The Economy

Robert Jenrick Excerpts

Thursday 22nd March 2018 Commons Chamber

[Vicky Ford (Chelmsford) (Con)]

It is a great honour to follow the hon. Member for Shannon, which is a beautiful part of our United Kingdom, and it is great to hear so much positive news. [Hon. Members: “Strangford!”] I mean the hon. Member for Strangford (Jim Shannon). I know the area well.

I have frequently said that the economy must come first, because only with a strong economy can we maintain our public purse and fund our other ambitions for healthcare, welfare, education and security. That is why it is such excellent news that the deficit is under control, the debt is falling, employment is at record highs, unemployment is at record lows, inflation is coming back down, real wages are set to rise, and our economic performance is outstanding. Manufacturing output is up for, I think, the ninth month in a row. It is almost impossible to open a newspaper today without seeing yet another good-news story about our economic statistics. [Interruption.] I hear Labour Members laughing, but let us not forget the state in which they left the economy.

A strong economy, however, must be a strong economy for all, and that is why I am also pleased that wealth inequalities are shrinking and the gap between the richer and the poorer is becoming less enormous.

As I said in my maiden speech, innovation drives growth, and science and research are at the heart of that innovation. I am a member of the Science and Technology Committee. We are in the middle of a digital revolution, the world’s fourth industrial revolution. We are world leaders in science and technology, and it is key to our success that we maintain that status. I am therefore delighted that science and research are at the heart of the Government’s industrial strategy, and that the commitment to increasing investment in research and development to a massive 2.4% of GDP is coupled with the largest investment in research and innovation by any Government in 40 years.

[The Exchequer Secretary to the Treasury (Robert Jenrick)]

The largest ever.

[Vicky Ford]

Is it now the largest ever? I thank my hon. Friend.

Those are phenomenal targets, ambitions and spending, but they are coupled with specific, targeted actions to unlock some of the most innovative sectors. It has been great to be in the House when we have been discussing how to unlock investment in the next generation’s batteries so that we can get the automated vehicles sector up and running and leading the world. My constituency is the home of radio. The first ever radar messages were sent out to the world from Chelmsford. The Space Industry Bill will mean that this country can not only make satellites and be part of their manufacture, but actually launch them.

I also spoke about productivity in my maiden speech, because it is key to our success. I said then that the people of Chelmsford spent too much time sitting in traffic jams and waiting for delayed trains, that it was a waste of their personal time, and that it hit the nation’s productivity. I was so pleased yesterday when the Government identified 44 parts of the country that would receive a further £4.4 billion of investment in our roads, railways and infrastructure. My part of Essex is a key element of that. The infrastructure in which the Government are investing will help not just to deliver new housing for the future, but to unlock our productivity and enable people to get on with their lives.

I want to say something about taxation, because it is part of the big picture of how we get the economy working. Under the last Labour Government, I was working as a volunteer chairing the local free school. I recall one of my best members of staff coming to me and saying that she had to hand in her notice because she simply could not afford to work any more: she would be better off claiming benefits. Ensuring that the tax system works for those who are on the lowest incomes, and ensuring that work pays, has been key to the Government’s success. That is why I am so proud that 4 million people have been taken out of tax altogether, and 24 million, I believe—the figure may have increased—have benefited from tax cuts. The tax gap has in fact narrowed, and those on the lowest incomes are now paying the lowest tax, with those on the highest paying more.

--- Later in debate ---

[The Exchequer Secretary to the Treasury (Robert Jenrick)]

I thank all right hon. and hon. Members for their contributions today. We have heard a succession of Opposition Members espousing doom and gloom. There was one honourable exception—the hon. Member for Strangford (Jim Shannon). In that cocktail was mixed a dose of collective amnesia about the legacy of the last Labour Government. The shadow Minister, the hon. Member for Oxford East (Anneliese Dodds), could not even acknowledge the incredible, unprecedented economic success of her own constituency, where, thanks to this Government, we have seen record jobs levels and record levels of low unemployment. In the spring statement, we heard about further progress with the great Oxford to Cambridge and Milton Keynes corridor, one of the greatest growth and prosperity generators this country has ever seen. The shadow Chief Secretary, the hon. Member for Bootle (Peter Dowd), a proud Liverpudlian, could not bring himself to acknowledge the investment we are seeing in Liverpool. Well, this son of a Liverpudlian will tell him that there is unprecedented foreign and domestic investment being made into Liverpool’s ports. We even heard an unprovoked attack on Tigger by the shadow Chief Secretary—this time, of course, I do not mean on the Chancellor of the Exchequer.

