Budget Resolutions and Economic Situation

Gavin Williamson Excerpts

Wednesday 20th March 2013 Commons Chamber

[Gavin Williamson (South Staffordshire) (Con)]

It is always a great pleasure to follow the hon. Member for Great Grimsby (Austin Mitchell) with his candour and honesty in saying that Labour would always want to spend more. Many of my constituents and most of the country recognise that Labour always wants to spend more. I always found it most unusual when, before entering the House, I used to listen to the Budget statements of the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) who professed his devotion to prudence. On the Floor of the House he would constantly hammer home the importance of prudence, and how it was central to everything that he did. If he loved prudence that much, he must have been cheating on prudence with someone who was very reckless, as all the money was spent. The destruction that he has wrought on the economy has been vast.

The Chancellor has aimed to set out a plan to continue to support British business and British families. It is not possible to create an economy overnight that has business confidence. It is not possible to build an economy overnight where there is a massive investment in technology and engineering—it has to be done over time. That is why we should all welcome the Chancellor’s continued moves to bring down corporation tax, from 28% to 21% last year, and 20% going forward.

The constant drive to lower corporation tax will build confidence across the globe that Britain is a place in which to invest. Page 41 of the Red Book shows the dramatic change in business confidence in the UK. In 2007 it was rated at just under 30%, and as recently as 2009, it was rated at under 20%, whereas if we look at comparator countries, such as Ireland, the Netherlands and Switzerland, we see that the percentage ratings were between the mid-80s and the mid-70s. That confidence has totally changed how people view the United Kingdom’s tax competitiveness. Indeed, we have seen the growth of confidence that Britain is a good place to invest as a tax competitive area: it moved from below 20% in 2009 to above 70% in 2012.

Only the other day I met representatives of Caterpillar, a major investor and employer in the United Kingdom. They said that what international businesses need is certainty. They need confidence that the tax regime will not constantly change and that if they invest in this country, their investment will be safe. They reported that that confidence is starting to return, because it is quite clear that the Government want to deliver a low rate of corporate taxation, and it is not going to go down one year and then up the next; the trend is to reduce it continuously. That is what international business wants and that is what will benefit Britain.

Another measure that I do not think has been commented on so far, but which will be of great value to all businesses, especially those in engineering and manufacturing, is the increase in R and D tax credits by up to 10%. Members in all parts of the House talk passionately about the need to promote and encourage engineering and manufacturing. If we want to do that, we must promote and encourage the R and D that is so vital for their success. We in the Chamber—on both sides, I believe—recognise that technology and the people going into those industries are absolutely vital to rebalancing our economy, and so too are the changes to R and D tax credits, both in the way they are accounted for and the amount of money that companies can get back.

In South Staffordshire, we are fortunate enough to have had a great amount of economic success, with rapidly falling unemployment, and major investment coming into the area. Over the past three years we have had announcements of £550 million of investment in the constituency, half a billion of which is coming from Jaguar Land Rover. We see that manufacturing success not only in South Staffordshire but right across the west midlands, and it is being driven and supported not only by R and D tax credits but by the Government’s approach to apprenticeships, taxation and the regional growth fund, which is creating key incentives not only for businesses currently domiciled in the UK but for those that want to invest in Britain or in the European area.

I firmly believe that the measures that have been taken on R and D tax credits are to be welcomed. I also think that the work that is being done on the Technology Strategy Board is making a solid difference by helping businesses of varying sizes, whether they employ a few hundred people or many thousands, to access universities and different areas of funding in order to take the risk and develop the ideas and products that will make Britain more competitive in future.

The issue of financing has been touched on. The hon. Member for Hackney South and Shoreditch (Meg Hillier) talked about lending, particularly to small businesses. I have to say that she and I are, to a certain extent, in agreement on one thing she mentioned. She touched on the Government’s strategy of funding for lending. Currently, that is available to banks, but we should be looking at how we can make it much more widely available, because it would be easy to expand it to all financial institutions.

In my constituency, many businesses are served by the Black Country Reinvestment Society, a mutual that helps many small and medium-sized businesses to get the funding that they would not otherwise get from banks. I think that by changing the funding for lending scheme we would be able to help many similar organisations right across the country.

[Charlie Elphicke]

Does my hon. Friend think that in this country we do not make enough of mutual finance providers and that we should make more of them?

[Gavin Williamson]

My hon. Friend is absolutely right. We need to be more imaginative in how we get finance to the small businesses that want to grow.

A little less than a year ago, I had an Adjournment debate on the need to get rid of the beer duty escalator. I am incredibly pleased that the Chancellor has reduced beer duty by 1p. It might not sound much, but it will make a real difference to the 83 pubs in my constituency and to the three small breweries in Kinver, Enville and Essington that are employing people in my constituency. I hope that this will act as a stimulus not only to the brewing industry but to the pub industry right across South Staffordshire, across the west midlands, and across the country. It is my firm belief that this Budget has not only been good for brewers, manufacturers and business, but good for Britain.

[Mr Speaker]

It is a pleasure to welcome the return of the Chairman of the Committee of Selection; I thank him for coming back to the Chamber so quickly. I call Alison McGovern.