Budget Resolutions

Steve McCabe Excerpts

Thursday 12th March 2020 Commons Chamber

[The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)]

I thank the right hon. Member for Hayes and Harlington (John McDonnell) for his opening remarks. I think we can all agree that we need to demonstrate a unity of purpose across the whole House, particularly at this time. As I go through my remarks, I will address some of the points he raised, but I will just say this in candour and with the hand of friendship. When I entered the House in 2010, he had already been here for a number of years. In 2010, the economy was absolutely on its knees. [Interruption.] We had the highest, biggest deficit in peacetime at over 10% of GDP. When George Osborne delivered an emergency Budget, there were siren voices on the Labour Benches—I do not know whether the right hon. Gentleman was one of them—who said that as a result of those policies we would lose 1 million jobs and the economy would be decimated. That is not what has happened. Ten years on, we have record levels of employment and we are able to make the investments the Chancellor set out yesterday precisely because we took the right decisions in terms of fixing the public finances.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

Is the Secretary of State not prepared to concede that within a year of that emergency Budget George Osborne actually had to reverse many of the capital cuts he had made, because of the damage he was doing to the economy?

[Alok Sharma]

I do not have to look back. I can look at the present, which is record levels of employment. As I go through my speech, I will highlight some of the Government’s other achievements.

Let me talk a little bit about the Budget. The Budget the Chancellor set out yesterday delivers security today and lays the foundation for prosperity tomorrow. The right hon. Gentleman said that all commentators were somehow against the Budget. That is not the case, as he knows full well. The Federation of Small Businesses called it a “pro-small business Budget”. The CBI said:

“It’s a bold Budget at scale…which will help people and business through tough times.”

The British Chambers of Commerce said:

“There’s much to welcome in this Budget for business communities across the UK.”

This is, of course, a Budget delivered in challenging times. I am grateful to the right hon. Gentleman for acknowledging that point and for supporting many of the measures the Chancellor put forward yesterday. I know that many people are concerned about the impact on investment, cashflow and the future of their businesses as a result of covid-19. The Government, as the House knows, announced a £12 billion package for public services, individuals and businesses whose finances are being affected. Support for businesses includes a £1 billion coronavirus business interruption loan scheme, delivered by the British Business Bank, which is already supporting over £7.2 billion of finance to over 93,000 SMEs.

--- Later in debate ---

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

I want to begin by acknowledging the Chancellor’s response to the international crisis we now face. I welcome his measures to support business in these difficult times. It is the right thing to do and remarkably similar to the steps taken by Gordon Brown and Alistair Darling when we faced another crisis, in 2008. It was right then and it is right now. The only difference is that I am prepared to acknowledge that, while my opponents have spent the past 10 years condemning the action Gordon Brown took.

Like my right hon. Friend the Member for East Ham (Stephen Timms), I welcome the Chancellor’s decision to remove the minimum income floor for self-employed people attempting to access universal credit, but surely that is tantamount to admitting that the existing floor is an unfair barrier to the self-employed. I hope we will hear more about the impact of this change and why it should only be a temporary measure. The Chancellor should also have lift the five-week wait for universal credit, if he really wants to help people.

As I have said, I welcome the temporary support for business, but what we really need is long-term reform of business rates. The review announced by the Chancellor must complete its work urgently. Business rates are stifling small stores and innovation on our high streets. They are a key part of the problems faced by too many small businesses.

I hope that the Chancellor will carefully monitor the impact of his reduction in entrepreneurs’ relief. The last thing we need to do at a time when we are experiencing a significant restructuring of our economy is to take measures that discourage start-ups, entrepreneurs and innovation.

I appreciate that the pension tax relief taper has been prompted by the shortage of doctors and the hours that doctors are willing to work because of tax bills, but this is an expensive giveaway that will disproportionately help those with the highest salaries and biggest pension pots—not just doctors—at the very time when the people who really need our help with pensions are the young and the very poorly paid.

The Chancellor presents his red diesel provision as a green measure, while simultaneously announcing a huge road-building programme. None the less, he has announced a delay and has gone out of his way to placate the National Farmers Union—a special interest group. I simply remind him of the other sectors this will affect. Pumps all over the country are currently in action, pumping out floodwater, and most of them run on red diesel. Our construction industry, which most certainly does not need any further cost pressures, particularly if the Chancellor is to realise his infrastructure ambitions, makes extensive use of red diesel, as do fairgrounds. I am with the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier): I am sure the Chancellor does not want to go down in history as the man who did for the fairground ride.

I welcome the announcement of additional resources for the British Business Bank, but I wonder whether £200 million is really enough to support such a key sector as UK life sciences. None the less, I am anxious to get details of how we can secure part of that resource for the Birmingham life sciences park so that we can expand the pioneering life sciences work taking place in Birmingham and the west midlands.

I welcome the borrowing, at a time of low interest rates, to finance the infrastructure plans, but I have to say that I am amused at how a Tory Chancellor can say it with a straight face after the years of unnecessary cuts. Implicit in the comments made yesterday by the right hon. Member for Bromsgrove (Sajid Javid) was the question: how is the Chancellor going to pay for this? We know he is going to borrow, but he cannot rely on low interest rates forever. If he is going to change the fiscal rules that were in the Tory manifesto only three months ago, we have a right to ask what the Tory economic plan is now.

I welcome the small capital sum for further education, but in the west midlands we have two problems: an existing skills gap, which is a constraint on growth; and far too big a pool of unskilled labour, which can only grow with the shakeout from the fourth industrial revolution. We need a step change in our approach to reskilling and lifelong learning. Remember—adult skills expenditure was cut by 40%, so what we need is not rhetoric, but something that is going to make a real difference. My constituency has unemployment rates that are double the national average, so a change in our approach to lifelong learning is every bit as important for levelling up in my constituency as the offer of an infrastructure project.