Category: Debates

I welcome the opportunity to debate the many opportunities that Brexit presents. It was always the case that, once we had achieved Brexit, the Government needed to use the freedoms it brings to promote the greater health and prosperity of United Kingdom citizens. We meet today with a success already as a result of these freedoms. The United Kingdom Government decided last year not to join the common vaccine procurement system of the European Union. They went their own way. They had confidence in British science and in British medicine, and they had confidence in great companies based in the United Kingdom and in our great universities.

It is tremendous news that, as a result, the United Kingdom helped pioneer one of the first successful vaccines. The United Kingdom pre-ordered a very large number of vaccines for United Kingdom people on the basis that some of these vaccines would be good and would be available for use, and that put the United Kingdom in the position to vaccinate much earlier, saving more lives than those countries can that were not in the happy position of having early supplies of vaccine. Even our regulators were quicker and more agile. Our regulators gave regulatory approval to the first vaccines some weeks before the European regulator, though the European regulator came to the same view in due course.

I think this is a model for how we can use our freedoms more widely to promote our health and better prosperity. I would draw the Government’s attention to a very important policy initiative from President Biden. They may find it surprising to see me recommending something from a Democrat President, but I think his 24 February Executive order—looking at America’s supply chains, and saying that America can do much better at developing its own technology, putting in its own industrial capacity and creating many better-paid jobs by having more capacity in the United States—is a model we should follow. Indeed, it is the model we have been following with the development of the vaccine, which has led to more good jobs in the United Kingdom and more United Kingdom productive capacity.

The Biden initiative starts with a very rapid—100-day —attempt to fix the need for the United States of America to have a much bigger presence in pharmaceuticals, batteries, rare earths and minerals, and semiconductors. There is then an annual programme, involving all the relevant Departments of Government, of going through the supply chains and asking what can be done to use innovation funding, Government procurement and Government regulation to encourage more onshoring and more exciting technical developments. Of course, a country needs to have strong competition law and not to abuse state aids, but many good things can be done with the massive procurement programmes of the British Government, like those of the American Government, to encourage competitive responses in the United Kingdom and to encourage that increasing capacity.

I hope the Government will do more on both the Northern Ireland border issue, where I think we need to be firm—and I support their recent action—and on the fishing industry, where I think we need more rapid progress to build up our fleet and to take back control of more of our fish. That was the promise and that is clearly the intended journey, but I wish the Government would be firmer, because I do not think that at the moment we have the right deal to promote that industry. If we wish to develop our green policies, as we do, we need to do more at home, cut the food miles, cut the fish miles and have more value added in the United Kingdom.

I welcome the extension of help to individuals and companies. All the time people cannot go to work or businesses cannot trade and all the time that there are pandemic regulations and social distancing that impede people going about their normal business, it is vital that the Government offer alternative income and support. I am pleased that the Government came up with a big response originally, and it is necessary to carry it on for as long as these restrictive measures remain in place.

I also welcome the fact that the OBR has decided that we will be borrowing £39 billion less in the current year than in its recent November forecast. I think that serves as a reminder or a warning to all those trying to debate the economy based on a set of figures; these are very uncertain times. It is difficult for the official forecasters to come up with accurate figures, and we should be especially suspicious of ideas based on what the deficit might be in a couple of years’ time. This deficit will fall very rapidly.

Assuming the great success of the vaccines continues, and assuming that we can relax and get people back to normal work and normal business within a few weeks or months, we will then see the deficit come down because so much of the deficit has been caused by the special pandemic measures.

The figures confirm that around £250 billion of extra spending in 2020-21 was the direct result of the special pandemic measures, and that there will be another large figure in the first part of 2021-22. We want to see the end of all those special expenditures—because people have better-paid jobs to go back to, businesses are trading successfully, and there is turnover and profit coming back to our small and large businesses—and so much of that expenditure was a poor substitute for being able to do the thing itself.

There was of course some loss of tax revenue, and again, we would expect to see tax revenue rise quite rapidly as soon as people can trade properly again, as soon as there are more transactions in the economy, and as soon as we are making more goods and providing more services to each other, as I am sure we will. So the Chancellor is right to say that the crucial step to getting the economy back to health, the deficit down and the numbers back into shape is to promote a recovery. He is right to want more investment in our economy.

The public sector numbers show public sector investment going up, and it is very important that good projects are chosen that will have a good payback. It is very important, too, that the tax incentives are correctly honed so that we get the boost in private sector investment that we want. The Chancellor is also right not to rush out any new fiscal rules.

We will need a new set of rules in due course, however, and they must be geared to a faster growth policy and a policy about levelling up and investing in great projects around the United Kingdom.

That must be linked to sensible discipline on public finances and, above all, to keeping the good control of inflation that we have had for a number of years now. It is reassuring that the OBR and the Bank of England are very confident that inflation will remain low, which gives us a bit more flexibility, but we need to watch that inflation situation.

