Trade, Exports, Innovation and Productivity — House of Commons, 2016-01-13
Topic: Macroeconomics
Jo Johnson (Conservative, Centre-right): I shall come on to exports shortly, but we remain strongly committed to that target. It is right that we set ourselves a challenging and ambitious target for exports. The whole Government are working towards achieving that goal Our regions are at the centre of our plan. A crucial part of the Government’s plan is to devolve powers to local leaders and enable them to drive growth, attract investment and create jobs, as we are doing with the development of the northern powerhouse and the midlands engine. We have secured an historic city deal for Glasgow and the Clyde valley, and I am pleased that discussions are under way for Aberdeen and Inverness, too The manufacturing sector is a part of this renewal. While our manufacturing sector faces headwinds, as we have seen in recent statistics, from the sharp fall in the oil price, a strong pound and slowing external markets, manufacturing output since 2010 has expanded by 18.5%, and by 17% in Scotland. Quite contrary to the assertion of the hon. Member for Dundee East (Stewart Hosie), there are more manufacturing jobs, too, than in 2010. There are 90,000 more of them in our economy today than in September 2010 While we are about it, let us not miss an opportunity to celebrate the remarkable growth in motor vehicle manufacturing. The 6.4% increase over the past year underscores an historic transformation in that key industry’s fortunes which has been under way since 2010. The Government need no lessons from Opposition parties on manufacturing generally, given that, as many know, it suffered its fastest decline on record as a share of GDP under Labour Business investment is increasing too. It has been growing by well over 4% a year in real terms since 2010. Specifically, investment in research and development rose to £19.9 billion in 2014, well up on where it was in 2010. The record levels of support that the Government are providing for innovative businesses through our R and D tax credit are a big part of the reason for that. Our support rose from £1.1 billion in 2010 to £1.75 billion in 2013-14, and the tax credit is helping more than 18,000 businesses to engage in innovative R and D investment The hon. Member for Dundee East said that there was a missed opportunity for Scotland. I disagree; the evidence shows otherwise. The hon. Gentleman should, perhaps, note that there were 1,045 successful claims for R and D tax credit from Scottish businesses in 2013-14. He should also recall that the five parties in the Smith commission agreed that corporation tax and its associated reliefs should not be devolved, on the basis of a strong body of evidence that such a move would not be in Scotland’s interests. It was striking that neither Opposition party joined businesses in welcoming our plan to cut corporation tax to 18% by 2020. Companies throughout the United Kingdom will benefit from that, just as they are benefiting now from our R and D tax credit. The hon. Member for Livingston (Hannah Bardell) mentioned the important issue of equality. We are active in that respect as well. There are more women in work than ever before—a record 14.6 million—and the number has risen by nearly 1 million since 2010. We are also taking steps to eliminate the remaining gender pay gap through new transparency requirements, and, as part of our broader goal of achieving full employment in our economy, we recently set out our aim of halving the disability employment gap. This is not the uncaring, uncompassionate Government that the Opposition parties seek to portray Let me say something about the business environment. As part of our economic plan, we want to make Britain the best place in Europe in which to do business, with a business environment that supports investment, productivity, growth and job creation. When Labour was in government, corporation tax stood at 28% and national insurance was set to increase, which would have had a devastating impact on jobs. By contrast, this Government have shelved the planned national insurance increase, increased investment allowances, and introduced the most competitive corporation tax regime in the G20. While we are about it, we are deregulating too, building on the steps that have been taken since 2010. We are committed to cutting the cost of red tape by a further £10 billion during the current Parliament. It is no surprise that Britain has just leapfrogged others in the World Bank’s global ease of doing business rankings to become the top country in the G7 in which to do business Let me now turn to another aspect of today’s debate: trade and exports. Our long-term economic plan will enable us to move towards an economy with a stronger export performance. While we are, of course, facing real global headwinds, including a slowdown in China and continued weakness in the eurozone, we are backing British businesses with global ambitions. The number of United Kingdom companies that are exporting is growing strongly—it has increased by 18% since 2010—and Scottish companies are also exporting more. In 2011 there were 9,300 Scottish exporters; now there are 11,100. Our trade deficit is responding, and narrowed in the three months to November.[Official Report, 27 January 2016, Vol. 605, c. 2MC.] As Members have noted, our £1 trillion export goal is rightly ambitious, and much depends on factors that are out of our control. What we can do as a Government is offer effective support for exporters, and push for ambitious trade agreements that will help them to break into new markets. That is why the Government have recently established the cross-Government exports implementation taskforce to drive a new and tough whole-of-Government approach in support of our export target and our aim to increase by 100,000 the number of UK firms exporting by 2020. The Government are also pushing hard for ambitious trade deals that will remove tariff and non-tariff barriers facing British exporters and open up new markets.