I am grateful for the opportunity to discuss the measures the Government are taking to help people and families who are struggling to make ends meet. No party in the House has a monopoly on compassion. We know that there are problems, and that families and people are struggling, not least because of increases in prices, including global energy prices. The issue is that the Government must tackle those problems with no money, as we were reminded by the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), the former Chief Secretary to the Treasury. We must create a better fiscal position while tackling that difficult problem to ensure that we help people. And we are doing just that. We are cushioning people from the impact of rising prices and protecting the most vulnerable. We are trying to make these big, difficult decisions in as fair a way as possible, to be fair to those who work hard while helping those who fall on hard times.
On that very point, does the Secretary of State agree that food and energy comprise the highest proportion of expenditure for the very poorest—they are escalating out of all proportion—and that he is cutting money for those very people, namely those on benefits? Is not the harsh reality of this Government that they are hurting the poor most because of the bankers’ recklessness?
The picture is rather more complicated than the hon. Gentleman says. We have a range of measures to help the most vulnerable with their energy bills, which I will come to during my speech.
One way to help people is to ensure that work pays. We must ensure that we are creating jobs in the economy and that there are links from benefits into employment. That is rightly one of the Government’s obsessions. We are introducing a range of policies to help people. Interest rates are at record lows. Income tax cuts are making a big difference: this year, 24 million employees will have an income tax cut of £600; next year, the cut will be £700. Some 2.5 million of the lowest paid will be taken out of income tax altogether. The income tax bill for people on the national minimum wage will be cut in half. That is a good record.
It did not take long for someone to mention Europe. The hon. Gentleman will be shocked to hear that, as a Liberal Democrat, I strongly support Britain’s membership of the EU.
The Government are taking other measures. We are cutting fuel duty, we have capped rail fares, and we are helping the most vulnerable with their energy bills. We are extending free nursery provision and helping working parents with child care costs. The Opposition do not like to talk about the Government’s record on jobs. We have helped to create 1 million private sector jobs since we came to power. We have 1 million apprenticeships. That is a record we should be proud of, and one the Labour party was not capable of delivering.
The Secretary of State says he is helping the poorest with their energy bills, yet this is the first time for 30 years that there is no taxpayer-funded energy efficiency scheme. The energy company obligation does not have enough money in it. It is also funded by a levy on everybody’s fuel bills, which is regressive—it pushes more people into fuel poverty than it draws out. When will he put in place measures that will protect the poorest?
My hon. Friend is absolutely right. It is worth reflecting on the Government’s record on jobs. The Opposition do not like to talk about it, but the truth is that, despite the difficult circumstances—despite the Government having no money because we must pay down the deficit, and despite not having the growth that we would like in the world, European or UK economies—we have created jobs. That is a very good record.
Against the glowing backdrop that the Secretary of State paints, why do I now have a food bank in every single village in my constituency when there was only one three years ago? Why has there been a quadrupling of food banks under this Government? His record cannot be that good, given the backdrop of the inexorable rise of food poverty.
People who run food banks are doing an extremely good job and deserve credit for their work. However, it is completely wrong to suggest that there is a statistical link between the Government’s benefit reforms and the provision of food banks. It is good that people are helping others. I hope the hon. Gentleman supports that.
I wish to make progress and to talk about energy and climate change policy. My Department has three major objectives. The Department wants to ensure that energy is as affordable as possible for consumers and business; that we keep the lights on with energy security; and that we decarbonise the power sector. With the Energy Bill, the green deal and many other policies, we have the most coherent energy and climate change policy of any Government in Europe—and indeed of any Government in this country for many, many years. Our approach also tries to maximise the jobs and growth potential from our energy and climate change policies. We also try to ensure that the impact on the bills of consumers and businesses is as low as possible, and we have policies to try to meet the climate change challenge.
The total increase in average global temperatures since we started industrialising is approximately 0.7° Celsius. How much of that is due to carbon emissions and how much is due to the natural warming that was going to take place anyway as the earth came out of a cool period?
I am disappointed that my hon. Friend seeks to deny the science of climate change. He may have heard Sir John Beddington, the Government’s recently retired chief scientist and a very distinguished scientist, say that the science showing climate change was human-made was “unequivocal”. When it comes to science, I like to listen to the experts.
It is important that we gain jobs, especially green jobs, through our investment in low carbon. We also need to ensure that these are profitable enterprises in which people can invest. We need £110 billion of investment in our energy infrastructure over the rest of this decade. That will be in low carbon, in gas and in other energy security measures.
On prices, we have to drive a wedge between the rising global prices and the bills that people have to pay. We also have to rise to the climate change challenge. We need to recognise that the challenge is serious and that—contrary to what my hon. Friend suggests—the science tells us that we have to act.
The Secretary of State talked about investments in our infrastructure. The green investment bank could be fuelling jobs in the green sector if it were also investing in SMEs that are developing and bringing to market technology in this area. Why are the Government failing to deliver on that?
The Government have delivered on the green investment bank. The hon. Lady should know that investment banks are not controlled by Government. They are given a remit to make investments, and the green investment bank is doing so and is extremely effective. Indeed, it is world leading. I am sorry that the hon. Lady is criticising it and I hope that she will look at what it is doing and realise that it is making a big difference. Our performance on green growth and green jobs shows that we are delivering on the coalition agreement promise to build a new economy from the rubble of the old.
We have this massive infrastructure opportunity because nearly a quarter of our capacity will close over the next decade. We have to replace that to keep the lights on, but at the same time we can begin, and really go for, the transition to a low-carbon energy economy. We need to do that by investing especially in energy efficiency. I have stressed that from day one as Secretary of State. We have several policies already, such as the green deal and the energy company obligation, but in the last year we have developed some very interesting proposals on electricity demand reduction. We will publish the response to our consultation on that shortly.
Around 1 million people work in the green economy, and the support that we are giving to clean energy will fuel the rise in the area. Between now and 2020, the support we give to renewables will increase year on year to £7.6 billion—a tripling of the support for renewable energy and a record the Government can be proud of. We already have 110,00 jobs in the renewable energy sector directly, and 160,000 jobs in the supply chain. By 2020, we believe the sector will have more than 400,000 jobs.
We also have the prospect of a new generation of nuclear power stations. I am engaged in discussions with EDF for a proposed nuclear reactor at Hinkley Point C. If we reach agreement, it will result in more than 5,500 jobs during construction, more than 1,000 ongoing jobs at Hinkley Point C and more in the supply chain. Our proposals on carbon capture and storage—we have two preferred bidders, Peterhead in Aberdeenshire and White Rose in Yorkshire—will also result in lots of jobs and deliver a pathway to commercial CCS in the next decade, which will be very important in meeting our climate change targets.
We sometimes forget the oil and gas sector, perhaps because it is not as green as renewables, nuclear and CCS, but it will be essential as we make the transition from a fossil-fuel economy to a low-carbon economy. We will still need an awful lot of gas and oil during that process and in the next few decades. I am delighted to report to the House that investment in the North sea is booming. We are seeing record levels of investment in the North sea, which is good for our energy security as we do not have to import so much gas from other parts of the world. I hope that right hon. and hon. Members will welcome that.
I have made it clear that we will also support the development of shale gas. If it has potential—and we do not know that yet—it could be beneficial, especially to our energy security. We are going to need gas for many decades. It replaces coal, so it can help us to meet our climate change targets. At the moment, we have to import increasing amounts as the amount coming from the North sea is declining. If we can exploit shale gas commercially, that will make sense, and I hope that we can reach agreement on that. We are going about this in a way that is designed to keep the public with us. In other countries that have rushed headlong into it, the public have reacted very badly, leading to moratoriums and bans. We want to ensure that we think things through carefully, which will help us do it properly.
The oil and gas industry is well represented in the Heath business and science park in my constituency, which is one of the most important employment sites. If the Secretary of State is keen to promote jobs, why does his Department still have a planning recommendation before it that it has had since Easter? It is very simple, involving just the removal of an electricity line, but the delay is holding up investment, jobs and housing. Why has he not made a decision on that, given that he has had the papers since Easter?
The House will not be surprised to learn that I am not aware of that particular planning application. Of course I will go away, look at it and write to the hon. Gentleman.
All our policies, whether on energy efficiency, renewables, new nuclear, CCS or oil and gas, add up to the proposition that my Department is about growth. We are seeing a lot of jobs created and we will see more in the future. However, I am also concerned about the bills and the cost of energy, and how those affect our constituents and industry. We have seen global gas prices increase dramatically. UK wholesale gas prices were 50% higher in the five years to 2011 than in the previous five, and they have continued to rise since then. That is the global context. People talk about the reduced price of gas in north America, but they forget to look at the price of gas in other markets, which has gone up significantly.
We need to provide a cushion or wedge between the prices going up in global markets and the bills that our constituents have to pay, and we have several policies to help. We have direct payments, including the winter fuel payment, the cold weather payment and the warm home discount. This last goes to 2 million of the lowest income households in the UK, taking £130 directly off their bills and helping 1 million of the poorest pensioners. We are trying to promote greater competition in the retail markets through our proposals on tariff reform and the work we are doing on collective switching. We are driving competition in the retail market, which is already having an effect for those who have benefited from the collective switching.
Through the Energy Bill, we are trying to ensure that we achieve wholesale market reform, and this will no doubt be debated on Report and in the other place. We welcome the fact that Ofgem is consulting on proposals to improve liquidity in the wholesale market. We look forward to its conclusions, and they will play a part in ensuring that competition can drive lower prices. When we talk about the cushion and the wedge between the global prices and the bills that people actually pay, energy efficiency is at the heart of the solution, whether in product standards, the green deal or energy company obligation. I am pleased that we are already seeing real interest in the green deal, and a huge number of assessments have already taken place.
I am pleased to hear that my right hon. Friend is interested in promoting competition, particularly in the retail and wholesale markets. Does he agree that there may also be significant opportunities, not just in the energy sector, but more broadly across the other utility sectors too, in reducing the infrastructure costs of the transmission network—be they wires or pipes for water, energy or whatever—using investment more effectively and efficiently and trying to regulate down those costs in a much more determined fashion?
I am sure my hon. Friend is right. In a previous incarnation, I was Minister with responsibility for competition and was extremely keen to make sure that the UK had the most robust and rigorous competition regime in the world. The changes going through this House have delivered on that. I am not an expert on every single utility sector, so I will be careful about making any particular points about the water industry, or any other industry, but I am sure he is right that competition has an important role to play.
The impact of our climate change and energy policies has been to reduce household bills by 5%. By 2020, bills will be 11% less than they otherwise would have been. We know, of course, that energy prices are going up globally, but we have the policies to try to cushion people. As a result, people will pay lower bills than they otherwise would have done.
I thank the right hon. Gentleman for giving way, and I will not abuse his graciousness any more. Against that backdrop, why is it that independent analysis from the Fuel Poverty Advisory Group shows that an additional 300,000 people went into fuel poverty last year, and the Hills review suggests that 200,000 will be driven further into fuel poverty in the next four years? Against the glowing backdrop he has set out, why is that happening?
I agree with the hon. Gentleman that fuel poverty is a real problem. [Interruption.] Opposition Members, from a sedentary position, say that the number of those facing fuel poverty is going up. Indeed, with global gas prices going up we have a challenge to keep bearing down on fuel poverty, but we are completely committed to doing that. Later this year we will produce a fuel poverty strategy, the first to be produced for more than a dozen years. One reason why he can quote the Hills review is that the Government commissioned that review to look into the exact nature of fuel poverty to ensure that it is being measured correctly. It shows that the previous Government could not even measure fuel poverty correctly. We will ensure that we measure it correctly, so that our policies can be targeted far more effectively to help the fuel poor. Opposition Members are not the only people in this House who are compassionate about the fuel poor.
It is important that we are concerned about the high cost of energy for all businesses, and energy-intensive industries in particular. That has to come through greater energy efficiency and we have a number of programmes to deliver that. There also has to be compensation and extra help for energy-intensive industries. I am grateful for the work and co-operation of the Treasury and the Department for Business, Innovation and Skills to ensure that we have a package to address the problem, particularly for energy-intensive industries. We have not had one before.
The right hon. Gentleman was critical of the previous Government’s definition of fuel poverty and praised Professor Hills’ proposals. The problem is that no one can understand them. Will he please explain to the House the Hills’ definition of fuel poverty?
The interesting thing is that that definition has two parts: it tries to measure overall fuel poverty in terms of energy efficiency; and, most importantly—it has not been done before—it looks at the depth of fuel poverty. If we consider not just fuel poverty statistics, but income poverty statistics too, we should be most concerned about those in poverty year in, year out—the grinding fuel and income poverty. Unless we have measures that show what is happening to deep fuel poverty and allow us to attack it, we will not be able to deal with fuel poverty. Our measures are more effective and more sophisticated than anything produced by the Labour party.
We must ensure that business energy costs are, through climate change policies, similar across the EU and the globe. One measure that the UK and the EU have pushed is the European carbon market, which is often known as the EU ETS. It is important that the EU ETS carbon price provides incentives and signals to the markets for investment in low carbon, and that it creates a level playing field for industries across the EU. I regret that the vote in the European Parliament on the back-loading proposals was lost by 19 votes. The proposals were part of the reform of the EU ETS. We need to do a lot better. I hope that the ENVI Committee in the European Parliament can come forward with another package so that we can reform the carbon market. That is in everyone’s interest, not just on climate change, but to ensure that we have competitive industries on a level playing field across the European Union.
