Financial Services

Neil Carmichael Excerpts

Wednesday 6th February 2013 Commons Chamber

[Greg Clark]

It is essential that the banks do not do that. They need to be transparent as to the source of the payment to meet the fines—that is essential. Far from those people being masters of the universe, they are culpable of doing a great disservice in falling way short of the standards of behaviour by which most decent people up and down the country would expect to live their lives.

[Neil Carmichael (Stroud) (Con)]

I welcome the statement and its robust and vigorous tone, which sets the scene for the appropriate direction of travel, but does the Minister agree that we need an influx of professionalism to the banking sector? That would be enhanced and made more likely by strong accountability mechanisms and more transparency. That is what I hear from small and medium-sized businesses who struggle to contact banks at all.

[Greg Clark]

I completely agree with my hon. Friend. The commission led by my hon. Friend the Member for Chichester (Mr Tyrie) is looking at how such professionalism, which can be found in financial services, can be bolstered and further recognised.

Air Passenger Duty

Neil Carmichael Excerpts

Thursday 1st November 2012 Commons Chamber

[Mr Graham Brady (Altrincham and Sale West) (Con)]

It is a pleasure to follow the right hon. Member for Wythenshawe and Sale East (Paul Goggins), with whom I share an interest in the importance of Manchester as a key driver of growth, jobs and prosperity in the north-west of England, particularly in the part of Manchester that we both represent. I am pleased to follow the good and cogent case he made about the importance of the airport and of freeing it up to attract more investment into the UK.

I also congratulate my hon. Friend the Member for Witham (Priti Patel) and others on securing this important debate. The case is unanswerable. We always want this country to be a world leader, except when it comes to the levels of taxation we impose on businesses and investment, and on our people when they have the modest aspiration of taking a foreign holiday. That is the position we find ourselves in. I am delighted to see the Economic Secretary in his relatively new position. He is a sensible man and a good Minister, and I hope that he will give this debate a good hearing.

I know that the Government believe in our key point, because they have set about reducing levels of corporation tax with the express intention of making us more competitive in the world and ensuring that businesses see the UK as a place to locate, rather than going to other places. The argument here is exactly the same. We do not want to be at the top of the international league table for aviation tax; we want to be towards the bottom, as that will help to bring in international business and investment.

[Neil Carmichael (Stroud) (Con)]

I am listening carefully to this important debate and I have heard a lot from my constituents about it. I recognise the revenue-raising function, but should we not underline the importance of international competition in transport and capacity, and think more in terms of an holistic approach to this policy area?

[Mr Brady]

That is absolutely right. It is also important to note, as the hon. Member for Belfast East (Naomi Long) did, that the Government have recognised the strength of this argument, not just in general terms about levels of taxation applied to business but specifically in relation to APD. They understand that in the case of Northern Ireland competing against the Republic there was an unanswerable case for a reduction in APD. It is apparent to us all that precisely the same argument applies to the UK and particularly to the regional airports—which many Members have mentioned—that compete with airports in continental Europe.

Beer Duty Escalator

Neil Carmichael Excerpts

Thursday 1st November 2012 Commons Chamber

[Greg Mulholland]

Despite being a co-sponsor, I only get eight minutes, so I will take only two interventions.

[Neil Carmichael (Stroud) (Con)]

I wish to highlight the fact that I have four breweries in my constituency—Uley brewery, Severn Vale, Stroud and John Kemp’s excellent brewery, which has produced a Coalition ale, appropriately for this debate. All four do a huge amount for the community. Does my hon. Friend agree that that is a powerful reason to support this motion?

--- Later in debate ---

[Neil Carmichael]

My hon. Friend is making some excellent points. Will he join me in commending the work of the Campaign for Real Ale, which does an outstanding job of promoting local pubs and sensible drinking? It certainly does that in my area of Gloucestershire.

[Bob Blackman]

I thank my hon. Friend for his intervention. I must declare an interest as a member of CAMRA. I have been a strong supporter of the organisation since I was at university. It is indeed important to promote the responsible drinking of real ale.

Infrastructure (Financial Assistance) Bill

Neil Carmichael Excerpts

Monday 17th September 2012 Commons Chamber

[Neil Carmichael (Stroud) (Con)]

Thank you, Mr Deputy Speaker, for calling me to speak in this important debate. This is a necessary piece of legislation, not least because we need to stimulate growth by showing that we are interested in developing our infrastructure. Such infrastructure investment has taken place in the past, but we need more, and it is important to understand what kind of investment is needed and how the process needs to unfold. We do not always remember that organisations involved in civil engineering, for example, want to see a little more confidence in the world of infrastructure investment, so that they can start to prepare for projects that are in the pipeline or that are urgently needed. We must recognise that some of those projects will stimulate further economic activity. Transport and energy are classic examples of sectors in which more investment is needed, as a stimulant to create even more exponential economic activity.

Let us take transport as an example. By investing in more transport infrastructure and ensuring greater connectivity, we give businesses a better foundation from which to grow. I know that from experience in my own constituency, where the news of the investment in the redoubling of the railway line between Kemble and Swindon on the Stroud to Swindon line has had an enormous impact. There is a real feel-good factor for the medium term in relation to the connectivity of my constituency. We need to see much more of that kind of signalling, and I welcome the thrust of the measures that relate to transport.

