Jobs and Growth

Fiona O'Donnell Excerpts

Thursday 17th May 2012 Commons Chamber

[Ed Balls]

The economy is in recession and they hate it, and so do business organisations up and down the country. Is it any wonder that businesses have been so disappointed and upset by the Queen’s Speech of just two weeks ago? Let me quote the director general of the British Chambers of Commerce:

“There is a big black hole when it comes to aiding business to create enterprise, generate wealth and grow.”

Quite right, Mr Deputy Speaker.

There will be some parts of the Queen’s Speech dealing with Treasury matters which we will support. On banking reform, we will look forward to supporting legislation to strengthen capital ratios and promote competition, although it is now nine months since the final report of the Vickers commission, and we are still waiting for a response from the Chancellor of the Exchequer. However, after 18 months of flatlining, with our economy now in recession and business investment depressed, the question I ask—it is the question British business is asking too—is this. Where is the plan in the Queen’s Speech to restore confidence and promote business investment and jobs in Britain?

With net lending falling month on month—according to the Bank of England it has been down every month for over two years now—where is the action in the Queen’s Speech to promote small business lending? With youth unemployment now at a record high, and with yesterday’s figures confirming that long-term unemployment among young people is still rising, where is the legislation in the Queen’s Speech to get our young people back to work? Where is the legislation to repeat the bank bonus tax to fund a jobs guarantee for young people—or, for that matter, to cut taxes for small businesses hiring new workers, or to help the construction sector with a temporary cut in VAT? Our economy has ground to a halt and our construction sector is in great distress. Where is the plan to support jobs and growth by bringing forward new infrastructure projects? Where is the legislation to make our economy stronger and fairer for the future? Stronger corporate governance; a business investment bank; progress on high-speed rail; reforms in our universities to promote innovation—all are completely absent from this Queen’s Speech.

[Fiona O'Donnell (East Lothian) (Lab)]

Does my right hon. Friend agree that young people in Scotland are facing the double whammy of a coalition Government who are complacent and a Scottish National party Government who are cutting further education funding?

[Ed Balls]

I understand my hon. Friend’s concerns at the lack of a youth jobs plan in Scotland. We can understand that from the Conservatives, because they abolished the future jobs fund, but people will find it hard to understand why the Scottish National party Administration in Scotland have failed so woefully to do anything to tackle the challenge of youth unemployment.

--- Later in debate ---

[Mr Osborne]

As I was explaining, four fifths of those who work part-time are getting the part-time work they want. The right hon. Gentleman should celebrate the fact that 400,000 more people are employed than was the case two years ago. Why not get up and welcome that?

If the Opposition’s argument is that we need to do even more, I agree. In the past six weeks alone, we have opened 24 enterprise zones around the country, cut businesses tax to one of the lowest rates in the world, increased support for small business research and development, reformed employment law in the teeth of Labour opposition to double the period before unfair dismissal claims can be made, reinvigorated the right to buy, launched NewBuy mortgage schemes, awarded ultra-fast broadband grants to 10 of our largest cities, frozen council tax across England, launched a £20 billion national loan guarantee scheme that is already delivering cheaper loans to hundreds and thousands of businesses, and increased the personal allowance to cut tax for 20 million working people and lift 1 million of the lowest paid out of tax altogether, with another 1 million to come. That is just in the past six weeks.

Yes, the Government must work harder and do more. The world does not owe this country a living. We will do that, but we have done a great deal already.

[Fiona O’Donnell]

What does the Chancellor say—apart from “Work harder”—to SMEs in my constituency that tell me that the single greatest contribution his Government could make to economic growth and the creation of jobs is to cut VAT?

[Mr Osborne]

This is what we have done for small businesses: we have cut the small companies tax rate, which was going to go up under the plans that we inherited and which the Labour party voted for in the previous Parliament; we have got rid of Labour’s jobs tax; and we have frozen the business rates. We will check the record carefully, of course, but I think that in his speech the shadow Chancellor was advocating an increase in national insurance.

--- Later in debate ---

[Fiona O'Donnell (East Lothian) (Lab)]

This is less a speech, more a postcard from East Lothian, but I am grateful for the opportunity to contribute to the debate, because I want to send Government Members a message from East Lothian about how we create jobs and growth. We rely heavily on the small and medium-sized enterprise sector, and the message from such businesses is clear: they are lukewarm about a lot of last month’s Budget, but they say that what would make a difference is a cut in VAT. I hope, therefore, that Ministers will listen.

I also want to talk about jobs. Many aspects of job creation in Scotland, including in my constituency, are devolved to the Scottish Parliament, and this House and the Government here need to work more closely with the Scottish Government. I have written to the Secretary of State for Work and Pensions—[Interruption] —whose attention I do not appear to have right now—about a constituent of mine. He is a 19-year-old man who finally had the chance of a job in a community bakery in Dunbar, but he was not allowed to apply for it because he was on the Government’s Work programme and the job was funded by the Scottish communities job fund. When a young man has the opportunity of the perfect job in his own community, it is simply inadequate to give him the response, “You cannot have it because of the double funding.” It surely cannot be beyond the wit of this Government and the Government in Holyrood to work together to address the issue. I understand that that is not a problem in England or Wales.

I went to see the providers of the Work programme in East Lothian, and they told me that they would be perfectly happy to consider transferring funding from their stream into the Scottish communities job fund in order to prevent a similar situation happening again, so I hope that Ministers will open discussions with the Scottish Government to address the problem. There is already enough pressure on young people trying to find work in my constituency. Figures last month showed an increase of 467% in youth unemployment, and that simply is not good enough.

Tourism is very important to the East Lothian economy, but unfortunately it is suffering and will suffer further, as I will find tomorrow when I visit the owner of a caravan park in North Berwick. So if the Government want to promote tourism and growth in my constituency, I ask them to look again at the introduction of VAT on static caravans.

I was also disappointed that in the Queen’s Speech we did not see any proposals on offshore gambling. Musselburgh race course recently won its third award this year, as the finest race course in the UK, and it is a driver of growth and innovation in a community that is struggling in so many ways. I am sorry that we did not see the issue addressed, but once I have heard the result of the private Members’ Bill ballot, I might find that I am able to do something about it myself, for my own constituents.

None of the barriers to business, growth and job creation was addressed in the Queen’s Speech and, as many others have said, it has been a missed opportunity. Telling people to work harder is not good enough, when inflation for the poorest 10% is at 41%, and for the richest 10% is at only 3.3%. This is a Government who choose to help that richest 10%, and that says it all.