I want to end by talking briefly about climate change. Some will say that we should put off action on climate change until we get to better financial times, and some will say that we should not be looking at this issue at the moment given our financial and economic problems. I reject those arguments completely. The science of climate change is unequivocal: we have to act now and we should have acted before. That is why we need to reform the EU ETS. It is about not just the back-loading proposals, but structural reform. I am working with fellow EU Ministers and have set up a like-minded group—the Green Growth group—to try to build a coalition at the European Council, so that we can achieve these vital reforms on climate change.
There has been a big debate during the passage of the Energy Bill—a carry-over Bill in the Queen’s Speech—on the proposal for a decarbonisation target, which has a role to play in tackling climate change. Of the general election manifestos from the Liberal Democrats, the Conservatives, the Labour party and even the Green party, guess how many mentioned a decarbonisation target for the power sector? Not a single one. When we published the draft Energy Bill in May 2012, it did not contain a decarbonisation target, and there was no decarbonisation target promised in the coalition agreement. Now we have one in the Bill. The Government have looked at the issue and put the target in the Bill. We are the first Government ever to do that, and it is a very strong move. We are an early mover. The Opposition want to carp at one or two details, but I am afraid that they fail to acknowledge what we have done and what we have delivered.
Does my right hon. Friend agree that, whether or not people are sceptical about climate change, reducing our reliance on fossil fuels and carbon is equally as important to energy security as it is to climate change? This policy is very important in making sure that we have energy security in this country.
My hon. Friend is absolutely spot on. I believe that the climate change science is unambiguous and that we have to act on that basis, but he is absolutely right: there are other reasons to invest in low carbon and energy efficiency. It is important that this country takes a lead on climate change by working with EU colleagues to reform the EU ETS and the European carbon market, by including the decarbonisation target in the Energy Bill, which we have done, and by taking various other measures. Other countries are looking at our measures on electricity market reform and our green deal because they believe that we are leading the way.
All those measures are critical in the run-up to 2015, which is when the climate change talks will take place in France, probably in Paris. During the climate change talks in Durban in 2011 the world agreed to sign a legally binding global treaty at the climate change talks in 2015. This will be a critical moment in the global battle against climate change. We need to ensure that our international legal obligations apply to everyone in the world, not just to Europe or the Kyoto protocol nations. Having agreed in Durban to do that in 2015, we now have to prepare the way to make it a success. Our work here and with the EU is critical because it will enable us to sign a treaty in 2015.
Whether we are trying to keep down costs for people or creating jobs, the package of measures introduced by the Government—not just my Department or the Department for Communities and Local Government, overseen by my right hon. Friend the Secretary of State—are focused on helping people in our country. On the longer-term challenges, we have rejected short-term fixes and the siren calls of vested interests. If we are interested in building a new and sustainable economy, we must make it a low-carbon economy and consider the long-term challenges.
I am grateful to the Opposition for how they have debated energy policy over recent months, particularly on the Energy Bill. I have seen a desire to build a consensus, which is really important, because investment to tackle our energy challenges and climate change are, by their very nature, long term, and the investment framework that one builds needs to span not just one Parliament or one Government, but several Parliaments and Governments into the foreseeable future. Building a consensus is critical for successful policies that are as cheap and effective as possible. I look forward to hearing what the right hon. Member for Don Valley (Caroline Flint) has to say. I am sure that she wants to add to that consensus.
I beg to move an amendment. At the end of the motion add:
‘but believe that the Gracious Speech offers no answers for squeezed households facing a cost of living crisis; regret that the economy is flatlining, unemployment is rising, borrowing is set to be £245 billion more than planned and the Office of Budget Responsibility has confirmed that by 2015 people will be worse off than they were in 2010; and call on your Government to take real action to get people back into employment, build more affordable homes, tackle rising energy and water bills, tackle the growing cost of getting to work and instability in private sector housing rents and tenancies and end extortionate letting agents’ fees and charges.’.
We debate the Queen’s Speech at a time of crisis for millions of people in our country. This was a golden opportunity for the Government to show that they were in touch with the nation’s concerns and that they would help with the rising cost of living and offer hope to families who are seeing their dreams evaporating with every year that passes. But this Queen’s Speech will not take the pressure off the squeezed middle, lessen the anger of commuters powerless to halt the relentless rise of rail fares or address the choice between heating and eating for our most vulnerable senior citizens. For the shop worker whose hours have been cut, putting them with the 1.5 million people who are part-time through no choice of their own, for the middle manager workless for the first time at 50, for the design graduate offered only unpaid internships and for the parents whose child is still living with them at an age when they should have a home of their own, this Queen’s Speech has only confirmed what they dreaded: jobs and growth will have to wait and living standards will continue to fall.
While the wealthiest 1% will see their earnings rise with the Chancellor’s spring bonus, everyone else will have to settle for less. They will be expected to make ends meet, cut corners, postpone the holiday and perhaps join the 5 million families who, according to Which?, use credit or savings to pay for food. The Queen’s Speech is not just a missed opportunity, but a denial of the power of Government to change lives for the better. I believe that Government can stimulate jobs, foster growth, encourage investment and skill a work force for today’s jobs and those of tomorrow, but not if the golden rule, at every turn, is to cut the deficit first, whatever the impact, cost and evidence.
Of course, the right hon. Lady is right that the employment market is tough for many people, but in these difficult times, will she welcome the fact that there are now 750,000 more people in work than when her Government left office and that the UK’s overall employment rate is growing at twice the rate of the United States’ and is the fastest growing of any G7 country? That is not a bad record in tough times.
The Prime Minister promised change, but things have got worse, not better. He inherited an economy in which growth had returned, inflation was low, unemployment was falling and borrowing was lower than forecast. Today the economy is still flatlining, with more people out of work than when he became Prime Minister, the slowest economic recovery for more than 100 years, prices rising faster than earnings and real wages down £1,700 since 2010, while energy bills, train fares and the cost of a weekly shop have spiralled out of control.
My right hon. Friend is right to mention train fares. The Government talk a lot about reducing the cap to 1%, but is not the truth that they have removed the ban on so-called flexibility, meaning that train companies can now increase their ticket prices by as much as 5% above the retail prices index, which was something the Labour Government removed?
Will my right hon. Friend add to her list the trap that many of my constituents find themselves in, not earning an £81,000 salary and unable to afford the £17,000 deposit on an average-priced property—generation rent trapped in an unregulated private rented sector? What comfort are the Government giving them?
They are offering them no comfort, and I will address that issue later, as too will my right hon. Friend the Member for Leeds Central (Hilary Benn).
Even by the Government’s own tests, they have failed to face up to the stark reality that whatever the intention, after all the cuts, pain and hardship, the plan is not working. The credit rating test was to ensure our triple A status, but that has been downgraded by not one, but two agencies. The borrowing test was to eliminate the deficit by the election, but that is £245 billion off course. Struggling families, pensioners and businesses cannot afford another two years of stagnation, so the challenge for the Government in this Queen’s Speech was to get our economy back on track, get people back to work and stop the slide in people’s living standards.
Will the right hon. Lady tell us something that the Labour Front-Bench team have been reluctant to tell us, which is how much higher borrowing would be if Labour was in charge and what effect that might have on interest rates?
I am afraid to say that the Chancellor’s spending cuts and tax rises, which went too deep, too fast, have left our economy flatlining. As I said, the Government are borrowing £245 billion more than they planned. [Hon. Members: “Answer the question!”] I am going to. That is why we have called for infrastructure investment to be brought forward and for a temporary cut in VAT as part of Labour’s five-point plan for jobs and growth. These measures would lead to a short-term rise in borrowing, but getting growth and confidence back into the economy from a boost such as the VAT cut and investment such as in the building of affordable homes would increase our tax revenues, help reduce the welfare bill and see borrowing fall in the medium term.
Does my right hon. Friend agree that that much-needed boost to the economy is precisely the message of encouragement that young people in this country need? It is a damning indictment of the Government’s policies that more than 1 million young people are unemployed.
I want to make some progress, because there are only six minutes per speech, and I am sure that many right hon. and hon. Members want to get in.
Let us take a closer look at the real lives of hard-working Britain. On energy bills, the facts speak for themselves. In just three years, bills have risen by more than £300, and, despite falling between 1997 and 2010, fuel poverty is now increasing sharply. There has been a doubling in the number of pensioners dying from hypothermia compared with five years ago. What have the Government done about it? The Secretary of State mentioned the energy company obligation, the ECO. But less than half the budget of that will go to people in fuel poverty. He has tried to claim credit for the warm home discount, but he will not want to talk about the hundreds of thousands of low-income families with children that are missing out on help. He mentions the green deal, which is going so well that the Government still will not tell us how many people have taken out a package.
But one thing I am sure he does want to talk about is the Prime Minister’s now infamous pledge to force the energy companies by law to put everybody on the cheapest tariff. I will not forget Wednesday 17 October 2012 when the Prime Minister said:
“I can announce…that we will be legislating so that energy companies have to give the lowest tariff to their customers.” —[Official Report, 17 October 2012; Vol. 551, c. 316.]
It sounded great; it is a shame his own Ministers did not know about this announcement until it happened. When the Government finally published their proposals in February, it confirmed what we knew all along; that this was an impossible promise from an out-of-touch Prime Minister making it up as he went along.
You do not have to take my word for it, Mr. Speaker. We can look at the Government’s Energy Bill, which categorically does not require the energy companies to put everybody on the cheapest tariff. All it says in clauses 121 to 124 is that the number of tariffs the energy companies are allowed to offer will be limited and that those tariffs may have to be standardised, and that customers will have to be provided with more information about cheaper deals. If the Secretary of State disagrees, I am more than happy to let him intervene to tell us that all energy companies will be required by law—as the Prime Minister promised—to put everyone on the cheapest tariff, the date on which the switchover will happen, how many of 22 million households will be affected and how much money on average they will save.
My right hon. Friend will be aware of the great potential of smart metering to reduce people’s bills. Is she as disappointed as I am, and the rest of the country, that the Government have now delayed the roll out of smart metering by 12 months?
Yes, further delays to that programme were announced last week. Whether it is smart metering, the green deal or changes to the feed-in tariffs, we have seen one mistake after another and bad handling of what should be very good policies not just for consumers, but for creating jobs and growth in this country.
Curbing the costs of energy for Britain’s households is very important, but the Government have introduced an energy market reform Bill that does nothing to reform the energy market. They have cut winter fuel payments for pensioners, despite promising not to. They have halved the fuel poverty budget while claiming it is bigger and better than ever. They have closed Warm Front, which helped well over 2 million households to insulate their homes. They stand proudly as the first Administration since the 1970s not to have a Government-funded energy efficiency scheme.
If this was our Queen’s Speech, we would be providing real help now for people and reform of the energy market for the long term. Here are three Labour policies that we would have included. [Interruption.] Well, we have been mentioning all these policies for the past year and this is another opportunity to confirm them again. First, elderly customers, who are most vulnerable to the cold weather and most at risk of fuel poverty, are among the least likely to be able to access the cheapest online deals or to switch supplier. We would put that right and put all those over 75 on the cheapest tariff for their gas and electricity. If we did that, as many as 4 million pensioners—including nearly 8,000 in the Secretary of State’s own constituency—could save as much as £200 a year off their bills. [Interruption.] The Minister of State, the right hon. Member for Bexhill and Battle (Gregory Barker), might like to listen, as I am offering him this policy to put in the Energy Bill. The energy companies know that that is our policy and they know that it can be done. The Government can have that policy for free; take it, put it in the Energy Bill and get help to those who need it most.
We also want everyone to benefit from a competitive and more responsible energy market. That means wholesale reform of the way in which energy is bought and sold. At the moment, no one really knows what the true cost of energy is. If energy companies were forced to sell the power they generate into an open and transparent pool, anyone could bid to retail energy.
But it does not stop with energy prices. Let us look at another basic need on which every household relies; water. Ofwat estimates that some 2.2 million households—one in 10—spend more than 5 per cent of their income on water and sewerage. As my hon. Friend the Member for Wakefield (Mary Creagh) has pointed out, despite Labour’s legislation, which allowed for new social tariffs to help people squeezed by rising water bills, the Government have washed their hands of any responsibility and are leaving it to water companies to decide whether to introduce social tariffs. We think that that is a responsibility that the Government should take on and deal with.
I refute that accusation; investment in energy was up, there were more starts in terms of renewables, some of which will be completed under this Government—that is our legacy—and by tackling fuel poverty, the insulation programme through Warm Front and the decent homes programme we helped millions of households.
To answer honestly, I have witnessed things over the past three years that have made me challenge what we need to do for the future in terms of how the energy market works. It is up to all of us to reflect on where we are today and on what has happened in the past three years and try to put it right. That is why we believe that we need to encourage new entrants, increase competition and ease the upward pressure on prices.
One of our other proposals is to deal with Ofgem. Ofgem removed price controls a decade ago, so in the belief that competition had developed sufficiently and that privatisation had delivered a functioning competitive market. I believe it is clear now that that was a mistake. We need to create a tough new regulator that people can trust and ensure that the regulator has the power it needs to protect consumers. That is why we would abolish Ofgem and create a tough new regulator with a statutory duty to monitor the relationship between the prices that energy companies pay for their energy and the bills the public pay and the power to force them to cut prices when wholesale costs fall. We believe that that is very important.
The right hon. Lady has explained to the House the Opposition’s policy to get rid of a regulator and to replace it with another regulator. Given that we need to attract £110 billion of investment in energy to this country, is she aware that one of the things that investors prize about the UK is regulatory stability and certainty? Will her proposal improve that or make it worse?
