Budget Resolutions and Economic Situation

John Bercow Excerpts

Wednesday 20th March 2013 Commons Chamber

[Mr Iain Wright (Hartlepool) (Lab)]

On a point of order, Mr Speaker. It says on page 93 of the Red Book:

“The Government will…publish the Business Bank’s first business strategy”

this coming Friday, on 22 March. Given that you, Mr Speaker, have been very clear that important announcements should be made first to this House, and given that it is my understanding that the Secretary of State for Business, Innovation and Skills will open tomorrow’s Budget debate, can you give me any guidance about the powers you have either for the publication to be brought forward to tomorrow to allow hon. Members to question the Secretary of State when he is at the Dispatch Box during the debate or to provide for an oral statement to be made to the House on Friday morning? Mr Speaker, how can we question the Government on this important topic?

[Mr Speaker]

I am grateful to the hon. Gentleman for his point of order. I do not have formal powers in this regard and have only just had notice of what the hon. Gentleman sought to raise. What I would say to him is as follows: first, the Secretary of State will have heard—or will soon hear—of the point of order, and it is perfectly open to him to adjust his plans accordingly if he judges it appropriate to do so. Secondly, my sense is that this is a matter that can reasonably be expected to be raised in the debate, and the versatility, not to mention the indefatigability, of the hon. Gentleman as a parliamentarian, suggests to me that he himself is likely to do so. As to whether a statement or a publication intended for Friday will be brought forward, I cannot say, but Ministers will have heard what the hon. Gentleman has said, and I will keep an eye on the matter.

--- Later in debate ---

[Geoffrey Clifton-Brown]

I think someone is telling me that 400,000 jobs have been lost in the private sector. However, I am talking about net job creation, which amounts to just over 1 million. That is the important figure. Of course, in a dynamic economy some jobs will always be lost and some will be gained, but as long as more are being gained than lost, we are on the right side of the argument.

The Chancellor mentioned that the eurozone had contracted by 0.6% in the last quarter. That, of course, is one of the reasons why our economy is so difficult to repair. As the Red Book makes clear, 42% of our exports go to the eurozone and 16% go to the United States. Both the eurozone and the United States are experiencing little growth, and the economy of the eurozone is contracting. However, there are some bright spots. Between 2009 and 2012, our exports of goods to Brazil, Russia, India and China increased by 49%, 133%, 59% and 96% respectively. Last year, indeed, we were the only country in Europe that managed to increase its exports to China. The international markets have endorsed the Chancellor’s policy in the form of our 10-year bond yields, which, according to the table in the Red Book, would be virtually the lowest in the eurozone, outstripped only by those in Germany.

I am struck by the fact that, according to KPMG’s table, Britain is the best place in which to do business—better than Switzerland, the United States and France. However, I must issue a small caveat to my hon. Friend the Exchequer Secretary. I fear that we are in danger of losing some of our foreign direct investment, the inward investment that sustains 40% of our GDP. Until recently we were in a fortunate position, in that 70% of all the European corporate headquarters were based within 75 miles of Heathrow, but owing to our current indecision about where our major hub airport should be located, we are losing those corporate headquarters by the day. I think that we should persuade all parties to agree that whatever Sir Howard Davies comes up with in relation to the hub airport should be implemented as soon as possible after the next election, so that we do not lose that international place. Let me also say that, while I fully support High Speed 2, our most expensive engineering project ever, the route should not be designed in isolation from the location of our major hub airport.

I warmly welcome some of the factors that KPMG identifies as making Britain one of the best places in which to do business. I particularly welcome the Chancellor’s announcement today that all corporation tax, whether on large or small companies, is set to fall to 20%. I think that that is a huge achievement, and I think that it will continue to encourage companies to come to this country. I also welcome the fact that the first £2,000 of national insurance will be left in the pockets of the companies themselves. I welcome the fact that the small business rate will be continued and that the Chancellor is abolishing the fuel duty rise this autumn. All those are seen as welcome steps to encourage employment. I particularly welcome the fact that well over half a million new apprenticeships have been established this year, including 570 in my constituency—that is a 63% increase on the figure for the year before.

