Trade, Exports, Innovation and Productivity — House of Commons, 2016-01-13
Topic: Macroeconomics
Jeremy Mark Quin (Conservative, Centre-right): It is a pleasure to follow the hon. Member for Livingston (Hannah Bardell), with her list of Scottish innovations. I had no idea that the overdraft was developed in Scotland, but one learns something new every day. I do not know what that great Scottish innovative thinker, Adam Smith, would have thought of her speech, but it was interesting none the less It was interesting to hear the tour d’horizon of the proposer, the hon. Member for Dundee East (Stewart Hosie), setting out what he thought was the root of the problems identified in the motion. In response to my intervention, he said that our problems were 50 years in coming. To go through the problems of the last 50 years might be pushing it in a 10-minute speech or in the much shorter contribution that I intend to make, Madam Deputy Speaker, but it is worth touching on some of those issues Over the past 50 years, we have seen the decline of empire, on which my hon. Friend the Member for Spelthorne (Kwasi Kwarteng) is an expert. We have seen our entry into the European Union and the rise of China, India, South Korea and eastern Europe, to name but a few. Of course, those huge macro changes have had an enormous impact on our manufacturing base, the shape of our economy and the pattern of our imports and exports. At the same time, there has been a revolution in the service sector across the world and in technology—two things in which this country is at the absolute forefront In proposing the motion, the hon. Member for Dundee East said he would not deny the numbers, and I know he would not. He dwelt, understandably on the circumstances, on the manufacturing figures for the last quarter. They are not a happy set of figures, and no Conservative Member would suggest they were. Equally undeniable is the fact that over the last year our economy grew by nearly 3%, making us the fastest growing economy in the G7. This year, the OECD forecasts that our growth will equal that of America at 2.5%—again, the fastest rate of growth in the G7 To build on that success and to grow exports and innovation, we need thriving small companies and, of course, investment. That is why I have no doubt that Members on both sides of the House will be delighted by the record of smaller business creation under this Government, particularly the 300,000 that were created in 2014 alone. I am sure that those on both sides of the House would also be delighted to recognise that, with the general election safely out of the way last summer and a new Government established, investment by business grew 7% in the third quarter of 2015, compared with the same quarter in the year before Equally, as a result of that general election we have one of the lowest rates of corporation tax in the OECD at 20%. That is down from 28% under the Labour Government, and it is falling still further. In response to the hon. Member for Hartlepool (Mr Wright), I recognise that that is only part of a package, but it is important in bringing foreign direct investment to our country, and the Government should be congratulated on that. Another part of that package is the benefit of being—according to the World Bank—the sixth best place to do business in the world. The motion addresses the rebalancing of the economy, and no one would underestimate the importance of manufacturing, or our disappointment with the recent figures to which the hon. Member for Dundee East referred. However, we can go to business districts in London, Manchester and Glasgow, and in just those areas we will find more tech start-ups than in the whole of some of our EU partner countries. The UK is rated second in the world for global innovation for a reason I commend and congratulate the Secretary of State on his paper, "Fixing the foundations", which back in July tackled head on many of the issues raised in this debate. We have heard today that the paper was too short, but I do not think that British businesses want "War and Peace"; they want simple, workmanlike solutions, and that is what they are getting from the Government. I welcome the £7 billion of committed investment over the next five years in research infrastructure, the protected science budget, and the £14 billion benefit from R and D credits that is being provided to 14,000 companies. As the hon. Member for Dundee East was gracious enough to acknowledge, the £1.5 billion global challenge fund will also bring benefits. Those measures, combined with a Government who have a clear sense of economic purpose, imbed confidence One example of that confidence is found in my Horsham constituency, and I am delighted to announce the deal made last week between Novartis and the county council, and the creation of a new science park in the heart of our town On exports, the Government’s focus on the emerging markets is reaping dividends. Companies in my constituency say that a new generation of ambassadors is pushing our export drive. They have had that direct experience, and they are grateful for it The hon. Member for Hartlepool and my hon. Friend the Member for The Cotswolds (Geoffrey Clifton-Brown) referred to UKTI and said that we are not yet all the way there. I think that is recognised across the House, and I look forward to the report on UKTI that the Business, Innovation and Skills Committee will produce. I know that Ministers on the Treasury Bench, and Lord Maude, are at the forefront of ensuring that UKTI is working its hardest for our exporters. The level of that support is witnessed in what the Prime Minister and Chancellor have been doing on their visits abroad, and in the visits of the Prime Minister of India and the Chinese Premier. Above all, it is witnessed in the 68% increase in exports to China from this country since 2010 On exports, I counsel some caution, as I did earlier in the debate, because—as the hon. Member for East Antrim (Sammy Wilson) eloquently put it—we have real problems in exporting at a point when our economy is booming in relative terms, and when an extra 2 million people are in work and spending money, yet our main trading partners on the other side of the channel have been in recession. That will inevitably cause problems for our export record The hon. Member for Sefton Central (Bill Esterson) referred to our productivity, and it will not have escaped his attention, or that of other Opposition Members, that what the Government have done to tame the excesses of the City, and the sad consequences of what has been going on in the North sea and with oil prices recently—the hon. Member for Aberdeen South (Callum McCaig) spoke eloquently about that—has of course impacted on two of our highest value sectors, and that in turn has impacted on our productivity statistics. Given those two existential impacts, I hope that the whole House will congratulate the Government on the conditions that they continue to create to allow UK plc in general, and particularly its many new small businesses, to be productive, to export, and to flourish.