Investment in the renewables sector in this country has gone down; we are a less attractive place to invest. The Secretary of State makes much of the so-called “decarbonisation target” in the Bill. The truth is that there is no such target. Investors say to me that they need certainty, which is why we need to have strength behind a decarbonisation target to make sure that that investment comes forward.
I also believe that we cannot have a regulator that people do not trust. It has not been doing the job it was asked to do; it is not fit for purpose. To get our energy market and sector into a better place, we need consumers to have confidence in the regulator, which is why it needs to change. There is no point in trying to hold up a regulator that does not command confidence. We need a regulator that does just that and can move us to a better place, where energy has the certainty it needs for investment but also has the confidence of consumers.
That was very good decision by my colleague. Is not the truth that investors see this country as having stable regulation, but that they see it as wide open? That was the way privatisation was set up in the 1980s, so that companies can rip off the public and put bills up on a whim and do not care how they do that as long as they can get away with it. Ofgem has failed continually and it needs to be reformed; my right hon. Friend is absolutely right in what she says.
I thank my hon. Friend for that intervention. The truth is that we do not have a competitive market: six large companies dominate 99% of it, so we have to open it up. We need to make it more dynamic and more transparent, so that the public feel they are paying a fair price for the energy they buy.
No. I will make some progress; I have taken a number of interventions.
I have discussed energy and water, but what about those families who get up to do the right thing and head off to work each day? Among them are hard-working commuters forced to travel at peak time. Often, they have moved a long distance away from their workplace to stand a chance of buying their own home. Their reward for doing the right thing, day in and day out, is season ticket price hikes of up to 9.2%. What understanding have the Government shown them? How about squeezing them further by allowing new “super peak” fares? As my hon. Friend the Member for Garston and Halewood (Maria Eagle) has made clear, if we were in government and if this was our Queen’s Speech, we would put passengers first, not siding with the powerful private train operators. Our consumers Bill would cap fares at no more than 1% above inflation in each year of this Parliament and ban train companies from introducing even higher “super peak” fares.
What we are clear about is that the rail companies must prove themselves when it comes to their franchises being renewed. On my local line—the east coast line—the operator has done a remarkable job. Unlike some of the other operators, it has paid premium payments back into the Government’s coffers to spend on other things. However, we must ensure that each rail company is fit for purpose, and where a company is not doing the job and we need to take action, we can make a decision on a case-by-case basis at the time.
On housing, as my right hon. Friend the Member for Leeds Central will set out in his speech later today, the Government are not just failing to tackle the housing crisis; their policies are making it worse. House building is at its lowest level since the 1920s, annual housing starts are down and housing completions were lower in both years of this Government than in Labour’s last year in power. As a result, more and more people are locked out of home ownership, stuck on local authority waiting lists or forced to live in the private rented sector. Whereas this Government sit back and do nothing, Labour would act now to change the private rented sector so that it works for all—landlords and tenants.
In my constituency, both house prices and private rents went up last year by 8%, which is eight times the rate at which wages rose. It costs £650,000 to buy the average property in my constituency and £800 a week to rent a three-bedroom house, yet the Tory response is to sell off council homes when they become vacant and to put families into bed-and-breakfast accommodation, at a cost of £1 million a year.
My hon. Friend makes some important points. I seem to recall that we were told that the Government’s housing policies would not lead to an increase in private rents, but the opposite has happened. I, too, saw the headline—I think it was in the Evening Standard a few weeks ago—about private rents in London rising eight times more than wages.
If this was our Queen’s Speech, we would have had a housing Bill in it and we would be taking action to encourage landlords to offer families longer tenancies, so that they have security and stability. We would introduce a register of landlords and empower local authorities to strike off rogue elements, and we would end the rip-off fees and charges imposed by letting agents. However, this Queen’s Speech offers nothing to address those concerns. It is a no-answers Queen’s Speech from a tired, failing and increasingly fractious Government.
This Government promised change, but nothing is changing for hard-working Britons. Our country faces big challenges, but this Government and this Queen’s Speech are not equal to the task. The Queen’s Speech fails to provide a reboot for flatline Britain; it fails to address the rising cost of living; and it fails to listen to hard-working people. The big question that those people are asking of Government is: how can they afford to secure a roof over their head, heat their home, feed their family and get to work? However, this Queen’s Speech has no answers for them. The promise is that we will get there in the end, but like so much with this Government, it is wearing thin. Even the Government’s own independent Office for Budget Responsibility is saying that British people will be worse off in 2015 than in 2010.
I do not relish the rising levels of young people out of work, or the months turning into years among the adult jobless. I regret that our economy remains in the doldrums. None of us has all the answers, but our amendment shows that there are ways to help people through these harsh times. At no cost to the Government, we could cap train fares, put the over-75s on the cheapest energy tariff and stop private landlords ripping their tenants off. Labour’s amendment is about what is fair, what is reasonable and what is just, and I commend it to the House.
I support the Gracious Speech and commend the Secretary of State for Energy and Climate Change on the important measures that he has outlined, which will help the hard-working families in my west midlands constituency with the cost of living.
It is the rising cost of global energy that has had such a huge knock-on effect on household bills, not least the cost of travel to work. I therefore wish to speak about the proposed investment in high-speed rail, which will run through my constituency. We will get both the pain and the gain, as the first stop outside London will be Birmingham International, just 38 minutes from Euston. High Speed 2 throws a lifeline to the west midlands, which has been held back by a lack of transport investment down the years.
The principle behind high-speed rail is the lack of capacity on the existing railways. There is already a lack of capacity, which is why freight has had to be moved off the west coast main line, on to the Chiltern line or the congested west midlands road network. That lack of capacity means that I frequently have to stand when travelling at peak times to and from my constituency. Indeed, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) teased me as I read the contents of my red box standing up when I was a Minister, but I reminded him about his note to the effect that there was “no money left” for us when we took power.
The Opposition claim that the Queen’s Speech does nothing to tackle rail fares, but we are about to make a huge investment in rail infrastructure that will create jobs and growth. Without that extra capacity, the fundamental tool to meet rising demand will not exist. With a renaissance in west midlands manufacturing and the success of companies such as Jaguar Land Rover, demand for rail will only increase, so we must have a transport network to match the needs of the 21st century as we compete in the global race for jobs.
I absolutely agree. That is an example to west midlands constituents of the Government’s commitment to growth, jobs and infrastructure, which is essential.
When I drive home up the M40, I frequently see transporter loads of newly made cars from Solihull, representing our export-led recovery, but would it not be so much better if there was capacity on our railways to take that freight straight to Southampton for export? Frequently, the motorway link between the M42, the M40 and the M6 is heavily congested, even with the innovative active traffic management system. There are strategic assets along the length of the M42—the Blythe and Birmingham business parks, Birmingham airport and the national exhibition centre—but what we need is connectivity. The evidence from France is that the towns that really benefited from high-speed rail were those that managed to put such connectivity in place, and we have a Government who are committed to rail infrastructure.
HS2 would also optimise the under-utilised runway capacity at Birmingham airport, which would make the travel time competitive with London’s airports. The runway at Birmingham is being extended to accommodate long-haul traffic, which reflects the preferred destinations in the Indian subcontinent of west midlands manufacturers and exporters and, of course, those of the region’s residents, many of whom have their origins there.
I cannot outline the potential gains of HS2 without touching on the real pain suffered by my constituents whose homes will be blighted by the route. Properties have lost approximately 20% of their value. I say “approximately” because it is actually hard to sell a property at all, given the level of uncertainty. There is a hardship fund, and I have helped many constituents to apply to it, but very few have received help. The blight compensation is to be calculated on a set distance from the rails, which can be harsh on those who are just beyond the eligible distance. This is why I introduced a ten-minute rule Bill calling for the use of noise contours, which might more accurately reflect noise nuisance. I hope that the paving Bill proposed in the Queen’s Speech will contain significant improvements to the compensation package.
I urge the Government to look again at a property bond scheme of the type proposed by Birmingham airport when a second runway was on the cards. A property bond would enable people blighted by HS2 to move on with their lives. The evidence from HS1 is that, if the Government were to buy up their property today, most of it would not lose value once construction was completed and the perceived blight had lifted. There might even be an uplift in value from the proximity to an improved transport network. I urge the Government to continue their efforts to improve and mitigate the impact of HS2. Just today, I have heard that a new tunnel will be constructed under Castle Bromwich in my constituency, but as yet I have had no response to my request for a deep-bore tunnel that would protect the Greenway and villages such as Berkswell and Hampton-in-Arden, as well as keeping the surface around the interchange station free of rigid structures.
The House would expect me, as a former Environment Secretary, to give consideration to the environmental impact of HS2, and of course there will be a loss of green space, but it is also possible to do something really beneficial to the environment through biodiversity offsetting. During my time at the Department for Environment, Food and Rural Affairs, we introduced a tool that allowed us to calculate what had to be done to compensate for the loss of nature where development occurred. With such credits, a big scheme for the restoration of the environment can be achieved either near to or where the loss occurs. For example, the university of Birmingham, in conjunction with the engineers Arup, has come up with a proposal to restore the Tame river valley, which was badly polluted by the industrial heritage of the west midlands. Biodiversity offsetting was one of the key tools in the natural environment White Paper, and the HS2 project provides a good opportunity to put it into practice.
I hope that Ministers will accept some of these suggestions for how to build on and improve the legislation for a high-speed railway, which will need to demonstrate clearly the gains to the community it serves economically, socially and environmentally in order to be sustainable and to expand public transport capacity to help with the cost of living.
I often wonder on these occasions how Aneurin Bevan and Michael Foot would have got on, having only six minutes to make a speech, but I will do my best.
Last week, my right hon. Friend the Member for Dulwich and West Norwood (Dame Tessa Jowell) reflected on the current political dialogue, saying that
“our political narrative has been characterised by a view of the worst of national human nature rather than the best.”—[Official Report, 8 May 2013; Vol. 563, c. 28.]
I regret to say that she is right. She is right because history teaches us that when politicians—particularly those of governing parties—are prepared to stoop to the politics of blame and resentment, and when the fulcrum of politics shifts to looking to our communities, rather than to the international financial and banking fraternity, to see who can be blamed for our problems, that is when we see people turning on each other. That is what we are seeing now. People are looking at those on welfare as though they are living high on the hog, and looking at migrants as though they are responsible for what has happened to their living standards, even though they are not.
There is a danger that the current ridiculous debate on Europe could put our prosperity at risk. Today’s debate is about the cost of living. If the debate on Europe continues as it is doing at the moment, the ratio of the pound to other currencies internationally will worsen to the point at which our imports will be more expensive and our cost of living will rise. The uncertainty will reduce inward investment into our country and, as we have seen from the Prime Minister’s somewhat ill-timed visit to the United States this week, negotiations over international trade with China, India, the US and the Russian Federation which require a Europe-wide approach to achieve a scale that allows us to negotiate sensibly, will be put at risk.
I simply ask Members on both sides of the House to be big enough to address the real challenges that we face as a nation, rather than turning individuals against individuals and fostering the politics of grievance. Historically, we seem continually to rewrite the issue of migration to this country. There is nothing new about using the politics of insecurity and uncertainty and the fear of change and difference to turn one set of people against another—usually the poor against the very poor—and we are seeing it again today.
Let us compare properly organised, legal inward migration with the illegal migration that pushes people into the sub-economy, which would have happened had we not reached the agreement to allow people to work legally here and pay tax and national insurance from 2004. This is fact, not fiction: 40% of those people from eastern Europe who registered to work here in 2004 were already in this country. They were working in the sub-economy. Nobody wants that; we want secure boundaries and legal, open migration that is properly organised.
I could not help but note, when the right hon. Gentleman said it was ridiculous to blame migrants for our economic woes—I agree with him on that—that it might also be ridiculous to assume that they had nothing to do with our economic woes. At the weekend, Lord Mandelson said:
“In 2004 when as a Labour government, we were not only welcoming people to come into this country to work, we were sending out search parties for people and encouraging them, in some cases, to take up work in this country.”
Would the right hon. Gentleman care to comment on that?
This talk of search parties is, frankly, risible. The fact was that we had a booming economy with enormous growth and we needed people to fill those jobs. We needed them to do so legally, rather than illegally. At the moment, however, illegal migration is growing and the message we are sending out, particularly to graduate and postgraduate students, is entirely wrong. Of course there is an issue about integration and about protecting people, but we need a sensible, rational dialogue, rather than one that fosters and engenders fear.
What about the welfare state? In 2005, we set out our principles for welfare reform. Of course, earned entitlement is crucial. We all accept that work is the best form of welfare, but turning those who are struggling on welfare into victims and suggesting that they are responsible for the dilemmas that we face in these times of austerity is frankly unacceptable. My right hon. Friend the Member for Don Valley (Caroline Flint) mentioned the £1,700 cut in average earnings, but this Government have also frozen child benefit and cut tax credits. In-work benefits have also been cut, creating a disincentive rather than an incentive to work. Goodness knows what is going to happen when universal credit comes in later this year.
Above all, the Government are punishing people who are already struggling. The bedroom tax is the most iniquitous of the changes that the Government have brought in—[Hon. Members: “It’s not a tax.”] Does someone want me to give way?
Order. The hon. Member for Elmet and Rothwell (Alec Shelbrooke) cannot opportunistically spring up in that way. He is showing a considerable discourtesy to the House. The right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) should proceed unhindered with his speech.