Another critical area whose importance we do not always recognise when we talk about investment is the energy sector. Again, the word “connectivity” is important, but we must also understand the need to provide a framework for the right kind of investment, as well as ensuring, as the Bill does, that guarantees can be put in place for those investments. For example, in the renewable energy sector, we need to think about the infrastructure required to get the energy from where it is created to the place where it will be used.

We must also encourage new technologies by providing the right policy platform to enable them to be developed and promoted. A good example is energy storage. In some sectors, we have the kind of technology that could make energy storage a realistic prospect. I have told the House before about liquid air, but I will tell it again. Liquid air provides a significant way of storing energy, but we need the infrastructure to achieve that. The Bill could provide the necessary encouragement for that to happen, and for an interest in energy to be developed.

[Chris Leslie]

Is it hot air?

[Neil Carmichael]

It is certainly not hot air. It is very cold. The technology is well worth looking into; it is all about the transfer of pressure.

The hon. Member for York Central (Hugh Bayley) talked about the proximity of the Bill to private finance initiatives and public-private partnerships, and I agree that that proximity exists. We need to learn lessons, however, from our experience of the more complicated and convoluted PFI schemes. We need more flexibility, and we need to give the public and private sectors the confidence to think, “Let’s get this done”. We need to generate a can-do approach, and the Bill will go some way towards achieving that.

[Mr Newmark]

Does my hon. Friend agree that the Government should not do all the heavy lifting when it comes to funding these projects? It is important that the private sector should play its role in ensuring that public projects get funded, and that it should act as a partner in any funding of infrastructure projects.

[Neil Carmichael]

My hon. Friend is absolutely right. The Bill provides a comfort zone for the private sector that will enable it to get involved and to work as a partner with the public sector to deliver the kind of infrastructure that we desperately need.

These arrangements have worked before; the Hoover dam was a good example. It involved hydro-electricity, a relatively modern form of energy, and it is still generating electricity today. No one would claim that it was a panacea, but it was certainly an example of the right kind of investment, and the right kind of relationship between the public and private sectors. We can look to other examples and say, “Yes, this is the way forward to enable the private sector to give comfort.”

In parallel to the Bill, we also need the appropriate policy frameworks to give the sectors a sense of the direction in which we are going. I have mentioned energy, but that applies to transport as well. For example, I hope that the Government will come up with a realistic solution to the question of airport capacity, and that we can be bold enough to recognise that more capacity is needed. We should be thinking big-time about some sort of solution in the Thames estuary or elsewhere. That solution should also include regional airports, and we need a policy framework and the necessary medium-term planning to allow all that to happen.

That brings me to local authorities. It is no good simply saying that we are entering happy times for investment if local authorities do not recognise that they have a role to play in delivering the necessary planning outcomes, and that they need to work together to determine where the most important infrastructure projects should be placed. There must be relationships between local authorities as well as within them if we are to deliver the desired outcomes.

The Bill will motivate the private sector to get involved; it should encourage those who are interested in infrastructure to feel that forward planning is taking place and that they should get involved in the process. I hope that the Government will continue to develop the idea that we need co-operation between the private and public sectors, and that together we will end up with some worthwhile outcomes.

Bank of England (Appointment of Governor) Bill

Neil Carmichael Excerpts

Friday 6th July 2012 Commons Chamber

[John McDonnell]

I suggest that people listen to my speech. I will get to that point, but if I miss it out, perhaps the Minister can intervene again.

The wider engagement of Parliament in the appointment process is more likely to result in the appointment of a talented and competent professional whose independence is demonstrable and protected, and who will therefore have the authority to drive through the reforms and change of culture in our banking system for which we are all calling.

This is not a revolutionary proposal. To allow Parliament, via the Treasury Committee, to have a decisive say in the appointment of key posts is nothing new. If Members read the Institute for Government’s excellent report “Balancing Act”, by Akash Paun and David Atkinson, which the Committee recommended, they will see that the Bill stands in an evolutionary line on the growing role of Parliament in public appointments. In the past 30 years, there has been an evolution from all public posts historically being appointed by prerogative of the Executive through to pre-appointment hearings, confirmation hearings for the Monetary Policy Committee, to the current Chancellor granting the Treasury Committee a veto over the senior posts in the OBR. That was enshrined in the Budget Responsibility and National Audit Act 2011, the wording which I have simply transferred into my Bill.

The OBR is not the only area where appointments are made subject to the approval of a Select Committee. For example, last year the Ministry of Justice announced that the appointment of the Information Commissioner would not be made if the Justice Select Committee opposed it. The proposal in today’s Bill, then, is nothing new or revolutionary but simply part of the evolving relationship between Parliament and the Executive.

In line with the evolutionary progress in that relationship, when the Treasury Committee undertook its investigation into the accountability of the Bank of England, the report of which was published in October 2011, it examined parliamentary involvement in the appointment and dismissal of the Governor and concluded:

“The power of veto with respect to the OBR was given to ensure the independence and accountability of that body. The Governor of the Bank’s independence from Government is crucial for his or her credibility. Given the vast responsibilities of the Governor, the case for this Committee to have a power of veto over the appointment or dismissal of the Governor is even stronger than it is with respect to the OBR.”

The Committee recommended, therefore, that it be given a

“statutory power of veto over the appointment and dismissal of the Governor”.

That was a fair, appropriate and responsible submission from the Committee.

