The Economy and Work

Part of Debate on the Address – in the House of Commons at 1:23 pm on 26th May 2016.

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Photo of George Osborne George Osborne Chancellor of the Exchequer and First Secretary of State 1:23 pm, 26th May 2016

I personally looked closely at this proposal, and it would cost more than £3 billion a year. It is a very expensive tax reduction, only a small proportion of which would go to the steel industry and none of which would go to the steel industry in Wales, where rates are devolved to the Welsh Government. That is why we have not taken that step. We have done other things to reduce business rates for small businesses and changed the uprating of business rates for all firms, including large industrial firms, to the consumer prices index, which will bring a massive saving over many years, but I judged that the hon. Lady’s proposal to help the steel industry was a sledgehammer and that only a small amount would get to the steel industry. It is better to use other forms of direct support for the industry. That is why we took the decision we did in the Budget. We thought there were better ways of helping.

The economic reforms in the Queen’s Speech continue what we are trying to do to improve the productivity growth of the British economy so that Britain, unlike many other advanced western economies, sees its living standards not stall but continue to rise. That is why we have increased expenditure on transport infrastructure, even in straitened times, and many projects, such as Crossrail, are now close to completion. That is why we introduced the apprenticeship levy—to drive up skills—accepting that low skills had been an endemic problem in the British economy for many decades; and that is why, in part, we introduced a national living wage—not just as a measure of social justice but to tackle low pay and drive up productivity in the workforce.

We will not rest there. The Queen’s Speech sets out a raft of other things. Measures in the Finance Bill will continue to make work pay by raising tax thresholds, helping 20 million people with an income tax cut and taking 4 million of the lowest-paid out of tax altogether. We are also making big changes in corporate taxation by closing loopholes, restricting interest relief and preventing the diverting of profits, while reducing rates of business tax to ensure that we remain the most competitive place in the world to do business.

The digital economy Bill will ensure that Britain remains at the forefront of the information revolution and provide the broadband network that is the equivalent of the canals, railways and motorways of the past that previous generations built for us. That is why, as mentioned in the Queen’s Speech, we are introducing the legal right for anyone to request a 10 megabit connection and encouraging more private investment into this vital artery of the modern economy; and why we are making sure that Britain is at the forefront in the revolution in driverless cars.

We are boosting competition with the better markets Bill and putting our new National Infrastructure Commission on a permanent statutory footing, for which people in both political parties have been calling for decades. It will now be one of the permanent fixtures of our country and has already made recommendations, under the excellent leadership of Lord Adonis, to improve transport connections in London, with Crossrail 2; to improve connections in the northern powerhouse and across the Pennines; and to plan for the future of our energy supplies by being able to store energy. All those recommendations, accepted by the Government, are now in the Queen’s Speech. I am also delighted that we have reached an agreement with Sadiq Khan, the Mayor of London, that Andrew Adonis will help develop the Crossrail 2 proposal, which is vital for our capital.