George Osborne
Main Page: George Osborne (Conservative - Tatton)Department Debates - View all George Osborne's debates with the HM Treasury
(10 years, 3 months ago)
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George Freeman (Mid Norfolk) (Con)
1. What fiscal steps the Government are taking to support women who want to set up businesses.
The Chancellor of the Exchequer (Mr George Osborne)
The most important thing that we can do to support women in business is supporting the economy to grow. Today’s gross domestic product figures show that our economy grew by 0.7% in the last quarter, bringing four-quarter growth up to 2.8%. I am sure that that news will be welcome across the House. These numbers are a boost for the economic security of hard-working people. Growth is broadly based, with manufacturing growing fastest of all. It is more evidence that our long-term economic plan is working, but the job is not done, and it is clear that the biggest risk now to the recovery would be to abandon the plan that is delivering jobs and a brighter economic future.
George Freeman
May I congratulate the Chancellor on the appointment of Karren Brady as small business ambassador? Does he agree that our record of 500,000 new businesses started last year, bringing the total to 880,000 now run by women, and accelerating economic growth to 2.8% a year demonstrate that our long-term economic plan for an entrepreneurial recovery is working in the face of the pessimism and bankrupt business credibility of the Opposition?
Mr Osborne
My hon. Friend is right to draw attention to the remarkable success story of many women entrepreneurs. Karren is a role model for many of them, and she is helping with a mentoring programme to encourage more women to set up their own business and become entrepreneurs. It is all part of the picture where we now have a record number of women in work, and our proposals to bring in tax-free child care next year will help as well.
Lucy Powell (Manchester Central) (Lab/Co-op)
The Chancellor will know that one of the main barriers for women setting up a business is the cost of child care. Given that it has risen five times faster than wages in this Parliament, what help is he offering to women in this Parliament to meet those costs?
Mr Osborne
We have provided extra free child care, and we have increased the number of hours available, which has been a real help. We have also helped the parents, including mothers, of those on low incomes by extending the child care offer to younger children, and we will legislate for tax-free child care. I hope the hon. Lady can support that.
Caroline Nokes (Romsey and Southampton North) (Con)
22. Little Bee bakery in my constituency is owned by Melissa O’Dwyer, and it is a great example of a business set up from home that has expanded into an industrial unit, employs exclusively female staff and is growing. Does my right hon. Friend agree that this is an example of female entrepreneurs playing a critical part in economic growth?
Mr Osborne
I absolutely agree with my hon. Friend, and I congratulate Melissa on her business and her expansion plans. We are there to provide advice and support for women who want to grow their businesses. We are there to provide help, as I have set out, with tax-free child care. Above all, we are there to provide economic conditions in which businesses can grow and our long-term plan is, as the numbers show today, delivering that.
Sheila Gilmore (Edinburgh East) (Lab)
Of course, 0.7% is lower than 0.8% in the previous quarter, but leaving that aside—[Interruption.] With construction—[Interruption.]
Sheila Gilmore
Construction is down as well, but to return to the question—[Interruption.] Well, the Chancellor did not return to it. Support through tax credits and child care tax credits has been crucial for many women going into self-employment for the first time. Proposed universal credit rules will make it a lot more difficult for self-employed people. Will the Chancellor speak to the Secretary of State for Work and Pensions to help him to get this right for women entrepreneurs?
Mr Osborne
First, the economy shrank by 7% of GDP when the Opposition were in office. It is striking that no Labour MP has yet got up to welcome the good economic news today. They cannot bring themselves to welcome the news that jobs are being created and the economy is growing and, yes, we are reforming our welfare system with universal credit to make sure that work always pays.