[Neil Carmichael (Stroud) (Con)]

I wonder whether the Bill is really necessary, given that the process, which we discussed yesterday—oddly enough—in the Enterprise and Regulatory Reform Public Bill Committee, for decisions on public body appointments vis-à-vis Select Committee endorsement is already well enshrined. There is a list, which was last reviewed by the previous Labour Government in 2009, to which we can add or subtract.

[John McDonnell]

If there was a way of moving forward by that process, I would use it, but the problem is that we have now debated this matter in the Financial Services Bill, both in this House and the other place, and the Government have refused to accept the Treasury Committee’s recommendation. I hope that once I have sent this message today, the Government will shift their position and use whatever device is possible—either an amendment to the Financial Services Bill, the route the hon. Gentleman suggests, other routes that the Chair of the Treasury Committee has suggested exploring or the acceptance of this Bill.

At the time of the Treasury Committee’s recommendation and the debates on the amendments here and in the other place, the Government set their face against the proposal. I shall deal with the five basic objections and arguments that Treasury Ministers have put forward. First, there is the argument made by the Chancellor to the Committee that the Governor must be independent. He said:

“I think it is proper that the Government of the day chooses the Bank Governor, is held accountable for that choice, but also that the Governor is given some protection, some independence, so it is quite difficult, to put it mildly, or extremely difficult, to get rid of them.”

Ironically, the Committee fully agreed that the Governor should be independent and that this independence should be protected, but concluded that the best way of securing that independence was to ensure that the appointment was not solely in the hands of the Executive or one single politician. It further concluded that dismissal should also be determined more widely. Logically, then, the Governor is more likely to be seen as a creature of the Executive if he or she is solely appointed by the Executive. Making appointments and dismissals subject to the Committee’s approval must logically increase a post’s independence from Government and free the appointee from any charge of being a political appointee.

The second issue, which the Minister raised, was potential politicisation.

--- Later in debate ---

[Brandon Lewis]

I thank my hon. Friend for that intervention, which highlights the fact that when this subject was considered in depth in the other place the view was taken that the Bill might not be the right way forward. When their lordships considered whether the non-statutory arrangements for scrutinising the appointment of the Governor and the deputy governors were adequate, they will have done so in the light of the extensive new powers in the Bill and will have considered whether the Treasury Committee might or might not require a more formal role in the process. They have clearly commented on that. That process and involvement would require legislation to enshrine it in law and the Bill endeavours to formalise that process within the law. I am sure the hon. Member for Hayes and Harlington will have read carefully the Lords deliberations in Committee to see whether there are any pronouncements in favour of the course of action that he prefers. So far, as we heard from the Minister, the Lords seems to have taken the view that that is not necessarily appropriate.

I shall listen carefully to the views expressed today and those expressed in another place. At present my view is that the Bill would interfere with, rather than strengthen, the Select Committee’s scrutiny. The current system used for the non-statutory hearings that precede the appointment of members of the Monetary Policy Committee is working and should continue to be used for the appointment of the Governor of the Bank of England. The Treasury Committee has held those hearings since 1997 and has carefully scrutinised, reviewed and commented on appointees.

Members of the Select Committee have disagreed with the Government’s nominee. They urged the then Chancellor of the Exchequer to think again about appointing the economist Christopher Allsopp to the MPC. Well known in some circles for his flexibility on policy, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) promptly took no notice of the Committee’s recommendation and went ahead with that appointment. That was his ministerial prerogative, as he was exercising the powers that he was given as a member of the Executive. A Treasury Committee report after that incident was still able to observe that the hearings played an important role nonetheless.

In a parliamentary democracy it is right for Ministers to make Executive decisions and it is also right for Parliament to scrutinise those decisions. I stress the word “scrutinise”. There is a clear line of differentiation in the current structure between the Executive and Parliament’s ability and role in scrutiny, and it is one that we should protect. It would be wrong for Select Committees to have Executive power, in effect, and such a change would create an Executive power for a Select Committee in an appointment.

[Neil Carmichael]

I am in huge agreement with my hon. Friend, who is making exactly the point that if a Select Committee is involved in decision making, no matter how slightly, it becomes less inclined or less able to scrutinise ruthlessly the decisions and outcomes. Does he agree?

Beer Duty Escalator

Neil Carmichael Excerpts

Monday 2nd July 2012 Commons Chamber

[Gavin Williamson]

As always, my hon. Friend and fellow Staffordshire Member of Parliament makes an excellent point. We want to encourage investment by our brewers into this vital industry and into our pubs.

[Neil Carmichael (Stroud) (Con)]

rose—

[Gavin Williamson]

Over the last eight years there has been a 50% increase in beer duty but only a 10% increase in revenues from that duty. That is a great concern.

[Neil Carmichael]

rose—

[Gavin Williamson]

My hon. Friend is bobbing up and down, so I had best give way to him.

[Neil Carmichael]

We are talking here about small and medium-sized businesses—businesses that employ some 1,600 people in my constituency. My four breweries are very successful small businesses, but they could do with some help in respect of this policy.

[Gavin Williamson]

All the Members who have intervened have made the most wonderful points, and my hon. Friend certainly has not disappointed in that regard. I am a little disappointed, however, that he did not mention his four breweries for a potential future press release.

Green Economy

Neil Carmichael Excerpts

Thursday 28th June 2012 Commons Chamber

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

I thank the Backbench Business Committee for bringing this important matter to the House, and the hon. Member for South Thanet (Laura Sandys) for her opening speech. Other hon. Members have mentioned the drive she showed to ensure that we had the opportunity to discuss this matter.

