Jobs and Business

Sam Gyimah Excerpts

Friday 10th May 2013 Commons Chamber

[Vince Cable]

That should not be the case, and the Prime Minister has gone out of his way—as he did on a recent visit to India—to make it clear that we welcome valid, legal overseas student visitors to the UK. That is our policy and we are encouraging it.

[Mr Sam Gyimah (East Surrey) (Con)]

Will the Secretary of State confirm to the House that there is no cap on the number of students who can study in the UK if they attend and have a place at a proper university?

[Vince Cable]

That is true and the core of the policy. There is no cap on legal immigration for students, not just for universities but also properly accredited colleges. There is also a right to work subsequently in graduate-level employment, and I hope that that information will be made more widely available.

The second crucial group of people are those with key skills. The Government exempt intra-company transfers from the cap on immigration. There are many key individuals in management, banking and engineering specialties, and in a highly specialised economy we will have more and more demand for services of that kind. The Home Secretary has gone to considerable lengths to remove some of the impediments surrounding visas for people who are needed by British industry and are an important part of our economy.

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[Vince Cable]

Yes, there is an issue with the demand for loans. It is not simply a question of aggregate demand in an economic sense. Many small companies have been discouraged from applying and we need to overcome that handicap. On the wider question, I know that the Chancellor is listening carefully to this debate. I read the contribution of the former Chancellor, the right hon. Member for Edinburgh South West (Mr Darling), who suggested that the key issue was value for money for the taxpayer. I agree completely.

[Mr Gyimah]

I thank the Secretary of State for giving way once again. Does the intervention from the hon. Member for Streatham (Mr Umunna) not highlight the confusion in the Opposition’s approach to RBS and state-owned banks? On the one hand they want the Government to compel them to lend, and on the other hand they say that the banks should return to health and make a healthy profit for the taxpayer. Those are two conflicting positions. That is why schemes such as funding for lending, which help banks get money to small businesses, are the right way forward.

[Vince Cable]

Funding for lending is an important and valuable step forward. As I am sure my hon. Friend would acknowledge, it predominantly affects the mortgage market rather than the SME lending market, but it is an important initiative. I do not think that we are talking about forced lending here, and we should not be talking about that; we should be talking about how we change the risk appetite of banks. Some of the Government’s key interventions, such as the enterprise guarantee scheme and the new schemes for export finance, are crucial to changing the balance of risk. They work with the grain of the market, and that is the way we should deal with this issue.

I conclude on the banking issue, because it is the big legacy problem we have to deal with, along with the enormous deficit, which is painful and difficult but on which we are making real headway. The key point is that despite those problems, some real signs of hope are beginning to emerge: we have rapid growth in private sector employment; record levels of start-ups in the private sector; a growing sense of entrepreneurial energy and commitment in the UK; and a rapid growth in exports to some of the emerging markets, where future demand lies. There is every reason to be optimistic, and the legislative programme we are setting out will reinforce those positive trends.

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[Mr Umunna]

I certainly accept that we want to grow our manufacturing sector, but the Secretary of State has conceded that, for example, the things we did in the automotive industry by setting up the Automotive Council have helped to increase the output of that sector. So I do not agree that we did nothing to boost manufacturing in this country.

My right hon. Friend the shadow Work and Pensions Secretary will talk later about the failure of the Government’s schemes to get the unemployed back to work.

[Mr Gyimah]

The hon. Gentleman is presenting his case very clearly, so will he give us a clear answer? Would the Labour party borrow more or less than we are?

[Mr Umunna]

I remind the Prime Minister’s Parliamentary Private Secretary that his boss is borrowing £245 billion more than planned. The only part of our five-point plan to get the economy growing again that would incur extra borrowing is the VAT cut, which would cost £12 billion in the short term. We advocate a VAT cut because it is the fastest way to give an injection to an economy that, frankly, has flatlined over the past three years. We have seen it work previously. During the economic downturn when we were in office, we introduced a VAT cut that we know—Institute for Fiscal Studies numbers have provided supporting evidence—helped to boost growth in the economy. That is what we need now. Of course, boosting growth would increase corporation tax receipts and income tax receipts—as more people enter work—and reduce the benefits bill.

[Mr Gyimah]

Will the hon. Gentleman give way?

