Economic Affairs and Work and Pensions

Nadhim Zahawi Excerpts

Tuesday 8th June 2010 Commons Chamber

[Mr Darling]

I think it was providing a response to a parliamentary question from my right hon. Friend that obliged me to read the report. I remember spending two days reading it and giving my decision. However, I do not have the benefit of the advice I received, which I now need to remind me why I refused his request at that time. All I can say is that I refused his request for entirely the right reasons but, 10 years later and in the spirit of freedom of information, I am not saying that it definitely should be looked at, but the present Chancellor or whoever is dealing with the issue should look at the matter and perhaps 10 years further on someone else looking at that report might reach a different conclusion. I reiterate, whatever decision I reached was right for the reasons I gave at the time.

May I also tell the Chancellor that it would be helpful if he took the opportunity to spell out the Government’s policy on the banks in which the Government have shareholdings—Northern Rock, Lloyds, the Royal Bank of Scotland—because that is a matter of interest, especially now that RBS is talking about disposing of its Williams & Glyn’s branches and others? I believe it is the view of both main political parties that there ought to be more competition in the system, so a clear statement on Government policy on how we do that would be helpful. We do not want to end up selling a tranche of banks to another big UK operator, because that would mean that we would not get the competition we want.

I was interested to re-read last Friday the Business, Innovations and Skills Secretary’s criticism of the banks’ failure to lend, but it is not entirely clear to me what the new Government are doing to increase bank lending. It would be useful to hear from the Chancellor, or at least one of his colleagues, in the fairly near future on that.

However, the main focus of today’s debate is, inevitably, the economy, as it was in Treasury questions for the past hour or so. Yesterday, predictably, the Prime Minister, as the Chancellor did today, sought to lay the blame for everything the new Government plan to do on the previous Government. There is nothing new in that: new Governments frequently blame their predecessors and it is the easiest thing in the world to do. It is equally unsurprising that the Prime Minister and the Chancellor should go around the country and other parts of the world and say, “The situation is much, much worse than we thought. It’s all terrible and we will have to do terrible things.” By a stroke of good fortune, they have the Liberal Democrats to front up some of the difficult decisions they must take.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

Did not the shadow Chief Secretary to the Treasury, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), rather than the new Government, reveal the desperate state in which the shadow Chancellor left the country’s finances?

[Mr Darling]

Forgive me if I have misunderstood the hon. Gentleman, but throughout the three years when I was Chancellor, I do not think that I ever, on any occasion, concealed from anyone the difficulties that we and other economies would face as a result of the deepest global downturn in the past century. There can be no doubt about that.

However, I should tell the hon. Gentleman and his colleagues that by 2008, it was clear that this country, and every other major developed country in the world, faced the catastrophic consequences of the failure of the banking system. Had we not taken action to stabilise the banking system—many of those decisions were opposed by the Conservatives—and to ensure that we supported our economy when private sector investment dried up and died away, we would have had a situation in which recession tipped into depression. That is why we took the action that we did. We were right to do so, and the Conservatives were wrong to oppose us. Our economy is now growing, and as I said earlier, unemployment is half that in the downturn of the 1990s, and borrowing is coming down, because of the action we took in 2008 and 2009. We took that action along with most developed countries.

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[Nadhim Zahawi (Stratford-on-Avon) (Con)]

Thank you for calling me, Mr. Deputy Speaker. I should like congratulate all those who have made their maiden speeches, especially my good Friends the hon. Members for Rugby (Mark Pawsey), for Bromsgrove (Sajid Javid) and for Spelthorne (Kwasi Kwarteng).

Mr Deputy Speaker, I would love to be able to tell the House that generations of Zahawis have lived and worked in Stratford for hundreds of years, but I suspect you just might spot that I would be stretching the truth a little. What I can tell the House is that I have had the most incredibly warm welcome from all the thousands of people I met through the campaign, and that Stratfordians are truly special people—a rightly proud people. It was humbling for me to achieve 51% of the vote in an eight-horse race, and I will never forget who put me in this place.

