I beg to move,
That this House has considered Government support for business.
It is a pleasure to hold this debate under your chairmanship, Mr Bone. I declare an interest as a former member of the boards of Sky and Just Eat. I also recently visited the US on an all-party parliamentary group visit in the company of British-based space businesses.
The timing of the debate is auspicious. It falls in the narrow window of time during which we will decide how to make our way in the world, liberated from the chains and anchors of a protectionist trading bloc that has often poorly served the entrepreneurial and fast-growing nature of the businesses with which the United Kingdom is blessed. The good ship GB is tugging at its moorings with upward buoyancy and a new captain, my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy, standing astride its helm. Like my hon. Friend the Minister for Business and Industry, who is in his place, the Secretary of State has personal roots that stretch beyond these shores into the overseas markets that represent an outsized opportunity to create growth and employment for generations to come.
To a degree, we have the wind at our backs. Our exports are growing. We are the world’s 10th largest exporter, despite not ranking in the top 20 most populous countries. Our economy has grown for nine straight years. We are Europe’s leading destination for foreign direct investment, attracting more capital than France and Germany put together. But we must not be blind to the challenges. We are approaching the end of a decade-long recovery cycle. Globally, protectionist forces are in the ascendancy. We must not repeat the mistakes of growth built on the shaky foundations of too much debt or imported cheap labour.
Our natural advantages as a location to start, grow and run a business are immense: we have a world-class legal system with a strong respect for the rule of law; we sit between the Asian and American time zones; we have a flexible and educated workforce; and, of course, English is our own, but increasingly the world’s, language. In fact, 20% of the world’s population of 1.2 billion people now speak English. There are more English speakers in China than people in England. English is the official language of the European Union, the United Nations, the African Union and the Association of Southeast Asian Nations. The world is pregnant with opportunity, so what support does business need from the Government?
In my experience, business needs the Government to do three things: to facilitate access to markets for our products and services; to remove points of friction and barriers to doing business; and to provide the right fiscal framework. I spoke recently in the global Britain debate—as did you, Mr Bone—on facilitating access to markets. I talked about the opportunity to help the 90% of British firms that do not export to do so through better market access, more boots on the ground and having more of Her Majesty’s trade commissioners, and by expanding the export credit guarantee scheme and getting the Foreign and Commonwealth Office and our aid policy to support British businesses.
Rather than revisit that point, I will turn to my second point about the important role that the Government can play in removing points of friction and knocking down barriers to doing business. The only way to truly level up the whole of the United Kingdom is with an enterprise-led renaissance. It is only business that will create the real jobs, opportunities and wealth that will make our future school and university leavers look askance at the idea of ever leaving our great northern cities to move south. Investment in infrastructure can provide the connective tissue, but it is business that fires the neurons between the nodes and provides a two-way flow of activity, motion, growth and employment.
There is no more productive and supportive infrastructure for small businesses than making gigabit broadband a reality by 2025, so I welcome the former Chancellor’s commitment of £5 billion for that purpose. We must rapidly turn plans into action and promises into reality. There is no time to waste, with just under 50 months to go and a huge amount of planning, procurement, construction and connection to be done. I strongly welcome the decision by West Sussex County Council last week to commit funding to projects under its full fibre programme and to shift that to the next phase of delivery for businesses across West Sussex.
My hon. Friend the Minister shares my enthusiasm for reducing the burden of regulation on small business. I do not know how familiar he is with the Better Regulation Executive within his Department, but this is the perfect time to give that initiative a much-needed boost. In a measure that is bound to prove popular with its members, he should send it on a round-the-world fact-finding trip to see the excellent work that is being done in New Zealand, Australia, the US, Singapore and, although it pains me to say it, France.
I congratulate the Minister on his new business support campaign to bring all the support together in one place at businesssupport.gov.uk, which is just the sort of practical measure that business needs. I encourage the Government to go further and to look again at a merger between Her Majesty’s Revenue and Customs and Companies House to give business a single online identity and a true one-stop shop.
There is also room for a modern industrial policy that is as much about knocking down barriers to scaling fast as it is about picking winners. It should focus on a small set of opportunities, each capable of spawning multibillion-pound industries, and making sure that when we get behind something, we align everyone behind it, from No. 10 down.
I commend the support that the Minister’s Department is already giving to genomics, artificial intelligence, space, fusion, zero-emission mobility and quantum computing. With the National Physical Laboratory, the Stevenage Bioscience Catalyst, the Faraday Institution and the Culham Centre for Fusion Energy, it is no exaggeration to say that the UK is genuinely world-leading in each of those areas. UK-based companies are at the heart of the technology that the Solar Orbiter satellite probe, which blasted off into space last month, will carry all the way to the sun. When quantum physicists the world over want lasers with the purest light, they come here.
But others are catching up fast. It is equally true to say that the next 24 months are critical and will determine whether we succeed or the opportunity is lost to us forever. As the UK is such an attractive place to do business, we should be competitive, but have the self-confidence not to compete on always having the lowest rate of tax. As those of us who have lived the reality of business know, the burden of tax is about much more than the rate; it is about complexity, certainty and the approach to compliance.
There is an opportunity to unleash further potential from Britain’s businesses. The World Bank ranks us eighth in the world for ease of doing business, but only 27th for ease of paying taxes. How have we managed to create, but not to have solved, such complexity? To simplify it, we should tax an enterprise’s profits, not its inputs. To use a baking metaphor, we should tax the cake, not the raisins, flour and eggs.
There is an increasing recognition across the House that the current structure of business rates is a burden, particularly for small enterprises. It taxes businesses before they have had a chance to make their first pound of turnover, and penalises those that remain anchored in their local communities, such as on high streets in the small market towns of Arundel, Hurstpierpoint, Storrington and Petworth in my constituency. That has rightly been recognised by a series of reliefs for the smallest and other particular types of business, but I welcome the commitment to a fundamental review. I encourage the Minister to be a radical and uninhibited voice for business in that review, as I shall be. It is my belief that in the 21st century huge benefits would flow from unifying the income tax and national insurance regimes and from clarifying once and for all the ambiguities that lie around employment status. Perhaps the Minister will raise that with the Chancellor as well.
This is a critical subject at a critical time. We may never have such a window of opportunity again. The business leaders and entrepreneurs to whom I speak every day have placed their trust in us. We could be at the start of a new renaissance of British businesses seizing and leading in all the sectors that will define the economy in the 21st century; of knocking down barriers to enterprise and inspiring a new generation of entrepreneurs in every corner of the country and from every country of the globe to base themselves here; of rekindling the swashbuckling spirit and appetite for risk that saw our ancestors sail over the edge of the oceans in pursuit of profits from new markets. Or we could fail. We could be too timid in our ambition, too encumbered in our thinking and too slow to seize the opportunity. We must be the change we wish to see. Now is the time. The opportunities are tantalising and tangible, and they could be ours for the taking.