Stuart Andrew (Pudsey) (Con)
2. What assessment he has made of the effect of freezing fuel duty on the price of petrol.
Andrew Jones (Harrogate and Knaresborough) (Con)
12. What recent fiscal steps he has taken to support small businesses.
The Chancellor of the Exchequer (Mr George Osborne)
We heard today that our economy continues to grow and we know that there is currently the greatest number of businesses in the UK on record—around 400,000 more than at the general election. We have supported that by reversing the previous Government’s increase in the small companies tax, undoing their jobs tax, cutting red tape, freezing fuel duty, taking the smallest firms out of business rates and helping the high street, and in a few months’ time, we will have our employment allowance, a £2,000 cashback on jobs, which will take almost half a million small firms out of employer national insurance altogether. Unlike others, we are unabashedly pro-business.
Alun Cairns
Small businesses recognise the supportive economic framework that the Chancellor has set out, such as reductions in corporation tax, national insurance and business rates, among many others, by recruiting more people than ever before. Will the Chancellor reassure me that he will not follow any advice from the shadow Chancellor, who called for a plan B and predicted a double and even a triple-dip recession?
Mr Osborne
There is no danger of that. In the last few days, even the Labour Ministers who served with the shadow Chancellor are not prepared to follow his advice. The important point here is that we have supported a private sector recovery, small businesses are absolutely at the centre of that, and the Prime Minister yesterday, at the Federation of Small Businesses, reinforced the point that we are there to do more to help small businesses and we encourage them to come forward with ideas for the Budget.
Damian Hinds
Town centre businesses in Alton, Bordon and Petersfield will welcome the Government’s package of help for high streets. As many young people rely on local shops and cafés for their first job, will my right hon. Friend update the House on what he is doing to make it easier to employ those young people and give them the key skills that they need to get on in life?
Mr Osborne
This year, there is the help for the high street and the £1,000 support for business rates for our high street shops, cafés and pubs. We are also introducing the employment allowance, which will take many small businesses out of employer national insurance altogether. Next year, we have the removal of the jobs tax altogether when someone under the age of 21 is employed. That is what we are doing to help the many businesses that my hon. Friend so ably represents in Parliament.
Margot James
There have been 3,000 new business start-ups in my borough of Dudley since 2010, many of which will benefit from increased research and development tax allowances, the national insurance rebate and the business rates cap. Does my right hon. Friend agree that while the fiscal measures he has introduced make a vital difference, the 2.8% growth in the economy announced today is sure-fire proof that his economic plan is working and that those small and medium-sized enterprises are now on a far better growth trajectory as a result?
Mr Osborne
I am delighted to hear about the success of businesses in the Dudley borough area and in my hon. Friend’s constituency. The Government made a choice that we were going to back a private sector recovery and that, in a time of limited resources, we would put our efforts into helping small businesses grow by cutting their business and employment taxes. That is what we have done, and we are beginning to see the fruits in the growth of jobs in the west midlands and across the whole country.
Andrew Jones
In the past 20 months, unemployment in my constituency of Harrogate and Knaresborough has halved. It is now has one of the lowest levels of unemployment in the country, particularly for young people. Much of that growth has come from our strong small business sector. What assessment has my right hon. Friend made of the impact that the employment allowance will have on improving the situation further, and does he agree that the anti-business rhetoric and measures proposed by some would destroy that progress?
Mr Osborne
The employment allowance will help many small firms that want to invest or take on a new member of staff. I saw that for myself when I visited a small business in Enfield that, as a result of the employment allowance, will take on an extra member of staff. That is the support we can give. It is up to those in this House who promote anti-business rhetoric to get up and explain how that could possibly help our economy. The truth is that by being anti-business, they are anti-recovery, anti-jobs, anti-investment and anti-the British people.
Mr Andrew Love (Edmonton) (Lab/Co-op)
The latest figures show that net lending by banks to businesses has dropped by nearly £56 billion since 2010. The Chancellor is on record as supporting lending to small businesses, so what action is he taking to address the problem?
Mr Osborne
Credit conditions for small businesses have been one of the huge challenges since the banking crash. The better news is that conditions are starting to ease, as the most recent surveys show, but I am the first to say that the job is not done. That is why we are shifting the focus of the funding for lending scheme with the Bank of England onto small business lending and why we have introduced the British business bank, which did not exist before. We are doing all those things to support credit, including for small businesses.