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[Mr Umunna]

That is an extraordinary intervention from the hon. Gentleman, given the huge cuts that this Government have made to information, advice and guidance, including to careers advice. I remind the hon. Gentleman that it is his Government—and he voted for it—who have cut and destroyed Connexions. I know from experience in Lambeth in my constituency that Connexions made a massive difference.

Let me move on to infrastructure. Good infrastructure, of course, is at the heart of an industrial strategy and crucial to creating the right business climate. That is why we asked the chairman of the Olympic Delivery Authority, Sir John Armitt, to crack this issue for us.

In the Queen’s Speech, after three years of dither and delay, we have finally seen some movement on transport infrastructure in the form of the HS2 Bill. I think I speak for many business people when I say that people would like to see this Government move on aviation, too. The Government should bring forward the date for Sir Howard Davies’ review of aviation and ensure that his report is produced before the general election. We need no more dither and delay on that issue either.

[Mr Gyimah]

rose—

[Mr Umunna]

I want to make a bit more progress.

With our economy flatlining, this country is crying out for investment in infrastructure to create jobs, boost confidence and strengthen our productivity and competitiveness. Both the CBI and EEF have criticised the Government for their failure to get on and deliver on infrastructure. They are right to do so. The last infrastructure pipeline update given by the Treasury showed that of their 576 projects, fewer than 5% of them were completed or operational. If they got on with delivery of those projects, we might see a pick up in construction, which fell by 2.5% in the last quarter and by 5.9% compared with last year. While the Business Secretary was on his feet, the Office for National Statistics published its latest construction output statistics, showing that all new construction work is 3.2% down on the last quarter. Why was there not more, then, in the Queen’s Speech to bring forward spending on infrastructure?

[Mr Gyimah]

Going back to supporting businesses, specifically in the context of small communities, will the hon. Gentleman give me a sense of whether he will support the National Insurance Contributions Bill, which would, after all, reduce the national insurance bill for every business by up to £2,000? It will affect business communities not just in the BME areas, but throughout the country.

[Mr Umunna]

It is funny that the hon. Gentleman should bring that up, as I was just coming on to it.

Finally, on tax and other incentives for business, we have been arguing for months for a national insurance break for micro-businesses taking on extra workers. The full scale of the failure of the Government’s initial national insurance holiday scheme was laid out for all to see by the accountants UHY Hacker Young last week when they disclosed that the scheme, which the Chancellor said would benefit over 400,000 small businesses, reached a new low in December last year, attracting only 400 applications. I thus say to the hon. Gentleman that I really hope that the National Insurance Contributions Bill in this year’s Queen’s Speech, which introduces the employment allowance—no doubt there is more detail in the paper the hon. Gentleman has with him—will prove far more successful than the Government’s scheme to date. [Interruption.] I am asked whether I support it, but I have just said that I hope the scheme proves to be far more successful than the lamentable failure of the Government’s scheme to date.

Before I finish, I want to deal with the Government’s consumer rights Bill. As I said, empowering the consumer is an important part of ensuring healthy and efficient functioning markets. The Government have included a consumer rights Bill in the Queen’s Speech. We are told that it consolidates consumer rights legislation in one place, bringing together eight pieces of legislation and covering goods, services, digital content and unfair contract terms. I agree that consumers need more clarity on their rights, but from what we have seen so far, the Government’s proposals appear to fall short of the action that we have called for to help families, to ensure a fair deal on energy prices and to tackle high rail fares, for example.

I think that the Government’s changes in this area have been muddled, as we have seen this week. First, the Government were going to abolish Consumer Focus, but now we learn that they are going to keep it in a slightly watered down form, and it will now be called Consumer Futures. It seems that it will be doing a similar job, but who knows what landscape we will be left with.

As part of our policy review, which was led by consumer champion, Ed Mayo last year, we have been planning to bolster collective action and to empower consumers so that they can club together more easily to seek redress. As the consumer rights Bill makes progress, we will press Ministers for a strong, accessible collective redress mechanism—one that mirrors the Portuguese and Australian models, which remove the legal excesses. It will not be a US-style class action, where litigation is dominant. We will address the matter in more detail when the Bill begins its passage through the House.

