Department for Business, Innovation and Skills (Performance)

Mel Stride Excerpts

Wednesday 2nd February 2011 Commons Chamber

[Mr Denham]

My hon. Friend is absolutely right, and I shall address several such decisions that the Business Secretary has made.

[Mel Stride (Central Devon) (Con)]

Will the right hon. Gentleman give way?

[Mr Denham]

Not at the moment.

It is not as though the Government were not warned about what was coming. When the Tory-led Government took over, recovery was strengthening and unemployment falling. Since then, every decision they have made has made things worse. They stopped the loan to Forgemasters, showing that they had no plan to ensure that British companies gained from a new nuclear programme. When the emergency Budget was introduced in June, the Office for Budget Responsibility said that growth would be slower and employment down as a direct result of the Government’s measures. When they chose to make the biggest cuts in the most vulnerable communities, it was clear that the regions would need new growth and new jobs. When the Government published the comprehensive spending review in October, the Office for Budget Responsibility told them that growth would fall and unemployment would rise. Independent organisations from the Chartered Institute of Personnel and Development to PricewaterhouseCoopers and the Local Government Association warned that reckless cuts would destroy jobs in the public and private sectors, yet the Business Secretary did nothing.

We were promised a White Paper on growth in October. Then the civil servants said that there was not enough content to warrant one. Two months later, the Business Secretary was bundled aside and the Chancellor took charge, so now we are promised a Budget for growth on 23 March. This Tory-led Government will have been in office for 10 months and three weeks by then. That will be 321 wasted days of complacency, drift and inactivity. By the time any Budget measures are implemented, we will have had a wasted year that this country cannot afford.

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[Mr Denham]

Thank you, Mr Speaker, and given what you have said, the House will understand if I do not take too many more interventions. However, I would simply point out that I was proud to be part of a Government who created 3 million jobs. After we had been in office, there were 1.1 million more small businesses than there were when we came into power.

[Mel Stride]

Will the right hon. Gentleman give way?

[Mr Marcus Jones (Nuneaton) (Con)]

Will the right hon. Gentleman give way?

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[Simon Kirby (Brighton, Kemptown) (Con)]

The right hon. Member for Southampton, Itchen (Mr Denham) is absolutely right when he says that the Government must take decisive action—decisive action to address the staggering deficit and huge public debt inherited from the Labour party; decisive action as a direct result of the previous Government spending more than they raised in taxation; and decisive action because the Labour party burdened generations to come with the liabilities incurred for the current generation. That decisive action will help to put in place the right macro-economic conditions for recovery.

[Mel Stride]

Does my hon. Friend agree that only the prompt action that the Government took in the emergency Budget shortly after the election ensured that we stabilised the markets, which in turn kept interest rates low, which in turn kept sterling low and encouraged manufacturing exports?

[Simon Kirby]

My hon. Friend is, as usual, correct. We inherited a very big mess indeed.

Coalition Ministers are driving forward a programme with one purpose—creating jobs. There is talk about what is happening. A raft of measures have been introduced, and those are designed to support economic recovery, boost business and help the private sector to create jobs. Corporation tax is falling for both small and large firms. The previous Government’s planned increase in employer national insurance contributions has been stopped. National insurance contribution discounts are being offered to encourage new start-ups to take on employees. Small-business rate relief has been doubled for a year, and the Government are getting to grips with the red tape that strangles so many of our small firms.

Let me be clear on this point—

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[Simon Kirby]

No, I will not accept those facts. I am often struck, looking at those on the Opposition Benches, by how few people have been in business, how few have employed people and how few have filled in a VAT return. I have employed more people than could fit in this Chamber, and I speak from some experience.

[Mel Stride]

On the point made by the hon. Member for Kingston upon Hull East (Karl Turner), does my hon. Friend agree that it is typical of the previous Government that they left office with unemployment higher than when they came to office—the case with every single Labour Government in history?

[Simon Kirby]

I agree with my hon. Friend. One of the sad things about unemployment is the youth unemployment element, which is particularly prevalent in my constituency. It is, frankly, a disgrace.

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[Mr Brian Binley (Northampton South) (Con)]

Today has been a revelation to me. I understood that denial was a medically treatable condition, but I did not know that it was a collective condition. Today has opened my eyes in that respect. The denial is best illustrated by the shadow Chancellor’s recent statement:

“I don’t think we had a structural deficit at all”.

