Economy and Jobs

Wera Hobhouse Excerpts

Monday 20th January 2020 Commons Chamber

[Sajid Javid]

The good news for our citizens, whether in Scotland, England, Northern Ireland or Wales, is that our infrastructure revolution and the funds we intend to use to build new infrastructure will benefit every part of the United Kingdom. When we set out our plans and provide more detail in the forthcoming Budget, there will no doubt be a lot more investment in Scotland.

[Wera Hobhouse (Bath) (LD)]

The climate emergency is real, and we need to transfer quickly to energy resources that are not fossil fuels. That means we need a much bigger electricity grid. Is part of the Chancellor’s proposals for new infrastructure about how we actually get to a fourfold increase in electricity and the infrastructure that needs to go with that?

[Sajid Javid]

The infrastructure revolution will include significant new investment in our ambition—the statutory requirement to get to net zero by 2050, and also our ambition to make great strides towards that. If she will allow me, I will get in a few moments to the amendment in the name of the right hon. Member for Kingston and Surbiton (Sir Edward Davey), which touches on the all-important issue of climate change.

We will invest in infrastructure in every corner and nation of the United Kingdom. We will invest in roads, in railways and in broadband so that our country can boast the most formidable connectivity on the planet.

We will put significant investment into one of the most critical challenges we face, and that is climate change. Our strategy will take huge strides towards achieving our world-leading commitment to achieve net zero emissions by 2050. We will invest in new technologies and markets as we look ahead to the critical COP26 talks later this year.

--- Later in debate ---

[Sir Edward Leigh (Gainsborough) (Con)]

I assure the hon. Member for Leeds West (Rachel Reeves) that no Government Member wants to degrade the rights or the dignity of working people—quite the opposite. We are not interested in turning us into some bargain-basement economy by lowering standards.

This Parliament seems to have a much calmer atmosphere. We seem to have passed through a hurricane, and we now have a solid majority. However, some would claim that we are simply in the eye of the storm and that another hurricane will hit us over a so-called hard Brexit and a failure to achieve a free trade deal. I doubt whether the free trade deal will be so difficult to achieve. After all, we start with exactly the same rules, regulations, tariffs and everything. If there is good will on both sides, as there certainly is on ours, I see no difficulty in achieving the free trade deal.

Much has been made of what the Food and Drink Federation said this week, but I see no difficulty there. Are we going to downgrade the Lincolnshire sausage compared with the Bavarian sausage? Are we going to produce low-grade orange juice? Of course not—we will keep our standards. I look at the Chancellor when I say this: there is use in the Government making it absolutely clear, when it comes to environmental standards, working rights and ensuring that we have good-quality products, that we are absolutely top-notch in the world and that we will not downgrade any of our standards. What would be absolutely intolerable is to sign up to a deal that says that for ever more, we have to follow rules made by another jurisdiction. That would be absurd, which is why I am opposed to remaining permanently in some kind of single market or customs union. I know that the Chancellor will be absolutely robust in resisting that, but the free trade deal can and will be achieved, because we are a party of free trade. We are open to the world—that is what we believe in. I am not a believer in a hard Brexit or a soft Brexit; I believe in a Brexit that is good for business—a business Brexit—and I am sure that the Chancellor does, too.

How will we increase our competitiveness in Europe and the world as Brexit takes place, if we are to maintain these excellent standards? I suggest, by way of a Budget submission to the Chancellor, who is sitting on the Front Bench, that we could learn lessons from the past. I think I have now sat through over 40 Budgets in this Chamber, and most have been frankly unimpressive. They have looked to the next day’s headlines in spending a bit more money here and there. The one Budget that really impressed me was Nigel Lawson’s Budget in 1988, because he had a vision. It was a vision of a lower-tax economy from a Chancellor who was determined to strip away the mass of allowances and ensure that we no longer had the longest tax code in the world after India. I remember when the Chancellor arrived as a fresh-faced young Back Bencher in 2010, a man who had been a success in the City of London, and I saw him as a Thatcherite. I want him to remember those early days and at the next Budget to take a leaf out of Nigel Lawson’s Budget.

Nigel Lawson said, “If you reward enterprise, you get more of it”. We are a Conservative Government with a solid majority. Have we got the courage of our convictions? Nigel Lawson reduced the top rate of income tax from 60% to 40%. Throughout the period of the Labour Government, they kept that top rate at 40%, except in the dying days when Gordon Brown increased it to 45%, and it is still at 45%. There is no economic justification for it, nor was there for George Osborne’s attack on young entrepreneurs through national insurance. Has the Chancellor got the courage in this Budget to do what Nigel Lawson did, to be a visionary and to start simplifying our tax system and rewarding enterprise? I would be very happy to give way to him, if he wants to make that clear. As I said to the shadow Chancellor, given that 30% of all income tax receipts come from the top 1% of income tax payers, I accept that it will be impossible, probably, to ever achieve the dream of a truly flat-rate tax system, but we can simplify it and gradually flatten taxes. Businesses are employing thousands of accountants to help them avoid taxation. Why can we not simplify our taxation system? I hope we can make progress on that.

I hope we can be a radical Government in other respects. I hope we do not feel we have to ape the Opposition in promising more and more public money. Of course, we have to spend more on the NHS—we have an ageing population with more and more treatments coming on stream—but we have to be a radical Government in trying to deliver outcomes. What is important is not what we spend on the NHS or social care, but the outcome, so we must not be afraid of promoting within the NHS private sector solutions that deliver more efficiency. What do the public care about? They care about their operation and treatment being on time. How that is delivered is not really a priority for them. I feel in his heart of hearts that the Chancellor agrees and is committed to achieving free-enterprise solutions.

[Wera Hobhouse]

rose—

[Sir Edward Leigh]

I remember that the Liberal party in its heyday was a party of free trade and liberalism, so I hope this intervention will be part of that.

[Wera Hobhouse]

Will the right hon. Gentleman not accept that the many vulnerable people who need help who come to my surgery, and whom I see on a daily basis, need good public services?

[Sir Edward Leigh]

Of course they need good public services, and we are a party of good public services, but we do not believe that the only way of improving public services is by increasing spending in real terms year in, year out. The best way to downgrade productivity and efficiency in the public services is by rapidly increasing spending without tight cost controls on outcomes. I am sure I can rely on the Treasury in that regard.

Where the Opposition have a point, and where we do have an argument, is that some of the big companies, particularly the American digital companies and tech giants, are not paying their fair share of tax. There is also an increasing feeling in this country—this is the one nation point—that the employment rights of some of the people at the bottom of the heap are being downgraded. The Conservative party has an historic opportunity to build on its alliance with working people to improve standards, workers’ rights and the ability of those big companies to pay taxes, and we can do that while also being an enterprise Government and rewarding hard work. By doing that, we can achieve a great deal.

The last part of the jigsaw—this alliance with working people—is the question: why do they vote Conservative? Why did they vote for Brexit? It is because they are fed up with cheap labour being imported into this country and fed up with their rights and employment opportunities being downgraded. If the Chancellor is now looking to the world in terms of immigration, let him ensure that we will no longer downgrade the rights of workers in this country by importing cheap labour. Let us have good-quality labour—people who have something real to contribute.

I believe that there is a real, historic opportunity for the Conservative party to build on this alliance with the working people in the north of England who have felt forgotten for so long. That opportunity is here, and I am confident that this Chancellor will deliver it.