I am grateful to you, Mr Speaker.
I am talking about children under 10 who suddenly discover that their parents have to move and that they can no longer have their own bedroom, and about those with shared care not being able to look after their children at weekends. We could have provided incentives for people to move, but I am not sure whether the Government want them to move or whether they want to punish them for having a house with two bedrooms.
My right hon. Friend’s brilliant contribution is reminding us all of why he is such a towering force in politics. Does he agree that the bedroom tax—it matters little what we call it; it is what it is—is a precise example of the politics of division that he has been talking so eloquently about?
I am very grateful to my hon. Friend for her kind words. I want to make the point that there were alternatives, including introducing incentives for people, including older people, to move. It is often older people who require smaller premises and who have larger premises that they can no longer manage. But we will not move them, will we? We will not tax winter fuel or assumed benefits for older people because older people vote in very much greater numbers than younger people. My message today is that politics—democratic politics—can be our solution and that people should engage with it as citizens in their community. They should engage with it through voting, but they should not be misled by organisations and parties such as UKIP that seek to obtain their vote by building on resentment and hatred, which history shows us has brought countries to their knees.
Yes, we need strong borders; we need welfare reform; we need a review of the European Union—but we need fairness at home, too. Today, Sheffield city council’s fairness commission, of all parties and no parties, has presented to Downing street thousands of names on a petition. I mean fairness, not just in respect of dealing with the recession and austerity, but fairness in the sense of what Barbara Castle used to call the social wage—the investment in our decent public services. That is the message we should be putting out today.
It is a privilege to take part in this debate on the Gracious Speech, and it is a particular pleasure to follow the right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett).
In view of recent events relating to the Government side of the House, I think I should make it abundantly clear that I intend to vote for the Queen’s Speech, that I will support the Prime Minister and the Cabinet, and that I will vote against any amendment, tabled or selected. The face that I should feel the need to make such an assertion at the outset will underpin some of the observations I shall make.
I continue to support the restoration of economic stability. That was the raison d’être of the coalition and it remains its overarching objective. To fulfil that commitment, I, like others, have had to subordinate my views on other subjects to that objective. I felt it necessary to do so because of the economic circumstances we have inherited and because of the very obvious difficulties that exist in resolving them. Some of the decisions that have been made have been very painful—to me and to others—but I believe them to have been necessary.
We continue to make progress towards the objective. We have reduced the deficit; we have maintained low interest rates; there has been no run on the pound—and although it is a volatile measurement, it is worth observing that the stock market, often seen as a barometer of confidence, has in recent days returned to its levels of five years ago. Between now and 2015, nothing should be allowed to distract the Government from that objective. It is impossible in the present context to ignore possible distractions.
Thankfully, the internal management of the Conservative party is nothing to do with me, but speaking as someone who was a not entirely dispassionate observer of the Major Government between 1992 and 1997, I say that there are surprising echoes of that period in the current turmoil of the Conservative party. It is worth remembering that that Government had very substantial economic achievements—to such an extent that the incoming Labour Government, with the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) as Chancellor of the Exchequer, accepted the public spending proposals of the outgoing Government.
If we undermine the authority of our Prime Minister, we will undermine the credibility of our Government. If we undermine the credibility of our Government, we will undermine the economic objectives of that Government. This is all the more the case when the coalition agreement contains a perfectly rational mechanism for a referendum if constitutional change is made. Is it rational to spend the next two years on a fractious and divisive debate over Europe when so much remains to be done? I simply cite the example of Scotland, in respect of which every decision, every policy and every political statement has for some time—and it will continue for some time—had to be seen through the prism of the referendum fixed for September next year.
If these events are a reaction to UKIP, let me offer a sporting metaphor. Teams that chase the game are rarely successful. That applied, of course, to the right hon. Member for Kirkcaldy and Cowdenbeath when he sought to outbid the current Chancellor on the question of inheritance tax, and as it did when he declined to call a further general election. Concessions rarely satisfy dissidents, who have the ghost of Oliver Twist among them.
Another issue—that of Syria—should not allow us to be distracted from these economic goals. I retain my previously expressed reservations about the proposals to arm the rebels. President Obama’s resistance to that is sometimes related to an inactivity—whether or not that is right is neither here nor there, but in my view his resistance is well founded. The objections are many, including the emergence of Islamist Jabhat al-Nusra as an increasingly influential part of the rebel forces, which raises the question of who would inherit any arms that we might deliver. The risk of a proxy war between the United States and Russia is another example, with each matching each other in armaments supply. Once we depart from non-lethal supplies, where would we stop?
I am about to finish.
Some have suggested a no-fly zone, but if we have one, we must be ready to shoot down the aircraft that intrude into it and accept the risk of the aircraft enforcing it being shot down. We must also be ready to suppress the air defences, many of which have in an entirely deliberate but cowardly way been situated among the civilian population.
I finish by noting that as Russia and the United States tentatively explore the possibility of a joint approach on Syria, this is no time to encourage the rebels to believe that they need not subscribe to any political settlement in the hope of outright victory.
I am delighted to have the opportunity to make a few comments on the Queen’s Speech. This is the third anniversary of the formation of this particular coalition, and this Queen’s Speech is the penultimate one, with only one more to go—Hallelujah! What is most remarkable about this Queen’s Speech is how thin it is, and how it is dominated by two particular elements. The first is just how little the coalition parties can agree on—they seem to have spent most of their time deciding not what should go into this Queen’s Speech, but what to keep out of it. That explains its paucity to some degree.
The other element is the fear of the saloon-bar stage that is Nigel Farage and UKIP. It was said at the end of the 19th century that the spectre of communism was haunting Europe, but the spectre of UKIP now haunts the Conservative party to such a degree that it really does not know how to deal with it. There is widespread sympathy on the Conservative Benches for UKIP’s aims and objectives, and there is a degree of incomprehension, as I observe it, of the fact that the natural home for right-wing fruitcakes is within the Conservative party. The acts of UKIP have clearly led to some confusion.
The amendment tabled by the hon. Member for Basildon and Billericay (Mr Baron) and predominantly, although not exclusively, supported by Conservative Members is no amendment at all. I think the technical expression for it is “pious”—it just expresses a view and will have no impact whatever either for good or ill. If these Members were serious about voting against the Queen’s Speech, they could, of course, vote against the main motion, but they will not—
Order. I want to help the hon. Gentleman by gently saying that he would not think it right to start to debate an amendment that has not been selected. He is an experienced and wily old hand, and I feel sure that he will be able to frame his remarks in an appropriate way.
I am grateful for your guidance, Mr. Speaker, as, indeed, I always am.
I think that this also reflects the enduring resentment among Conservative Members, and their failure to appreciate that they did not win the last election. They try to behave as if they did, and they try to believe that they can simply have their way in this matter, but that is not the situation that the electorate gave them. I understand their resentment, because if there was one election that the Conservative party really ought to have won it was probably the one that took place in 2010, but they failed to do so.
The Prime Minister, of course, is away. He will not even be voting for the Queen’s Speech himself when it is put to the vote tomorrow. He has thrown just a few titbits to the fruitcakes by saying that while Ministers must not vote for the amendment, others can abstain. He is trying to draw up a strange pact, the “pax Cameron”.
I see quite easily how a logical person could reach that conclusion.
I myself am in favour of a referendum on the question of Britain’s continuing relationship with the European Union, but I believe that it is a matter for the next Parliament. I hope that we can prevail on the Opposition Front Bench to include a manifesto commitment, but of course the manifesto for the next election is still two years away.
Order. We must not pursue this exchange, whether in relation to fruitcakes or in relation to a prospective amendment which has not been selected. The hon. Member for Monmouth (David T. C. Davies) should not seek to divert the hon. Member for Lewisham West and Penge (Jim Dowd) from the path of virtue to which I think he had just about returned.
But I entirely understand that there may be those who would.
The argument needs to be heard. The other day I received a message from a constituent who was an avowed Tory voter at the last election—in the Bromley part of my constituency; there are not many Tory voters left in the Lewisham part—
My constituent resented the suggestions that were being made about the referendum, because no one had put the idea to the electorate at the last election. I expect the issue to be a key part of the next general election campaign, and I think that we should offer people a referendum on it.
Labour is the only party that has ever given people in this country a referendum. Back in 1975, under the Wilson Government, the referendum was on whether we accepted the revised terms under which we would remain in what was then the European Economic Community. Scottish and Welsh devolution, the forming of the Greater London Authority, the direct election of a Mayor of London and elected mayors in cities across the country have all spawned referendums, and all of them were instituted by a Labour Government. The closest that a Conservative Government have ever got was being forced into a referendum on electoral reform and the alternative vote by the terms of the coalition agreement.
No, I will not, tempted though I am. I have taken two interventions, and if I took another it would come out of my speaking time.
The deal over boundary reform, and not Lords reform, was another part of the coalition agreement, but the Liberal Democrats appear to have ignored that. Mind you, I am not complaining: both the boundary gerrymander and the equally ridiculous AV system were well worth kicking into touch.
Others speak of a “mandate referendum”, whatever such a thing is. A Government have a mandate; and what would be the question in this “mandate referendum”? “Should the Government seek every opportunity to protect and promote the best interests of the British people”? I believe that all Governments do that, although I do not agree with the way in which this Government do it. I believe that the mandate stems from the general election. Who on earth is going to vote “No”? It is ludicrous. This is merely a distraction, an attempt to confuse activity with action.
My right hon. Friend the Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) referred to the way in which we are isolating certain people. While we must provide fair access to public services, the Government must be careful not to fuel the flames of xenophobia. We should understand in this country that while there must be a genuine entitlement, and while a contribution must be made—according to people’s ability—the overwhelming majority of immigrants and their descendants have contributed mightily to what the country is today. We should not allow that to be put at risk by any obsession at the margins, or try to reduce what is a great record.
As I said at the outset, the Queen’s Speech is thin. It is clearly not up to the task of meeting the challenges that face Britain today. The sooner this Government go, the better.
It was kind of you, Mr. Speaker, to allow a segment of today’s debate to those of us who were concerned about the Opposition’s decision not to choose foreign affairs, defence or, indeed, Europe as the subject of one of the themed days of debate on the Queen’s Speech, so that we could refer to some of those matters. I suppose that I ought to get the words “cost of living” into my speech from time to time, and I shall endeavour to do so, but I hope that if I fail, they will be taken as read.
Although the right hon. and learned Member for North East Fife (Sir Menzies Campbell) and I serve closely together on the Intelligence and Security Committee, we are not best known for agreeing on issues such as the future of the European Union or that of the Trident nuclear deterrent. On one issue, however, we find ourselves in close agreement, and that is the question of whether or not we should arm the rebels in Syria, or become militarily involved in the civil war in other ways.
I think I am right in saying that my hon. Friend’s view is quite widely shared on the Back Benches, at least on this side of the House, and, I suspect, on the other side as well.
It is not a matter of wanting to do something less than we might in terms of humanitarian intervention. I certainly supported humanitarian military intervention in Sierra Leone, and I was one of the first to call for military intervention to topple Miloševic. I have supported military action in other theatres, such as Afghanistan and Iraq, and I even supported such action—albeit with considerable reluctance—in the case of Libya, given Gaddafi’s explicit threat to the citizens of Benghazi. We must, however, consider two aspects when thinking about undertaking military intervention. One is the humanitarian consideration, but the other is the question of who will take over if that military intervention is successful. What concerns me is the possibility that the people who take over will become dominated by a group allied to al-Qaeda who are even worse than the Assad regime—and that is saying something.
My mind goes back to the speech made by Tony Blair as Prime Minister in the run-up to the Iraq war. What did he say that so swayed the House in favour of intervention? He said that his nightmare was the prospect of weapons of mass destruction falling into the hands of al-Qaeda. We now know that either there were no weapons of mass destruction, or, if there were chemical or biological weapons, they were not there by the time the allied forces went in.
In this case, however, we know that there are weapons of mass destruction—chemical weapons; a big stockpile of nerve gas—in Syria. What the Foreign Secretary has admitted at the Dispatch Box, repeatedly, is that there are, to use his own estimate, several thousand al-Qaeda-linked militants fighting alongside the Syrian opposition. I have raised the question at least five times since last September, and I have had five answers, none of which has satisfied me on the point. The point is this: how do we prevent that stock of deadly chemical weapons, which in the hands of Assad and his regime poses no threat to the west, from falling into the hands of al-Qaeda-linked militants, who would undoubtedly use them against the west, with terribly adverse effects on our cost of living and on our being able to stay alive?
It is not beyond the realms of possibility that Carla del Ponte may be right, because it certainly does not make sense for the Assad regime to use chemical weapons—the one thing that would cause the west to intervene and overthrow him. If he did use them, why use them in such small quantities that they could not have a decisive effect? If the intent was to intimidate the opposition, why deny vehemently, as the Assad regime does, that it has used them? It does not make sense.
What would be the direct effect on the cost of living in this country if an al-Qaeda-led Government in Syria got together with the Shi’a-led Government in Iran and took a direct look at the democracy in Iraq, which is diametrically opposed to their beliefs?
I am sure that my hon. Friend is right in his implication that there would have to be a huge uplift in public expenditure on all forms of counter-terrorist techniques, and there would undoubtedly be a deleterious effect on the freedoms of peoples in this country, which would have to be restricted considerably if we found ourselves under attack from deadly chemical weapons in the hands of an extremist group allied to our enemies.
