Government are doing would have to have been done whichever party had got in. Labour Members’ wholesale opposition to cuts and every single tax increase that has been forced on us is nothing short of astonishing. A BBC journalist to whom I was speaking over the weekend had interviewed all five contenders for the Labour leadership contest and only one had had the courage to admit that the public sector was simply too large and unaffordable. We are merely doing what has to be done.

The Labour party proposed spending cuts before the election; that is well known. It postponed the spending review until after the election, but it was planning 50% reductions in the capital budget and 20% reductions in revenue. However, it would not say where the cuts were coming from. Does it not concern Labour Members that they are so isolated? The OECD, the G20, the Governor of the Bank of England and even past Ministers from their own Government are acknowledging that this Budget is a good one in the circumstances. If they are not concerned by what those global organisations and City opinion leaders think of our Budget, will they be concerned about what the average man and woman in the street thinks of it?

The people whom I represent in Stourbridge, in the black country, have had to make cutbacks in their personal expenditure, as families and individuals, for a long time. They have had to prioritise the paying off of their own debt as individuals. The small businesses for which they work have had to pull their horns in. In the past two years, companies in my constituency have seen their order books fall by 50%. How can they manage such a reduction without resorting to the sort of cuts in their own expenditure that our Government are now courageously proposing as part of the Finance Bill?

The public know that the situation cannot go on. The shadow Chief Secretary to the Treasury was right to say that some of the problems were brought about by the banking crisis that precipitated the global recession. But the public also know that this country was the least prepared on entering that recession. From 2001, the former Prime Minister, as Chancellor, started upping the ante and increasing spending year on year without relief. During the years of growth, he made no provision for rainier days.

[Stephen Williams (Bristol West) (LD)]

My hon. Friend may be interested to learn about what happened when we sat on the Opposition Benches on the other side of the Chamber. Our right hon. Friend the Secretary of State for Business, Innovation and Skills, as Lib Dem shadow Chancellor, warned the former Chancellor of the Exchequer about the credit bubble being built up, but he was jeered and hooted at by Labour MPs, who were on this side of the Chamber at that time.

[Margot James]

I thank my hon. Friend for giving me the benefit of some of the history of the House before I was a Member. Many of the opinions of the Secretary of State were indeed prescient. What my hon. Friend has added to the debate is truly shocking.

The public sector is clearly unaffordable. The restructuring has been inevitable; there has been no choice on our side as far as that is concerned. Yes, we will try to make a virtue of a necessity and seek to rebalance the public and private sectors, which this country has long needed irrespective of the conditions in which we now find ourselves.

[Toby Perkins]

The hon. Lady mentioned the prescience of the right hon. Member for Twickenham (Vince Cable) and has commented on the size of the debt and how we got into this position. Will she also acknowledge that right up until 2008, before she came to the House, her party was arguing not for less but for more public spending in a raft of areas?

[Margot James]

I am glad that the hon. Gentleman intervened because I cannot understand why that point keeps being made by Labour Members. I fought the 2005 general election and our party’s policy was clear: we would share the proceeds of growth. We were not advocating spending at the same rate as the Labour party did when in government; yes, we were arguing for increases, but at a significantly lower rate than was happening under the Labour party. I should like to put that on the record.

I return to my theme that this Budget does a great public service in restoring the private sector as the driver of the growth that will get the country out of the mess that has been left to us to sort out. I want to commend a few of the key features of the Bill. The reduction in corporation tax to 20% for small and medium-sized businesses and the longer-term reduction for larger businesses are key. There is also the Work programme, which is about making work pay. We need to make sure that those who can work have the opportunity to do so—indeed, they must.

There are 50,000 more apprenticeship places and the national insurance holiday for new companies, which do not have to pay any national insurance whatever for the first 10 employees. Furthermore, the Government have abandoned the Labour party’s dangerous plan to levy an additional rate of employers’ national insurance and there has been a £250 million increase in the enterprise growth fund, meaning that medium-sized companies in this country have access to more credit. Those measures will restore the private sector. Painful measures that we are obliged to place on the public sector—with the full support, I believe, of the public—will be more than made up for by the recovery of the private sector, because, according to the Office for Budget Responsibility’s projections, employment will rise year on year. I know that Labour Members are sceptical about that, but I believe in British industry and think that our private sector, including all the small companies in my constituency, is ready for the challenge. We have at last liberated it so that it can take up the challenge. I have every confidence that through the recovery of the private sector, the country will prosper once again.