Mr Brian H. Donohoe (Central Ayrshire) (Lab)
Following that answer, will the Chancellor tell us how many firms have actually been helped by the business investment bank?
Mr Osborne
The British business bank is lending to intermediaries that support non-bank lending to small firms. [Hon. Members: “How many?”] There was no British business bank before. The only bank that the Opposition helped to take into public ownership was the Royal Bank of Scotland, because they completely failed to regulate it.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
One of the ways that the Treasury can help small businesses is by giving them a better chance of winning Government contracts. What is the Chancellor doing to use his Department’s clout across Whitehall to ensure that those contracts are not just snaffled up by the big guys?
Mr Osborne
That is a huge challenge for any Government and any bureaucracy, but I am pleased to report that under this Government, because we have focused all Departments on trying to increase their procurement from small firms, that has gone up from around 10% to around 20% of Government procurement. That is a big step forward, but I am the first to say that the job is not done. We want more procurement from small firms, not least because they are often the most innovative and entrepreneurial in the country.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
Business rates are one of the biggest concerns for employers, yet they are still going up and up under this complacent Chancellor. The autumn statement saw some relief for retailers, but will the Government commit to giving genuine support to all small and medium-sized enterprises, which are the lifeblood of our economy, by matching our pledge to cut and freeze business rates for all small firms—not just those in retail, but manufacturers, high-tech firms and other job creators too?
Mr Osborne
Business rates rocketed under the last Government. First, we have taken about 400,000 of the smallest businesses out of business rates altogether, a scheme that the Labour Government wanted to bring to an end. Secondly, we have capped the increase at 2%, so we have protected businesses from inflation. Thirdly, we have chosen to provide particular support to our high street stores, and I am very disappointed that the hon. Lady does not support that. It is interesting that another of the Labour spokespeople has got to their feet, but not one of them has yet—20 minutes into Treasury questions—welcomed the good economic news today.
Sir Malcolm Bruce (Gordon) (LD)
Is my right hon. Friend aware of changes in the VAT export rules that are causing concern among auctioneers, damaging EU trade and putting them at a competitive disadvantage? Will he look into this, and try to ensure that Her Majesty’s Revenue and Customs makes the system manageable?
Mr Osborne
I will make sure that the specific issue is looked at and that the right hon. Gentleman can meet my hon. Friend the Exchequer Secretary, who handles such tax and VAT issues.
Ms Margaret Ritchie (South Down) (SDLP)
There is evidence that Ulster bank deliberately bankrupted some viable businesses to make more profit, according to one of the Government’s key advisers, Lawrence Tomlinson. What is the Chancellor going to do about this to protect the small businesses affected by Ulster bank and by RBS?
Mr Osborne
The revelations by Tomlinson shocked everyone, and the business practices of RBS, including Ulster bank, are now under the microscope. Of course, these revelations would not have come to light if we had not asked Tomlinson to do his work and had not published the Tomlinson report.
We are particularly aware of the challenge in Northern Ireland, with the weakness of the Northern Ireland banking system—affected by what has happened in the Republic and the fact that RBS is such an important player through Ulster bank—and we are in constant discussion with the Northern Ireland authorities. I know that my hon. Friend the Financial Secretary is talking to the Northern Ireland Executive about precisely what we can do to help to protect the Northern Ireland economy, as RBS implements its bad bank plan.
Mr Andrew Tyrie (Chichester) (Con)
The Prime Minister said yesterday:
“I am a tax-cutting Tory”.
So am I. Does the Chancellor agree that, when resources allow, cuts in tax are the best possible tonic that the Government can provide to small businesses? Does he further agree that the best spur to incentives for small businesses is to cut the marginal rates of corporation and personal tax as soon as he can?
Mr Osborne
I am a low-tax Conservative as well, and I hope that I am in good company on the Government side of the House. We have made reductions in tax. The small companies tax rate was due to go up to 22% under the Budget plans voted on by the Labour party, but we have reversed that and reduced it to 20%. We are now of course bringing the main headline rate of corporation tax down to 20% as well, and getting rid of the complicated taper. That is all further evidence to support the ambition of reducing marginal tax rates for businesses.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Could the Chancellor and I make a deal that I will start to welcome any measure of improvement in the economy if he stops blaming the whole economic world meltdown on the previous Labour Government?