So there we have it: after three wasted years, we have yet another wasted chance to bring change to this country—change that it desperately needs.

Oral Answers to Questions

Sam Gyimah Excerpts

Monday 10th January 2011 Commons Chamber

[The Minister of State, Department for Work and Pensions (Steve Webb)]

I do not recognise the estimate of 8,500 displaced families. We have made changes to the proposals so that the changes to housing benefit will be phased in and existing tenants will have nine months’ protection starting from the anniversary of their claim, with the result that local authorities will have time to manage the transition and that there will be more direct payments to landlords, so we will be able to negotiate rents down. We will of course monitor the impact of the changes as they go on, but 8,500 displaced families is not a number that we recognise.

[Mr Sam Gyimah (East Surrey) (Con)]

T8. Although I welcome the Government’s payment by results model as a way of delivering value for the taxpayer, the challenge for a lot of small organisations is that it will pose huge cash-flow problems. They will have to deliver the work and pay their staff, and then they will be paid by the Government. What steps is the Minister taking to ensure that small organisations that can deliver effective work programmes are not disfranchised by the Government’s payment by results model?

[Chris Grayling]

I recognise the problem to which my hon. Friend refers, which is one reason why we have been absolutely clear to would-be bidders for the prime contracts for the Work programme that we expect them not simply to build but maintain a network of smaller providers. Where they have such cash-flow problems, it will be the big guys with the capital who are expected to carry the burden. In addition, we have put in place the Merlin standard, a code of conduct for contractors that basically states that if they do not do right by smaller organisations, and if they treat them badly commercially, they can lose their contracts.

Capital Gains Tax (Rates)

Sam Gyimah Excerpts

Monday 28th June 2010 Commons Chamber

[Mr Sam Gyimah (East Surrey) (Con)]

Thank you very much, Mr Deputy Speaker, for the opportunity to make my maiden speech on this emergency Budget.

I strongly believe that over the past few years, the state has taken too much. It was interesting listening to the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper). She declared that the nasty party is back, but I know from my personal life that to protect the vulnerable and to give people a genuine chance of making the most of their lives, we need to empower individuals, families and communities.

In talking to several of my constituents in East Surrey, the constituency I have the honour of representing in this House, it became vividly clear to me that budgetary discussions should focus not only on accountancy, numbers and economic jargon, but on people and their lives and futures: including the hard-working young family juggling child care and work, who are concerned about their jobs and the rising cost of living; the 22-year-old graduate with more than £20,000 of debt, wondering whether she will ever get a job or a foot on the housing ladder; and the couple about to retire who are worried about their pension after years of paying their taxes and saving for retirement, and who are left wondering whether they will achieve their aim—this must be the aim for every generation—of leaving a better future for their children and grandchildren.

For my constituents, this is what the Budget boils down to: real people, real lives and real issues. Yes, we have beautiful rolling countryside in East Surrey, most of which has been recognised as green belt, meandering between vibrant towns and beautiful villages. It is the epitome of what makes England unique. We know how fortunate we are, and we take seriously our duty as custodians and protectors of the local environment for future generations. We have great community spirit and pride in our area, which means that for the vast majority of people in my constituency, putting back into the community is a way of life.

It sounds idyllic. However, my constituents work very hard, and I know from my postbag that some of them face difficulties just as real as those faced by people in other parts of the country. A lot of them think—and I tend to agree—that the previous Government treated them as a cash cow, and squeezed and squeezed and squeezed. That is true of all those paying taxes, and of the various local councils who do sterling work on a shoestring budget from central Government.

On a national level, East Surrey has been served with distinction by two great public servants: Peter Ainsworth, for 18 years; and Geoffrey Howe, who now sits in another place, for 24 years. They championed the constituency in this place and always stood up for what they believed in. I know I have big shoes to fill, and at 5 foot 4½ inches, I need to stand on the shoulders of giants.

Peter’s radical stance on the environment was instrumental in shifting attitudes to green issues, and he introduced as a private Member’s Bill the Green Energy (Definition and Promotion) Act 2009. I also respect him for sticking to his guns on the Iraq war when it seemed unpopular to do so. From my dealings with him, I can say without equivocation that he is a good man.

