Businesses (North of England)

Debate between David Rutley and Julian Smith

Wednesday 14th January 2015 Westminster Hall

[Julian Smith (Skipton and Ripon) (Con)]

Does my hon. Friend agree that the difference between the south and north from a business point of view can be characterised by the fact that only about half a dozen FTSE 100 companies are headquartered north of Watford? That has big implications for many of the things that I think my hon. Friend wants to raise in this debate and means that northern businesses need to be represented strongly.

[David Rutley]

Absolutely; without question. Having spent many of my working years in the north, it is clear to me that we need more focus, not just from the Government but from business. We know, from the businesses we work with, that there is huge enthusiasm to make the northern economy flourish and become even stronger. There is no question but that there is more work to do, including in the private sector as well as in the public sector.

I should like to set out what the Prime Minister said are his six commitments for the north-west, to remind colleagues. He said clearly in Manchester that he wanted to see an increase in the long-term rate of growth in the north-west at least at the forecast growth rate of the United Kingdom. He wants to see the north-west at the same average employment rate as in the UK as a whole. We have seen progress already. Output per head in the north- west grew faster than, or at least as fast as, elsewhere in the UK during 2013. The ambition is to generate an £18 billion real-terms increase in the size of the north-west economy by 2030, with more than 100,000 more people in employment during the next Parliament. These are big ambitions, and they are so important because in the north-west and in the north generally, historically, we have not seen the employment levels that the area and the region deserve. We need to do more to help achieve those ambitions.

The Prime Minister talked about how those commitments would be achieved. He talked about getting the largest ever and most sustained investment in the long-term transport infrastructure of the north-west and about making sure that we get scientific innovation standing out more.

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[David Rutley]

It is probably way above my pay grade to try to think through what should happen in Cumbria. Like my hon. Friend, I love Cumbria and do not want to see it get left behind. The infrastructure points raised about rural broadband and transferring power must link into rural communities. Otherwise, the northern powerhouse initiative will not achieve the potential that the north deserves. His idea is worth exploring, but I am sure that he has more expertise in that than me.

In drawing to a conclusion, I want to focus on the lessons from Alderley Park, which was an important experience in my career, to see how partnerships between city and county can bring about successful results. In further reference to the point about Cumbria, let us learn the lessons from such experiences to ensure we take the maximum from them.

[Julian Smith]

Like my hon. Friend, I pay tribute to the work that Manchester has done, but does he agree that Leeds, which also wants to do a deal with Whitehall, needs to show that it will act above politics and provide scrutiny and governance mechanisms that are beyond reproach to demonstrate to people of all parties that it is working for the region and not for any one political party?

[David Rutley]

As always, my hon. Friend makes an important point. I absolutely agree. Leeds is a city that I know well and love. We must trust local politicians and civic leaders to do the things that are in the best economic interests of those whom they serve. They need to work closely with local MPs and surrounding authorities to fulfil that potential. Whether in the centre of Leeds, Pudsey or wherever, they must work in the economic interests of local residents.

I feel as if I have spoken for a little too long [Hon. Members: “No!”]. Okay, I will take the next 10 minutes. I know that many people other want to speak, so let me draw to a quick conclusion. The report put forward by Jim O’Neill of the Royal Society of Arts, who is a well respected economist and the city growth commissioner, said that, if we get this right, we will get a 5% improvement in productivity throughout the UK. We absolutely need that and the people whom we seek to serve deserve it.

When the Chancellor first set out his compelling vision for the northern powerhouse, he rightly did that at the Museum of Science and Industry in Manchester: a museum that sets out how the north led scientific innovation and industrial progress. Sadly, too many people find out about our industrial heritage from the Science Museum in south Kensington, which is not exactly the economic or industrial powerhouse. That needs to change. We must not let London lead the whole debate. We are not kowtowing to London and we do not want to copy it or do what it says. We need to compete strongly, show what our commitments are and play to our unique selling points. We have huge potential in the north to set out a compelling and attractive vision for a northern powerhouse by engaging with our local businesses and residents. With the Government’s support, we can go on to achieve even greater things.

Deregulation Bill

Debate between David Rutley and Julian Smith

Monday 3rd February 2014 Commons Chamber

[David Rutley]

Absolutely.

The duty to pay employer’s national insurance contributions for people under 21 will be abolished completely. Last year’s autumn statement included a cap on the increase in business rates and a rolling programme of small business rate relief that will enable a £1,000 reduction in business rates for shops and retail premises, which will help to safeguard our high streets.