On small businesses, many people find crowdfunding and crowdsourcing a real way to start businesses and get the finance to do it; women, in particular, are coming through that route. Will he meet an all-party group of MPs to talk about the proposed regulation of crowdfunding so that we do not strangle a rather nice baby at birth?
Mr Osborne
I am glad that the hon. Gentleman welcomes the better news. Indeed, I think that unemployment in his constituency has fallen by 20%, which is further good news. It is the first time in years that I have heard him try to defend the record of the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown): since he is not here, the hon. Gentleman has to do it for him.
The point that the hon. Gentleman makes about crowdsourcing is a serious one. We are looking at this new market and at what, if anything, the Government should do to support it. It is of course growing without Government support, but we are actively looking at it, and I would very happily consider any positive suggestions he has on what more we can do to support crowdfunding.
Chris Heaton-Harris (Daventry) (Con)
5. What recent steps he has taken to reduce income tax.
Stella Creasy (Walthamstow) (Lab/Co-op)
T1. If he will make a statement on his departmental responsibilities.
The Chancellor of the Exchequer (Mr George Osborne)
The core purpose of the Treasury is to ensure the stability and prosperity of the economy.
Stella Creasy
When the right hon. Gentleman was first asked to vote on the issue, the figure was 1 million; now it is 5 million—that is, people in hock to payday lenders. Does the Chancellor therefore regret voting against the cap on the cost of credit so many times?
Mr Osborne
I was the shadow Chancellor for five years and never once did the Labour Government propose a cap on payday lending. It is this coalition Government who are introducing a cap on payday lending. I would have thought that of all people the hon. Lady, considering her campaign, would welcome that.
Philip Davies (Shipley) (Con)
T2. Does the Chancellor agree that the previous Government led us to financial ruin not through taxing us too little but by spending too much, and that the solution to the problem is to reduce spending to affordable levels? Will he therefore guarantee to plug the remainder of the deficit through spending reductions, rather than through tax rises on hard-working and hard-pressed families?
Mr Osborne
While no responsible Chancellor rules out tax changes, I believe the remainder of our deficit reduction plan can be achieved by reducing spending. Indeed, the reduction in the deficit has contributed to the economic stability that has been a platform for the economic growth we have seen. Perhaps the shadow Chancellor will get up and welcome that.
Ed Balls (Morley and Outwood) (Lab/Co-op)
After three damaging years of flatlining in our economy—[Interruption.]
Ed Balls
After three damaging years of flatlining, today’s growth figures are welcome, but everything we have seen today from the Chancellor shows he just does not understand that for working people facing a cost of living crisis, this is still no recovery at all. Last week, the Chancellor and the Prime Minister tried to use dodgy figures to tell people they had never had it so good. Why will he not today admit the truth: he has failed to get the deficit down, and since he came to office, working people have been not better off, but worse off?
Mr Osborne
I am not sure that that was worth waiting for. Since we last met, there has been a very important Labour economic announcement, and one that we wholeheartedly support: the decision to keep the right hon. Gentleman in his job until the general election. He welcomes the economic news through gritted teeth, because he said not only that it would not happen, but that it could not happen if we pursued our economic plan. He predicted that jobs would be lost, but 1 million have been created; he predicted that the deficit would go up, but it has come down; he predicted there would be no economic growth, unless we borrowed and spent more. He has been wrong on all these things. What the Opposition need are new crystal balls.
Ed Balls
Very good, Chancellor—a joke about my name being Balls. Fabulous.
