Amendment of the Law

Chris Heaton-Harris Excerpts

Thursday 19th March 2015 Commons Chamber

[Mr Iain Wright (Hartlepool) (Lab)]

You said “you” again.

[Chris Heaton-Harris (Daventry) (Con)]

Will my hon. Friend give way?

[Mr Binley]

Before I give way, may I say that age brings with it forgetfulness, as I hope you will understand, Mr Deputy Speaker?

[Mr Deputy Speaker]

You must be very old!

[Chris Heaton-Harris]

It will be a great loss not to have my hon. Friend in the House after the general election, because he is a worthy champion of the wealth creators of this country. In his valedictory speech to this place, will he share with us some of his great expertise on why small businesses are the bedrock of British society, and how they employ so many people to the benefit of our tax system?

[Mr Binley]

I would be delighted to do so. Small businesses are the bedrock of the growth in the number of businesses overall because, first, they welcome the Government’s approach, and secondly, they have the courage to go out, put their own money on the line and add to the number of jobs available in this country. I am delighted to say that that is exactly what I did 25 years ago, and the companies I founded now employ 300 people —that is what entrepreneurialism is about—and to say that that is a part of my record and always has been.

The Chancellor has acknowledged that the success of the Budget will not be calculated by the accumulation of individual measures. I will therefore speak about the economic architecture that will help to achieve his ambitions. I want to comment on how his efforts to rebalance the economy are taking off, something which requires a bold and strong local infrastructure that supports businesses.

In particular, I want to speak about the importance of local enterprise partnerships. I am delighted to say—here is a compliment—that I understand that the Opposition have welcomed LEPs and will continue to use them. That is sensible, and we should give the Opposition credit when they agree with sensible measures. LEPs are critical to the rebalancing of a successful economy in every part of the UK. As some of my colleagues know, I am the vice-chairman of the Northamptonshire LEP. I may be the only Member of the House to be so intimately involved in an LEP. I believe that it is important for hon. Members to take an active interest in their LEPs and be associated with them with a view not to running them or overpowering their potential, but to being involved because they can be a great help. I hope that the Opposition spokesman, the hon. Member for Hartlepool (Mr Wright)—to be fair, he is a great supporter of small business—will take that message on board.

Northamptonshire had the vision to create the Northamptonshire enterprise partnership before LEPs were mooted. I pay tribute to the leaders of the county council for their foresight. The pressures on local government funding will increasingly restrict the ability of local authorities to sustain their support for LEPs. If we are to make them work, they need to be owned by the entirety of the local economic community, and not just by one sector.

Why has the performance of LEPs across the country been so patchy? I believe that it is because many of them, particularly many of the smaller ones, are not in receipt of the support that they need to create the sort of administration that will produce the growth that we are seeking. The original design for LEPs envisaged local businesses as the main source of income for the administrative costs. However, in areas where small businesses are the main engine of economic growth, that is an optimistic expectation. In Northamptonshire, some 94% of those working in the private sector work in SMEs. SMEs simply do not have the spare cash fully to support the LEPs in the way the Government originally envisaged.

I would like to see a system whereby a proportion of the finance that is available for the projects that LEPs handle is allocated to sustain their administration. I hope that the Economic Secretary will recognise that I am not asking for more money, but for some of the money that is devoted to local growth to be redirected to the administration of LEPs so that they can achieve the objective of growth.

This Budget must be seen as the prelude to prosperity in the next five years. Frankly, the Chancellor will need the support of LEPs after the election. That support will have to be strong and sensible. Consequently, the Government will have to give careful thought to how best to organise and manage the structure of LEPs. I appeal to the Economic Secretary to recognise that, in view of the Government’s policies that were expressed by the Chancellor, LEPs will need a little more financial help if they are to do their job correctly on behalf of the Government.

I am happy to offer an exemplar for what can be achieved by a LEP. I refer to my own LEP in Northamptonshire —there’s nothing like blowing your own trumpet! The economy in Northamptonshire is recovering well from the great recession. The food and drink sector is the largest sector in our county in terms of employment and turnover. We are building a new food and drink academy at one of the important colleges just outside Northampton. More than 40,000 people are employed in the auto sport and aerospace industry. They are grateful for the help that has been given to the industry, but they want it to continue. Our craft industry, which makes the best boots and shoes in the world, has received help from the LEP. Church’s, which is one of the best-known brands, has had help to extend its manufacturing facility. Northamptonshire’s enterprise zone has created more than 1,000 jobs.

Finally, Northamptonshire’s Challenge 2016 project, which aimed to achieve a massive reduction in youth unemployment, has far exceeded our expectations. Two years ago, we had more than 5,600 young people not in education, employment or training; there are now a little under 1,500. That is the success of this Government—giving people opportunity and aspiration. I say to those who tell me that young people do not have aspiration that it is amazing how aspirational young people become when they have a job.

If we are to put ourselves in the premier league of economic growth, the measures in the Budget must be combined with an effective local economic framework. I am confident that Northamptonshire will continue to provide an example of how best to drive regeneration and economic growth, but it will need more help, as will many LEPs across the country. I beg that you consider that factor—you being the Economic Secretary, Mr Deputy Speaker—

--- Later in debate ---

[Chris Heaton-Harris (Daventry) (Con)]

It is a privilege to speak in this debate not just because it follows a sensible and wise Budget but because I have been able to benefit from the wisdom of a number of retiring Members. I am talking about my hon. Friend the Member for North Dorset (Mr Walter), my right hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke), my hon. Friends the Members for Dudley South (Chris Kelly), for North Warwickshire (Dan Byles) and, not least, for Northampton South (Mr Binley). It is a true privilege to follow some great speeches with some very wise words. Indeed, the hon. Member for Easington (Grahame M. Morris) also delivered a great speech. I would love to disagree with him on every single point that he raised, and probably will do in my speech, but he is such a nice man that it is very difficult to do that.