We heard 14 subsequent speeches, covering a range of subjects—I shall mention some of them in my remarks. I welcome the Economic Secretary, who is here to listen. A succession of Ministers has been present during the debate, which is important in the context of joined-up government. I hope she finds the debate slightly less of a hot seat than she was subjected to previously. It is good that hon. Members have tried to shed more light than heat.

I am proud that one of the Labour Government’s legacies was the broad acceptance of the need to tackle climate change. They worked tirelessly to attract low-carbon investment and to strengthen the UK’s green economy. The Climate Change Act 2008 was a world first—it binds the UK Government by law to reduce carbon emissions by a third by 2020 and by 80% by 2015. My hon. Friends the Members for Southampton, Test (Dr Whitehead), my hon. Friend the Member for Kingston upon Hull North (Diana Johnson) and others were part of that process. We owe them a debt of gratitude for their work at that time, because it helped us to reduce the UK’s greenhouse gas emissions by more than 20%—to below 1990 levels—and to beat our Kyoto target.

The Labour Government doubled renewable energy generation. We tried to establish Britain as a world leader in offshore wind capacity, and moved towards the UK becoming a world leader in the prototype development of wave and tidal technology, as hon. Members have said. Clean coal and coal-fired power stations can sometimes be controversial, but the previous Government proposed that no new coal-fired power stations would be built without carbon capture and storage to cut emissions drastically.

When I spoke of the debate being generally consensual, I should have mentioned the slightly discordant note struck by the right hon. Member for Hitchin and Harpenden (Mr Lilley). I use the word “discordant” not to be critical. In characteristic style, he made his point and put the other side of the argument. It is important that such views are heard. When Labour left office, investment in alternative energy and clean technology had reached £7 billion, and we were generally thought to be moving things in the right direction compared to other economies in the world. Even amid the worst global economic slow-down since the 1930s, the low-carbon economy in the UK still grew by 4.5% in 2008-09 and by 4.3% in 2009-10.

Several contributions this afternoon have referred to the Chancellor and the Prime Minister’s position when in opposition. Indeed, prior to the 2010 election, both promised to continue the work under way and to prioritise the transition to a low-carbon economy. We have heard several quotes this afternoon, but let me recap the Chancellor’s position in 2009, when he said:

“We need to recognise the fierce urgency of now. We need to see the whole of the government pulling in the same direction to cut emissions and green our economy… Climate change cannot solely be the concern of the climate change Minister.”

That is an important message—and might be one of the few occasions I have agreed with the Chancellor. He also said:

“I want a Conservative Treasury to be in the lead of developing the low-carbon economy and financing a green recovery”.

He then gave the following commitment:

“If I become Chancellor, the Treasury will become a green ally, not a foe.”

Some of today’s questions have focused on how the Government plan to deliver on their promise to be the greenest Government ever and to build on the work already done.

[Neil Carmichael (Stroud) (Con)]

I have just come from the Enterprise and Regulatory Reform Public Bill Committee, where we discussed the green investment bank, which is an important part of the Government’s strategy. Does she agree that it will be a powerful driver for improving our environment as part of the green economy?

[Cathy Jamieson]

I thank the hon. Gentleman for that information, and I am glad that the Committee is discussing the green investment bank. It has generally been welcomed this afternoon, although there is concern about whether it can deliver on its objectives and whether the Government are taking the right action to secure investment. Hon. Members have mentioned borrowing powers and other things that I will develop later, if I have time. However, although the green investment bank is important, it must have the right powers to succeed.

I have another concern that was reflected in contributions this afternoon. Are we really on the path to making this the greenest Government ever, or is the coalition, as has been suggested,

“on a path to becoming the most environmentally destructive government to hold power in this country since the modern environmental movement was born”?

Those are not my words—I mention them because it is important to consider different sides of the argument—but the words of leading environmentalists, including Greenpeace and the Royal Society for the Protection of Birds writing at the end of last year.

It is almost as if the Government, despite their earlier promises, no longer consider the transition to a low-carbon economy as their top priority. In the autumn statement, the Chancellor said that if we burden British businesses

“with endless social and environmental goals, however worthy in their own right, not only will we not achieve those goals, but the businesses will fail, jobs will be lost, and our country will be poorer.”—[Official Report, 29 November 2011; Vol. 536, c. 807.]

As hon. Members have argued powerfully, that is a particularly short-sighted way of looking at the world and completely ignores the opportunities to create an active industrial strategy within which the green economy can grow.

As other Members have argued, we have choice: we can either embrace and lead a new energy industrial revolution, or we can be left behind. We know that we are in difficult economic times, but all the measures we want to take on growing the economy will also help green growth, which is why Labour’s five-point plan sets out the immediate actions that we believe the Government should take to boost growth and create jobs, which would also help to strengthen the green economy. Even businesses have rejected the argument that the transition to a low-carbon economy is a burden; they believe it provides the UK with a huge opportunity for growth. The deputy director general of the CBI was very clear:

“Environmental regulation doesn’t have to be a burden for business. Framed correctly, environmental goals can help our economic goals—help start new companies and generate new jobs and enrich us all.”

