Productivity

Huw Merriman Excerpts

Wednesday 17th June 2015 Commons Chamber

[Huw Merriman (Bexhill and Battle) (Con)]

I pay tribute to the hon. Member for Sheffield, Brightside and Hillsborough (Harry Harpham) for his moving speech about a part of the world I know well, having spent two and a half years fighting you, Madam Deputy Speaker, in North East Derbyshire; my productivity was not as high as yours. I also pay tribute to my hon. Friend the Member for Hertsmere (Oliver Dowden) for a fantastic, polished speech. I would like to follow in the same manner, but I may fail.

I am reminded that the concept of productivity requires the measurement of the quantity of goods and services produced per unit of labour input. Although many Conservative Members would maintain that it has indeed been Labour input that has caused a lack of productivity, via the party’s role in government during the economic crisis of 2007, I wish to explore the performance of my Government since 2010. In short, I contend that our success in creating 2 million new jobs in a difficult economic climate may have had some impact in the ratio of goods and services produced per unit of labour, but increased employment will ultimately cause the increase in productivity that I believe we are on the cusp of enjoying if we remain on the course we have plotted since 2010.

In reaching that conclusion, I am indebted to the excellent article “The UK productivity puzzle”, published by the Bank of England. The report explores the various factors at play in explaining why productivity has not behaved as one would expect following a recession. Again, I consider these reasons to be grounds for reflection or optimism in that, first, the UK electorate has been protected by the Government’s macro interventions since 2010; secondly, companies have focused their output on matters, such as research and development, that are not measured in productivity figures until unleashed on the market; and, thirdly, that we have new entrants to the workforce—some of whom are economic migrants, who have the potential to increase our productivity as they excel up the career ladder. I will briefly take each point in turn.

First, on protecting the UK electorate, unlike in previous recessions UK plc has not shed its workforce, but has retained its staff. Companies have kept going and kept workers employed and they deserve our thanks for doing so. These positive survival rates for businesses can also be put down to the increased forbearance of banks with respect to SMEs.

In previous recessions, banks failed to stand by businesses, which experienced falls in profitability. Thanks to the pressure applied by this Government since 2010, companies have been able to ride out the recession because banks have been forced to stand by them. Additionally, the Treasury, the Bank of England and HMRC have played a part by providing incentives to employ, keeping interests low and granting time-to-pay schemes for staffing levels to be maintained and for recruitment to occur.

[Maria Caulfield (Lewes) (Con)]

Does my hon. Friend share the view that the Labour party’s aim to raise taxes from businesses would have put people out of work and put job security at risk?

[Huw Merriman]

I absolutely agree. These decisions and the extra 2 million new jobs created might have had some impact on productivity in a statistical sense, but we have done what a one nation Government should do. It is markedly different from the behaviour of other Governments during past recessions. It is different, too, from measures taken by countries such as France. French productivity may be higher, but France created fewer jobs between 2010 and 2015 than did Yorkshire. The French labour market is so regulated and expensive that French companies opt out by failing to hire. Higher productivity can mean lower employment and vice-versa.

A second cause of optimism about increased productivity is the output to come. Companies have had to work harder to win or maintain a stagnant order book, perhaps moving labour to roles such as sales and marketing, which would not count as “output” in the national accounts until the product was sold. As this effort bears fruit, the productivity rates will benefit. A similar argument can be put for research and development. Thanks to this Government’s programme of incentives to increase R and D, investment has proved strong. The output from R and D is not apparent, and not included in the GDP data, but as these returns filter through, R and D will, as the Bank of England reports,

“bring about a relatively prompt and significant improvement in productivity growth”.

[Helen Whately (Faversham and Mid Kent) (Con)]

Does my hon. Friend agree that the roll-out of high-speed broadband is vital in constituencies such as mine and his for the productivity of rural businesses?

[Huw Merriman]

I agree that high-speed broadband is essential. It would create capacity and productivity in areas that infrastructure might find hard to reach.

These factors will, I believe, allow the UK to overcome the impact on productivity from cyclical and sector changes, such as the scaling back of financial services and the artificial productivity that financial services might have created during the last 10 years.

The third cause of optimism is the new workforce. Although a high proportion of the 2 million jobs are highly skilled, some are obviously lower skilled and might not yet contribute as much to the UK’s productivity. This is part of the investment in people, via new jobs and apprenticeships, which will take people up the career ladder to increased productivity. Giving a job opportunity to someone who was previously on welfare can transform their lives and, as they reach their potential, I believe that will help our economic productivity as well as enriching the cause of social justice in this country.

I am led to conclude that the nation has experienced significant support, thanks to action taken by the Government since 2010 that has allowed UK plc to increase the UK employment rate by 2 million jobs. Naturally, with the definition of productivity being the unit of output per unit of labour, that may have impacted on overall productivity rates, but I believe we stand right to increase our productivity as long as the Government stand their course on the route ahead.

Royal Bank of Scotland

Huw Merriman Excerpts

Thursday 11th June 2015 Commons Chamber

[Harriett Baldwin]

I have just been informed by my hon. Friend the Member for Croydon Central (Gavin Barwell) that the hon. Member for Cardiff West (Kevin Brennan) still owes him a fiver, which he lent him last week.

