Budget Resolutions and Economic Situation
It is a pleasure to follow the hon. Member for Tunbridge Wells (Mike Martin). Perhaps because of the time limit, he did not dwell on the dismal economic inheritance that the Government were left by the Conservatives, which we are still having to contend with—huge national debt, public services starved of investment, and dismal levels of productivity and growth. It is encouraging that we are the joint fastest-growing economy in the G7, according to the OECD; that the IMF has lauded this Government’s efforts to tackle the national debt; and that unemployment is down. But the Chancellor is right that, with the war between Iran and the US driving economic uncertainty and pushing up inflation, there is still much more to do to help family finances and tackle more of the long-term challenges our country faces. I welcome, in particular, the Budget’s focus on the cost of living and the support for families with their energy bills. One of the most pressing long-term challenges that our country faces is how ambitious we want to be in resetting our relationship with our European allies. Made in Europe is the canary in the coalmine—the warning that the more distant we get from Europe, the more vulnerable British jobs dependent on European export orders will become. In the European Union our voices would be louder, our reach would go further and our economic security would be more assured. I recognise that my constituents will want to know the costs as well as the benefits of rejoining, so I very much welcome the Government’s appetite to have that honest debate. This time, however, there should be a plan B. An “all or nothing” choice to go in or not would be even more irresponsible than the Cameroons’ failure to prepare for the possibility of exit a decade ago. So the reset must deliver more. Greater access to the single market, of the sort the Swiss have, and a uniquely British deal, but one recognisable to our allies in Europe, would bring substantial economic gains, albeit not the full benefits of rejoining. On some of the specific measures in the Budget, I welcome very much the focus on small businesses and the sensible measures that the Chancellor set out, but we need to go further: to offer better access to capital, to help small businesses find new export markets, and to explore offering tax relief to help SMEs hire those who are not in education, employment or training.<span id="391" class="column-number" data-column-number="391"></span> Securing affordable finance to grow a small business remains significantly difficult for many firms. It is a sustained market failure, with a gap of up to £4 billion holding back growth, and it is particularly acute for businesses outside the south-east, and for women, disabled and ethnic minority entrepreneurs. That market failure is made even more acute by high-cost credit firms offering easy-to-get loans without real affordability checks or clarity on annual interest rates, and often those who broker such loans are not open about the commission they charge. This is the payday lending scandal over again, with entrepreneurs and small-business owners being exploited. The further investment announced for the British Business Bank is welcome, but it needs to drive a sustained expansion of community banks, or community development finance institutions. They must build capacity jointly with big banks such as Santander, Barclays and HSBC, which invest in community banks in the US, but as yet not in the UK. There is a neglected sector of the business community that exists not to make a profit for shareholders but to serve a social purpose, and it is crucial to delivering sustainable growth in every postcode. Those co-operative and mutual businesses do not charge the highest prices and they often cannot secure traditional bank finance, but they exist to achieve social goals for the communities in which they operate.