The hon. Member for Lewisham West and Penge (Jim Dowd) quoted Marx, without attributing the words to him, when he said that the spectre of communism is haunting Europe. I am put in mind of a quotation attributed to Lenin:
“The capitalists will sell us the rope with which we will hang them.”
We would have to be out of our minds to assist in the overthrow of one shocking regime and the coming into place instead of a regime that was equally shocking and atrocious but hostile to us and armed with chemical weapons.
I am sympathetic to much of the hon. Gentleman’s argument, but a humanitarian crisis in Syria has to be addressed. Given the difficulties between the Russians, ourselves and the Americans in relation to an international conference, how do we move a political settlement forward?
I am extremely grateful for that intervention, as it leads me to my final point. Whenever we talk to our Government spokesmen about this, they say that the answer is a peaceful transition. It is abundantly clear that either there will be something peaceful and no transition, or if there is a transition, it will not be peaceful. If our concern is, above all, to stop the killing, we ought to be working with the Russians not for a transition but for a cease fire. We ought to aim to freeze the situation, the effect of which would be to stop the killing but not to result in the transfer of the chemical weapons stocks to the hands of an opponent of western civilisation that is even more deadly than the people who currently hold them.
I am honoured to speak in this year’s debate on the Loyal Address and to make some comments on Her Majesty’s Gracious Speech.
I join the sentiments expressed by other Opposition Members that Britain could and would have hoped for so much more from this Queen’s Speech. After three years of low growth, rising unemployment, increased borrowing and a rising cost of living, including fuel and food bills and transport fares, Britain deserved much more. We got no answers on tackling the rising cost of living, at a time when real wages have fallen by £1,700 since the election, and there was nothing to help the increasing number of Londoners struggling to afford food. It is clear that, after three years of failure and U-turns, this Government are out of touch, out of ideas and unable to bring the change this country needs.
Last year, I spoke in my first Queen’s Speech debate as the Member of Parliament for Feltham and Heston. I spoke of local unemployment and how Her Majesty’s Gracious Speech last year offered no hope to these local families and young people, but 12 months later the situation is worse. More than 550 local people in my constituency who were unemployed 12 months ago are still unable to find a job. More people are out of work now than there were when this Prime Minister took office, and a growing number of food banks are now opening across the country—these are the most visible manifestation of the growing crisis of food poverty in Britain. Food is the most basic of human requirements, yet in one of the richest cities in the world, local families and children cannot afford to eat and are going hungry. The Trussell Trust, which runs the largest chain of food banks in the country, fed more than 34,000 people in London in the past year. In my borough of Hounslow two food banks have opened in the past two months alone, with the local council, local charities, places of worship and volunteers doing all they can to help local families and a growing number of children in poverty.
Perhaps the hon. Lady would like to put on the record the fact that food banks increased tenfold under her Government. Will she condemn the fact that her Government refused to let Jobcentre Plus signpost people to food banks because they were worried about the political damage? That was a callous way of treating people in need.
Yet again, we see how the Conservative Government are so out of touch and so complacent, not acknowledging any of the challenges—rising unemployment and a rising cost of living—that people in Britain are facing today; they are not taking any responsibility.
A recent report by the London assembly found that more than 95% of teachers asked in London said that children in their schools regularly went without breakfast—more than half of such instances were because families could not afford food. That is completely unacceptable in modern Britain. The health, educational attainment and life chances of these children are threatened by hunger, and the Government continue to do nothing to help with the cost of living.
Teachers and head teachers in my constituency have given me similar messages. One school has what it calls a “tack room”, where it takes in young people’s mobile phones or a deposit—little bits of money—towards a blazer or school equipment, because the children cannot afford that or their school lunches.
My hon. Friend makes a moving contribution. We have seen how schools are increasingly picking up the pieces so that children can have something to eat and at least then be able to study.
The Government are even making things worse. A recent Institute for Fiscal Studies report into child poverty found that between 2010 and 2020 absolute child poverty will increase by 55%, with the IFS saying that the projected surge is a result of the fiscal and social security policies of this Tory-led Government. A great sign of weakness is not admitting when you have got it wrong, and it is a shame that the Government did not take the opportunity of this Queen’s Speech to put forward real solutions to meet the challenges our businesses and families are facing. As Labour’s alternative Queen’s Speech argued, the focus should have been on those matters that will make a real change: jobs; growth; tackling rising consumer prices; and banking reform to back our British businesses. Last month, the International Monetary Fund published figures showing that in 2012 the UK economy grew by just 0.2%. That was 0.7% less than Germany, 2% less than the United States, and 3.8% less than India. We are, of course, in a global race, in which Britain can lead, although not under this Government if the last three years are anything to go by.
The Queen’s Speech has been a missed opportunity—another chance missed to improve the prospects of Britain’s families. It is a no-answers Queen’s Speech from a tired and failing Government. They are out of touch, out of ideas and losing the global race for Britain. My constituents in Feltham and Heston deserved better. It is not too late for the Government to change course, and I look forward to the Minister’s response.
It is a privilege to support the Gracious Speech. Although I appreciate that it is unfashionable to talk about conviction politics, I suggest to the House that there is nothing wrong with having principles, talking about principles and sticking to principles. The principles underlying the Queen’s Speech are those of freedom, choice and individual responsibility as well as rights. Through those principles, Conservative Governments throughout the ages have brought prosperity to Britain and improved the lives of British people.
The Labour party does not work on principle. It works—[Interruption.] Labour Members are shouting; if they have a principle to tell me about, let them get up and tell me the principle on which they oppose the Queen’s Speech. They work not on principle, but on short-term party political popularity.
The hon. Lady makes my point for me. The Queen’s Speech is all about fairness, to which I am coming in a moment. Child poverty has arisen not because of the content of the Queen’s Speech but because of 13 years of economic mismanagement by the last Labour Government.
Indeed it is. I thank my hon. Friend for that point. It is important that we treat women fairly, and much in the Queen’s Speech will make it easier for women to go to work and look after their families and do the two important jobs of being a mother and being active in the economy and the workplace. It is through measures such as reforming how we organise child care that that will be done. That is fairness and how we eradicate child poverty and improve the position of all families throughout the country.
On child poverty, did my hon. Friend note, as I did yesterday, that the Institute for Public Policy Research, a left-wing think-tank, has now disowned Labour’s approach to priority and is backing ours in dealing with the causes of child poverty? That is good news, as I am sure my hon. Friend will agree.
I did indeed, and my hon. Friend makes the point extremely well.
There is something that has not surprised me, but let me draw it to the House’s attention. The hon. Member for Feltham and Heston (Seema Malhotra) and many of her colleagues get excited about food banks because they believe that it is in the power of the state to do everything to help people. We believe, as a matter of principle, that power is with the people and it is up to individuals to help each other, voluntarily, if they so wish, in times of need. Food banks are not about entitlement. Entitlement and benefits are one issue, but food banks are about relieving short-term need. It is important that we should be able to do that voluntarily.
It is not nasty to make difficult economic decisions, but necessary. It is not nasty to tell the truth about having to cut public spending, but necessary. It is not nasty to reduce the nation’s debt to secure the future for our children, but necessary. It is right to construct a taxation and public spending regime that makes work pay. That is what fairness is all about—taking people on lower incomes out of taxation and not requiring them to pay benefits for those who can work but find that there is no point because they are better off not working. That is what Labour brought about, and it was wrong.
By reforming benefits and immigration laws, we are putting Labour’s mistakes right. It is wrong that people who have worked and saved all their lives have to sell their homes to pay for care in later life, and we are putting that right. It is wrong that enterprising people should be held back by the dead hand of an overbearing state. That is what Labour believes it in and it is one of the reasons made such a mess for 13 years. It was wrong and, again, we are putting it right.
Something else is wrong. Most of us appreciate the benefits of the European single market. However, it is wrong that unnecessary rules and regulations from expensive institutions are hindering our businesses and restricting our freedom. We must, as a nation, renegotiate the terms of our membership of the European Union. I am not going to mention any hypothetical amendments, Mr Deputy Speaker.
Indeed. We are today debating the cost of living, an issue fundamental to the lives of everyone in Britain today. On these Benches, we care about the prosperity of our country and the well-being of our people, so we want the freedom to run our economy and the institutions of our country in a way that benefits the people of Britain.
I hope that the Queen’s Speech will be augmented by a Bill that might come through the private Member’s Bill route and that such a Bill will pave the way for a referendum on our relationship with the European Union. I fully understand, although some appear not to, why such a Bill cannot be a Government Bill. We have to appreciate that we are in the most unfortunate situation of being in a coalition, and one part of that coalition does not want a referendum on or a renegotiation of the terms of our membership. However, many of us do want those things. We need a renegotiation and then a referendum for the simple reason that there is a silent majority of people out there who get on with their everyday lives, work hard, look after their families, contribute to their communities and look to this Parliament to hear their voice and give them the freedom to do the best for their country.
I want to speak about the three Fs—fags, farmers and fairness. From time to time, fruitcakes may also creep into this speech; perhaps some will want to intervene, although I hope they will not.
I turn first to fairness and the cost of living. Today is the start of carers week, so it is an appropriate time for us to think about fairness for the most important people in our society—people who give back, who care for others and who are in need. It is important that we make sure that the measures that will be presented to the House during this term of Parliament do most to deliver for those most in need, particularly carers or those in receipt of benefit.
There are 214,000 carers in Ulster, and they desperately need assistance. I look forward to the measures that will be introduced to assist them.
Child poverty has been mentioned in this debate. We all understand that finances are very tight, but does my hon. Friend agree that it is vital that the cuts that the Government have imposed do not penalise children? The Children’s Society estimates that 200,000 more children could go into poverty, and that should not be allowed to happen.
My hon. Friend hits the nail on the head.
The people who most require fairness are the most vulnerable in our society, such as families in the low-income bracket. One of the ways we can help to address that is through the cost of fuel. Sixty per cent. of fuel costs are duty or VAT. The Government could do something to deal with that, and I look forward to them taking measures to do so over the course of the year. I welcome the increase in the personal allowance for income tax, because that is focused on the low paid.
Job creation is really where the Government’s attention should be directed. Over the past few days, many people have expressed concern about things not being in the Gracious Address, and one such thing is a change to corporation tax levels in Northern Ireland. I am disappointed about that, because such a change would have allowed us to create additional employment and stimulate the economy in the way it needs to be stimulated.
However, I pay tribute to the Government for listening to us on some of the welfare reform issues. They have allowed Northern Ireland to develop its own flexibilities, such as direct payment to landlords, twice-monthly payments to claimants, and the splitting of the single household universal credit payment between two people. That is very welcome because it helps families in Northern Ireland, especially those on low incomes, to manage their money better.
The hon. Gentleman is making a very detailed speech. I agree that those are good concessions for his part of the world, but is there any reason why they could not apply in the rest of the country, because people in the north of England have similar circumstances to those in the north of Ireland?
Like the hon. Gentleman, who is also a great Unionist committed to the Union, I believe that the same benefits should flow whether in the north of England or the northern part of Ulster. [Interruption.] That includes Donegal; we will get it back into the Union at some point soon.
Families with a person who suffers from cancer may face difficulties. Macmillan Cancer Support recently produced an interesting report showing the significant impact on the cost of living of cancer sufferers, which could amount to as much as a year’s mortgage payments. The Government should focus their attention on what additional support they can introduce to assist those people.
Not at the moment, but I will shortly.
A disaster is coming to our farming community that will dramatically affect the cost of living through the rising cost of food. We have had one of the harshest winters ever. That is affecting, and will affect, the price of foodstuffs to feed our cattle and our sheep in the countryside. If next winter is equally harsh, I predict that this time next year the cost of food could be as much as double what it is this year. A bale of hay to feed cattle can cost as much as £60 in Northern Ireland—almost triple last year’s price. That will have a knock-on effect on the cost of living of ordinary households up and down the United Kingdom because it will affect how much a person can purchase to feed their family. The Government had better be warned about this now so that they can try to address the needs of the farming community across this country.
The impact of the cost of living in our rural communities is leading to an increase in suicide. For example, there was a very saddening episode last week in the Republic of Ireland, in County Monaghan, where a farmer shot 40 of his livestock because he could no longer afford to feed them, and then turned the gun on himself. This is a diabolical situation that is starting to affect our economy and will see the price of food increase.
I want to deal briefly with fags. Over the past few days people have talked about the impact of not having something in the Queen’s Speech. I want to commend the Government for taking a stand by not including measures on plain packaging, because that would have driven people out of employment, and not only in Northern Ireland; it would have affected shopkeepers up and down the United Kingdom and destroyed people’s opportunity to make a living.
In addition, it is a giant con trick. I am a non-smoker and I have four children who I never want to see smoking. If I thought for one moment that plain packaging would stop them smoking, I would have been in favour of it years ago. Indeed, the Labour party had the chance to introduce this measure in 2008 and did not do so. I am glad that 18 members of the Labour party signed my open letter to Her Majesty’s Government to support my campaign to stop plain packaging because of the impact it would have on smuggling, on counterfeit trade, and on all sorts of other aspects that would not affect the health of the nation in any way.
As a reformed smoker, perhaps it would be helpful if I told the hon. Gentleman that the branding of cigarettes did not make me start smoking. Smoking became an addiction and unfortunately I got hooked, but what was on the packet had nothing to do with it whatsoever.