We have heard the Foreign Secretary’s views quoted a number of times this afternoon. I suspect that he would be surprised to feature so often in a debate on the green economy. I shall not repeat quotes already referred to, other than to say that there are some powerful messages in them, as there are in the report published last month by the Environmental Audit Committee, which warned that green investment should play a key role in the UK’s economic recovery. We have also heard figures suggesting that the global market for environmental goods and services stands at around £3.2 trillion today, but will potentially be worth as much as £4 trillion by 2015. The figures on investment in clean energy have also been mentioned.

The green economy is growing worldwide, but the real danger is that if this Government do not continue the work started under the previous Government and do not see that climate change is important or that the green economy is a part of growing the wider economy, we risk being left behind.

Let me return briefly to the green investment bank. The Chancellor was very quick in the autumn statement to take credit for it as the Chancellor who funded the first ever green investment bank. It could, of course, leverage private investment and help drive economic growth, but the danger is that it risks falling into limbo. The Government now seem set to borrow £150 billion more than they planned to do a year ago, which poses issues, and the date by which we will have a proper functioning green investment bank with full borrowing powers has slipped back to 2016 at the earliest. Perhaps the Minister will provide some reassurance on that. The Government’s claim that the green investment bank is part of a strategy for growth and is to be centre stage will look pretty thin if it is not able to deliver any real investment in a meaningful time scale.

I have a couple of further points before I allow the Minister to sum up. The green deal has been referred to by several hon. Members this afternoon. That is important, but concerns have been raised about the fact that, despite the original claim that up to 100,000 jobs would be created in the insulation sector by 2015 and that 14 million homes would be reached by 2020 and 26 million by 2030, the consultation on the green deal, which was published in November 2011, came with some downgraded job forecasts, less funding for fuel-poor households, as we have heard, and no detail about the interest rates on which the green deal will rely.

Some Government Members have raised concerns—quite gently, I think—about what I and others described at the time as “shambolic” attacks on the feed-in tariffs for solar power. That risked thousands of jobs and left the public with legal bills running into tens of thousands of pounds.

Let me add my concern to those already raised about the plan by Vestas for the manufacture of wind turbines. It was originally hoped that it would create some 2,000 jobs, but it has been abandoned. The hon. Member for South Thanet, a member of the Energy and Climate Change Committee, was quoted as saying at the time that Vestas’ decision would have been

“a commercial one but it also suggests a lack of confidence within the industry over the government’s commitment to the green economy and crucially to offshore wind.”

As I understand it, she went on to say, as other Members have said this afternoon, that the market needs certainty from the Government. That has been a running theme throughout our debate: in order to develop, create and ensure that new technology is made accessible and affordable as part of the delivery from tackling climate change and growing the economy, the market needs certainty and long-term planning. I strongly argue that it is necessary for the Government—across all Departments, including the Treasury—to stand up and take those responsibilities seriously.

Let me end my speech by telling the House what Labour believes we need to do. Some of it has already been set out by the shadow Secretary of State for Energy and Climate Change, my right hon. Friend the Member for Don Valley (Caroline Flint). She identified five key elements in an active industrial strategy. First, we need to unlock private investment by delivering on electricity market reform and ensuring that the Government act decisively. Secondly, we need to improve public procurement to support the green economy. We have heard about housing-related issues, and I think that we could do more in that regard.

Thirdly, we need a strategy for skills for a low-carbon economy. Over the past weeks, I have been meeting representatives of the automotive industry and the biofuels and combined heat and power sectors. All of them have said that there are possibilities for job creation, but that it will require investment, research and development and the right skills set, and that young people should be encouraged to take up those job opportunities.

Fourthly, we need to rebalance the economy, support growth in the regions and encourage manufacturing, and, as I have said, supporting green technologies will be a vital part of that. Further growth will require policy certainty and stability for investors, producers and users. Although talks are in progress in some of those sectors, I find it worrying—as, I am sure, do other Members—that the Government’s long-term commitment to combined heat and power and biodiesel, for instance, has not yet been made explicit. The industry must be persuaded that investment in those processes is worth its time, effort and money.

The final element in an active industrial strategy is something that we did not have the opportunity to discuss in great detail this afternoon, although a number of Members referred to it. We need to engage with the public and communities. Such engagement cannot be seen as a mere add-on, or something that we should do after everything else has been done. That goes for economic growth, but it also goes for our own behaviour. Household energy consumption is responsible for nearly a third of total carbon emissions. Of course we could do more in that respect, but we must also ensure that our communities are actively involved. Members have given some good examples today of how that can be done—for instance, through co-operative energy ventures or through communities’ buying, establishing and benefiting from their own turbines.

Today’s debate has given us an opportunity to explore ideas, to raise the concerns of industry—which have been mentioned throughout the debate—and to consider creatively how we can bring about the right economic conditions for sustainable growth and how the green economy itself can contribute to jobs and the wider economy. What we now want to hear from the Minister are practical ideas for fulfilling the commitments that the industry wants from the Government.

Business and the Economy

Neil Carmichael Excerpts

Monday 14th May 2012 Commons Chamber

[Neil Carmichael (Stroud) (Con)]

It is a great pleasure to follow the right hon. Member for Knowsley (Mr Howarth). The Queen’s Speech is the continuation of the important narrative of dealing with the deficit and promoting economic growth.

The link between reducing the deficit and securing low interest rates is pivotal and is significant for investment, small and large firms, and householders. We attach a lot of importance to deficit reduction, which is being saluted by key worthies in the world of economics and finance and is clearly linked to interest rates. We must focus on that.

