Priti Patel is an elected Member of the Conservative Party Board, the 1922 Committee’s Executive and the Public Administration Select Committee. She is also a member of the Party’s Policy Board and MP for Witham.
The Autumn Statement earlier this month and the economic data from the Office of Budget Responsibility prove the success of the Government’s economic policies. Not only did the positive economic data on jobs and growth – 1.4 million new private sector jobs, the number of people in work reaching 30 million and growth forecast to rise to 2.4 percent next year – expose the shallowness of Labour’s scaremongering on the economy, it also set out a compelling vision for the future of Britain for Britain beyond the next election, and clearly defined the economic priorities of a future majority Conservative Government. Conservative policies to curb Government spending and encourage private sector economic growth are making a positive difference to the economy, and growth and jobs would be compromised by a return to Labour’s big state, big spending approach.
The investment decisions on infrastructure in the Autumn Statement are particularly welcome. On average, every £1 spent on infrastructure construction generates around £2.84 of wider economic benefits. Developing new infrastructure and investing in roads, rail, broadband and energy makes economic sense. It is also vital that we upgrade our infrastructure so that we can support UK businesses, compete internationally, and encourage new inward foreign investment. The World Economic Forum has ranked the UK 24th in the world in terms of the quality of our infrastructure, which is behind our major European competitors, France, Germany and the Netherlands, as well as being below Barbados, Oman and Saudi Arabia.
Under Labour, when the economy was growing, investment in infrastructure faltered and created an “infrastructure deficit”. The Civil Engineering Contractors’ Association has produced a report which highlighted that infrastructure spending fell as a proportion of GDP from 0.8 per cent to 0.5 per cent between 2003 and 2007 and that, had spending kept pace with other leading economies, then GDP could have been five per cent higher over the course of the last decade. The Chancellor’s commitment to ensure that spending on capital as a proportion of GDP will be higher in this decade than over the period that Labour were in government therefore sends out the right signals to investors.
Decisions taken to encourage investment in shale gas will unlock new energy supplies that should help to reduce our dependence on imports, and may have a positive impact on energy bills. The commitment to invest in superfast broadband to enable 95 percent of homes to access these services will transform the way we work and open up new opportunities for businesses. Last week’s horrendous weather also reminded us of the importance of investing in flood defences, and the spending committed in the Autumn Statement will go a long way to protecting homes and businesses.
We would all like to see our infrastructure enhanced immediately, and as a MP I have a list of projects which will benefit my constituents. But developing capital schemes and proposing, planning, consulting, financing and implementing them takes time. So it is welcome to see that the National Infrastructure Plan is listing over 600 projects and programmes to ensure that they are kept on the agenda. It is vital that there is a majority Conservative Government after the next election to take forward these projects, along with many more, as Labour would no doubt have to cut investment in economically productive infrastructure to pay for the bloated benefits and welfare bill it will generate.
The Autumn Statement also contained some very positive outcomes for businesses. As Chair of the All Party Parliamentary Small Shops Group, I have been campaigning hard for the system of business rates to be reformed. In recent years, a growing disconnect has emerged between the amount that is paid in rates and in rents while, for some firms, the cost of rates has surpassed rent as their biggest item of expenditure behind salaries. Business rates in this country now make up the equivalent of around 1.6 percent of GDP, which is three times higher than commercial property taxes in France and five times more than in Germany. The measures announced by the Chancellor to alleviate this burden were a positive step in the right direction.
In the medium and long term, new reforms to the business rates system will need to be considered. But by extending the Small Business Rates Relief Scheme for a further year until April 2015, capping the increase in rates to two per cent, which is lower than the inflation rate, and introducing the reoccupation rate relief to encourage the use of empty retail premises, the Government is yet again showing it is on the side of small businesses. Along with the cut in the small profits rate of corporation tax introduced in the June 2010 Emergency Budget, the measures to cut the burden of national insurance contributions and the reduction in fuel duty we should be proud that Conservative Ministers are keeping the costs of doing business down.
Last week’s Small Business Saturday events up and down the country showed how much affection the public and MPs have for the small firms that give life to our high streets and town centres. In my own constituency, over 80 per cent of local jobs are based in small and medium sized firms and measures to support these firms is an instinctively Conservative approach to take.
While much of the media coverage on the Autumn Statement was rightly focused on the introduction of the welfare spending cap, the reducing deficit and positive headline economic data, the Government’s choices on infrastructure and small business will resonate well with the public. They will also bring lasting economic benefits, new jobs and growth that would not be possible under Labour’s misguided plans.