The Bill is an integral part of the Government’s long-term approach on deregulation. As the Minister said, the red tape challenge has highlighted just how much regulation there is and demonstrated the Government’s willingness—their desire even—to drain the swamp of existing regulation. The Minister kindly referred to that as a lake, but I think that it is more of a swamp.

[Julian Smith]

I fully support my hon. Friend’s comments. Does he agree that the Minister for Government Policy, the Minister for the Cabinet Office and several other Government Members have worked hard for many years on this specialist subject to ensure that we reduce regulation on business?

[David Rutley]

I agree with my hon. Friend completely. There has been great determination not only to reduce the deficit, but to build a plan for growth. Deregulation is a fundamental part of that plan, so I praise the work of the Minister for Government Policy and other Ministers who have made invaluable contributions.

The Government have turned their attention to not only the stock of regulations, but the flow of new regulations—the river that is running into the swamp that we are looking to drain. Their progress has been so good that their one in, one out approach has become a one in, two out rule. Ministers must remove twice the cost of any new regulation that they introduce. As we heard from my hon. Friend the Member for Hertford and Stortford (Mr Prisk), who also made an invaluable contribution in this area as a Minister, that is a culture change that will keep us on the path to more jobs and increased growth.

I welcome the fact that hundreds of regulations have been improved, modified or removed by the Government, and that they are being more ambitious still in the Bill by aiming to improve or sweep away thousands more. As the Prime Minister said, this will be

“the first government in modern history that at the end of its parliamentary term has less regulation in place than there was at the beginning.”

That must be an important priority. With the eurozone in a sluggish period of economic growth and an in/out referendum on the cards in the UK following a Conservative victory at the next election, the Bill will hopefully not only help the UK to tackle its own challenges, but provide the impetus for serious deregulatory reform in Europe.

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[David Rutley]

I thank the Minister for that reply. I am sure that the hon. Member—and friend—for Bassetlaw (John Mann) and I will enjoy further conversations about that subject outside the Chamber.

The Bill will help to provide further impetus for change in not only the UK, but Europe. Fortunately, there is increasing evidence that, in contrast to the abject failure of the French socialist approach under President Hollande, the UK’s plan A can only help to bolster the pragmatic supply-side reform movement that has been spurred on by the Government and by the Prime Minister’s business taskforce. It has already been embodied by Open Europe and the Fresh Start group, which I and other Government Members support. Indeed, I was honoured to help to host a round-table discussion on better regulation only last month with delegates from across the EU. The Bill will do a good deal to deregulate in the UK, but if we are also to increase the EU’s competitiveness, we need to spread the lessons of our approach across the European economy.

[Julian Smith]

I think that my hon. Friend was on the trip to Brussels when we asked the Commission whether it had removed any regulatory burdens from small businesses. The lady we were speaking to looked absolutely startled and could not remember any rule that ever been removed from business.

[David Rutley]

My hon. Friend makes an important point that further highlights something I said earlier: 72% of the cost of all regulation—that is tens of billions of pounds—that has been put on UK businesses has come from the EU. That has to change.

Churchill once said:

“If you have ten thousand regulations, you destroy all respect for the law.”

Those words from the wise are worth listening to. Of course, 10,000 regulations also destroy competitiveness, so there is an urgent need to make targeted reductions in the swathes of regulatory burdens that are preventing British citizens from getting back to work.

National Insurance Contributions Bill

Debate between David Rutley and Julian Smith

Monday 4th November 2013 Commons Chamber

[Julian Smith (Skipton and Ripon) (Con)]

Because I lost a contact lens on the tube, Madam Deputy Speaker, I can see you but unfortunately cannot see the Minister. I apologise in advance for the fact that my myopia means that I will be slightly less coherent than usual.

This Bill is a fantastic boost to all British business. In a constituency such as Skipton and Ripon, it is a particularly good shot in the arm for an area of Britain where employment is on the up and unemployment is going down. In my constituency, unemployment is down by about 30% and youth unemployment is down by about 35%, and more new businesses are being created. This is a big opportunity to give those entrepreneurs the backing they require to take on more jobs. The businesses in my constituency are largely based around tourism, agriculture, farming and small manufacturing. Many of the businesses in the 900 square miles that I represent are working under tough conditions, isolated and very vulnerable to the weather, and every bit of help they can get is a major boost.

