Economy and Jobs

Robert Neill Excerpts

Monday 20th January 2020 Commons Chamber

[Sajid Javid]

Yes—I am pleased that my hon. Friend has asked me that. We are absolutely committed to that deal; indeed, we want to go further. The automotive sector is one of our most important sectors, responsible for much of the growth and many of the jobs in our economy. It will certainly get the Government’s strong support.

Let me briefly address an important question for the future of our economy: our future relationship with the EU. We are leaving the EU, its single market and the customs union. We are seeking an ambitious, Canada-style free trade agreement. In doing so, we will be a sovereign and independent country, not a rule taker, so yes, some things will change. It is a new chapter. We are ambitious for British businesses, through a close relationship not only with the EU but with other partners. Some 90% of global growth is expected to come from outside the EU over the next decade, so there are real opportunities for the UK. We will maintain high standards not because we are told to, but because that is what the British people want. Above all, we will be driven by British interests.

[Sir Robert Neill (Bromley and Chislehurst) (Con)]

I welcome what my right hon. Friend is saying, but will he bear in mind in particular the need to protect the interests of the financial services sector, as Britain is a world leader in financial services? It is right that so large a sector would not necessarily be a rule taker, but does he recognise that we need better than the current equivalence regime, to make sure that we maximise access for our world-leading financial services?

[Sajid Javid]

I agree absolutely with my hon. Friend and will come to that topic in just a moment.

The foundation of our new economic plan is fiscal responsibility. It has taken a decade of hard work by the British people to turn our public finances around. The deficit has fallen from 10% of GDP in 2010 to just 1.8% today. We are not going to throw that away. We were elected on a platform to manage the public finances responsibly, so it is a matter of trust, as well as economic credibility, that we deliver on that promise to the British people. We will be bound by a credible new fiscal framework that will keep our borrowing and debt under control while allowing for new investment in levelling up and spreading opportunity throughout the country. At the Budget, I will publish a new charter for budget responsibility that will give effect to those rules, and the Office for Budget Responsibility will scrutinise our performance against them.

Thanks to the hard work of the British people, we have got that deficit down, and debt is under control. We can now afford to invest more in levelling up and spreading opportunity right across our country. The first step will be our national infrastructure strategy. Better infrastructure can boost people’s earning power by making it easier to find work. It can help businesses access new markets. It can help us thrive and grow. It can boost communities and places and improve standards of living. It is simply not good enough that we have fallen behind so many other countries on infrastructure, and the Government are going to fix that.

--- Later in debate ---

[Harriett Baldwin (West Worcestershire) (Con)]

If a week is a long time in politics, three months must be an absolute age. It has been three months since I last spoke in an economy debate on the Queen’s Speech, and what a lot has changed in this Parliament. I have to say that I like this Parliament an awful lot more than I liked the previous Parliament. I am aware that there have been some wonderful maiden speeches in these Queen’s Speech debates, and I look forward to hearing more maiden speeches today, but I particularly enjoy the speeches from Members who represent areas that have never before elected a Conservative MP. I would like to take this opportunity to thank the good voters of West Worcestershire for returning me to this place.

I welcome the measures outlined in this Queen’s Speech, and I am very pleased that they have a much greater chance of being enacted and put on the statute book than when we last had the opportunity to debate them. My hon. Friend the Member for North Dorset (Simon Hoare) asked the shadow Chancellor for his analysis of why the awful diatribe we heard from the Opposition Dispatch Box earlier did not resonate with the British people and lost the Labour party seats at the last general election. The shadow Chancellor simply said it was Brexit. Well, I am going to give him some free advice on some of the other things that I think led to that performance. First, we clearly had a much better manifesto. It was much more fiscally responsible and much more credible to the British public. As the shadow Chancellor said, we also had a much clearer and united approach to Brexit as a party, and that certainly was another factor. Clearly, we also had much better leadership, and that came up time and again on the doorstep.