I can say the same of Geoffrey Howe, whose mild manner disguised a steely sense of purpose. He was Mrs Thatcher’s longest-serving Cabinet Minister— 11 years is a long time in politics. In his now famous 1981 Budget, when our party faced the task of getting the country back on its feet, he followed the courage of his convictions by deflating the economy at a time of recession, in the face of resistance from all sides, including 364 leading economists who wrote a letter to The Times saying that the Budget had no basis in economic theory.

However, I believe we learned a greater lesson from that Budget—that we cannot pull certain economic levers in certain circumstances. The lessons from that Budget lie firmly with its weaknesses rather than its strengths. We have learned that we cannot be coldly dispassionate when setting economic policy, and that we cannot ignore the effect on jobs and people’s lives. That is why I support our programme to get people back to work. Getting people into work is the best route out of poverty.

As in 1981, our party once again faces the task of redefining our economy and reshaping our society. That is why I welcome the Chancellor’s proposals for small businesses, which are the backbone of our economy. A long-lasting recovery must have its foundations in the private sector, which is where jobs will come from. Jobs will come if we reward enterprise, endeavour and ambition, and if we have a step change in our approach to enterprise. We need to encourage a spirit of adventure. Without accepting that basic premise, we will not have people taking the risks that are essential to creating the next Vodafone, the next Dyson and the next lastminute.com.

Many Opposition Members say that having the state do less by focusing on getting people into work and building an economy based on rewarding endeavour will penalise the less well-off. They are wrong, and I should know. I grew up in very modest circumstances. My standing here in the Chamber is the result of the vision, care and support of a strong mother, who brought us up on her own and overcame numerous odds, and instilled in us character, discipline and the value of hard work. I do not believe that any state programme could achieve what she has. On the contrary, I would have been trapped in poverty, as millions are.

At university I struggled to pay my rent. But for the generosity of my college, Somerville, I would have been thrown out. That could have been the end of my university education, and perhaps I would not have made it here, so I understand that we cannot leave people to the mercy of markets. For me, the crux of the Budget is that we should empower individuals, families and communities to make the most of their lives.

Some have said that on the face of it, I am an unlikely candidate to represent East Surrey. I have pointed out to them that it is a privilege and a pleasure for me to represent this great constituency because every day I see there the values that shaped me and that I hold dear. Those values should be at the heart of our economic policy and should guide us as we seek to reshape our society for the better.

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[Glenda Jackson]

Perhaps that is one of those areas—this was briefly touched on in an earlier contribution—that, like our health service, has increased so much because we are all living longer, so that people who might have died many years before are still living, but justifiably claiming disability living allowance because they are disabled. The hon. Gentleman should forgive me for giving him a tiny history lesson, but I would just point out to him that when his party was last in total government—as opposed to being propped up by the “30 pieces of silver” party—it massaged the unemployment figures by putting people on incapacity benefit, and that ran for years.

The hon. Member for Peterborough is also suffering from selective amnesia. Those of us who lived through the first Thatcherite era remember well the levels of unemployment, the destruction of communities, and the throwing on to the scrap heap of the greatest national resource that this country will ever have: its people. Their talent, their ability, their creativity and their capacity for hard work were all thrown away for the same reason that they are being thrown away now. “You can’t buck the markets” was the litany then; it is exactly the same now, even though it has been dressed up and presented in a very different way.

We hear massive arguments from Conservative Members that the Labour party created this fiscal downturn, yet they are all intelligent enough to know that that is grossly untrue. It is easy, in the blame culture that we live in today, to make threats to bankers and to say that they are the most blameworthy people, yet they have not been punished in the Budget at all.

[Mr Gyimah]

What is progressive about leaving the country without any money, as the former Chief Secretary to the Treasury said had happened?

[Glenda Jackson]

You really have to get another club to beat us with. I would have thought that there were a couple, although they are not necessarily to do with the Budget.

The hon. Member for St Ives (Andrew George), who is no longer in his place, and the hon. Member for Gainsborough (Mr Leigh) both attempted, in their different ways, to make a salient point—namely, that this is a fair Budget because the richest pay the most. They must know that that is completely and utterly untrue. It is a grossly unfair Budget, because the poorest are the most dependent on public services, which we know will be slashed under the comprehensive spending review, when it eventually happens in October.