We are very excited in the Yorkshire dales and in all parts of my constituency because in less than a year the Government-backed Tour de France will be on its way. I hope that the Minister may come and participate; I know that she is very into her sport. That event, which this Westminster-based, Conservative-led Government have backed, will be a major boost for Yorkshire—one of the most rural parts of our country. This policy will help businesses to try to make sure that they are taking advantage of this great sporting event.

We have talked about how this policy contrasts with the policies of the Labour party. Most of my colleagues in the Chamber have set up and run businesses, and we probably all agree that at the start of the previous Government’s time in office the messages were quite good. There were things such as taper relief to encourage entrepreneurs and talk of deregulation tsars, and it all looked as though it was moving in the right direction, but it tailed off pretty quickly. As well as pledging at the last election to raise the jobs tax, which the Federation of Small Businesses said would cost about 57,000 jobs in the UK, they raised the 50p tax rate—one of the so-called elephant traps set by the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) to try to trap the next Government. Six regulations were added to the statute book per week. There were regular, astronomical rises in fuel duty, which in a constituency such as Skipton and Ripon had a major impact on businesses and families. Somebody may correct me, but I understand that not one debate about exports took place in this House under the previous Labour Government.

[David Rutley]

My hon. Friend is making a characteristically impassioned speech on behalf of small businesses and enterprises, which will thrive on the back of this Bill not only in North Yorkshire but in Cheshire and across the country. Will he remind the House of what steps the previous Government took to tackle the amount of regulation that was coming in from the EU at the time? I cannot remember them doing too much in that direction either.

[Julian Smith]

My hon. Friend makes a characteristically good point. I seem to remember that they signed up to more treaties and more red tape from Brussels. Only now have the Prime Minister and members of the current Government set up a deregulation unit to look at EU regulation, and I hope that we will all encourage them to do more. Any claim that Labour is the party of small business is a very hollow one.

The reason for my excitement about this policy is that it is one of a very large number of policies to back the risk-taker and the entrepreneur—the person who is ready to spend all night worrying about the new employee and ready to risk their capital. A few weeks ago, I went to Downing street with a number of right hon. and hon. Friends, and I met the most inspiring young people who were beneficiaries of the start-up loan scheme and the new enterprise allowance scheme. Downing street was packed with budding entrepreneurs who were benefiting from this Government’s policy. That policy is one of many, including taking out two regulations before one regulation is brought in; ensuring that 25% of all procurement goes to small businesses; taking away pre-qualification questionnaires; increasing the annual investment allowance from £25,000 to £250,000; cutting corporation tax; investing in apprenticeships; creating 27,000 business mentors; and introducing the regional growth fund and the local enterprise partnerships. There is an endless list of policies that this Government have put in place to back the entrepreneur.

That is not to say that we are perfect. The Government have a very strong record, but I would pose them a few questions. We are doing so many good things that we often fail to communicate them in as coherent and focused a way as possible and in a way that is easiest for small businesses. I encourage the Minister, who is coming turbo-charged into her new job, to consider the role of HMRC. The Government communicate more through HMRC than any other arm of Government. How can we use it better to signpost, particularly to small businesses and micro-businesses, the good things that this Government are doing?

How can we cut bureaucracy? We have heard about the bureaucracy involved in the national insurance holiday. How can we make sure that any red tape involved in this new policy is reduced as much as possible?

I urge the Government and my party to start differentiating ourselves not just from the Labour party, but from our coalition partners, with a small business Bill to show that we need to do even more to take small businesses out of the regulation quagmire they find themselves in. I remember sitting through the debate on the Government’s employment changes—colleagues have already discussed them—which were very simple and straightforward. Employers will have two years before they have to decide whether they want to keep an employee. Settlement agreements will at least allow an employer to offer an employee a deal when things are not working out. There will also be tribunal charges, not for people who cannot afford it—before Opposition Members intervene—but for most employees, who will have to pay a fee before taking an employer to tribunal. All of those really good changes—every single one of them—were opposed by the Labour party. It is heartening that, despite Labour’s rhetoric, it looks as though its Members are going to back this Bill, not by voting in favour of it, but by not opposing it.

I pay tribute to the Treasury, the Exchequer Secretary, who started this debate, the Chancellor and the Conservative Ministers at the Department for Business, Innovation and Skills, who are pushing ahead with enterprise reform. This Bill is a major step towards sealing the Conservative party’s record on backing those people in our society who want to take a risk and run a business.