Let me say on this very important issue that I was delighted that 18 members of the Labour party signed my open letter to the Government, as did a former Labour Cabinet Minister, the current Chairman of a Select Committee, and three other former Ministers of the Crown. They did so because they were concerned about the impact that the introduction of plain packaging would have on crime, including smuggling and counterfeiting. It would drive young people—over 18-year-olds—to smoke the illicit cigarettes that are smuggled over a country’s borders. I welcome the fact that the Government have taken a stand on this. Very few people have been prepared to stand up to encourage and defend them, but I certainly will.
It is always a pleasure to follow the hon. Member for North Antrim (Ian Paisley).
Our membership of the European Union affects, one way or another, the living standards of our constituents and the prosperity of our people. Membership of the European Union has primarily been founded on an economic case that membership is in our economic interests. In 1973, the argument was principally that we wanted to join a common market because it would raise living standards in this country. More recently, proponents of our membership of the EU say that one fifth of all EU direct inward investment comes to the United Kingdom, representing a source of jobs.
What our membership of the EU has never been, in the eyes of the British people, is, to use the treaty language, a project for
“ever-closer union among the peoples of Europe”
Since 2010, this Government and their Ministers have been engaged in pushing back against the onward march of greater economic integration and the attendant political integration that follows from that. We saw that when our Ministers ensured that we did not contribute to the bail-out mechanism for sovereign states in difficulty. In the banking union proposals, where the rules of the European Central Bank could have seen banks dancing to the tune of a European regulator, they ensured a double majority system to protect UK financial services.
We have also had to push back on greater justice and home affairs integration. The Home Secretary has sensibly entered a reservation on 130-odd justice and home affairs measures, including the European arrest warrant and DNA fingerprinting.
I will not at the moment because time is short.
It is also the case that, historically, we have been against greater integration. Why else did we secure an opt-out from the euro—that disastrous project that we did not want anything to do with at the outset and that we will not, I trust, wish to join in the future? We were also, of course, one of the few EU countries to say that we would have nothing to do with the Schengen arrangements, whereby many of the other EU members decided to throw their borders wide open.
The question of whether UK membership of the EU is in the national economic interest is being asked with increasing urgency. Telling interventions have been made in recent days by Lords Lamont and Lawson and Michael Portillo, who have asked a question that has for too long been ignored: what are the costs and what are the benefits? They have come to the preliminary conclusion that the costs probably outweigh the benefits, but it is not just the words of Conservative politicians of the past that we should take into consideration.
Some important work has been done by Goldman Sachs. Jim O’Neill, who to my knowledge is not a card-carrying member of the Conservative party, has calculated that trade patterns are very much in flux. He says that if we look at German trade patterns from 2000 to 2012 and extrapolate to 2020, we will find, interestingly, that Germany will export 25% of its exports to the BRIC countries—Brazil, Russia, India and China—and a falling proportion of only 30% to the EU, and that 15% of them will be to China alone and just over 8% to France. The world economy and its trade patterns are in flux, and the idea that we have to be wedded, as an article of faith, to the single market deserves serious scrutiny and examination.
I regret the absence of a referendum Bill in the Gracious Speech. In the case of any hypothetical amendment so regretting that omission, I will gleefully and proudly support it for this reason and this reason alone: we have to have a rigorous and well-informed national debate about the costs and the benefits to our people of membership of the European Union.
I draw the House’s attention to my entry in the Register of Members’ Financial Interests.
The cost of living in my constituency, as in others up and down the country, is a real concern. Wages have been depressed, unemployment is still too high, and many of the new private sector jobs that the Government like to trumpet are zero-hours contracts or part time, with no opportunity for increased hours. I will not repeat the comprehensive list that my right hon. Friend the Member for Don Valley (Caroline Flint) gave from the Front Bench about the challenges that face our nation.
I want to focus on housing, particularly private rented housing in my constituency, where the social rented sector accounts for 44% of households. Around 26% of my constituents are owner-occupiers and 29% are in the private rented sector, which has increased exponentially. The number of people in the private rented sector is projected to be double the number of people who own and occupy their own home in the next 15 years or so. Rents are high and growing.
On Saturday I hosted the Hackney housing summit, bringing together a range of people who are experts in their field and on living in Hackney. We said that enough is enough. We in Hackney think that the Government should listen to some of our solutions, but sadly the Queen’s Speech did not include any of them.
My constituency epitomises the challenge facing private sector renters—generation rent—who have no opportunity to get on the housing ladder, if that is what they want, and are trapped in an endless cycle of poor housing and high increases in rent, evictions or the like through extortionate rent increases. As a percentage of London rent, my constituency, across nearly all the quartiles, has more than 100% the average rent for properties of every size in London, except for the highest priced four-bed properties. All my constituents pay more than the average and the cost is going up. Costs are high, rents are increasing without limit and housing supply is woefully low.
This Government have a poor record: house building is down, homelessness and rough sleeping are up, people are struggling to get mortgages and to get on the housing ladder, and the rapidly growing private rented sector has so little security, with people having to pay increasing rents at a record high—not just in my constituency, although it epitomises the worst of it—and suffer poor quality accommodation.
On Saturday we heard very moving testimony from Rosie about Digs, a private rented sector body in Hackney that has been set up to campaign against the challenges. In nine years living in Hackney, she has had to move nine times and only one of those moves was voluntary. She also spent £50,000 on rent during those nine years. In order to buy an average sized home we would need an income of £81,000 and a deposit of £17,000. There are, however, many Rosies out there; she is not alone.
The Government must look again at the issue. I urge them to look at Treasury borrowing rules. A strong message from Saturday’s summit was that they should give local authorities the freedom to invest in new homes. It would provide construction jobs and homes in the private rented sector. Why not allow a good local authority to be a private rented landlord? The assets could ultimately be cashed in to pay off the initial investments, or they could be sold to the individuals, thus increasing home ownership, or, in boroughs such as mine, I would like to think that they could be turned into socially rented properties at affordable rents for local people so that those on the lowest incomes are not driven out of my borough.
In addition to those housing costs there is the huge challenge of paying for child care. This Government have reduced tax credit and child benefit for those on higher incomes, as well as other work-related benefits. No wonder there is a high turnover of population in my constituency, and no wonder young families are priced out of the area. We have to take a serious look at what sort of balance we want in our inner cities. People must not be driven out. We need an increase in housing supply, on which the Government have a woeful record. Their record on new starts over the past two years is the worst of any peacetime Government since the 1920s. In the past year alone there has been an 11% decrease in housing starts.
The proposed consumer rights Bill, which has not yet been mentioned, is a real opportunity to improve the rights and the lot of private tenants. Their rights should increase, including a right to repair and protections against landlords who evict or who increase rents exponentially after reasonable requests for basic repairs. We should also tackle the practices of unfair letting agents, particularly with regard to fees taken at source, not just after the event, which has been addressed by a welcome amendment that was agreed to the other week. The decent homes standard should be applied to the private rented sector. We also need to see the licensing of landlords and to look again at section 21 notices, which are not fit for purpose, because they frequently are misused by landlords to evict people on spurious grounds.
I also call on the Government to look at rents. We need to grapple, on a cross-party basis, with the issue of spiralling rents in the private sector without any notice of the impact on tenants and their homes.
Does my hon. Friend accept that another facet of the spiralling cost of rent, particularly across London, is the increased pressure it is putting on social housing and local authorities? I am sure that she, like me and many other MPs for London and for other parts of the country, is visited by more and more people asking for assistance with regard to social housing on the grounds of cost.
Absolutely. Without the supply, none of those issues will be solved. One man who came to see me was a kitchen porter struggling to support his family—he had two children. The jobcentre asked him to go for jobs further afield, but the combined cost of extra travel and child care meant that he could not afford to travel a couple of boroughs away. That is the reality of the cost of living and life in constituencies such as mine. This Government’s Queen’s Speech was detached from the lives of people who want to work hard but who often cannot get the extra hours and of private renters who cannot ever hope to earn in the required bracket.
I would add to the hon. Lady’s list of housing costs the practices of some leasehold management companies, which trap tenants with ever increasing service charges while not allowing them the access they should to the right to manage.
Absolutely. Although there has been good cross-party work in the House to reform leasehold management, there is much more to be done. It is no wonder that there is a demand for home ownership in this country, because it gives people greater control. However, that is now out of the reach of so many people that reforming the rights of tenants is long overdue across all sectors, but particularly in the private rented sector, including leaseholders.
I call on the Government to look seriously at rents and at the growing housing benefit bill. The £45 billion a year that is spent on housing benefit could, if capitalised, provide a huge opportunity for bodies such as local authorities, housing associations and perhaps others to invest in building new homes at affordable and intermediate rents, which would provide homes for the very people in my constituency who are being driven out by high costs.
Finally, I want to touch on the Government’s policy of providing new social housing at 80% of local private rents. I will give the private rents in my constituency to give the House a flavour. A two-bedroom flat in my constituency in the lower quartile costs £300 a week. One in the upper quartile costs £400 a week. For a three-bedroom, family-sized property, the average rent in the lowest quartile is £388. Even if only 80% of those rents is paid, how affordable are they?
We need to tackle what affordability means if we are serious about helping people into work and getting the economy moving. If people are in work and have disposable income, they will spend. At the moment, they are struggling to survive and the Queen’s Speech does nothing to help them.
It is a great pleasure to speak in support of the Queen’s Speech.
The Government recognise that household budgets are under extreme pressure. I am happy that we are taking action to support households with the cost of living. In the little time available to me, I will concentrate on one aspect of those costs: the cost of energy. The consumer group Which? recently found that 82% of consumers list the cost of energy and fuel as a top financial concern. It matters not just to fuel-poor households, but is a key issue for millions throughout the UK, including many small businesses. That is why I am glad that the Energy Bill will introduce radical new measures to make energy tariffs fairer and to make energy suppliers more accountable to consumers by strengthening Ofgem’s role.
By giving statutory backing to Ofgem’s retail market review proposals, we will ensure that customers receive the best deal on their energy tariffs, which will mean a radical reduction in the number of energy tariffs that are offered to consumers. That will be a huge improvement on the old regime, in which the hundreds of complex tariffs have led to confusion and a complete lack of transparency. Under the reforms, energy companies will be legally obligated to place households on the cheapest tariff for their individual payment and tariff preferences, and to provide households with relevant personal information.
Does the hon. Gentleman feel that competition provides the motivation to reduce prices? In Northern Ireland, where there is not the same competition, energy costs for industries and businesses are 30% or 40% higher. That is an example of where competition could bring prices down.
I agree entirely. I would add that unfair competitive practices are being used, especially where businesses are concerned. Small businesses are being locked into long-term deals and are missing windows to change to different suppliers. They are penalised by higher charges—sometimes 60% or 80% higher. Energy for small businesses is a serious concern that needs consideration in the Energy Bill.
There is another side to the energy market, which is the supply side. Does my hon. Friend agree that after the rapid closure of our coal-fired power stations because of EU regulation, the new supply is not coming down the track fast enough, which will add to higher fuel costs?
I agree with the hon. Lady to a point. I believe that the Energy Bill will help to ensure that extra power generation of a cleaner and greener nature will come further down the track. I will say a little about that later, if I have time.
The Energy Bill will ensure that the changes for energy companies become legally enforceable from summer 2014. We are working with the companies and urging them to implement the changes voluntarily ahead of that date, but the signs of such voluntary change are patchy. When I met one of the big six energy companies recently, it spoke animatedly of its plans for the future, but the talk was not of simplification. Instead, it talked about personalising the tariff to my individual circumstances and tailoring the charges to mirror my lifestyle and work pattern. To put it another way, it made it so complex and confusing that the chances of me understanding it and switching my energy supplier were minuscule. That is not the way forward. We want to empower energy customers by untangling the maze of tariffs. The Bill will do just that and make energy suppliers more accountable and more focused on the needs of their consumers.
We are raising awareness of and supporting collective switching schemes. That is one way in which customers can save money on their energy bills. DECC allocated £5 million to 31 successful projects in the Cheaper Energy Together competition, which spans 94 local councils and eight third sector organisations in Great Britain. One of the successful bids came from South East Scotland Together, which is delivered through Changeworks. It received more than £400,000 to help people in my constituency to save money. Such measures to ensure that consumers get the best deals on their energy prices reflect our determination to tackle rising energy bills.
Energy education for consumers is also key. I have spoken in previous debates about the necessity of reducing energy use. Reduction is the one step that will not only help households to reduce their bills, but help us to achieve a greener future. To quote from the report by the Energy and Climate Change Committee,
“Demand-side measures…are potentially the cheapest methods of decarbonising our electricity system…reducing overall demand”.
Knowing how we use energy in our homes and workplaces is key to reduction. That is why the single largest infrastructure project on which the Government are embarking in this Parliament is to roll out smart meters by 2019.
As was acknowledged in a written ministerial statement on 19 December last year, smart meters are the best tool that we have in energy reduction. They have the potential to give customers accurate, real-time information about how much energy they are using and how much it costs. In my constituency, British Gas has installed 837 smart meters. With the average home saving 5% through the use of a smart meter, that is a potential saving of £54,405 in my constituency alone. More importantly, that is 5% of their energy use that we no longer have to generate. It is essential that smart meters have the capacity for real-time management, as well as the ability to record the energy that is fed back into the distribution network from co-generation sources, such as wind turbines and solar panels.
Unfortunately, the pressures on wholesale energy prices mean that household energy bills will probably go up in the medium to longer term. We must be clear that wholesale energy prices are a reason to increase our investment in renewables, which will increase our energy security and help to insulate this country from the unpredictable wholesale market, rather than a reason to run headlong towards the mirage of cheap shale gas. Our commitment to a diverse, low-carbon energy mix is radical and positive. Our reforms will ultimately ensure that people get the best value for money by shielding them from the volatility of global fossil fuel prices.
