Budget Resolutions and Economic Situation

Debate between John McNally and Alan Mak

Monday 13th July 2015 Commons Chamber

[Mr Mak]

I shall come to that point later in my speech.

This Budget builds the opportunity society, which is important because in the global race for success, Britain cannot afford to waste the talents of anyone in this country. Last year, the Sutton Trust estimated that improving social mobility, including by getting people back to work, could add up to £140 billion to our GDP by 2050.

This Budget helps to build on the Government’s track record during the past five years, when 1,000 jobs were created every day, the deficit was cut by half as a share of GDP, 2 million apprenticeships were created and we enjoyed the highest growth of any developed country—higher than France, Germany or America. It is therefore no surprise that the latest World Economic Forum global competitiveness index report places Britain ninth in the world, which is up from our position last year and ahead of competitors such as France, Canada, Australia and Ireland. The Budget builds on and locks in the growth that we have sustained during the past five years. It helps Britain to move from a high-tax, low-wage and high-welfare economy to a higher-wage, lower-tax and lower-welfare country. It delivers a stronger society at home, and it gives us a more competitive economy abroad. Conservative Members share an abiding faith that individuals and businesses flourish when they have control over their lives, so I welcome this Budget.

[John Mc Nally]

I rise to make the same point again. Does the hon. Gentleman think that legislation will stop the farcical situation of big businesses delaying payments to small businesses? A small company wanting to grow ends up having to chase bigger companies to get the money they owe, which frustrates its wish to employ apprentices. Does he agree that we need to tighten up the legislation on that?

[Mr Mak]

The hon. Gentleman will know that the Government are taking decisive action to ensure that small firms are not punished and penalised when larger firms delay their payments. I come from a small business background, so I fully understand the challenges that that poses. What the Budget does for businesses is to lock in the growth and success that we have had during the past five years. I have talked about apprenticeships, and I will come on to the cut in corporation tax later.

I welcome the Budget because, ultimately, it keeps working people in work and allows them to keep more of the money they earn. The rise in the tax-free personal allowance to £11,000 from April next year means lower taxes for about 45,000 working people in my Havant constituency, and an estimated 750 people will be taken out of income tax altogether. That is what the opportunity society Budget looks like on the ground, and it is one that I am proud to support.

At the same time, lowering the welfare cap sends out the clear, distinct and unambiguous message that a life dependent on welfare and benefits, funded by those who work hard and do the right thing, is no longer an option. Our welfare reforms also send a strong signal that modern Britain will be a lean, nimble and productive economy that not only pays its way in the world, but asks each and every one of us to contribute where we can.

Although no one must be held back in our society, it is equally right that the Government do not allow anyone to be left behind as we run the global race for success. In other words, we want everyone who can contribute to be on the field of play, not watching from the sidelines. In particular, our Budget gives 18 to 21-year-olds a clear path from welfare and into work. I welcome the new earn or learn youth obligation and the ending of the automatic right to claim housing benefit. At the same time, the new apprenticeship levy for larger employers will ensure that our ambitious and successful apprenticeship programme gets the funding it deserves.

In addition to those structural policy reforms, Britain’s place in the world economic order and our ongoing national prosperity are dependent on our regions, cities and counties doing just as well as our capital city. In my Havant constituency and the wider Solent region, we are heartened that the Government are committed to rebalancing the economy and bringing local growth to every part of the UK, whether by building a northern powerhouse or supporting important regional economies in the midlands, the south west or the south coast, where my constituency is based.

The summer Budget confirms that the Government are working towards further devolution deals, for example with metro areas such as Sheffield, Leeds and Liverpool, to boost local growth. I can confirm to my right hon. and hon. Friends on the Treasury Bench that in the Solent region all our councils support more devolution of powers to our county of Hampshire. I am personally committed to working with them to use any new powers to boost local economic growth and raise living standards.

I am very pleased to be working with my hon. Friend the Member for North East Hampshire (Mr Jayawardena) to create a new all-party group to champion Hampshire’s economic growth, and I look forward to working with other Members, particularly my hon. Friends the Members for Portsmouth South (Mrs Drummond) and for Fareham (Suella Fernandes), whom I can see in the Chamber. We are all committed to regional growth in our county for the greater prosperity of our citizens. That will help Havant to build on an already impressive record of growth, with exciting plans for local economic development being implemented. For example, at the Dunsbury Hill Farm development, a 50-acre stretch of farmland is being redeveloped with support from the Solent local enterprise partnership to become a new modern business park, driving local growth. We anticipate up to 3,500 new local jobs as well as investment in infrastructure such as local roads. The Solent LEP has been awarded £125 million in vital funding from the local growth fund for exactly that purpose.

Elsewhere in Havant, Langstone Technology Park and the Solent Retail Park are both booming. Business is coming to Havant. Businesses that relocate to Havant—and I urge them to do so—will benefit from a range of measures in the Budget designed to help businesses and our local economy. Corporation tax, already the lowest in the G20, will be cut to 18% over the course of the Parliament and the annual investment allowance has been put at £200,000 on a permanent basis.

The Government’s continued commitment to hard-working people and supporting local growth also means that unemployment in my constituency fell by 48% between May 2010 and May 2015. Those are people who have moved from welfare into work. They are playing a key role in Britain’s economy and our opportunity society.

The Government rightly put security at the heart of our manifesto and of this summer Budget. That means economic security, financial security and national security. The most important thing for me is the social security not of a life on welfare but of giving opportunities to people to work hard and make a better life for themselves.