I welcome my right hon. Friend the Prime Minister’s initiative at the G8 and G20 to make sure that although we lower the rate of corporation tax, we require companies that make profits in a country to pay a reasonable rate of tax on the profits in that country. Our measure will help not only this country, but countries in the third world, which often have difficulty collecting corporation tax from big multinational companies on profits made in them. As the Chancellor said today, these rules—these international tax treaties—were written in the 1920s, and their updating is well overdue.

Let me deal with some more domestic issues. As chairman of the all-party group on wine and spirits, I welcome the Chancellor’s announcement that the beer duty will fall in this Budget. However, his announcement that the 2% alcohol escalator will continue will mean that wine duty will have increased by 50% since 2008, while the duty on spirits will have increased by 48%. The industry supports 2 million jobs, many of them for young people in the hospitality industry, and it contributes £16 billion-worth of duties. There are signs that that is beginning to decline because of the rise in the duty escalator. Alcohol consumption has fallen by 13% since 2004 because of the responsible measures the industry has taken. Until now, the duty on beer and wine per unit of alcohol has been broadly taxed the same. In 1983, the European Court of Justice warned the UK that it is illegal for the UK to tax wine and beer at different rates, because they are seen as competing products. There must now be a real risk of a legal challenge, and I ask the Exchequer Secretary to consider this matter seriously to see whether something can be done about it before the Finance Act is introduced.

In conclusion, there are many things to welcome in this Budget. For individuals who want to work hard and keep more of their own money, I warmly welcome the fact that anybody earning less than £10,000 will not pay tax. We are helping people to buy their own house, and I have only one thing to warn the Exchequer Secretary about on that. As he and others will have realised, house prices in central London are rising very fast—they are literally increasing by the day—and I hope that these measures will not lead to a housing boom in London. We are also helping people with the cost of living, helping people with their pensions and their retirement, and helping people to keep their hard-earned life savings from being removed to pay for the cost of their elderly care. There is a huge amount to welcome in this Budget, but it has not been welcomed by the carping Labour party, which caused many of our economic problems in the first place.

[Mr Speaker]

I must say to the hon. Member for The Cotswolds (Geoffrey Clifton-Brown) that it is deeply irregular for a Member to toddle out of the Chamber immediately upon the conclusion of his speech in expectation—and anticipation, no doubt—of a very important engagement. I dare say that he is leaving the Chamber in order to chair the Committee of Selection meeting at 4.45 pm. It is true that that is a most burdensome and important responsibility, but had I known that he would be doing that immediately afterwards, I would not have called him. I put it to him politely that there is a much greater responsibility upon him to sit in the Chamber and listen to the hon. Member for Great Grimsby (Austin Mitchell). If he does have to go, I suppose that we will have to tolerate it, but I hope he will toddle back immediately afterwards.

[Geoffrey Clifton-Brown]

I did actually mention this to the Deputy Speaker when he was in the Chair before you, Mr Speaker. I said that I would be more than happy to be called at any time later in the evening. So I will be guided by whether you want me to stay or to go to chair the Committee, Mr Speaker.

[Mr Speaker]

The hon. Gentleman has acted in good faith and that is respected. If his colleagues are expecting him, so be it. What I politely ask, because the tradition in the House is an important one, is that if he feels able he comes back to listen to other parts of the debate, as that would be appreciated by the House. We do not wish to detain him now if his colleagues are waiting for him, and we recognise that he meant well by the House. The hon. Member for Great Grimsby will have one fewer member of his audience.

--- Later in debate ---

[Gavin Williamson]

My hon. Friend is absolutely right. We need to be more imaginative in how we get finance to the small businesses that want to grow.

A little less than a year ago, I had an Adjournment debate on the need to get rid of the beer duty escalator. I am incredibly pleased that the Chancellor has reduced beer duty by 1p. It might not sound much, but it will make a real difference to the 83 pubs in my constituency and to the three small breweries in Kinver, Enville and Essington that are employing people in my constituency. I hope that this will act as a stimulus not only to the brewing industry but to the pub industry right across South Staffordshire, across the west midlands, and across the country. It is my firm belief that this Budget has not only been good for brewers, manufacturers and business, but good for Britain.

[Mr Speaker]

It is a pleasure to welcome the return of the Chairman of the Committee of Selection; I thank him for coming back to the Chamber so quickly. I call Alison McGovern.