What a difference we heard in the contributions from Conservative Members. My right hon. Friend the Member for Witham (Priti Patel) set out a bold plan—a vision for economic renewal as we leave the EU. My right hon. Friend the Member for Wokingham (John Redwood) invoked the legacy of Margaret Thatcher, going further than she ever went, exhorting us to take advantage of the opportunities presented by Brexit. We believe that Brexit will not determine the future of this country—rather, it is about the choices we make next. We are going to ensure that those choices are the right ones and that they are pro-innovation and pro-growth.

What infectious enthusiasm my hon. Friend the Member for Clacton (Giles Watling) shows for his constituency. What a difference a Conservative representative makes. I knew I was making a good investment in Clacton when I went there to support him in 2014. I am afraid it took him a little longer to come to this place, but we in the Conservative party believe in making long-term rather than short-term investment. He could not be a member of the class of 2014, but he did get in a few years later.

We heard from my hon. Friend the Member for Angus (Kirstene Hair) a devastating critique of the SNP’s failing economic record and about the fact that the greatest, most enduring and important single market that this country has ever known is the single market of the United Kingdom, which we will always support.

Six themes emerged in the debate. First, of fundamental importance to us all—our central mission since the Conservatives arrived at the Treasury in 2010 and found that note on the desk saying that there was no money left—has been to restore the public finances so that we can live within our means and provide the confidence and credibility that every economy requires. We need that confidence to create the jobs, which have been created, to secure the inward investment, which is at record levels, and to keep interest rates low so that people can stay in their homes and continue to have economic security. We will continue to work towards that, today and in future.

As my right hon. Friend the Chancellor said at the spring statement, debt is now forecast to be nearly 1% lower than at the autumn Budget, and we will see the first sustained fall in debt for 17 years. That is a turning point in the nation’s recovery from the financial crisis that was left to us in 2010.

We have heard today about manufacturing, which is enjoying its longest period of sustained growth for a generation. UK foreign direct investment is leading Europe—it is third in the world behind only the United States and China—and is continuing to grow, even after the Brexit referendum. What do we hear from Labour Members on that? That they have learned nothing. We heard a series of bad puns and jokes with which the shadow Chief Secretary, the hon. Member for Bootle, managed to outdo his usual record. The Labour party would destroy the credibility that we have built up over the past few years. It does not know how to manage an economy. The last time the shadow Chancellor, the right hon. Member for Hayes and Harlington (John McDonnell), managed anything was before I was even born—and then he was sacked by Ken Livingstone for being too left wing.

Secondly, we have heard how, as a result of our hard-won economic credibility, we have secured the prize of record high levels of employment and record low levels of unemployment. Nothing matters more to our constituents than the dignity and security of a job. More young people, women and disabled people are enjoying employment. Some 3 million more jobs have been created and there are more jobs in every region and nation of the United Kingdom.

[Anneliese Dodds]

Does the Minister acknowledge that under his Government, record levels of in-work poverty are affecting children?

[Robert Jenrick]

I am surprised that the hon. Lady cannot bring herself to welcome what I have just described, even in her own constituency, where jobs and employment are booming—

[Anneliese Dodds]

Answer the question.

[Robert Jenrick]

I will come to the hon. Lady’s point.

It is not just important to us to create a country of working people; it is our mission to create a nation of well-paid people in secure and fulfilling careers. We are doing that by tackling the root causes of our low national productivity as no Government have done before. We are seeing some positive signs. Inflation is falling—it fell from 3% to 2.7% in February—and the OBR has said that it will keep falling, leading to real wage growth.

[Alison Thewliss]

Two thirds of children in poverty are in working families. Does the Minister regard that as a positive sign?

[Robert Jenrick]

I am proud of the fact that more people are in work. When I go back to my constituency, Newark in the north midlands, where unemployment is currently at 1%, I am proud of our record and that more families are enjoying the key ingredients of economic security: a job and a reliable wage.

[John Redwood]

Did the Minister notice that the hon. Members for Oxford East (Anneliese Dodds) and for Glasgow Central (Alison Thewliss) on the Opposition Front Benches failed to remind the House that many people on lower incomes have been taken out of income tax altogether, that the living wage has been raised so we are dealing with this issue of low pay, and that inequality, as normally measured, has come down? Why do they never mention those things?