It is also good to see Front Benchers wearing their team colours. The Economic Secretary to the Treasury, my hon. Friend the Member for South Northamptonshire (Andrea Leadsom) and my next door neighbour, is adorned with a jacket that is the Northampton Saints strip. I know that the shadow Minister, the hon. Member for Hartlepool (Mr Wright), would be wearing his Hartlepool kit if he had the opportunity. I have heard him speak before, so I know it would not be as the mascot.

I listened to the speeches from the shadow Chancellor and others, and I really wanted to follow a Labour Member I did not like, because there is a brilliant Shakespearian insult that I wanted to use:

“O, he is as tedious

As a tired horse, a railing wife;

Worse than a smoky house: I had rather live

With cheese and garlic in a windmill”.

But unfortunately I followed the hon. Member for Easington, so I could not use any of that.

It is a pleasure to stand here today, only a week before Dissolution, and reflect upon the Chancellor’s remarkable economic achievement in picking Britain’s economy up off its knees after it was left in tatters by the Labour party. I would like to focus today on the businesses up and down the county without which this economic recovery would not have been possible. They are the meat on the bone of our long-term economic plan. It is they who have helped to get record numbers of people into employment, they who have helped grow our economy by 2.6% in the past year alone, and they who have taken the risks to help Britain succeed, now and in the future.

The economic news is good not only at a national level, but in my constituency of Daventry. Unemployment there is now running at the extraordinarily low rate of around 1%, with only 600 constituents on jobseeker’s allowance, which is down 42% since a year ago. Youth unemployment is down 40% since 2010, and long-term unemployment has been halved. Those figures are quite miraculous. They are a testament both to those who work in the jobcentre and help find work for my unemployed constituents and to the businesses in my constituency that created the jobs in the first place.

In fact, the midlands are having quite an economic renaissance. We are seeing a job created there every 10 minutes, with employment rising faster there over the past than even in London. Those are amazing statistics, especially when we consider that 80% of the jobs being created are full time and in high-skilled occupations. Over the past two years, Daventry has seen 1,700 people begin apprenticeships. I am proud of the legacy that we will be able to look back on in that area. The Prime Minister has outlined his ambition to see 3 million apprenticeships in the next Parliament, and I know that in only a few weeks’ time that ambition will start to become a reality when the British people rightly vote Conservative across the country and deliver a Conservative Government.

Another proud achievement of this Government has been the creation of and support for university technical colleges, one of which is in my constituency. There are now 40 UTCs thanks to this Government, and there are more to come. Daventry university technical college, under the wise stewardship of Dave Edmondson, is performing great things. With the Daventry international rail freight terminal in my constituency, the UTC focuses on sustainable and related new technologies in engineering, construction and environmental sustainability. That reflects the growing demand for well-qualified technical specialists in my constituency. It is now building the skills sets of students going through the UTC so that they can walk into jobs that are right on their doorstep.

There are many good points that got only a brief mention in the Budget statement. I echo yesterday’s statement from the Federation of Small Businesses, which said that giving stand-alone guidance for research and development tax credits for small businesses will

“drive further investment by innovative companies”.

In fact, I recently met a representative of an accounting firm who works with small businesses in order to discuss tax credits. Jane Ollis, managing director of RIFT, pointed out that in 2013 only 13,000 of the millions of small businesses in the UK claimed back the cash they were entitled to from the Government under research and development tax credits, so there is a lot of work to be done in that area. If a business has spent time and resources carrying out new product development, or if it is working on some innovative solutions, it should be able to reduce its tax bill or secure a cash injection of up to 25% of what it has spent. RIFT has identified that the average R and D tax refund claimed back from HMRC is £55,000, which is an invaluable injection of cash for any small business.

We have also taken 360,000 small businesses out of business rates over this Parliament by extending small business rate relief. We have thrown our weight behind businesses by cutting corporation tax, which in two weeks’ time will fall to 20%, the joint lowest rate in the G20 and a far cry from the legacy of the previous Labour Government—it stood at 28% in 2010. Now, we will go further. Realising that business rates have not kept pace with the needs of the modern economy, the Chancellor has announced a review of the structure of this system. That is welcomed by everybody in business.

We have argued in this place about whether people are feeling the benefits of the economic recovery. The IFS said today:

“Average household incomes have just about regained their pre-recession levels. They are finally rising and probably will be higher in 2015 than they were in 2010, and possibly higher than their 2009 peak.”

Families are, on average, about £900 a year better off under this Government.

On my next point, I should declare an interest. I do not receive any payment but I am the chairman of two regional theatres and a cinema. Arts, heritage and sport have received a great deal of money from this Government —£300 million extra in the past four years, compared with the preceding four years, because the Government changed the funding formula with the lottery. This is opposed by the Labour party, which has still not decided whether it would go back to the funding system that it previously operated, meaning a huge cut for the arts. I hope the hon. Member for Hartlepool will pick up this point and say how arts would be funded in the future.

We must never forget Labour’s great recession, its mismanagement of the economy and its economic illiteracy. The Leader of the Opposition and the shadow Chancellor fail to disguise their disdain for business, trotting out the same tired lines and failed policies, such as rent controls, threatening businessmen who criticise their policies, proposing punitive taxes on wealth creators and refusing to commit to deregulation. I have numerous photographs of many Opposition Members, including the one who is, I believe, next to speak, standing next to a huge ice cube, trumpeting their proposed energy price freeze, only to abandon it as energy prices are decreased by market forces. This literal political meltdown shows their utter incompetence. They have no economic plan, let alone a long-term one like the Conservative party and this Government.