The reality is that business investment is still weak, housing demand is outstripping supply, the savings ratio is falling and the average working person is £1,600 a year worse off than they were in 2010. Let me ask the Chancellor about the one thing he has refused to talk about now for four days. He has delivered one massive tax cut for the richest 1% earning more than £150,000, when everybody else is worse off. The Prime Minister and the Mayor of London are now saying that they want to cut the top rate of income tax again, to 40p. Is that really the Conservative party’s priority? If the Chancellor still believes that we are “all in this together”, why will he not stand at the Dispatch Box and rule out another top-rate tax cut from the Conservatives in the next Parliament? Come on, George: stand up and rule it out.
Mr Osborne
I will tell the right hon. Gentleman what the big tax cut was this Parliament: it was for working people through our increase in the personal allowance to £10,000. After last week, it is clear that the shadow Chancellor has learned absolutely nothing from the economic mess he brought upon this country. He said that Labour should have spent more money in the boom; he has set out fiscal plans that allow billions more of borrowing; and on the top rate of tax, he announced a plan that was attacked by Labour Ministers whom he served with in government, by the people who lent the Labour party money and by credible business people across the country—and his costings were shot down by the Institute for Fiscal Studies last night. There cannot have been a more disastrous policy launch in the history of the modern Labour party. On the day we learn that our economy continues to grow, is it not clear that the anti-business Labour party is now the biggest risk to the economic recovery?
Stephen Gilbert (St Austell and Newquay) (LD)
T3. That seems to be game, set and match.The European Commission is considering the removal of the aggregates levy exemption, which would affect the Cornish china clay industry and put up to 500 jobs at risk. Will my right hon. Friend confirm that the Government will do all they can to maintain the exemption and protect these vital jobs?
Harriett Baldwin (West Worcestershire) (Con)
T4. This time last year, the shadow Chancellor said that the economy would get worse. Can I lob the following question to the Chancellor and ask him how that prediction turned out?
Mr Osborne
The economy has grown by 2.8 % over the past four quarters, which is the point. First, when the shadow Chancellor was in office, he predicted that there would be no more boom and bust—we had the biggest boom and the biggest bust—and secondly, he predicted that there would be no recovery unless we borrowed and spent our way into economic risk, which has turned out to be untrue. I do not know why anybody in the Labour party still listens to his predictions at all.
Jason McCartney (Colne Valley) (Con)
T5. I do not know whether the shadow Chancellor has been to Yorkshire recently, but if he does come up north, he will see that, in Colne valley and Huddersfield, manufacturing is surging, whether it is Magic Rock brewery exporting to Australia, Camira fabrics selling its textiles to the Los Angeles transit system or even Newsholme foods selling black puddings to Spain. Will the Chancellor please continue to reject the doom-mongering, mithering and class warfare from the Labour party and continue with his long-term economic plan?
Mr Osborne
I was in Pudsey the other day seeing a very successful manufacturing business near to my hon. Friend’s constituency. What was interesting was that that business is now exporting to China, which is a total reversal of what we have seen in the textile trade over the last few decades. I am very willing to come and see my hon. Friend and perhaps taste some of that delicious black pudding that the Spanish are buying.
Alison Seabeck (Plymouth, Moor View) (Lab)
Thousands of small businesses are often unaware that they are sitting on a bit of a time-bomb: embedded swaps sitting within personal loans, often sold to them without their knowledge. What will the Chancellor do to bring that back into the Financial Conduct Authority review to ensure that these swaps, which are currently not subject to any regulation, are regulated?
Mr Osborne
The FCA is looking at the whole issue of swaps and how they were sold to small businesses, and clearly, considerable sums of compensation are going to be paid. I will look at the specific point that the hon. Lady makes. If she believes that there is a group that are not currently included that should be included in that work, I will take a close look at it personally and get back to her.
Chris Kelly (Dudley South) (Con)
T6. Last week, we saw the sharpest quarterly increase in the number of people in work since records began. Does my right hon. Friend agree that that is more evidence that the Government should stick with their long-term economic plan to reduce the deficit and create more jobs, which is already providing a record number of people with the stability and security of a regular pay packet from firms such as Steelco in Dudley, which I visited last week?
