Tuesday Volume 560 12 March 2013 No. 128 HOUSE OF COMMONS OFFICIAL REPORT PARLIAMENTARY DEBATES (HANSARD) Tuesday 12 March 2013 £5·00 © Parliamentary Copyright House of Commons 2013 This publication may be reproduced under the terms of the Open Parliament licence, which is published at www.parliament.uk/site-information/copyright/. 137 12 MARCH 2013 138 Sheila Gilmore (Edinburgh East) (Lab): Is it not House of Commons the truth that demand has been so sucked out of the economy by the Government’s policies that there just Tuesday 12 March 2013 is not the growth? Telling us how competitive we are is living in cloud cuckoo land, given that even the Office for Budget Responsibility says that growth is going to The House met at half-past Eleven o’clock be very slow, even in the coming year. Mr Osborne: To get a lecture from the Labour party PRAYERS on demand! The economy shrank by 6% when the shadow Chancellor was in the Cabinet, and we are [MR SPEAKER in the Chair] picking up the pieces of the mess he and his party left behind. One of those pieces was the deeply uncompetitive business tax system which meant that companies were BUSINESS BEFORE QUESTIONS moving their headquarters out of the United Kingdom. Companies are now moving into the UK because of the LONDON LOCAL AUTHORITIES AND TRANSPORT FOR changes we have made. LONDON (NO.2)BILL [LORDS](BY ORDER) Consideration of Bill, as amended, opposed and deferred Mr Andrew Tyrie (Chichester) (Con): It is small businesses until Tuesday 19 March (Standing Order No. 20). in our constituencies that will hold the key to Britain’s economic revival. Does the Chancellor agree that they are simply not getting the support they need from the banks at the moment and that although the funding for Oral Answers to Questions lending scheme is good, most of the money is currently going into mortgages rather than businesses? I realise that he will not want to say much now, just before the Budget, but can he at least reassure the House that the TREASURY needs of small businesses are right at the top of his agenda for this Budget? The Chancellor of the Exchequer was asked— Mr Osborne: My hon. Friend has that assurance. The funding for lending scheme, joint with the Bank of Competitiveness England, is now supporting the small and medium-sized business sector as well as the mortgage market, and is 1. Claire Perry (Devizes) (Con): What recent assessment repairing the damage to the financial system caused by he has made of the UK’s business competitiveness. the financial crisis. He is also right to say that small [147123] businesses are the bedrock of our economic revival, which is why we have cut the small companies tax rate, The Chancellor of the Exchequer (Mr George Osborne): which before the general election the Labour party Under this Government, Britain has moved into the top wanted to put up. We have also carried on the relief for 10 of the most competitive places in the world to do small businesses from business rates, and in the autumn business, according to the World Economic Forum; our statement we increased tenfold the annual investment tax system is seen as one of the most pro-business in the allowance, so that small businesses can invest for the world; market interest rates are at record lows; red tape future and create jobs. The Government understand has been cut by almost £850 million in the past two that there needs to be a private sector recovery in order years; and exports to China, India and Brazil are up by not to repeat the mistakes of the past. almost two thirds since 2009. Catherine McKinnell (Newcastle upon Tyne North) Claire Perry: I thank the Chancellor for that reply. Is (Lab): The Chancellor boasts that all is going well for he aware that, according to accountants KPMG, Britain British business, but terrible figures out this morning is now the best place in the world to do business, for the show that manufacturing is down by 3% compared with first time ever? That is very welcome news for businesses last year’s figure. Business has lost all confidence to in my constituency, but what more do we need to do to invest, so when will he pull his head out of the sand and maintain and consolidate that position? see that his plan is clearly failing? Mr Osborne: My hon. Friend refers to the remarkable Mr Osborne: The manufacturing sector halved as a survey by KPMG that found that in the space of three share of the British economy when Labour was in office years Britain has gone from having one of the least and we had the fastest decline in British manufacturing competitive business tax systems in the world to having in British history. The steps that we have taken to the most competitive one; we are ahead of Ireland, the support manufacturers, to help with investment allowances Netherlands and Luxembourg, as well as, of course, the and to ensure that they have access to fast-growing United States, France and Germany. That is because of parts of the world, such as China and India, are all part the hard work we have done on corporation tax and on of rebalancing and rebuilding the British economy. I the controlled foreign companies regime. Of course, we was in the west midlands a couple of weeks ago, and have to go on making this country the most competitive there are 67,000 new private sector jobs in that region place to do business, so that we can succeed in the alone; I mention the region because private sector global race. employment fell during the boom years under the previous 139 Oral Answers12 MARCH 2013 Oral Answers 140 Labour Government. We must get behind the private Mr Osborne: Our benchmark was to restore the fiscal sector and we must get behind business: that is exactly credibility of this country and that credibility has earned what this Government are doing. us record low interest rates. The hon. Gentleman talks about wriggling out of things we did in the late period Credit Rating of the last decade, but he ran the leadership election campaign for the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown)—he was the campaign 2. Nic Dakin (Scunthorpe) (Lab): What recent assessment manager—and he should apologise for that disastrous he has made of the UK’s credit rating; and if he will premiership and the chancellorship that preceded it, make a statement. [147124] which put this country in this mess in the first place. The Chancellor of the Exchequer (Mr George Osborne): Chris Leslie: We are all deeply moved by the Chancellor’s As I said to the House last month, the recent Moody’s remorse and contrition, but let me remind him of his decision was a stark reminder of the debt problems first benchmark test: facing Britain and the clearest possible warning to “We will safeguard Britain’s credit rating”. anyone who thinks we can run away from confronting them. We will not do that. He has failed on the other benchmark tests, too: he said that he would ensure greater availability of credit to small and medium-sized enterprises; he has failed on Nic Dakin: When he was shadow Chancellor in 2009 economic growth; he is failing on borrowing and the and Standard & Poor’s put the UK on negative watch, the deficit; and he is failing on living standards. After three right hon. Gentleman was unequivocal in calling for a years of failure, when will it dawn on the Chancellor general election. Now that the UK has lost its triple that his strategy is not working? A status on his watch, will he be consistent and urge his right hon. Friend the Prime Minister to go to the palace? Mr Osborne: We have cut the deficit by a quarter, a million new jobs are being created in the private sector Mr Osborne: The advice from the rating agency could and there is record employment in our economy, as well not be clearer: a reduced political commitment to fiscal as record female employment. We are rebalancing the consolidation would put Britain’s creditworthiness at British economy after all the problems of the past. The risk. That reduced political commitment would come hon. Gentleman talks about remorse and contrition, from the Opposition, who oppose every single spending but until we hear some remorse and contrition from cut, who have no credible economic policy and who, those on the Labour Front Bench about the economic despite having promised for two years to produce a mistakes they made, no one will pay the slightest attention deficit reduction plan, still do not have one. We hear to what they, and in particular the shadow Chancellor, that a draft Labour manifesto is coming this July; have to say. perhaps then we will see a proper plan to deal with the deficit Labour created. Stephen Williams (Bristol West) (LD): Given that the UK Government are able to borrow at historically low Mark Garnier (Wyre Forest) (Con): Does my right rates, may I urge my right hon. Friend to take advantage hon. Friend agree that the only true measure of of that position in order to prioritise capital investment, creditworthiness is the price paid by the Government to particularly in the housing market, to give a strong fillip borrow? Gilt yields are still 16 points lower today than to growth? before Moody’s downgrade.