The Economy

Sammy Wilson Excerpts

Wednesday 18th November 2015 Commons Chamber

[Harriett Baldwin]

That is exactly my point: they will be disproportionately helped by the increase in the national minimum wage through the national living wage from next year.

The motion mentions productivity, and it was also raised by the hon. Member for Caerphilly (Wayne David), who is no longer in his place. Productivity has been a long-standing issue since well before 2010, and we accept that. But rather than grandstanding, we have set out a wide-ranging productivity plan. We are delivering the infrastructure projects we need, through our infrastructure pipeline, and we have set up the national infrastructure commission to take a long-term, depoliticised approach to major projects. We have seen a recent strengthening in productivity growth. Output per hour rose by 0.9% in the last quarter, and the Office for Budget Responsibility forecasts that productivity will pick up by 1.7% next year, and 2.4% in the year after that.

The motion also questions our long-term commitment to science, technology and green growth.

[Sammy Wilson (East Antrim) (DUP)]

Does the Minister agree that the freezing in cash terms of money spent on science and research and development has had an impact on productivity growth and the potential for increasing productivity in the UK economy?

[Harriett Baldwin]

We agree that maintaining the science budget is incredibly important. As part of the £100 billion of infrastructure investment that we have already committed to, £6.9 billion will be going towards research infrastructure.

--- Later in debate ---

[Stewart Hosie]

I do agree. I thought it was telling that when the announcement in relation to onshore wind farms was made in this place to remove any support for those that had not passed every single hurdle, Tory Back Benchers were on their feet making the first attack on the solar sector as well. I agree with the hon. Lady entirely.

[Sammy Wilson]

Does the hon. Gentleman not see the contradiction, however, between some of the comments made by his own party colleagues last week when we were discussing the decline in the steel industry and the high energy prices and his support for renewables? Does he not accept that in Spain, for every one job created in the renewables industry, 2.2 jobs are lost in traditional industries?

[Stewart Hosie]

I have heard that argument before. I am not sure about its efficacy and I am not going to comment on it. On the substantive point, however, there is absolutely no contradiction at all between a general attempt to decarbonise, which is the right thing to do, and a clear recognition of the costs of high energy-using industries that are of strategic importance. There is no contradiction there whatsoever.

There is one final point of failure in the UK Government’s mismanagement of the economy: last week’s announcement of HMRC closures. If the UK Government are serious about clamping down on avoidance, evasion, fraud and even error, if they are serious about reducing the £16.5 billion tax gap from small and medium-sized enterprises, if they are serious about reducing the £14 billion tax gap from income tax, national insurance and capital gains tax, and if they are serious about maximising tax yield for investment, then closing 137 HMRC offices, including almost every single one in Scotland, is a catastrophic mistake.

--- Later in debate ---

[Sammy Wilson (East Antrim) (DUP)]

I accept that the Government have done a number of things right for the economy, and the fact that they were elected indicates that many people across the United Kingdom take that view. That is not to say, however, that there are no flaws or faults in their current strategy.

The hon. Member for Cheltenham (Alex Chalk) accused us of saying that economic growth has been anaemic. The growth rate is as good as, and possibly better than, most other developed countries in western Europe. However, it is fragile growth. The Government and the Chancellor promised us that growth would be export-led, but that has not been the case. In fact, our exports have dropped dramatically. He promised that we would not go back to the days of boom and bust, with high consumer borrowing, and yet most of the growth is determined by consumer spending based on borrowing. The Government cannot be complacent. There must be recognition that there are difficulties ahead and that there is a fragility to the improvements in the economy.

I want to make two points. As the shadow spokesman said, this debate is a prelude to what we want to hear in the autumn statement next week. First, there must be an element of fairness in the difficult decisions that need to be taken because of the economic problems that we still face. I implore the Minister to take back the message that has come not only from the Opposition Benches, but increasingly from his own Back Benchers, that the burden cannot be placed on the shoulders of the working poor. There have to be substantial changes to the proposals made for the tax credit regime. The proposals will be contradictory anyhow, because for many people the Government’s aim of making work pay will not be realised.

Secondly, when we talk about borrowing, we have to distinguish between borrowing for the kind of spending that the TaxPayers Alliance has highlighted in the past couple of weeks, which is wasteful, and spending which is productive and gives a return. Spending on infrastructure and on science and technology has fallen by 14%, yet it has been proved we are one of the countries with the most effective spending on science and technology and on research and development. Why do we not concentrate on borrowing for those purposes?

On infrastructure, I think of my constituency. One road costing £46 million has removed almost entirely the traffic jams that cost local businesses millions of pounds a year. The development at The Gobbins has attracted thousands of tourists and bed and breakfast bookings have helped the local economy. There has been a good return on those investments. If the Government are looking for ways of spending money and if there is to be borrowing, let us make sure that it is for such infrastructure investments, which will increase productivity, give a return, improve our competitiveness, contribute to the export-led growth that we want to see, and give us strong growth for the future.