A point that has not been made as frequently, however, is the one about our economic track record. We would never believe it—would we?—when we listened to that woeful speech of woe from the shadow Chancellor that we have actually just enjoyed an uninterrupted decade of economic growth in this country. We would never believe it when we heard that speech from the shadow Chancellor that we actually have record employment—record full employment almost—and particularly for full-time workers. And we would never believe it when we heard that speech from the shadow Chancellor that we actually have the lowest percentage of people in low-paid work in our economy than we have ever had before in history. That economic track record made a real difference going into the general election.

One thing that has not changed since I last spoke in a Queen’s Speech debate on the economy regards additional clarity for a sector that is important to our economy: the financial services sector. My hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill) raised that issue earlier, and I wish to ask about it again. Financial services are an important sector for our economy. It is our biggest export sector, and it employs well over 2 million people, not just in the City of London, but across the whole UK—indeed, two thirds of jobs in the financial sector are based outside the M25.

When I was Economic Secretary to the Treasury, I had the pleasure of seeing those jobs not only in my constituency of West Worcestershire and the west midlands but in Glasgow, Edinburgh, Belfast, Newcastle, and Leeds. Right across the UK and down to Bournemouth or Cardiff there are important and well-paid jobs in the financial sector. As a result, about £1 in every £10 of tax revenue comes from financial services, which is huge. As we leave the European Union, it is important that we get things right for that sector.

[Sir Robert Neill]

My hon. Friend makes an important point and I entirely agree with her. Does she agree that another strength and reason for the dominance of our financial services sector is that it is part of a hub, together with other key professional services that support it, such as law, accountancy and other services? As we leave the EU we must have a solution for all of those.

[Harriett Baldwin]

It is indeed the world’s global financial hub, as we saw today with the wonderful news coming from the UK-Africa Investment Summit. Tax revenues are important, and without that £1 in every £10 of tax revenue we would have 36 new hospitals instead of 40, and 18,000 police instead of 20,000. It is important to get things right with that major engine of tax revenue in this country.

I know that lots of Members wish to make their maiden speeches today, Madam Deputy Speaker, so in conclusion I ask those on the Front Bench to update the House on what they mean by “outcome-based equivalence”. If they are seeking something similar to a Canada-style free trade agreement, chapter 15 of which covers financial services, what will be the mechanisms for certainty and for businesses investing in the sector, regarding how quickly that equivalence could be contested or argued about? What will be the strategy for the FinTech sector and the UK being the best country in the world in which to locate a financial technology firm? What, if anything, will we have as a specific strategy on market access for businesses in the FinTech sector?

In reflecting on what has or has not changed from three months ago, I wish to repeat those questions to those on the Front Bench.

--- Later in debate ---

[Sir Robert Neill (Bromley and Chislehurst) (Con)]

It is a pleasure to see you back where we always thought you should be, Mr Deputy Speaker.

During this debate, it struck me that we sometimes forget the fundamental: unless we get our economy right, none of the other social goods that we wish to achieve as a country can ever be delivered. The need, therefore, to concentrate on the economy in the Queen’s Speech is fundamental. Whatever our views on what has passed, the way in which we go forward over the next few years must be calibrated in such a way as to make sure that our economy remains strong and stable.

I mention the quality of the maiden speeches that we have heard and I particularly compliment my hon. Friend the Member for Loughborough (Jane Hunt), the last maiden speaker before me. Her predecessor is a good friend and colleague, and I know that she will be a worthy successor. Anyone who comes to this House from a local government background will find a friend and ally in me, because that is what I did. Perhaps the more people who have done that, the better, because local government leaves us rooted in the reality of our communities.

My hon. Friend the Member for West Worcestershire (Harriett Baldwin) talked in some detail about the importance of financial services, and I echo everything that she said, but I stress yet again the importance of recognising that as we leave the EU, it is clearly not likely to be appropriate that the largest financial sector in western Europe—arguably, in some respects, the largest in the world—should automatically be a rule-taker. Equally, we have to find a sufficient degree of alignment to ensure that we continue to have access to the key European markets, where we trade very successfully and where there is a benefit to the Europeans from the capital that we can provide. The proposed arrangements, were we to leave now, of a form of equivalence are, as the City of London Corporation and the Governor of the Bank of England have pointed out, variable, uncertain and not satisfactory for the longer term. We need our deal to be more ambitious than that so that we have certainty for those who wish to write their contracts here in London or elsewhere in the UK, because this goes well beyond London.