I note that the OBR thinks the balance of payments is going to be weak for two or three years, and that provides an opportunity. In the post-Brexit world there are huge opportunities that we can exploit more easily in import substitution. Why do we not, for example, with our great green policies, plant many more trees and make sure there is much more sustainable husbandry of trees so that we replace many of the timber imports?

And while we are about it, can we replace the pelleted timber coming in to produce power at Drax with home-produced sustainable timber? We should also put in sufficient electricity capacity, because if we want an electrical revolution we will need a lot more capacity, and while we are doing that we should get rid of the imported electricity through the interconnector, which we rely on more and more for no particular reason.

We used to be able to have all our own power provided in the UK with a decent margin and I suggest we return to that. We can do a lot more on food and fish, too. I urge the relevant Ministers and Departments to promote food and fish, and also to make sure that the grant schemes and regulations that are now under our control are used to increase our capacity so that we start to substitute many of the items that are coming in.

A recovery needs more orders and more investment in capacity; it requires excitement over new products and services and the restoration of old products and services. That must be the single thing that most motivates all the relevant Ministries and Government policy, because the only way to get this very big deficit down is to have more revenue and less expenditure, and the only legitimate expenditure to cut is all the spending we have been doing as a poor substitute for a decent economy with well-paid jobs and successful businesses.

So I say, let’s go for growth; let’s do everything we can to promote more things being made and grown and sold within the United Kingdom. There are huge opportunities, and that will be good economics.

Now is not the time for tax rises. Now is the time to promote a vigorous recovery as soon as it is safe to do so. Yes, the deficit is far too large, but it is affordable as long as it is a one-off.

The deficit is the product of sensible support for individuals and businesses when they were locked out or closed down, and it was sensible support for the economy as a whole at a time when tax revenues had fallen sharply because people were not allowed to go to work and businesses were not allowed to trade. The way out of all that is not tax rises that would sap confidence and undermine business cash flows even more. The way out is a vigorous recovery that will replace lost revenues, and reduce the need for the support that the Government have rightly produced for small businesses and individuals.

What businesses and individuals will need is turnover, orders and work. I ask all Government Departments—led, probably, by the Department for Business, Energy and Industrial Strategy—to look at how the UK Government can make more work available. The Government have mighty procurement programmes, so when we are building great new railway lines, let us ensure that it is UK steel for the tracks and that it is UK-produced trains with plenty of components and value added, as well as the assembly work taking place in the United Kingdom.

As the Department for Environment, Food and Rural Affairs designs new grants and loans schemes, it should be promoting British food and agriculture at the same time as taking care of environmental concerns. There is a great opportunity to reduce the amount of imported food and to substitute Great British food from our farms and fishing grounds.

BEIS itself leads on energy. Why are we importing so much energy through interconnectors? Can we not have another round of capacity procurement so that we have future electricity generation here in Britain? We have plenty of means of generating power; surely we can harness that.

The Government should want to greatly expand the electricity output of this country because they want to unleash on us a great electric revolution in transport, space heating and powering our factories, so let us make the provision early. Let us invest now for the future so that we have that electric power when it comes to be needed.

A number of businesses have been very badly damaged by lockdown and shut-out, and I am glad that the Government are making some money available to them. I urge them to be generous. It was not those businesses’ fault and we need them to be there when we have recovery.

Small businesses and the self-employed are mightily flexible, but they cannot survive on thin air, and they will need to repay their debts, so give them some turnover and some tax cuts.

I thank the Government for their generous assistance to councils to help us through the pandemic crisis. My constituency is served by West Berkshire Council and Wokingham District Council—both are unitaries. They certainly needed money to assist with the extra costs that covid-19 has caused, and there was a scheme, the pressures grant, to do that. The councils certainly needed assistance to deal with losses of tax revenues, and there was a scheme to reimburse 75% of lost tax revenues during these extraordinary times of business closures and business stress.

There were clearly difficulties with shortfalls on sales, fees and charges, and again a scheme was introduced —I am pleased to see today that that is being extended for another quarter, because it looks as though there still will be an overhang into the second quarter of this calendar year. I am particularly pleased that there is additional assistance to allow councils to be sympathetic to people who are struggling to pay their council tax. The one little niggle that Wokingham has still suffered from is that where the council has brought in private sector management for a leisure sector, there can be difficulties with reimbursement for lost revenues. I would like to see further progress in sorting that out.

In the past, both West Berkshire Council and Wokingham Borough Council have suffered from pretty tight, or low, social care grants, and I am pleased to see a reasonable increase in social care grant going through for the next year. I urge Ministers to continue to look at that grant, because there is growth in demand and need, and we want high standards of care for people who require assistance. Certain councils, particularly the two serving my constituency, which were right at the bottom of the pack in terms of the amount of grant in relation to population, needed some tweaking of the sums. It is a very difficult situation. It is as costly looking after the elderly or children in Wokingham and west Berkshire as it is in the rest of the country, so we need at least as much, proportionately, as other places. We have often suffered from that.