By golly, we have had a deficit every year since 2002. Indeed, it rose massively to the point when, in 2010, we were borrowing £1 of every £4 we spent. If that is not a structural deficit in anybody’s book, I do not know what is.

This matter is best understood by recognising the growth in public sector employment of 20%. More than 1 million new people now work in the public sector. That productivity barely rose in some areas and went down in others shows how successful that was. That is an unbelievable fact that any businessman would say is the road to bankruptcy. That is exactly what the previous Government did to this country. Thank God we had an election and a change of Government.

I will move on to other areas in which the previous Government let down British industry. First, let us consider employment tribunals. When I was in business, I stood in four tribunals and won each of them. On each occasion, I was told by colleagues, “Pay ’em.” The previous Government created an aura of commercial blackmail that is totally unacceptable. Thank God the present Government are doing something about that.

[Mel Stride]

Does my hon. Friend agree that it is essential that we do something about claims to employment tribunals, which increased by 57% in 2010? They are feeding lawyers and depriving businesses of investment.

[Mr Binley]

My hon. Friend is right. There were 236,000 cases last year—a record figure. That suggests that something needs to be done. This Government are doing something about it and I am grateful.

The cost burden of regulation on business increased by £10 billion a year under the previous Government. That money could have been used for investment, but instead it had to be spent on complying with regulation after regulation, which the previous Government had gold-plated.

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[Alison McGovern]

That is an interesting perspective, and I obviously have great respect for the learned people that the hon. Lady has mentioned—[Interruption.] Of course I have great respect for the Royal Society.

The Government cannot say that the corporation tax cut will enable investment. Ireland had one of the lowest corporation tax rates, and look what happened there.

[Mel Stride]

Will the hon. Lady give way?

[Alison McGovern]

I have given way twice; I will not give way again.

The corporation tax cut will help only companies with profits. We want to see strategic Government-led and business-led investment in the sectors that can most help us to progress out of the recession. I see no leadership from the Government on this issue. They constantly crow about tax cuts for business, but they have effectively handed profits back to the profitable bits of the banking sector and large companies, when they should be using that money to invest in high-technology manufacturing, such as that in my constituency. That message is coming to me loud and clear from the global corporations that invest in Merseyside, as well as from the small companies. They need investment now, not an across-the-board corporation tax cut.

I now turn to the impact of all this on young people and on employment. Everyone in this House is concerned about young people, as well we should be. People will know that in the protests that have been taking place around the world, the action has been most pronounced in countries with extremely high unemployment. We have to face the facts. The Government’s offer to young people in Britain has been massively diminished. We have seen an end to the September guarantee and an end to the future jobs fund, which I know was helping young people in my constituency to build their CVs, so that when the recession ended and growth returned, they would be able to apply for jobs. We have seen an end to the education maintenance allowance, which was helping young people in my constituency to travel to the best possible courses for them, and an end to the commitment of the previous Government to the level of funding for further and higher education.

I was so concerned about what might happen to young people’s employment prospects that I asked the Minister responsible for employment some parliamentary questions about his expectations for the number of 16 to 24-year-olds on the dole. By my calculation, once we have taken into account the population projection for the current cohort of 16 to 24-year-olds, the Government expect there to be a reduction in the number of 16 to 24-year-olds on the dole across the life of this Parliament of less than one percentage point. I must ask Government Members whether they think it is good enough that the Government’s ambition throughout this Parliament is to reduce the number of young people on the dole by one percentage point. I do not think that is good enough.

The only answer that the Government seem to have to the unemployment that young people are facing because of the global crash and the Government’s inaction is their spurious figure of 75,000 new apprenticeships. We have already heard evidence that, even during the recession, the Labour Government were supporting a greater year-on-year increase in the number of apprenticeships, so the present plan seems wholly unambitious.

There is a further problem for 16 to 18-year-olds, many of whom are the very people we want to get into industry and business. They might not want to stay in full-time education, for whatever reason. As far as I can ascertain—I stand to be corrected if the Minister wants to intervene—16 to 18-year-olds will not be eligible for the new adult apprenticeships that the Minister wants to fund.