My second general point is that energy prices and commodity prices are causing our economy some difficulties, so I welcome the measures in the Queen’s Speech that address them, particularly those on energy. Thirdly, although quantitative easing is an important measure that the Government are rightly pursuing in a measured and modest way, we must ensure that the money ends up in the right place. QE is the flipside of monetarism—monetarism takes money out of the economy, whereas QE puts it in. Monetarism could be described as a blunt instrument and so could QE if we do not reform the banking sector to ensure that the money gets to the right place.

[Mr Ronnie Campbell]

Surely quantitative easing is just giving the banks money to pay off their gambling debts.

[Neil Carmichael]

That is neither correct nor appropriate to my line of argument. We must ensure that the banking sector gets into the right parts of the economy. It is not merely a question of planning our overdraft extensions; it is more a question of ensuring that we have sustainable investment and can generate the right kind of investment decisions by firms. The Secretary of State, in response to an intervention, saluted the Handelsbanken and the way it operates, because it is local and bothers to find out what is really happening. I have seen it in action in my constituency, I know it works and I know that the customers who use it benefit from that local approach. That is the sort of thing we want to see in the banking sector.

The real economy is where we will make the difference between growth and stagnation. We must get the economy going. First, we should bring engineering right up to the top. We must deal with it positively and holistically, because it has many aspects. We need the manufacturing sector to invest more in engineers and for engineers to be able to translate their products into saleable exports. We need to stitch together a policy on engineering, perhaps by creating a post of chief engineering adviser or something along those lines, so that we have some propulsion behind making improvements in that field.

Supply chains are an issue that is often flagged up in my constituency, partly because I have raised it several times including during my festival of engineering and manufacturing, which I ran over five days to promote those fields, and partly because it is a subject on which the Government are working hard. We must understand that our companies are part of supply chains in my constituency, in this country and in Europe. It is important that we recognise that exporting is part of that supply chain process and that we give the right encouragement to firms—usually small firms—that need opportunities to develop their markets in those chains. We should help them to ensure that their products are at the top of their technological, innovative and marketing capacity. Supply chains are critical.

It is also critical that we understand that the Government have a role in the energy sector and it is to provide the right framework for investment. Let me give the example of electricity and energy storage to make my point. We need to look towards creating a climate in which the business community thinks that it needs to invest in that and feels safe in doing so. The proposed energy Bill needs to give that comfort to firms that are thinking about not only existing technologies but new ones, and I am sure that it will. I think that those new technologies will be found in energy storage.

Much has been said about the green investment bank, which I welcome. The Environmental Audit Committee, of which I am a member, produced an interesting report on the subject. We were hoping for more capital early, but we recognise that there are constraints and that the Government will make informed decisions in due course. We must ensure that the people in the GIB know about the technologies, the environment and the industries involved in both, as is the case with the European Investment Bank, which draws its strength from its real expertise in the areas in which it will invest. I hope that the legislation paving the way for the green investment bank will bring that about.

Many Members have saluted the Groceries Code Adjudicator Bill and I do, too. It will be important in dealing with problems with food produce from farms and the position of supermarkets, which effectively form a cartel because of their buying power. I hope that the adjudicator will have the necessary power, and, as the Secretary of State suggested, will be given slightly more teeth if that becomes necessary—I hope that it will not, but there is a possibility that it might.

In summary, it is critical that we stand by our commitment to reduce the deficit. That is important for our interest rates. However, we must also recognise that there is still a lot to be done, that growth is the key, and that engineering is the method.

Amendment of the Law

Neil Carmichael Excerpts

Wednesday 21st March 2012 Commons Chamber

[Chris Heaton-Harris (Daventry) (Con)]

It is a pleasure to speak about the Budget on Budget day itself, and, indeed, to have quite some time in which to speak. The last time I tried to speak in a Budget debate, I was curtailed at three minutes and 52 seconds, just as I was building up a full head of steam. I hope to enjoy the nine minutes and 42 seconds remaining to me today.

I welcome the Budget for many reasons, but, in common with any Back Bencher trying to represent their constituency, I also have some questions and there are some areas on which I want to probe and seek commitments from the Government for future Budgets.

I listened carefully to the contributions on their constituencies of the right hon. Member for Tottenham (Mr Lammy) and the hon. Member for Hackney South and Shoreditch (Meg Hillier), who serves with me on the Public Accounts Committee. For the first eight minutes of the right hon. Gentleman’s speech, I did not disagree with a single word he said. It was a fantastic speech. I know his constituency very well. A friend of mine has set up a boxing club on White Hart lane, and he takes in young people from the Broadwater Farm estate. The right hon. Gentleman has led his community in a highly commendable way since last year’s riots.

Let me set out what I think we all want, and what I certainly want as a former small business man. Before going into the European Parliament, I ran my own business wholesaling fruit and veg in New Covent Garden market, working nights for 11 years. My second language at the time was Cockney, and the sort of people I used to work with were keen on trying not to pay any tax. These were cash businesses and people tried to keep it that way. They wanted to generate wealth and then to choose how they spent it. There is a delicate balance to be struck in government between encouraging as many people as possible to create wealth and ensuring the bit that is taken in tax is spent well, so that people feel they are getting value for their money. I would like to think that everyone in this House welcomed elements of this Budget, and certainly those dealing with small businesses.