Mr Osborne
I know from visits with my hon. Friend to the manufacturing businesses of Dudley that he is a powerful supporter of their interests in growing those businesses and taking on more people. Unemployment in Dudley has fallen by 19 % since he started to represent that town. I welcome his support. Together let us make sure that we have a business-led recovery and a recovery in the west midlands and that we reject the anti-business approach of the Labour party.
Mr Geoffrey Robinson (Coventry North West) (Lab)
The whole House has heard the Chancellor proclaim over the last three years that when the recovery comes—as it will—it will be a different kind of recovery, based on investment and, indeed, investment-led. Is it not the case that business lending is stagnating, if not falling, that capital investment in the much-heralded infrastructure plan is 7.4% lower than it should be, and that what we are actually seeing is an economic-pick-up based on consumer spending? Does that not send a warning signal to the Chancellor? Instead of boasting about the situation, he should be doing something about it.
Mr Osborne
Given his experience, the hon. Gentleman must surely consider the growth of the car industry in Coventry, and in the west midlands as a whole, to be as strong as any growth that he has seen in his career. We are exporting cars at a rate at which we have not exported them since the early 1970s. Of course we want to see more business investment and more exports, but what we are seeing now is a rebalancing of the economy. The private sector is growing, and the number of jobs is increasing throughout the country—and that includes the west midlands, an area in which the number of jobs fell during the boom.
Incidentally, given his business experience, I suspect that the hon. Gentleman does not support for one moment the proposals announced by the shadow Chancellor over the past week.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
T7. In south Essex, £1.5 billion is being invested at London Gateway, £500 million is on the table for a new power station, £180 million is being invested at Lakeside, and the regeneration of Basildon town centre is about to begin. Does my right hon. Friend agree that those inward investments in my area indicate that our long-term economic plan is working, leading to rising growth and falling unemployment for the benefit of my constituents?
Mr Osborne
I entirely agree with my hon. Friend. I congratulate him on the work that he has done to bring that investment into his constituency, and to create jobs and opportunities for the people whom he represents. It is important for us to send a message to the world that we are open for business and open to investment, and because we are doing that, we are now a go-to destination for world investment. Can my hon. Friend imagine the impact on jobs and investment in his constituency if we adopted the Labour party’s approach?
Mark Durkan (Foyle) (SDLP)
May we have an update on the Chancellor’s intention to introduce a new regime for annually managed expenditure? Will the overall welfare cap of which he has spoken include a cap within a cap for welfare spending in Northern Ireland?
Mr Osborne
We are not proposing a cap within a cap, as the hon. Gentleman puts it, but we are proposing a welfare cap. We have set out the details of the benefits and the annually managed expenditure that will be part of the cap, but we will announce further details about the level of it at fiscal events later this year.
Jesse Norman (Hereford and South Herefordshire) (Con)
T9. Next week I shall be hosting an event to celebrate independent retailers, cafés and pubs in the city of Hereford, in particular Hat Trick, La Madeleine and The Barrels. I greatly welcome today’s excellent economic news. Does the Chancellor share my view that low taxes are a vital means of helping and encouraging small businesses to grow and create jobs?
Mr Osborne
It sounds very tough, campaigning in Hereford.
I thank my hon. Friend for bringing those businesses to the attention of the House, and congratulate him on the support that he has given to the economic policies that are helping them to grow. He is absolutely right: we must continue to support firms of that kind. High street shops, pubs, cafés and the like will, of course, benefit from the £1,000 rate relief which will be introduced this spring, and which will be a huge help to all—or most—of the businesses on the high streets of Hereford.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
Average weekly gross pay in my constituency has fallen by 32.5% since 2010. Why?
Mr Osborne
The person who had the best answer to that question was the head of the Institute for Fiscal Studies, who said very clearly that the reason why the country was poorer was the very deep recession. He said that we have had the biggest recession in 100 years and that it would be astonishing if household incomes had not fallen and earnings had not fallen. This country is poorer because of the disastrous economic policies of the shadow Chancellor. It is under this Government that the economy is growing and jobs are being created, including jobs in the hon. Gentleman’s constituency.