I want to reinforce the Secretary of State’s important message about the role that councils can and should play in getting the country back to work and, in particular, in revitalising, refreshing and renewing our town centres, our village shopping areas and some of the shopping centres in which councils are engaged or have a stake. It is true that councils are very important agents in setting the tone, providing the regulations, sorting out the planning, and sometimes, as co-owners or landlords, creating the right kinds of spaces in our town centres and facilitating or providing the right environment for a return to vibrant life.

Let us be in no doubt: this is going to be a big ask and a difficult task, because the covid crisis and the resulting closures have accelerated a number of trends that were already under way. There will be more online shopping relative to shopping in shops, even after we get some return to normal and people can get out more and more shops can open. People will need to be tempted back to the restaurants and the cafés. We will need to work carefully with the businesses that own and run the shops and manage the cafés and restaurants to make sure that government, where it can, assists them and allows for the adaptation and development of town and village centres so that they can flourish again, with probably a different mix of services and businesses from that which preceded the covid crisis.

For example, as councils are usually the highways authority and they control access to town or village centres, surely the first thing they need to do is to review that access. A lot of families are going to need the car for elderly people, for children or because of the distance they are from the town centre in order to get there in the first place. They may need the car because if they are buying too much shopping to carry easily, they will need the boot to take the shopping back home. We need to make sure that car access is permitted. That requires looking at junctions to smooth them and make them safer, but also to improve the safe flow of traffic. I was pleased to hear the Secretary of State mention that there will be money for bridges, because quite often impediments to getting into towns are created by railway lines and rivers, and we may need more bridging capacity. I hope that the Government will look particularly at light-controlled junctions, because those with the wrong phasing can be clumsy and impede progress for people into town, city and village centres.

Councils often either own the parking provision or are important in making sure that it is adequate, and they sometimes regulate the car parks. I therefore hope that they will understand that in order to tempt people back into these centres to turn them back into the vibrant spaces we want, there may need to be a discount or a generous offer, certainly in the early days, to give people the idea that it is safe to go back into the town, that they are wanted there, and that they can then park for long enough. Increasingly, visits to our towns and shopping centres will not just be for be an hour or so to go and do a bit of quick shopping—people will want to sit down and have a coffee or lunch. They may want to take advantage of some of the services in the town centre, as well as actually buying physical goods. They may wish to enjoy the experience of lingering a bit longer in the shops, having been denied that for so long. I hope councils will look carefully at parking arrangements, and be generous.

I hope planning authorities will look carefully at flexibility so that owners, who may include the councils themselves, are allowed to carry out sensible plans for optimising the use of the building. The Secretary of State has been doing a lot of work on ensuring that planning restrictions and designations do not get in the way of sensible flexibility. Indeed, we will need plenty of flexibility and imagination, because a number of businesses that operated in town and city centres a year or more ago will not be available.

A great number of large chains of shops have gone through receivership or made major reductions, having come to the conclusion, one way or another, that they want fewer physical stores. Even if they have a good online offer, which will work with their favoured locations, we will see a lot of those chains retreat from high streets and shopping centres. I also fear that, wherever possible, a lot of small shops may need a friendly arm around them from the council and the Government, as otherwise we could lose a lot of capacity in the small shop area.

I trust that councils and the Government will work to make the situation as attractive as possible. A bit of money may need to be spent on beautifying towns and village centres, and ensuring they are in good order to welcome people back. Councils often have town or shopping centre managers, who need to be given backing in order to come up with imaginative solutions.

This huge task is in everybody’s interests, including shoppers, landlords, employees and the councils. Above all, councils need to help the Government to rebuild the tax base of our towns, cities and village centres, and ensure that there will be that flow of business revenue in future—not just business rates, but the trading revenues that the national taxation system can collect and reroute to local government. Without prosperity there is not sufficient money for great public services, and councils must be part of the process through which that prosperity is rebuilt. I thank the Secretary of State for the help he has offered local councils. I urge him to please be generous on social care, and to do everything he can to promote the recovery we desperately need.

John Redwood (Wokingham) (Con): Will the Secretary of State work with fish and general food retailers to promote and sell more of our great fish and other food products to domestic consumers? Will that in mind, will he urgently make grants available to expand cleansing facilities for shellfish, because we will need them for the domestic market?

The Secretary of State for Environment, Food and Rural Affairs
(George Eustice): I very much agree with my right hon. Friend. It is important that we build domestic demand. Indeed, many fish processors say that demand in the European Union is flat anyway because of the coronavirus and the lockdown, while UK retail demand remains quite buoyant for some species, although sadly not for all—in particular, the shellfish sector is quite reliant on export trade.

He is right that we should do more to promote fish, and we are working on a project with Seafish that the Government will co-fund to help build demand in exactly the way he outlines.