My predecessor was a first-class Member of Parliament and I am not surprised that he has been elevated to the other place. I did not know him well, as I have spent the past 11 years concentrating on building up a business rather than around the candidates department, but I very quickly learned that there is an enormous amount of affection and huge respect for him among the people of my constituency. Coupled with that achievement is his hard work for his country and his party. He held the posts of shadow Health, Defence and Foreign Secretaries, and he was also deputy chairman of the party twice. I am thrilled that he has chosen to be known as the Lord Maples of Stratford-upon-Avon.

My constituency covers some 465 square miles. It contains some of England’s most attractive market towns and some 120 stunning villages, ranging from Long Compton in the south to Earlswood in the north. Stratford town itself awaits the re-opening of the Royal Shakespeare Company theatre in November; under the great leadership of Vicky Hayward, it is undergoing a £112 million makeover that will deliver a whole new experience for those coming to see the works of the great bard. My wife Lana and I were honoured to be part of the procession for his 446th birthday celebrations in April, when we walked from his birthplace in Henley street to his place of rest at Holy Trinity church.

My constituency is not without its problems, some very local and others inflicted on it by the policies of the previous Government. The town of Stratford is suffering from overdevelopment, and the top-down targets set by central Government have clearly done a lot of damage. All our towns have problems with antisocial behaviour and thuggery, which stem from a combination of the 24-hour drinking laws and a police force who are hampered by bureaucracy. The farmers are suffering too, with too much red tape, the single farm payments being delayed for months, and the problem with badgers, which I highlighted in the House last week. I will continue my predecessor’s campaign for better flood defences and to save our fire stations in Alcester, Bidford and Studley.

The biggest problem in Stratford-on-Avon is the economy. We have too many closed shops and too many burdens on business. We need to help small and medium-sized businesses to do better and get back on their feet. They, as my right hon. Friend the Chancellor has identified, are the future and the solution to our economic woes. I am very pleased to have seen my right hon. Friend make the Government’s first ministerial visit to China and play such a central role at the G20 in South Korea. I am pleased to see in the Gracious Speech special emphasis on balancing the books, getting rid of the tax on jobs and giving a one-year national insurance holiday to start-ups. I strongly believe that that will be a catalyst to kick-start the enterprise economy.

I now utter my only word of caution. I am someone with first-hand experience of a start-up. We must be careful what we do on capital gains tax. Of course I understand the need to raise some taxes and to help to create a fairer tax system. It must be right to relieve the lowest earners of the tax burden. I would go as far as labelling it a moral tax cut. However, it is important to remember the job creators, those who back them and those who join them and work for them. It would be counter-productive to penalise people who invest in start-ups—in itself a high-risk thing—by increasing CGT on their investment. It would also be wrong to penalise employees who join a risky start-up from possibly a safer occupation and, of course, to penalise entrepreneurs themselves.

In the Gracious Speech there was a strong focus on freedom, fairness and responsibility. It would be unfair and wrong to penalise people who have acted and saved responsibly with a further tax at a time when we are introducing incentives to act responsibly in marriage and partnership. Penalising responsible investment would send a contradictory and unhealthy message to the country.

No maiden speech from the Member for Stratford-on-Avon would be complete without a quote from our country’s greatest poet and playwright. I thought long and hard about which of his works would be most appropriate, and I settled on the Scottish play, that great tale of human ambition, conspiracy and tragedy. It is from the witches scene in act I, which must surely be read as a warning to the three largest parties in this House:

“When shall we three meet again

In thunder, lightning, or in rain?

When the hurly-burly’s done,

When the battle’s lost and won.

That will be ere the set of sun.”

Our country faces a dark economic storm, and the people will be watching us and how we behave in this House. Let us not be tempted by self-interest or party interest but let us instead put our country first.