[Robert Jenrick]

My right hon. Friend makes a series of important points. Let us look at them. By increasing employment and reducing unemployment, we have sought not just to increase employment, but to tackle those people who are on the lowest wages and secure a better tax environment for them. The living wage will rise to £7.83 next month, which is £2,000 more for the average person in full-time employment.

[David Linden]

I am most grateful to the Minister for giving way. I hope that he will clarify to the House that that rise in the national living wage—and indeed the national living wage itself—does not apply to those under 25. Will he clarify that for Hansard?

[Robert Jenrick]

Our priority is to ensure that younger people in the workplace gain the skills that they need in good and secure employment and then, in time, they will benefit from the living wage, which did not exist before this Government created it. We have increased the personal allowance; we have taken 4 million British people out of tax altogether; and we have reduced the tax of 31 million of our fellow citizens.

On the subject of fair taxation, which was raised, the top 1% are paying 27% of the income tax in this country. On the subject of enforcing tax and reducing avoidance and evasion, the tax gap in this country is at its smallest ever level. It is one of the smallest of any developed country in the world and it is certainly smaller than the previous Labour Government left it. The bottom 20% of earners—this is an important statistic—have seen real wages increase by 7% since 2015. We have high levels of employment and we are working hard to support the lowest paid in society.

Thirdly, we have addressed productivity by investing in skills to ensure that our workers and fellow citizens have the skills that they need for the jobs of the future. We have seen that in many of the measures that we have discussed today: in increasing vocational and technical education; in our apprenticeships; in the advent of T-levels, one of the greatest innovations in our secondary education system since the creation of the A-level; in increasing numeracy and digital skills in schools with maths teachers, with IT teachers and with coding at primary level; and in the creation of the national retraining partnership—a partnership between the Government, the private sector, the CBI and the TUC, which was launched last month by the Chancellor—to ensure that workers have the skills that they require as the world of work changes in the years to come.

For small businesses and family businesses, we have increased management training and skills training, so that the greatest innovation in our economy is diffused throughout the regions and to the smallest businesses, we are backing people such as Sir Charlie Mayfield with his Be the Business movement, and we are undertaking a review of the long tail of British businesses, which was announced by the Chancellor in the spring statement. All of that will help to ensure that productivity increases in all parts of the United Kingdom and in all parts of the economy. What are the early results of those efforts? We have 2 million more children in good or outstanding schools than in 2010.

Fourthly, addressing productivity also requires us to invest in our infrastructure. The level of infrastructure investment—both public and private—by the end of this Parliament will be greater than at any time since the 1970s.

[Peter Dowd]

I thank the hon. Gentleman for mentioning my constituency earlier. I would like to mention his if he does not mind. Roger Blaney, the leader of Newark and Sherwood District Council, was speaking in response to a report that ranked the district near the foot of the social mobility league table. He put Newark and Sherwood

“323rd out of 324 local authority areas based on factors such as education outcomes, employability and housing prospects.”

Does the Minister still think that he is doing a good job for his own area?

[Robert Jenrick]

I most certainly do. That report revealed decades of underinvestment and neglect by Labour councils in Nottinghamshire, which let down their old former coalfield communities—the communities that they have taken for granted for too long. We are changing that, and the policies of this Government have seen, in my constituency, 40% more young people in good or outstanding schools, and a new free school in Newark, which I have created and of which I am proud to be a governor. Those are the practical changes that will transform the lives of local people. In the midlands and the north, we do not take them for granted; we get things done for them.

We are making long-term investments in infrastructure —road, rail, broadband and mobile—in all parts of the United Kingdom. The Infrastructure and Projects Authority, which measures our spending in those areas, said that there will be more central Government investment in the north of England over the course of this Parliament than in London or the south-east. We have created a pipeline of £600 billion of investment in construction and other infrastructure. The challenge now is less about money and more about ensuring that we have the construction workers and skills that we need to deliver on those projects. We are backing the midlands engine, the northern powerhouse and the Oxford-Milton Keynes-Cambridge opportunity. We are creating new deals in Sheffield, hopefully in the borderlands between England and Scotland, in north Wales and in other parts of the United Kingdom, where we believe in allowing local people to have greater say over their own lives. The Mayors whose positions we created—including Andy Street and, in the Tees Valley, Ben Houchen—are already making a huge impact and putting their own areas on the map.