I know that the threshold is set at only £77,000 of cash passing through someone’s small business, but some of the paperwork associated with their return to Her Majesty’s Revenue and Customs goes overboard—it is way too much. These people are normally one-man bands, although perhaps they have a partner, so reducing and simplifying their paperwork is fantastic for them. We are giving people who want to set up a chance to know that they are not going to be hammered by the taxman, because they will understand the form that they are filling in and will not be fearful of getting it terribly wrong.

The Budget contains lots of other good things. I am sure that the whole House welcomes the £36 billion that is being saved as a result of interest that we are not paying because of the low interest rates engendered by this Government’s economic policy. Some Opposition Front Benchers have been suggesting ways of dismantling this fantastic set-up that enables us to borrow at low interest rates, but, realistically, everyone has to welcome the fact that we are paying less for our debt at the moment.

[Neil Carmichael (Stroud) (Con)]

I am thoroughly enjoying my hon. Friend’s speech and he is hitting on the important issue of interest rates. Does he agree that smaller businesses, too, are going to benefit enormously from low interest rates, both now and in the future, because they mean long-term investment for those businesses?

[Chris Heaton-Harris]

I thank my hon. Friend for his intervention, and of course I agree with what he says. The more we can spread lower interest rates, the better it is. As hon. Members from across the House will know, it has been difficult getting the banks to lend to all sorts of small businesses in the past two years. Any measure we take that strengthens lending to small businesses is a thoroughly good thing, because these businesses are the acorns from which big businesses grow. The Labour Government had this fantastic policy of how to manufacture small businesses: they took a big business, taxed it and added loads of regulation, and a few months or years later they had a small business. We are doing exactly the opposite.

--- Later in debate ---

[Neil Carmichael (Stroud) (Con)]

It is a great honour to speak in this debate because it is an important one, given that the Budget is of decisive importance in terms of our economic future. It is also a great honour to follow the hon. Member for Belfast East (Naomi Long).

There are several reasons why this Budget is a good Budget, the first of which is that it reaffirms the need to tackle the deficit, and demonstrates that the efforts to do so have been successful. That is critical to this country’s interests, because it is about the price of money—interest—and we must secure a long-term, sustainable rate of interest for small businesses, mortgage payers and so on.

[Chris Heaton-Harris]

My hon. Friend will be interested to hear the views of John Cridland of the CBI, who said in the reaction to the Budget that

“the best news for businesses is that he”—

the Chancellor—

“stuck to his guns and delivered a fiscally neutral programme…by putting more money in the pockets of ordinary people, the Chancellor has provided a much-needed confidence boost.”

[Neil Carmichael]

I thank my hon. Friend for that intervention and helpful quotation, because it underlines my point, which all hon. Members should have firmly in their minds, because it is the key issue.

Sensible debt management goes on to secure lending at a reasonable price. We have seen how that has worked in Italy to some extent and it certainly works here. It is the real test of good government, and I am delighted that the Chancellor is pursuing it so determinedly.

The second thing I am pleased to welcome is the actions on tax avoidance. It is important that we demonstrate that we will not stand for people deliberately avoiding tax using inappropriate routes. That the new stamp duty mechanism and the mechanism to prevent tax avoidance in stamp duty are scheduled to recoup some £300 million is absolutely excellent news. That will lead to a total of £600 million, which is well worth having. We are therefore sending the right signal and getting some useful money. It is a good thing that the Chancellor has underlined that. There is annoyance in my constituency at tax avoidance, and I am pleased to be able to say that we are taking robust action. The general anti-abuse rule will be extraordinarily useful and a final threat to anybody who goes down that route in future.

Thirdly, I welcome the lifting of personal allowances, which the Liberal Democrats were right to promote. I am not going to argue about who promoted it first, but it is a useful policy for us to have and we should celebrate it.

The final thing I want to celebrate from the headline announcements is the action taken on child benefits. I received a lot of pressure in my constituency about them, right up until the last moment. One person came to visit me in Stroud tourist office while I was doing a stint to promote tourism week. In fact, he was one of many to talk about child benefit instead of buying tickets for various excellent shows and so forth. The fact remains that we have taken action, and I celebrate that fact. The Government have done a good thing.

In my constituency, I am having a festival for manufacturing and engineering next month. I am doing so to celebrate the successes in Stroud, and there are two key messages I want to get across. First, we need to invest in our small and medium-sized sectors, particularly in manufacturing and engineering, and the Chancellor has signalled that that is the direction of travel for the Budget and the Government. Secondly, I want to signal the importance of young people getting involved in manufacturing and engineering, because they need to think about manufacturing and engineering as a career. Again, he has signalled that that is a key part of the Government’s economic strategy. He has signalled many things, but those are certainly the two that matter most to my constituency.

[Chris Heaton-Harris]

I appreciate my hon. Friend for giving way a second time. I rise to help him with yet another quote, this time from Paul Everitt of the Society of Motor Manufacturers and Traders, who says that these Budget measures

“will trigger substantial extra business investment in the years ahead.”

That is obviously a solidly good thing.

[Neil Carmichael]

That is another first-class quote from my hon. Friend. He and I agree about many things, and certainly about this. I thank him very much for underlining my point again.