Financial services are part of a greater hub of professional services in which the United Kingdom excels. As well as making sure that we have arrangements that are satisfactory for the basic financial services—banks, insurers and others—we must still enable our legal services and accounting services, to give two examples, to trade successfully with Europe and elsewhere in the world. That is why, for example, in the legal services sector—I refer to my entry in the Register of Members’ Financial Interests—it is critical that we find both a means of ensuring the proper mutual recognition of qualifications so that British lawyers can continue with the fly-in, fly-out service that they provide for many of the multinational firms in Europe—as well as, I hope, elsewhere—without the need for requalification and, very importantly, a means of ensuring mutual recognition and enforcement of judgments of our courts.

At the end of the day, a contract is only as valuable as its ability to be enforced meaningfully. That is why the Law Society and the Bar Council are right to urge the Government to move swiftly to sign us up to the Lugano convention and to move, in our own right, into The Hague convention. They are not as good as the Brussels I recast arrangements, but they give us a means of ensuring that we have that, which we can then build on with good will. It is worth bearing in mind, too, that the Lugano convention would enable us to protect many small and medium-sized enterprises, consumers and individuals. Mutual recognition matters not just to big business, but, equally, to the small firm with a supplier in an EU state that defaults on its payments, in terms of getting their money back. It matters to the single parent whose partner, or former partner, may be in an EU jurisdiction, who is seeking to enforce their maintenance payment out there. Getting that right is in everybody’s interest on both sides of the debate, so I hope that we can do that and move on constructively.

Let me touch on an another important issue: why do people choose to bring their legal business to the United Kingdom? It is because they trust us as a clean, efficient and impartial jurisdiction. Our judges and lawyers are second to none. They are a benchmark that the world—not just in common law jurisdictions, the Commonwealth and elsewhere, but beyond—aspires to. I am conscious that we are looking at future arrangements for our constitutional matters, which is perfectly legitimate, but whatever we do, we must make sure that there is no suggestion of any diminution of either the quality or the independence of the British judiciary. I see no reason why there should be, but it is important to make that point.

I turn briefly to the question of access to justice, which my hon. Friend the Member for North West Durham (Mr Holden) mentioned in relation to legal aid. Access to justice is the other thing that underpins the integrity and reputation of our legal system. In the Queen’s Speech, we are rightly bringing forward a number of criminal justice Bills—some deal with policing and some with better, stronger redress for victims of crime. As a Government, we are rightly putting more money into policing and, where necessary, taking measures to increase sentencing for the most dangerous offenders.

That is all well and good—I entirely support all those measures—but to do that, we must have a system that is funded properly right the way through. If we rightly put more money into policing, that will mean greater work for the courts, the Crown Prosecution Service and, ultimately, our prisons and probation staff. If we are to do that, two things are necessary: first, there must be proper funding, because we cannot do it on the cheap, and secondly, we should take a nuanced approach.

Some people need to be kept inside for a long time—as a practising barrister over 25 years, I saw many of them—because they are a threat and a danger to the public. Equally, many others end up in our criminal justice system having made a mess of their lives at various points. By the time they end up in prison, they are very often well down the stream, and frankly, it is more a question of sadness and inadequacy than threat. We need to find better means of earlier intervention to stop those people being sucked into the system and permanent reoffending, and head that off, and equally, to find strong, robust alternatives. There is an economic, as well as a social, benefit in that: the cost of reoffending is about £18 billion a year.

It is right not just socially but economically to get our justice system right. I think that the Government recognise that. I therefore hope that we will see, building on what is in the Queen’s Speech, a holistic approach that recognises that economic competence and social justice go hand in hand. To my mind, that has always been the tradition of my party and this country.

[Several hon. Members rose—]