Policy for Growth

George Freeman Excerpts

Thursday 11th November 2010 Commons Chamber

[George Freeman (Mid Norfolk) (Con)]

As a shareholder in UK plc, I am delighted that at this year’s emergency general meeting, the shareholders threw out the last management team and voted in a new one. They face a chronic challenge, and a chronic crisis in our finances. We have the largest deficit in the G20, with a £155 billion deficit this year and a total debt of £700 billion. Debt interest would have risen to £76 billion a year if the situation had not been tackled as robustly as it has.

We have come out of a decade of profligacy under the former management team. Its chief executive officer was too often away on overseas adventures; its finance director went on a spending spree with the company’s credit card, chasing support for his ultimate takeover bid in all too obvious a fashion; and its board members were too busy rubbing shoulders with the rich and famous to do their jobs. This led to a series of profit warnings, and ultimately to the collapse of market confidence. That is why we need a growth strategy, and why a reduction in public spending must be intrinsic to it. If we had not tackled the situation, interest rates would have risen and we would have triggered a true double dip with a crisis in our housing market.

I support the coalition’s programme for cutting the deficit and restoring this country’s culture of enterprise. I support the regional national insurance exemptions, the lower tax for small businesses, the regional growth fund, the green investment bank and the protection outlined in the comprehensive spending review for infrastructure, especially for the A11 in my area. I also support the ring-fencing of spending on science and research. Those are the policies of a Government committed to innovation and new business growth, and, as someone who has worked in new business venture capital for 14 years, I know how widely supported they are.

I believe, however, that as we seek to unlock a new age of enterprise, we might need to go further in exploring ways of unlocking new growth without increasing public spending. As with a business in a cash crisis, we need to shore up the profit and loss account by reducing waste, as the Government have so quickly done. Equally, as with real business growth, we need to look creatively at our balance sheet and think about our assets and our competitive advantage. Everyone in government, in every Department at every level, should be asking themselves, “What can we sell to the rest of the world, in order to repair our damaged public finances?”

In the few second that I have left, I want to summarise two or three matters that may be worth considering. The first is infrastructure. We should ask Network Rail what its plans are for the massive land estate on which its tracks are sitting. I agree with what others have said about tax increment financing and ways in which to unlock private sector funding of infrastructure. The second is public services. Let us have a bold programme to empower our best public servants, who are often entrepreneurial in delivering services, and to liberate them from the confines of the public sector. The third is the national health service. I know from my own experience that we are sitting on billions of pounds-worth of patient data. Let us think about how we can unlock the value of those data around the world. We also need to look at new sectors of growth, such as agriculture. Why do we not look around the world and think about collaborating with countries with rising populations, such as India, where there is a long history of scientific research and food science and a prosperous and productive agricultural sector? Those are things that we could be doing to unlock growth without spending new money.

Businesses throughout time have shown us inspiring examples of turnaround. I think particularly of what Tesco has achieved in my lifetime: a turnaround from being a moribund monolith to being one of our best businesses. Now it is time for the Government to do the same.