Oral Answers to Questions

Simon Kirby Excerpts

Tuesday 29th November 2016 Commons Chamber

[Chris Elmore (Ogmore) (Lab/Co-op)]

7. What assessment he has made of the potential effect on the ability of small and medium-sized businesses to raise capital of the UK leaving the EU.

[The Economic Secretary to the Treasury (Simon Kirby)]

The UK remains very much open for business and the Government are committed to supporting SMEs to access the capital they need to grow, as demonstrated by the £400 million increase in funding for the British Business Bank announced at the autumn statement, unlocking £1 billion of funding.

[Chris Elmore]

The Minister will be aware that more than £10 billion of EU structural funds is invested annually in the UK, particularly in Wales. Indeed, in my constituency of Ogmore, many small and medium-sized businesses have benefited from Jobs Growth Wales, which is a success of the Welsh Labour Government. Will the Minister give a cast-iron guarantee to the people of Wales that structural funding will continue, pound for pound, after we leave the European Union?

[Simon Kirby]

We want to see the economy benefit every part of the UK. It is interesting to note that there are almost 1 million new businesses in our country since 2010, and I note the Prime Minister’s announcement at the CBI conference about the new patient capital review, which will be interesting, I am sure.

[Mr Jacob Rees-Mogg (North East Somerset) (Con)]

Does my hon. Friend agree that Brexit is essentially a red herring for SMEs in this context, that what matters is that the Government create the right conditions for businesses to do business and that the banks are in a sufficiently capitalised position to lend money?

[Simon Kirby]

I agree absolutely with my hon. Friend. It is about creating an economic environment in which businesses can grow and thrive. The British economy is strong and will continue to be strong as we prepare for our departure from the EU.

[Emma Reynolds (Wolverhampton North East) (Lab)]

What would be the impact on SMEs, particularly those in the supply chain of big manufacturing firms such as Jaguar Land Rover or Airbus, if we were to leave the EU without full access to the single market or a free trade deal with the rest of the EU and if we were forced to fall back on World Trade Organisation rules and tariffs?

[Simon Kirby]

The Government have been clear that we will not comment on every turn of the negotiations. Indeed, the negotiations have yet to start. However, we are absolutely committed to getting the best possible deal we can.

[Chris Philp (Croydon South) (Con)]

Does the Minister agree that the City of London plays a very important part in helping businesses to raise capital and that maintaining clearing in euros in the City of London will be an important way to ensure that the City retains that status?

[Simon Kirby]

The City of London is a very important financial centre and we fully intend it to remain as such. Clearing is an important element of the negotiations, and we will do all we can to retain London and the UK as a financial centre of excellence.

[Jo Churchill (Bury St Edmunds) (Con)]

8. What steps he is taking to support regional infrastructure development.

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[Ms Tasmina Ahmed-Sheikh (Ochil and South Perthshire) (SNP)]

10. What fiscal steps he has taken to help increase levels of UK exports since the UK’s decision to leave the EU.

[The Economic Secretary to the Treasury (Simon Kirby)]

The Government are committed to ensuring that exporters receive world-class support. That is why the autumn statement announced the doubling of UK export finance capacity.

[Ms Ahmed-Sheikh]

Last week, the OBR reduced its trade forecast, stating that this is

“due to the loss of trade that the OBR judges will result from the UK leaving the EU.”

We all know that this Government would like to have their cake and eat it, but changes to export finance alone will not bridge the gap between ambition and reality. Do the Government seriously expect to meet their own target of doubling exports without continued membership of the single market and without a comprehensive plan to do so? Do the Government stand by their exports target?

[Simon Kirby]

We do, and it is interesting to note that the Federation of Small Businesses, for example, welcomed the doubling of export finance because it felt that it would help small and medium-sized enterprises reach new markets. It is also interesting to note that the Scotch Whisky Association highlights the importance of exports, and it has seen an increase of 3.1%, to 531 million bottles. Perhaps the hon. Lady might remove uncertainty in Scotland by stopping banging on about a second referendum.

[Mr David Nuttall (Bury North) (Con)]

Does my hon. Friend agree that the best thing the Treasury can do to help British business export is to allow it to keep more of the profits it earns by continuing to cut corporation tax?

[Simon Kirby]

We have legislated for corporation tax to be reduced to 17% by the end of this Parliament—one of the lowest rates in the G7—and we will do all we can to help businesses grow and thrive in this country.

[John McDonnell (Hayes and Harlington) (Lab)]

Last week’s autumn statement should have been about providing answers to meet the challenges of Brexit and at least information on the options available. Instead, it appears that the only information we can glean is from photos snatched of the notes of a senior Conservative official in Downing Street. We know now, in the light of that leak, that many of the Chancellor’s senior colleagues in the Government are reluctant to pursue the transitional deal being called for by businesses when we leave the EU. Will the Minister now provide some clarity by inviting the Treasury and the Office for Budget Responsibility to undertake a full assessment of the public finance implications of the range of policy options associated with Brexit, including access—or not—to the single market, being in or out of the customs union and the potential for transitional arrangements?

[Simon Kirby]

I have to tell the right hon. Gentleman that that is a normal part of what we do on a very regular basis, and he really should not believe all he reads in newspapers from researchers or Back Benchers—it is hardly Government policy.

[John McDonnell]

I take that as a no.

Last week, we learned in the OBR report that the OBR was denied any information in respect of assurances provided to Nissan. The OBR said:

“On this occasion we asked specifically whether any contingent liabilities had been created in respect of assurances provided to Nissan and the Treasury declined to say.”

This level of opaqueness on an existing deal undermines the certainty businesses need to invest in any future deals. Will the Chancellor now provide the OBR with the information it has requested, so that it can provide a more accurate forecast, rather than being left in the dark or, as it put it, “none the wiser”?

[Simon Kirby]

Perhaps we should welcome the jobs to start with. However, in answer to the right hon. Gentleman’s question, it was, unfortunately, not possible to confirm this to the OBR in time to feed into the drafting process. Her Majesty’s Treasury therefore provided the same answer as it would to any query on contingent liability.

[Kirsten Oswald (East Renfrewshire) (SNP)]

11. What steps he is taking to increase the level of public infrastructure spending.