I want to canter through various critical measures announced in the Budget. One concerns infrastructure. It is absolutely right that we invest in infrastructure. The national infrastructure plan is a first-class document that signals the Government’s commitment to taking these measures. The recent announcement, confirmed in the Budget, about the possibility of private firms taking over roads is absolutely right. I would say, however, that although the Government are rightly reviewing the private finance initiative—it is far too cumbersome, has left us with a lot of debt and has created difficulties with procurement and so forth—we have to enable the private sector to invest more easily in infrastructure. Whatever the outcome of the review—I hope it is a robust review in terms of changing the PFI—we must still encourage the private and public sectors to work together to leverage in the money that we desperately need to improve our infrastructure.

On technology, it is great news that we will have a centre for aviation. I hope that it is in Stroud—it would be very convenient for Airbus just down the road—but wherever it is, it is important that we give that platform for development and technology. Technology matters, so I will throw in a comment about broadband, because it, too, is part of this story of ensuring that we are technologically advanced. I visited a firm called Jatech in my constituency last week. It is producing some excellent products for data management, and lots of different industries and firms are accessing that information. That means good technology in the computer and broadband industry. We need to celebrate those things too.

We had a great debate last week in Westminster Hall on UK Trade & Investment. We need to ensure that this organisation continues to do a lot of good work, so I am pleased that the Government are talking sensibly and robustly about encouraging exports and helping firms find office space and so forth. These measures in the Budget draw our attention to the need to export, because we certainly need to do that. At the end of the day, it is no good looking at Germany and saying, “Well, they’re doing better than us,” and putting our heads in the sand. We have to do as well as Germany and then better still. That is this country’s main mission on economics and growth. Let us ensure that we can promote that.

Energy is a critical issue. Again, the Government are right to talk robustly about investment in energy. The Chancellor is absolutely right to talk about supporting the oil and gas industry. That is great news for firms in my constituency supplying those sectors, notably in Brazil. For example, a firm in Eastington, Arc, is doing extraordinarily well. However, we need to provide a market opportunity for new forms of energy and even new forms of storing electricity. We need to think about that. If we can create market conditions where firms feel comfortable about investing in new technology that has not yet properly taken off, but which can add value to our energy infrastructure and provide that platform, so much the better.

Lord Heseltine will be talking about bringing the private sector and Government together—absolutely, and it is great that he is looking at implementing an industrial strategy, as it were, and how that could best be done. There are some good examples of what can be done in countries such as Germany—I mention Germany again, but it is worth looking at other countries, especially when they are doing so well. I remind the House of Germany’s market penetration in countries where we might not normally expect it, such as China and India, and so forth. We have to understand how the Germans do that and learn a few lessons from them. That is something that the Treasury, the Department for Business, Innovation and Skills and other agencies of Government would do well to consider.

The Chancellor quite properly referred to education and training, which we really have to focus on. I am absolutely delighted that, in the Budget and elsewhere, the Government have made a lot of the importance of skills training and education. The Chancellor said that we could put all the fiscal measures in place, but we really need the people to make it work—he did not use those words exactly, but that is the point he was trying to get at. We therefore have to do it. We have to ensure that the resource we have in this country—our people, all of them—have access to decent education, which will enable them to adapt and develop in their careers. It is no longer the case that people just turn up, do a job and then retire; this is about a process of development.

I want to talk a bit about banking. It is essential that we manage to get more money into the right places. One of the things about monetarism in the ’70s and ’80s is that it was quite a blunt instrument, as is quantitative easing, so we have to ensure that we get money into the right places. The issue of banking constantly recurs. The Government have mentioned a large number of measures that they intend to take, not least the national loan guarantee scheme. That is absolutely brilliant and good news, and I look forward to that. However, we need more banks, with a greater variety of offerings and more specialisms in appropriate sectors, and more competition in the banking sector. We also need to be alert to new ways of financing firms and encourage them to think about new ways of doing that. It is not just about the banks, although they need to improve their lending; it is also about firms themselves and the cultural change we need to bring about to encourage small and medium-sized businesses to think out of the box when it comes to borrowing money.

I finish with a comment about the business finance partnership, which is a great scheme. Indeed, the Chancellor mentioned it today, with £100 million in the Budget for non-traditional lending, which is exactly the sort of thing I am thinking about. It is also important that we continue to recognise, understand and promote the development of supply chains, because they are critical in the SME sector—they really do matter. Interpreting how supply chains will develop, recognising where the blockages are and understanding them as part of the export issue to which I referred will enable growth to take place, because the component parts of the chain will understand that process and be ready to support and buy from each other.

This is a good Budget, but there is a lot still to do.

Autumn Statement

Neil Carmichael Excerpts

Tuesday 29th November 2011 Commons Chamber

[Mr Osborne]

I do not have the specific details in front of me, but I will certainly engage with my hon. Friend on that proposal, and I hope that we can advance it.

[Neil Carmichael (Stroud) (Con)]

There are many substantial measures to welcome in this package, but I wish to focus on the national loan guarantee scheme, because it will help many small businesses in my constituency, particularly those in the manufacturing and engineering sector. Does the Chancellor agree that what we should be hoping for from banks is more sophistication when they allocate money to small businesses and more analysis of what the prospects of small businesses actually are?

[Mr Osborne]

Yes, I think that we all want to see a move to a banking system that is more responsive to local businesses and local people and that is not just based on a computer model that allocates credit and the computer says no. We want to return to having local bank managers empowered to make decisions, and a number of banks are doing this. One of the notable successes at the moment is Handelsbanken, which is out there lending money to small businesses and taking more of this local approach.