While we have been building a stronger, greener economy and a fairer society, our support for the people who need those things has not wavered. In government, the Liberal Democrats are helping millions of low-income and vulnerable households with the cost of living through the warm home discount, which is available to about 2 million households. That includes 1 million of the poorest pensioners, who are eligible to receive a rebate of up to £130 on their electricity bill during the winter. There is the winter fuel payment for more than 12.6 million pensioners in 9 million households, and additional cold weather payments, which during this year’s cold snap helped the most vulnerable people in my constituency to keep their homes warm. Last winter, 5.2 million individual payments were made in the UK, worth a total of £129.2 million. That level of support for our most vulnerable is available only because, in 2010, the coalition Government reversed Labour’s plans to reduce the payment to £8.50 and instead made it £25 permanently.
I do not have time to talk in detail about the green deal, our Government’s flagship—[Interruption.] I am astounded that Members seem to find something funny about the possibility of saving hundreds of pounds every year on their constituents’ bills.
No, I will not, because I have only one minute left.
Nor do I have time to talk about the UK Green Investment Bank, the excellent Edinburgh institution that has already invested £635 billion in green projects, leveraging the overall figure up to £2.3 billion. That investment will ensure that there is enough secure, indigenous, low-carbon energy to provide for more than 2 million homes in the United Kingdom.
The Government have a once-in-a-generation opportunity to decarbonise and ensure that there is a more competitive energy sector in the future. I am proud that we are seizing that opportunity while delivering policies to help families with the cost of living and investing in the future of our economy.
This Queen’s Speech has generated more debate about what is not in it than about what is, and it has highlighted the Government’s dysfunctionality. As we heard from my right hon. Friend the Member for Don Valley (Caroline Flint), the Prime Minister made a big announcement about putting people on the lowest energy tariff, a promise that has proved completely worthless. There is nothing effective in the Queen’s Speech to protect consumers from the cost of energy bills.
The Institute for Fiscal Studies published a report just before the Queen’s Speech showing that all the advances that had been made in tackling child poverty would be wiped out by the benefit changes that the Government are introducing. There was nothing to deal with that in the Queen’s Speech. Yet at the same time, there is a millionaires’ tax increase. Those millionaires share £27.4 billion of income, but they apparently deserve a tax cut while child poverty increases.
There are no coherent proposals for growth or job creation.
I think the IFS puts the increase at 1 million children, but I take the hon. Gentleman’s point.
There are no proposals in the Queen’s Speech to stimulate the construction industry and build social housing. It is worth remembering that the Government inherited the biggest council house building programme for more than two decades, and then scrapped it as part of their austerity measures. In London, there were 11,328 social rented housing starts in 2010-11. That figure plummeted to 1,672 in 2012-13. That is a time bomb hitting young people in London, and the problem goes right up the social scale. It does not just affect people on low incomes who are in desperate housing need. People on above-average incomes who have children cannot afford to rent or buy in the private sector in London. That time bomb will not go away, and the Queen’s Speech does nothing to address it.
I say that we need to build more houses. I said that when we were in government, I am saying it now and I will continue to say it consistently.
There is nothing in the Queen’s Speech on sport. We have just had the greatest year for sport that this country has ever known, but the Government have not come up with a coherent strategy across the whole of Government that will deliver sport in our communities and use the armies of volunteers up and down the country who are working hard in sport. We need a coherent strategy that will allow them to plan ahead for the long term and deliver the elusive sporting legacy, but there was nothing of that in the Queen’s Speech.
All that we have had is the Government parties falling into warring factions over different parts of their own Queen’s Speech. It started with the Deputy Prime Minister saying within 24 hours of the Queen’s Speech that he was not happy about the changes to child care ratios in nurseries. We have heard from several people who have been advising the Government on the matter, such as Professor Cathy Nutbrown, whom they commissioned to conduct an independent review of child care qualifications, and Dr Eva Lloyd and Professor Helen Penn, two more experts whom they commissioned. Professor Cathy Nutbrown said:
“Watering down ratios will threaten quality. Childcare may be cheaper, but children will be footing the bill.”,
and Dr Eva Lloyd and Professor Helen Penn said:
“Deregulation in the UK would lead to a reduction in quality.”
I hope my hon. Friend will forgive me, but I do not have time to give way.
These things were known before the Queen’s Speech was written, so it is incredible that the Deputy Prime Minister then discovered that he did not support the measure included in it. He said:
“When we as a government consulted on changing the number of little toddlers that each adult can look after, the response from experts, from parents, from nurseries was overwhelmingly negative…They felt that the risks outweighed the benefits and it wouldn’t necessarily reduce costs. So that’s what I still have reservations about, about this change.”
That is the Deputy Prime Minister within 48 hours of the Queen’s Speech to which he put his name.
We are told that there is no reference to a referendum on Europe in the Queen’s Speech because the bullying Liberal Democrats stopped the Conservative party including it. That may be so, but what about the little toddlers to whom the Deputy Prime Minister referred? If he has a veto on a referendum on Europe, why did he not veto the measure on little toddlers and staff ratios in our nurseries? It seems to me that more than one party on the Government Benches is obsessing about Europe, and that is the Liberal Democrats. They have clearly got their values wrong on this issue.
All Governments face rebellions—I have even rebelled myself in the past—but I have never heard members of the Cabinet say that not only will they abstain on something, they will abstain on their own Queen’s Speech right at the start of the parliamentary Session. Can that be right? Is that the way we expect our Governments to behave, by falling apart almost immediately? The Secretary of State for Defence has effectively issued a warning to his leader that unless a change in the deal with Europe is achieved, he will vote against us remaining in the European Union. The Secretary of State for Education has said that he intends to abstain if a motion is put before the House on the matter of regretting the absence of a referendum on membership of the European Union in the Queen’s Speech.
While that is going on—this, in my opinion, is where the public start to fall out of love with politicians—the Prime Minister is in the USA promoting on behalf of the UK a trade agreement that will be negotiated directly between the USA and Europe. He is enthusiastically supporting that agreement over there, while at the same time his party over here is falling asunder on whether to vote against its own Queen’s Speech because there is no reference to a referendum on membership of the European Union. No wonder the public are wondering what we as politicians are about.
The word “omnishambles” has often been mentioned in relation to this Government, and I think it will enter the vocabulary of the UK, just as “Fergie time” will. I say to the coalition that it is playing in Fergie time, and people out there are blowing their whistles and calling time on this Government.
The Gracious Speech by Her Majesty the Queen gives us a programme for the year ahead in Parliament, and today’s motion on the cost of living is immensely important and integral to the world we live in today—especially, I would argue, in the wonderful, creative capital city of London. The UK is ranked 18th in the world for the cost of living. Norway tops the ranking followed by Switzerland and Australia, and Japan and France are also above the UK. Real household income has almost doubled in the past 55 years, and living standards have been transformed. In 1970, fewer than one in three houses had central heating, but that is now 96%; just one third of people had a telephone, but that is now 87%; and 65% of people had a washing machine, which is now 96%.
The hon. Lady cites interesting statistics, but is she aware that figures came out today showing that Britain has dropped seven places down the world family income table to 12th, which shows the squeeze that the Government are putting on hard-working families?
If the hon. Gentleman bears with me, I will come shortly to what the Government are doing to help hard-working families.
The consumer prices index is steady at 2.8%, which is less than half its peak rate of 5.8% in September 2008. However, it is true that, in recent years, consumers are paying a higher percentage of their household income for essentials such as energy, fuel, child care and housing.
The right hon. Member for Don Valley (Caroline Flint) could not answer the question about borrowing, and nor did she apologise for leaving the country in the state she left it when the current Government took over in 2010. What are this Government doing? First, they are dealing with the budget deficit to ensure low interest rates and stability. Interest rates are at an historic low, benefiting all those who pay a mortgage. Mortgage rates are about 3.5%; in 2000, I was paying 7%.
Secondly, the Government are putting money back into people’s pockets by lowering tax. As I have said, they are raising the personal allowance to £10,000 in April 2014, and taking 2 million people out of tax altogether. That will mean that 4,900 Brentford and Isleworth residents in west London have been lifted out of tax by the Conservative-led Government since 2010, and that 49,000 people in my constituency will be more than £700 better off each year.
I completely agree with my hon. Friend. In addition, more women are in work than ever before.
Thirdly, the Government are taking action on the things that impact most on the cost of living. On energy bills, they are ensuring that providers let consumers know the best tariff by simplifying bills to make them easier for people to understand. The Government have cut fuel duty. Fuel is 13p cheaper than it would have been under the Opposition. It will cost the average family in my constituency £159 less to fill up the car.
I mentioned child care, which has been one of the main barriers to women in the workplace and in creating new businesses. The changes will make an impact on helping women to set up new businesses and to create growth and jobs in the years ahead. The Government are extending free child care to women who work fewer than 16 hours a week, and increasing entitlement to free education and care for three and four-year-olds to 15 hours a week. We have also increased the free entitlement to early education to two-year-olds from lower-income households, which is helping the poorest in society. From 2015, the Government will meet 20% of the first £6,000 in child care costs per child for working families with children under 12.
On housing, I welcome the Help to Buy package—a £5.4 billion package to tackle long-term housing market problems. I also welcome the mortgage guarantee scheme to help first-time buyers and the funding for lending scheme. Genworth Financial in my constituency proposes private sector involvement in the scheme. I look forward to working with it and the Treasury to see whether we can make the scheme a success.
Fourthly and importantly, the Government are boosting business and encouraging aspiration. Ultimately, building growth in the economy by encouraging aspiration and supporting business to grow is how to address the cost of living. What have we done? We have lowered corporation tax so that it is the lowest in the G20. We have national insurance breaks for businesses. We have deregulation of businesses and less red tape. We have scrapped the beer duty escalator. Fuller, Smith and Turner, which is based in my constituency in Chiswick, says that scrapping the escalator is excellent for British brewing, British farming, British pubs and British jobs.
Nearly 600 new businesses were founded in Brentford and Isleworth in 2012, putting us in the top 10 of the entire country. We have worked with women in my constituency to help and encourage them to set up their own businesses. The hon. Member for Feltham and Heston (Seema Malhotra) gave unemployment statistics from her constituency. I am not sure which statistics she was looking at. Her constituency is next door to mine and has the same London borough of Hounslow. Jobseeker’s allowance claimants fell by 4.4% and youth claimants fell by 10% in the past year. Youth unemployment in my constituency is down by nearly 15% since last year and unemployment by 5.5%. We have done more to help by having events such as the west London jobs and apprenticeships fair, which I led in my constituency.
West London is a hub for great business, and I am glad that my right hon. Friend the Secretary of State for Communities and Local Government is in his place, because I want to appeal to him on permitted development rights and change of use from offices to homes. We really wanted the Great West road in west London, which is right next to Heathrow, to be exempt and protected, because we want to build businesses there. I invite him to come to the Brentford golden mile and see what we can do for businesses and job creation for the future.
Britain is a great country for so many reasons. We have won 76 Nobel prizes for science and technology. We are the No. 1 location for European headquarters. We have the largest creative sector per head in the world. We are home to four of the world’s top 10 universities and the world leader in offshore wind energy production and research. The Government are standing up for business, for people who want to own their own homes and for people who work hard and aspire to get on in this great country. The Government are standing up for Great Britain, and the Gracious Speech will help us to deliver in that task.
I intend to focus, as many other hon. Members have done, not on what is in the Queen’s Speech, which is one of the thinnest in recent memory, but on one of the most serious omissions. I refer not to Europe, but to the absence of adequate measures to stimulate growth and improve housing output, and by doing so improve people’s living standards.
As I propose to speak about the vital importance of increased housing investment, I should at the outset draw attention to my interests as recorded in the register.
The figures speak for themselves. Housing starts last year totalled just 98,000, 11% down on the already hopelessly inadequate level of 111,000 the year before. Those two years, 2011 and 2012, represent the worst output figures from any Government since the 1920s. Why has this happened? Clearly, the financial crisis which erupted in 2008 had a huge impact. Before that, housing starts totalled 183,000 in 2007—a level that was not sufficient, because a larger output was necessary to meet the forecasts, but it was massively ahead of anything we have seen since.
With the impact of the global meltdown, starts fell to just 85,000 in 2009, the nadir, and then recovered to some 110,000 in 2010. Since then, housing starts, like the economy, have been flatlining. We have seen no growth and no further recovery. The telling figure is that new starts in the second quarter of 2010—the quarter in which the Government changed hands—were the highest that have recently been achieved. No quarter since then has matched the level of output in that second quarter of 2010. That reinforces the point about the housing market flatlining, like the economy.
The case for doing something about the level of new starts is not just about meeting housing needs—although that is a powerful case. It is also about the economy, because the housing sector has a huge economic benefit. Not only is it labour intensive, but there is a considerable multiplier effect. It has a long supply chain, with all the manufacturers and material suppliers who contribute to house building, and all the firms involved in manufacturing the white goods, furnishings and fittings that go into finished homes. Stimulating house building has real scope to create new jobs and create growth in the economy. So why are we not doing it?