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[David Rutley]

My hon. Friend makes an important point. That is absolutely the case. This is about how we build good working relationships and a strong economic base through SMEs. That is far more sustainable than the approach adopted by the previous Government, which seemed to be underpinned by more and more public spending. That is completely unsustainable.

What a boost it will be for more of the growing army of the self-employed to become small employers. Indeed, if they all, or a vast proportion of them, took on one employee, that would make a huge dent—even bigger than the current one—in the unemployment figures. The number of self-employed people with no employees has increased, but the number of self-employed people with a small number of employees has not kept pace, and that is what the Bill seeks to address. In the past, the focus has been more on encouraging people to start up a business and less on taking the next step to becoming micro-employers. The Bill is an opportunity to further liberate the self-employed from barriers to growth and to nudge first-time entrepreneurs into becoming first-time employers. The prize is stronger, more sustainable economic growth.

Micro-businesses play an important role in Macclesfield, working in forums like Make it Macclesfield and the Poynton business forum. They make a huge contribution to strengthening the community and, at the same time, moving our economy forward by creating jobs.

Surveys and statistics abound to show that small businesses can be, and often are, job-creation machines. They also show that small businesses are more likely to employ the longer-term unemployed and those who may struggle to enter the job market as a result of a lack of formal qualifications or, indeed, their ethnic background. This is what the Federation of Small Businesses calls the “entrepreneurial pipeline” to what Professor Mark Hart calls “growth gazelles”. We need to encourage more growth gazelles. Essentially, this is about everyday entrepreneurs, street-level small businesses and office-share operators giving people a chance to work. Analysis by the FSB suggests that 74% of those who become self-employed and who have employees come from the self-employed who had no employee, and that a further 13% come from employees who had been working in micro-businesses. Clearly, there will be a multiplier effect once we get this right and start moving in the right direction.

The Government are absolutely right to introduce the new employment allowance. Slashing the cost of national insurance and taking many employees out of it completely will encourage more of the self-employed to become employers. However, this is not—and nor should it be—the only measure to increase the number of first-time employers. The Bill must be viewed in concert with the new enterprise allowance—for which Levi Roots is an ambassador for the Government—which seeks to encourage the longer-term unemployed into self-employment. The three-year moratorium on new regulations for small businesses is another important step in the right direction. I encourage Ministers at the Department for Business, Innovation and Skills to view it as a rolling moratorium.

[Julian Smith]

I thank my hon. Friend for giving way in his excellent speech. Does he agree that one of the most depressing things about the lack of Labour Members present is that, to make those schemes truly work, we all need to push them, whatever our political viewpoint, in order to ensure that those who are taking the risks hear about them and understand them?

British Exports

Debate between David Rutley and Julian Smith

Wednesday 8th February 2012 Westminster Hall

[David Rutley]

I thank the hon. Lady for her intervention. She makes a very important point. Of course we need inward investment. We have seen success in that area and we need to continue to see success, but now, the focus needs to be on exports and driving success in that area. I know that she has made important contributions in debates on the subject.

On my visit to China, it was good to see people realising the importance of exports. We met the British consuls from Shanghai and from Chongqing. They are getting out and starting to knock on doors. There has been too much focus on research and, for that matter, paid-for research. I am much more interested—I think that others would agree with me—in knocking on doors. Any of us who have been involved with business know that it is about building relationships. People do business with people, not with pieces of paper.

[Julian Smith (Skipton and Ripon) (Con)]

Does my hon. Friend agree that, to achieve his goal, UKTI needs an injection of private sector talent into the organisation? That would enable it to meet some of the targets that he has set.

[David Rutley]

I thank my hon. Friend for his intervention. That point is vital. It is true for many areas of Government interaction with businesses, but it is particularly true for the area that we are discussing today. There is a huge and staggering opportunity. I think that it has been calculated as being worth $43 trillion. Whatever the number is, it is pretty big. We have to redouble our efforts in that respect. We are certainly putting the headcount on the ground. There are 50 more people in China and 30 more in India, but my hon. Friend makes a good point about the balance of expertise there. Perhaps the Minister will also reply to that, because many of us who have had experience in the business world would suggest that it is time to get people with that experience involved.

Understanding the local cultures is also important. I have not spent a huge amount of time in China, but there are many Chinese-speaking individuals in the UK with business experience. My hon. Friend the Member for Bedford (Richard Fuller), for example, has spent a lot of time in Asia. That is the type of experience that we need to bring to bear to help us in this export drive.