[Huw Merriman (Bexhill and Battle) (Con)]

Having spent the last seven years working on the Lehman Brothers unwind and repaying creditors in full, I pay tribute to the thousands of RBS staff across the nation, including those at Cotton Street, Bolsover, for returning the bank to health. Will the Minister confirm that selling the initial stake will make it much easier and more efficient to sell the remainder of the stake?

[Harriett Baldwin]

I welcome my hon. Friend, who has a wealth of experience in insolvency practice that he has clearly put to good use in his first question. Rothschild and the Bank of England Governor have said that one of the challenges facing this stake is the illiquidity of the float—the stock is not liquid enough to be in any of the major indices, for example—so there are liquidity benefits and potential price benefits from putting an initial float in the private sector.

The Economy

Huw Merriman Excerpts

Thursday 4th June 2015 Commons Chamber

[Huw Merriman (Bexhill and Battle) (Con)]

Thank you, Mr Speaker, for calling me to make my maiden speech. Before I do so, I pay tribute to the speeches of right hon. and hon. Members who have spoken so eloquently, leaving me with a hard task to follow. I also pay tribute to my predecessor as MP for Bexhill and Battle, the right hon. Greg Barker. Greg worked hard for his constituents over his 14 years as their MP, and left his mark in government as a Minister of State for Energy, working tirelessly to tackle climate change. I thank Greg for the advice and kindness he has given and continues to give me.

The Bexhill and Battle constituency nestles on the East Sussex seafront at its southern face and the beautiful Weald at its northern ridge. It spans over 200 square miles where my 100,000 constituents reside in 100 towns and villages. Mine is one of those constituencies that lists just two of the place names in its title. When I promised in my election literature to put the residents of Bexhill and Battle first, this raised questions about why I was de-prioritising the needs of the 50,000 constituents who did not live in either of those two towns. The use of the word “constituency” in literature is often overlooked.

My constituency borders the East Sussex constituencies of Hastings and Rye, Lewes, Wealden and Eastbourne. As the only male MP in this cluster of blue constituencies, I pledge to be the champion for other minority groups in East Sussex.

Many in this House will be unaware that Bexhill is the birthplace of British motor racing, having staged the first ever automobile race on British soil in 1906. This race was orchestrated by the eighth Lord De La Warr and the organisation that latterly became the Royal Automobile Club. Bexhill was also the launch-pad of another engine of progress and mobility, being the location where the Prime Minister launched his leadership bid to the membership of the Conservative party in 2005.

Next year, we face a battle against the aggressors of Europe who intend to march over our land, vanquish our sovereignty and replace it with French-based custom and rule. Will our nation rise up and repel this threat, or will we be defeated and be ruled for generations from Europe? I refer, of course, to the re-enactment to celebrate the 950th anniversary of the battle of Hastings, when William the Conqueror triumphed over King Harold and his army in a field that now adjoins Battle abbey. I believe there will be another key determination on Europe during this term, and I welcome my Government’s commitment to give people a say in a more civilised manner than that accorded in 1066.

It is customary in a maiden speech to bestow the title of “the most beautiful constituency” on to the area where one serves. Having lived in this wonderful area for almost 10 years, this is an easy case to make. I am, however, conscious of my upbringing for the first 19 years of my life in the noble constituency of Buckingham. As this House knows, this is your constituency, Mr Speaker, where my mother, sisters and wider family still reside as your constituents. I think it best to surmise that the most beautiful constituencies are entitled by the first letter of their description.

I hail from a family of Labour-leaning trade unionists. Having crossed the dining room floor of 5 Gawcott Fields, Buckingham at the age of 16, I know what it takes to stand for the courage of one’s convictions and to suffer the harsh consequences of washing-up sanctions as a result. Yet while my family and I may differ in the means, the ends of giving people hope and support via an education, a job, housing, support in ill-health and strong community are the reasons I sought election to this noble House. It is also the reason I am grateful to be able to deliver my maiden speech in the segment of the debate of the most Gracious Speech that is dedicated to the economy.

For the last seven years, I have led a team of lawyers who have been unwinding the Lehman Brothers estate in Europe. This was the largest bankruptcy in world history. From a starting position of bankruptcy, £35 billion-worth of cash and assets have been recovered and distributed by our small team; the books have been balanced with creditors paid in full; and we now focus on paying a surplus. I am aware that a much more challenging turnaround has been performed by the Government team, led by those on the Front Bench. I support the balancing of the national books, returns to taxpayers and the desire to record a surplus.

Earlier this year, the Prime Minister and Chancellor visited our region to announce the south coast plan. This is a plan that has already started with the delivery of a new link road between Bexhill and Hastings. When it opens this year, it will stand ready to deliver thousands of new jobs in a 42-acre business park, with 3,000 homes to attract new labour and give local people the chance of their own home and with a new country park bringing economic regeneration to my constituency. Thanks to the investment delivered by this Government, the future is positive for my constituents in Bexhill and Battle.

However, some of the most vulnerable and troubled of my constituents will always need a safety net, always require a defender and always need to rely on someone who will bat for them in their time of need. I pledge to work with all Members of this House in order that we may together provide this role—not just for my constituents in Bexhill and Battle, but for all constituents represented in this noble House.