Wera Hobhouse

I would like to address the barriers that businesses are facing right now that make them not so hopeful about the future. The south-west is home to many innovative businesses that employ local people and generate growth across the region, such as Drift Energy and Luthmore. Based in Bath, Drift Energy is developing a first-of-its-kind sailing vessel that harvests wind energy on the move. This groundbreaking innovator would reduce UK reliance on imported fossil fuels, increase domestic green hydrogen capacity and open new manufacturing and maritime innovation opportunities. CBI Economics has estimated that by 2032, Drift Energy could deliver nearly £200 million in growth through operations in the south-west alone. Luthmore is a south-west business that has developed a first-of-its-kind battery-enabled alternative to the gas combi boiler. It currently employs 42 people—a figure that is forecast to double to 80 within the next nine months, making it a significant local employer. With the right support and conditions, these businesses could generate real growth in postcodes across the south-west. The Government say that they will cut business costs and support innovation, but the measures in this Budget do not go anywhere near far enough in addressing the financial challenges that these businesses face. The Budget fails to address a significant funding gap—the gap between the points at which seed investment funds and venture funds respectively feel comfortable enough to begin investing in a business. As the financial markets continue to suffer, the risk appetite of venture funds decreases, which means that companies must reach a significantly greater maturity before they can be funded from these sources. The innovation loan and grant schemes, which have been separated into regional districts, and agencies such as the clean growth fund were meant to plug that this gap, but they are now approaching investments in a similar vein to commercial venture capital: they are looking for greater and greater reduction of risk. That forces innovative businesses that develop first-of-its-kind technology to seek funds from international sources, often with a requirement for operations to be moved away from the original region. These businesses want to employ local people, but the Budget does not address the failure of Government policy to support businesses to mass-manufacture in Britain. There are no local incentives that would reduce costs and enable them to compete with international manufacturers. British businesses moving abroad is not good growth in every postcode. The Budget leaves the future uncertain for those businesses, making it harder to employ local people, harder to trade with local businesses, and easier to move abroad and ultimately prevent the growth that we all want. I also want to address, very briefly, the unwelcome and short-sighted cuts in the warm homes plan and the boiler upgrade scheme. This decision is of profound concern in respect of not only our climate commitments but the basic health, security and wellbeing of many households across the country. As fossil fuel prices surge, the boiler upgrade scheme is cutting bills for people across the country, employing thousands, and improving the resilience of homes by breaking the link with oil and gas. The boiler upgrade scheme is more than a grant to help households; it is creating a UK industry that can deliver cheaper heating, skilled jobs, greater energy independence—and, yes, growth. I urge the Government to reverse this disastrous decision and immediately restore full funding to our warm home commitments. We all want growth. I have drawn attention to a few things that make growth very difficult for businesses across the south-west and across the country, and I hope that the Government will consider them.