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Private Sector Growth Trends

Volume 518: debated on Tuesday 16 November 2010

12. What assessment he has made of the effect on the economy of recent trends in growth in the private sector. (23975)

This Government have been determined to show that Britain is back open for business, and gross domestic product growth has been strong over the past two quarters. That growth has been driven largely by the private sector. The Office for Budget Responsibility, which this Government established, is responsible for producing independent economic and fiscal forecasts, and the Chancellor has asked the OBR to publish a new forecast on 29 November. That forecast will incorporate the OBR’s assessment of the effect on the economy of recent trends of growth in the private sector.

Does my hon. Friend agree that the hundreds and thousands of new jobs that have been created by the private sector in recent months make the outlook pretty positive? What encouragement would she give to budding young entrepreneurs in Yorkshire in existing businesses who are thinking of taking on a new employee?

My hon. Friend is right. In quarter two alone, private sector employment grew by 308,000. I believe that many people in the country want not just to take jobs, but to create them. I would encourage them to get on with it, and to pursue their dreams and aspirations. They will have a Government behind them who are giving them a national insurance holiday for the jobs that they will create, and who are determined to support them by keeping corporation tax rates low when they are successful.

Given that Government plans to cut half a million public sector jobs are expected to lead to the cutting of a further 1 million private sector jobs, does the Minister accept that it would be more effective to reduce the deficit in three ways—through progressive taxation, through economic growth and through savings—than simply to throw millions of people on to the dole and whole communities into poverty?

The hon. Gentleman seems to have managed to get from a reduction of half a million in the public sector head count to millions on the dole. The number that he cited is in the independent report from the Office for Budget Responsibility, which was published after our emergency Budget. Although the report showed that there would be a reduction in the public sector head count of about 490,000, it also showed—and I assume that the hon. Gentleman accepts all of it—that there would be an increase in employment of 1.6 million, and that, year on year, there would be reductions in unemployment and increases in employment. If he accepts the figure of half a million, does he also accept those figures?

I congratulate the Government on extending the enterprise finance guarantee scheme, but I note that it is closed to companies that export because of our over-zealous application of European Union state aid rules. Can my hon. Friend update the House on any plans that the Government have to overcome that obstacle to the achievement of our exporters’ growth potential?

We are examining ways in which we can help our UK companies to export more easily. The Prime Minister and the Chancellor have already led delegations to two key markets, China and India, where we hope that we can export more. That is critical if we are to put our economy back on its feet and it stands alongside the measures that we are taking to support companies creating jobs here, and the measures that we are taking to encourage investment in our country.