Amendment of the Law

Tristram Hunt Excerpts

Monday 26th March 2012 Commons Chamber

[Mr Vaizey]

Is it not a wonderful coincidence that I also get to suck up to one of the most important Back Benchers in the House?

Next week, a BDO report will say that telecoms, media and technology industries will be the success stories of 2012 in the UK, with software investment growing and investment last year at an all-time high. Innovations such as cloud computing are set to create more than 200,000 jobs in the UK in the next three years.

[Tristram Hunt (Stoke-on-Trent Central) (Lab)]

Is it because the Department for Culture, Media and Sport is no longer interested in art and culture that it has purged Dame Liz Forgan from the Arts Council?

[Mr Vaizey]

That gives me a chance to respond to one of the Labour party’s most important Back Benchers. If he thinks that we are not interested in art and culture, why is he never out of my office talking about art and culture and, in particular, our joint campaign to save the Wedgwood collection?

To support technology and innovation businesses we have protected the science budget and are funding new science capital projects, including £158 million for e-infrastructure. The total increase in capital funding since December 2010 is £495 million. I feel that point keenly because tomorrow is the 10th anniversary of the agreement between the previous Labour Government and the Wellcome Trust to build and site the Diamond synchrotron in my constituency. I must say, in a moment of cross-party unanimity, that the last Labour Government had two of the finest science Ministers we have seen in Lord Sainsbury of Turville and Lord Drayson. We have, of course, gone one better by appointing our own Minister for Universities and Science, who has two brains.

We will have increased the level of the small company research and development tax credit from 175% to 225% by April 2012. That is the largest programme of support for business innovation in the UK and will provide support of more than £1 billion a year. We have made it more attractive to invest in smaller high-risk companies by raising the tax relief available under the enterprise investment scheme. We have established 24 enterprise zones throughout England. We have introduced catapult centres, which will form a new elite national network to act as a bridge between academia and business. They will cover sectors such as high-value manufacturing, cell therapy and offshore renewable energy. The Technology Strategy Board is investing at least £200 million in the current spending review period to make that happen.

We need to build on that success and I am pleased to say that the Budget maintains the momentum. We are cutting taxes on patents through a 10% patent box corporation tax worth some £900 million, which will be introduced next year and phased in. We are extending enterprise zones to Scotland, Northern Ireland and Wales. We are investing £100 million, which will leverage a further £200 million, in new university research facilities. We are introducing transport systems and future cities catapult centres. In a country with the world’s second largest aerospace industry, we have announced an investment of £60 million in a new aerodynamics centre to encourage innovation in aerospace design and the commercialisation of new ideas. Those measures will ensure that our world-leading universities and innovative small businesses can come together with global companies to commercialise new technologies, ideas and inventions in a wide variety of sectors.

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[Mr Foster]

I will not give way because I want to make progress.

I was pleased with the comments of my hon. Friend the Minister because he was able to put at the heart of what the Government are doing some of the really important work of the Department for Culture, Media and Sport. He showed how the work being done there can help to deliver the growth in the economy that is really necessary, particularly in relation to the creative industries. As he said—and I am grateful to the deputy leader of the Labour party for agreeing—we have in this country some of the brightest and best people working in our creative industries. We need to give them as much support as we can. Even before the Budget, work had been done to try to achieve that, such as the establishment of the creative industries council, which is already making valuable recommendations on the skills and training needs of the sector.

[Tristram Hunt]

Is the right hon. Gentleman happy that as a result of the tuition fees introduced by his Government, we are seeing a massive collapse in the numbers studying modern languages, humanities and the creative industries?

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[Tristram Hunt (Stoke-on-Trent Central) (Lab)]

The preamble to the Budget was brilliantly set out by the Business Secretary, the right hon. Member for Twickenham (Vince Cable), when he suggested that the Government have no “compelling vision” and no plans for a strategy for growth. Last week, in a remarkable sign of joined-up government, the Chancellor sought to lay out the absence of a compelling vision. We know from the growth projections set out by the Office for Budget Responsibility, which has an unfortunate habit of being optimistic, that this is the slowest economic recovery on record. In terms of recovering our pre-crash levels of output, it is slower even than the great depression of the 1930s.

We have heard much about the Budget being fiscally neutral, but I suggest that it is also a growth-neutral Budget, for we have a clear post-Budget forecast, also provided by the OBR. Its verdict is a paltry revision upward of 1%—[Hon. Members: “0.1%”] That is even worse—one tenth. The contrast with countries taking the challenge of recession seriously could not be starker. In America, employment and business confidence is up, with the economy growing at twice the rate of our own, thanks to the interventions of the Obama Government. We know that the Prime Minister likes to be tucked up tight on Air Force One, but I suggest that he should also ask for a bedtime story from the President on how to grow an economy out of recession.

Instead, we have the fiscal stimulus of a cut in the 50p top rate of tax, based on some dodgy assumptions about economic behaviour and incentives. While millionaires and dining companions of the Prime Minister will get a £40,000 tax cut—“Bosh”, as Mr Peter Cruddas might put it—hard-pressed families will be pushed into poverty. In Stoke-on-Trent there are 1,220 hard-working families who, in less than a fortnight, stand to lose all their working tax credit if they cannot extend their hours from 16 to 24, and that is before we get on to the raid on pensioners. Like the previous Labour Chancellor, I am not wedded to the 50p tax rate. Governments generally should not be in the business of taking half the earnings of their citizens, but now is not the time to make this cut. It is the wrong choice at the wrong moment.

The Budget also fails to help our manufacturing base. What manufacturers in my constituency need now is support for investment, capital allowances for energy-efficient technologies and support for co-fund technology demonstrators. We are still waiting for details from the autumn statement on the package of measures for energy-intensive industries. We must ensure that our leading manufacturers, such as ceramics firms in my constituency, are not driven out of the UK.

I have a few last points. First, I welcome the decision on place-of-consumption reforms for internet gambling. This is big news for Stoke-on-Trent and we are happy to host Bet365.com, which pays its taxes in the UK rather than going offshore. However, there is no need for this reform to wait until December 2014; it should come in earlier. On the negative side, the decision to remove the zero rate of VAT on approved alterations to listed buildings is a real error. When that is combined with forthcoming planning reforms, it speaks of a Government with little feel for the natural and historic environment of this country. What we needed was a pro-growth plan, not a growth-neutral Budget, and the Government failed to deliver it.