Budget Resolutions and Economic Situation — House of Commons, 2016-03-16
Topic: Macroeconomics
David Henry Rutley (Conservative, Centre-right): These are challenging issues. Clearly, there needs to be discussion between the employers and employees. The Government have made it clear that they will name and shame to highlight the organisations that are not going forward with the national living wage. We will have to wait and see, but it is a positive direction that the Government have set out, providing real opportunities to grow wages further beyond the 2% that we have seen in the last year The key to the long-term economic plan and the rebalancing of the economy is to ensure that we rebalance geographically as well. This Chancellor and this Conservative Government have set out a very clear narrative for the north—the first in decades. As with the long-standing challenges with productivity, we need to measure our expectations of what can be achieved now, and we should be resolutely ambitious about what can be achieved in the future The Treasury analysis of the opportunities from rebalancing the economy and putting more focus on the north suggests an additional £56 billion going into the northern economy over the next 15 years. That is a prize worth having, and a prize in which this Government are willing to invest. Of course the Chancellor and this Government have championed city deals and growth deals across the country, particularly in the northern powerhouse, and they have done the same today. This is a fundamental part of the Government’s reform agenda Local leaders and local partnerships are creating strategic partnerships, which are empowering a new scale of activity that is required to achieve the growth across the country that we want to see. Ambitious measures are being taken forward. For example, the creation of a northern transport strategy is vital. Within just two years, we have seen a fundamental transformation of our ambitions for the north—not just economically, but in terms of civic renewal Transport for the North will be put on a statutory footing, with a £50 million budget to 2020. There will be smart ticketing across rail services in the north, with £150 million promised for faster and more frequent train services with greater capacity. Strategic investment in High Speed 2 will have a huge impact on Crewe and Cheshire East, as well as on the north-west as a whole Today we heard more from the Chancellor about better links among the individual cities of the north that need to get better connected. That includes trans-Pennine rail services, better road links and making the M62 a smart motorway. There is talk now of building a case for a trans-Pennine tunnel between Manchester and Sheffield. These are fundamental and ambitious schemes. They are not just about Government funding, because private investment is being leveraged in as well. It is fantastic to know that Manchester airport has now had planning permission to take forward its £1 billion investment in a 10-year transformation programme that will be welcomed across the north-west Work is being taken forward to help create this northern powerhouse with the infrastructure and devolution that is required. It will connect northern cities to ensure that the sum is greater than the individual parts. In doing so, we can make sure that we create a globally significant economic entity. We hear of Randstad, Amsterdam, Rotterdam, The Hague and Utrecht working together, and the same applies to the Rhine and Ruhr, with Koln, Dusseldorf and Dortmund. They are stronger because they are better connected—and we have the same ambition for the north Success will not only be about infrastructure or devolution. We must ensure that we back the sectors that can help to drive our economic strength. That is why life sciences are so pivotal—not just in Macclesfield or Cheshire, where we are seeing an emerging life sciences corridor, but in helping the UK to continue to be a world-class centre of excellence in a leading role, creating clusters of high-skilled and high value-added jobs, as we are doing in Cheshire. I hear that clusters are likely to form in some other places down south. Oxford and Cambridge, I understand, also have some claims to be pretty good at science. The fact that we are taking scientific initiatives is critically important We are performing well according to a number of key output measures. We are producing 16% of the top-quality published research findings on the basis of just 3.2% of the world’s R and D expenditure. That is a sign of strength in the sector, and it is important for the Government to get behind that sector as part of their ambitions for the northern powerhouse and for our long-term economic plan. They have an important role to play as a champion of science, a funder of science, and a facilitator of scientific endeavour. I welcome recent announcements, in the spending review and confirmed in the Red Book today, that the science budget will be protected in real terms until the end of the decade. As a result, we shall have a £6.9 billion research infrastructure by 2021, which means crucially that our party can deliver on its manifesto commitment to achieve record investment in the country’s scientific infrastructure Of course, funding and spending are not the only drivers of success. The lesson that we can learn from the last Labour Government is that it is important for Governments to spend well, and to encourage businesses in the private sector to invest too. That does not mean recycling old policies and adding shiny new words. Over the weekend, we heard the shadow Chancellor talk about the "fiscal credibility rule". Within a matter of minutes, it was deemed by many members of his own party to have a complete lack of credibility, so I am sure that businesses will not be fooled. They recall the size of the deficit that was inherited in 2010, and they recall that corporation tax stood at 28% and national insurance was set to increase. They will not be fooled by the soft words of the hard left which is currently running the Labour party. This Government are absolutely committed to increasing productivity, focusing on science, and rebalancing our economic geography in favour of the north.