Fifthly, we are embracing new technology, not turning away from it. We want to ensure that the United Kingdom leads the world in the technological revolution, but we also want to ensure that that works for everyone as the world of work changes profoundly. The pace of change has never been faster, but it will never be so slow again. The tech entrepreneurs and investors I meet are not preoccupied by Brexit. Their eyes are fixed on the horizon and so are ours. This is true of companies in FinTech, life sciences, artificial intelligence, autonomous vehicles and electric cars, and green growth, all of which we are taking seriously in our industrial strategy and in other policies. At least 15 UK tech companies could float today for in excess of $1 billion—companies that did not exist five or 10 years ago, including Citymapper, Deliveroo and Farfetch. This country is on the cusp of something great and we do not want the Labour party to lose that.

[Peter Dowd]

Does the Minister agree with Councillor Blaney that his constituency is the “Cinderella of regional funding”? What is he doing about that?

[Robert Jenrick]

Well, we have been investing in all parts of the United Kingdom, including the east midlands. We created the midlands engine, which I just mentioned and which is designed to unleash the economic potential of the midlands. In the west midlands, we have seen the huge potential that Andy Street has now given to a city that has been run by the Labour party for too long.

What are we doing to invest in new technology? As my hon. Friend the Member for Chelmsford (Vicky Ford) described, we are investing more in research and development than has been invested since the 1970s, when the statistics were first recorded, so we are probably investing more than has ever been invested in modern times. We have made the R&D tax credits more generous. We are investing in the enterprise investment scheme and the entrepreneurs’ relief that are so important to crowd in investment to the United Kingdom from all over the world. The Chancellor is today at the FinTech summit that the Treasury is hosting, with 600 investors from all over the world coming to the United Kingdom to see some of our most exciting business that are creating 60,000 new jobs in the FinTech sector alone.

What have we done to create a business environment? We have lowered capital gains tax and corporation tax, and committed to lowering it still further. Labour would reverse those changes. Our reductions in corporation tax have actually resulted in more tax revenue for the Treasury and more money for public services. That is prosperity over ideology.

[Anneliese Dodds]

I am sure that the Minister wants to be accurate on these matters. Therefore, perhaps he will slightly correct his suggestion that the increased revenue was due to the reduction in corporation tax. So many commentators—including, I believe, the IFS—have said that the increase in revenue is due to, for example, banks returning to profitability, and it should not be connected with the reduction in rate.

[Robert Jenrick]

In the Treasury we try to deal in facts, rather than in comments, and the effect of reducing corporation tax has been an increase in revenue.

The Chief Secretary and other Conservative Members have said that we must make the case once again for free markets—something we thought we might never have to do again. However, as Margaret Thatcher and, I think, Tony Benn—an unusual pairing—used to say, “There are no final victories in politics, and if you want to continue to win important arguments, you have to keep making them and restating them over and over again.” The case for free markets is threatened as never before by the hard-left, heirloom policies and personalities of Labour Front Benchers. As someone who used to work in the auction business, I can spot an antique a mile away.

The central battle on this conflicting vision of our society is being fought again. That matters for two reasons. First, just as our parents and grandparents paid the price for this ideology last time it was employed in this country, we do not want our children and grandchildren to pay the price for its resurrection today. Last time, it left us a weak country saddled with debt and high taxes, unable and unwilling to embrace new technology or to invest in public services—and working people paid the price.

Secondly, to paraphrase Robert Kennedy, living in a democracy is not merely about the absence of tyranny but the presence of freedom. A free market matters to us and our constituents not just because we have learned that it is the best way to run an economy but because it underpins all our other freedoms. That is why we will continue to defend it as we build an economy and a country that works for everyone.

[Mr Deputy Speaker (Sir Lindsay Hoyle)]

Let me just say to the Front Benchers that if they agree 10 minutes, they should stick to that, because I do not want it to break down in future with people taking advantage by allowing the Opposition to have 10 minutes and then you carry on for 17 minutes. I think we have to be fair to both sides. If we make agreements, let us please stick to them. If it is 15 minutes, I do not mind, but at least let us be honest with each other when we make those decisions.

Question put and agreed to.

Resolved,

That this House has considered the economy.