To be fair to the Government, they have been almost obsessive about trying to find ways in the past year to get the house building market going again. We have had endless announcements and proposals, some of which have been reasonably, if modestly, effective. Schemes such as NewBuy and First Buy, which were of course modifications of the previous Government’s homebuy schemes—I may have got the names wrong, because they change all the time, but the Minister knows what I am talking about—have made a modest but useful contribution. Others, however, have not. I am afraid that the new homes bonus has proved to be an extraordinarily expensive and ineffective measure, as the National Audit Office report devastatingly reveals. There has been no measurable sign of real advances in stimulating local authorities to grant planning consents.
Similarly, the Government seem to be tinkering obsessively and endlessly with the planning system to no demonstrable benefit whatsoever. The level of planning consents for new housing in the past two years has been the lowest on record for a very long time. That has not been successful, and nor is it likely that the mortgage support scheme announced in the Budget will be of great benefit. Acting to help to support demand when supply is absolutely inadequate is, as the Treasury Committee has highlighted, likely to stimulate house price inflation. We need to act on supply.
The Government need to focus on two areas, the first of which is the private house building sector. The big house builders are doing pretty well at the moment, but are doing so on the back of very low volume. They are seeing their balance sheets recover and their stock market valuations rise, but they are not building many new houses. Their model is very much geared towards high-value, low-volume development. The small and medium-sized house builders are suffering desperately, yet they are the people capable of providing greater volume and meeting the middle market.
The affordable and social housing sector is an even greater priority. The Government were responsible, with their ill-judged 60% cut in investment at the very start of their time in office, for undermining disastrously the affordable and social housing programme. Reversing that and investing in building new homes is a key priority. I regret that that is not in the Queen’s Speech, but I hope the Government change their mind and recognise its importance.
May I turn to the comments made earlier about our energy policy by the Secretary of State for Energy and Climate Change, the right hon. Member for Kingston and Surbiton (Mr Davey)? That policy will have an impact on the cost of living for all householders and anyone who buys manufactured goods. I do not accept his premise that the science on climate change, on which our energy policies are based, is settled.
The theory is pretty simple: ever since we started industrialising at the end of the 1700s, we started pouring CO2 into the atmosphere. As a result, the temperature across the world has warmed up and we must do something about it—that is the basic theory our energy policy follows. There are various flaws in that argument. The earth has always gone through cycles of warming and cooling. Coincidentally, at a time when we started to industrialise, we were coming out of a very cool period—a time referred to as a little ice age—when even the Thames used to freeze over. What is the total increase in temperature on which we are basing our policies and fears about climate change? According to all the statistics, it is just 0.7° C, yet some of that is clearly due to the fact that the earth was coming out of that cool period. Nobody can answer this simple question: how much of that 0.7° C is not down to CO2, but down to the natural warming that would have taken place anyway?
Then there is a problem with correlating CO2 levels with temperature increases in the past 300 years or so, because there is no straight line between the amount of CO2 in the atmosphere and temperatures going up. Between 1940 and 1970, temperatures were going down, and that was at a time when we were putting enormous amounts of CO2 into the atmosphere. Nobody can explain why that is. Since 1998, there has been no increase in average global temperatures—it has completely tailed off. Again, nobody can come up with a convincing explanation for that. Yet despite all that, and many other queries too, we are embarking on policies that will put up costs for householders, through the use of subsidies for solar and wind-powered energy, and put up costs for manufacturers, through the various taxes on carbon that we are levying.
The most serious point is that we are doing so unilaterally: Britain is taking steps that nobody else in the world is taking. Our carbon emissions are actually not that great compared with the rest of the world, yet we are unilaterally punishing manufacturers, forcing them to take their factories elsewhere, where they will continue to emit exactly the same amount of CO2, taking their jobs and forcing us into foreign exchange deficits as we buy goods that were originally made here.
My hon. Friend is eloquently putting the case for those who doubt that global warming is down to climate change, and I am sure that many support his views, but does he agree that moving to a more renewable energy environment is important for energy security as much as anything else?
My hon. Friend makes a good point, because there is a lot that we can do to generate electricity without CO2 and one would think that the Greens would be the first to support it. We had a proposal recently for a Severn barrage that could generate 20% of Britain’s electricity. It was an interesting proposal and one for which I would want to see more costings, but it was totally opposed by the environmentalists. We know that we can generate large amounts of electricity on demand and relatively cheaply from nuclear power without emitting CO2, but where do the environmentalists stand on it? They are totally against it.
In the United States of America, by exploiting shale gas, I understand that they have halved electricity prices and created a wonderful environment for manufacturers—so much so that they are returning to the States. More importantly for the environmentalists, however, that has also reduced American CO2 emissions. One would think that the Greens would be jumping for joy, but instead they are doing everything they can to prevent the Government from encouraging those companies to get in there, drill and exploit the cheap shale gas that we know we have and which could do so much. I question what their beliefs really are.
I hear the environmentalists saying to me, “The most important thing to do is reduce our CO2 emissions”, but whenever anyone puts solutions in front of them that would reduce CO2 emissions and deliver the cheap electricity that we all need, they do not want to know. They are the same people who march against globalisation and capitalism, who totally opposed any form of nuclear deterrent in the 1980s and who a few hundred years ago would have been the Luddites smashing up the spinning wheels. These people live in a fantasy world, believing that if we could just get rid of technology, we could go back to living in wonderful grass huts and things in some Tolkienesque world, like the hobbits before the evil one started attacking them. They are totally opposed to the high standards of living that globalisation and capitalism have delivered in the west and are delivering across the whole world.
It is high time that the Government realised that these people will never support anyone in government. Only recently, Friends of the Earth ran a big campaign against increased energy costs, but one reason energy costs have increased is that the Government have been trying to follow policies recommended by that same organisation—policies of supporting wind farms and solar panels that are bound to increase energy costs. It is ludicrous for the people who have been advocating policies that will increase energy costs to demand that we bring them down.
I really did not want to intervene, because I did not want to encourage the hon. Gentleman and give him an extra minute in which to continue coming out with this rubbish. I thought that the discussion on Europe was where we found the fruitcakes, but I am finding them this afternoon as well. Is he really suggesting that it is not rising gas prices that are increasing people’s fuel bills right now? It is not renewable energy, but the gas imports that are the problem.
It is not rising temperatures that the hon. Lady ought to be concerned about, but rising tempers among the vast majority of the public, who are fed up with paying higher fuel bills and bills for manufactured goods for a problem that simply does not seem to exist.
I say to the Government that we need a proper cost-benefit analysis of our climate change policies before we embark on measures that will drive manufacturing elsewhere in an effort to solve a problem that quite possibly does not exist, and I say to the hon. Member for Brighton, Pavilion (Caroline Lucas) and to the hon. Member for North Antrim (Ian Paisley), who is no longer in his place but who also referred to me as a fruitcake, that it was the fruitcakes who warned against the euro 10 years ago. We were accused of being fruitcakes then, but the fruitcakes were right. Fruitcake is a cheap and reliable source of energy. I am for the fruitcakes. I am proud to be a fruitcake. Long may fruitcakes continue.
Eleven hundred days into the fruitcake Parliament, we have the mid-term report. How did we get here? Everybody knows that the cost of living is going through the roof, while the standard of living is going backwards. The Government obviously have a narrative; they say it is all the Labour party’s fault. I agree with them to some extent. I agree that my party, when in power, was far too lax with the banks. Its light-touch regulation was far too light. The Conservative party then said that we were too severe, so how can they now say we got it wrong?
The truth is that it was working. In 2007, the net debt in the UK was only 38% of GDP—the second lowest in the G7 and almost the lowest in our history. Obviously the whirlwind that hit the world when Lehman’s collapsed affected everybody, but the Labour Government at the time did not become paralysed in the way that the current Government have. We went for growth. We cut VAT to 15%. We introduced the car scrappage scheme. We brought forward capital schemes, some of which were still going after the election only to be stopped by the Government, including £80 million-worth of new school building in my constituency which could have put people into work and given kids better schools.
We have gone from growth at 1.8% when we left power, to the Government breathing a huge sigh of relief over the past three years just because we have not gone into a triple-dip recession; they were even happier with only a double-dip recession. The best that we have had is stagnation. It is clear that the programme put forward by the Government has not helped this country and we need to see changes. Why do we need change? Who is paying? It is the same people who always pay: the poor, the weak and the vulnerable.
Let us look at what has happened in the past three years to affect the poor, the weak and the vulnerable. VAT has gone up. The child trust fund has been taken away. The education maintenance allowance has been taken away. Working tax credits have been frozen or cut. Pensions and benefits have been changed from RPI to CPI. Child tax credit has been cut and child benefit frozen. The sure start maternity grant has gone. The health in pregnancy grant has gone. Child benefit has been cut for better-off earners. We now have the bedroom tax and cuts in council tax benefit. There is lots and lots more. This is not about scroungers; it is about working people who are trying to get on in the world and who are struggling.
On top of that, almost 750,000 public sector workers have been sacked. They have been taken out of income tax all right: they have been sacked and are not paying it. They have been taken out of good, strong and stable jobs. People have been put into 1.25 million poor-quality jobs where they are underemployed and underpaid. Pensions have been cut, wages frozen and increments stopped. Why is it right to incentivise the rich but not the workers?
The worst thing is that the strategy has failed; it has flatlined. Even worse, the Government knew that it would fail, because it has always failed. It has been tried before and has always failed. Martin Wolf said last year:
“What is clear from UK history is that growth is a necessary condition for successful management of public debt. The...cuts of the early 1920s failed to lower the debt…the economy then collapsed.”
Nobel prize winner Paul Krugman said that the infuriating thing was that, half a century ago, any economist could have told policy makers
“that austerity in the face of depression was a very bad idea”,
and millions of workers are paying the price for that mistake.
Barack Obama, the absentee Prime Minister’s new friend, said that some people would say that
“The market will take care of everything…if we just cut more regulations and cut more taxes…our economy will grow stronger…And that theory fits well on a bumper sticker. But here’s the problem: it doesn’t work. It has never worked.”
Another Nobel prize winner, Joseph Stiglitz, said that
“austerity as the solution is just wrong. There won’t be a return to confidence—quite the contrary. So the direction Europe is going is…I think the wrong direction.”
There we have it: three Nobel prize winners—but they are wrong, aren’t they, because our Chancellor thinks that he is right? He ignores what happened in this country the last time we had a major recession. Keynes proved that you could not win with austerity and Roosevelt proved it in the United States. But we have a Government whose arrogance is matched only by their ignorance and now, as a result of his posturing, the Chancellor—even if he thought he was wrong—cannot back off. He has painted himself into a corner and he knows that if he puts in place plan B, he will be skewered by the shadow Chancellor. Pig-headed obstinacy, pride and ideology have combined to the detriment of this country. The job is far too big for the Chancellor. Now the Government are paralysed not only by their ideology and obstinacy, but by their internal fighting yet again about Europe.
We are seeing the people of this country struggling to get by, with tax cuts for the wealthy and tax hits for the poor. The poor are getting poorer and the rich are getting richer. It is, sadly, the same old Tories.
I think that all of us on the Government Benches absolutely recognise the increase in people’s bills, whether it is their gas bill, their electricity bill, the bill to fill up their car with petrol or diesel when they go to a garage, or their weekly food bill. We absolutely recognise the squeeze that our constituents are experiencing and the fact that wages have not gone up to compensate, and in many cases we have been extremely clear about that.
Nevertheless, because of the decisions that the Government have taken, it now costs people £7 less to fill up their cars than it would if we had gone ahead with all the price increases that Labour legislated to introduce before they left office. Also, we heard from the Secretary of State for Energy and Climate Change that our energy bills are 5% lower than they would have been, again because of the decisions we have taken. We know that Labour would have added £193 a year to our energy bills, because they would have funded the renewable heat incentive and carbon capture and storage through levies on people’s energy bills, whereas we are funding those things from general taxation.
Council tax is another area where the Government have done fantastic work to reduce the impact of the cost of living. Under the previous Government, council tax more than doubled—it went up by 109%. Thanks to the excellent stewardship of my right hon. Friend the Secretary of State for Communities and Local Government, we have managed to freeze council tax—certainly for principal authorities—for three years in a row. I remember that pensioners regularly came to see me in my surgeries, and some would complain that they were spending up to a third of their income on their council tax. I have not had pensioners coming to see me about that in the last three years, because in real terms we have cut council tax by 10%. In fact, my own council tax bill has gone down in cash terms in the last two years, thanks to the excellent stewardship of Central Bedfordshire council and Studham parish council. We are talking about a council that has taken £52 million out of its budget and improved services. We now have a better leisure centre in Houghton Regis, the gutters are sprayed three times a year rather than twice a year and more potholes are being filled, despite £52 million being taken out of the budget, which shows that it can be done.
We have an immigration Bill in the Queen’s Speech, which is absolutely necessary. I am sorry that the right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) is no longer in his place, because I would have liked to remind him that the Migration Advisory Committee—an independent body from the UK Border Agency that advises the Government—has pointed out that the 2 million extra net migrants who came to this country under the previous Government decreased wages for working people and meant that fewer UK citizens went into jobs. That is something that we need to be mindful of when many of our constituents are looking for work. Only two days ago, one of my constituents wrote to tell me that on the construction site he was on in London he was virtually the only British worker; all the others were Albanian. I am not sure why they were there, given that Albania is not a member of the European Union. These are genuine issues for our constituents. The people of this country are speaking to us loud and clear, and we would do well to heed what they are saying.
I hugely welcome the national insurance contributions Bill. We are talking about a tax off jobs. Up to 2.5 million employers will benefit and 450,000 of our smallest businesses will no longer pay national insurance contributions. That means that every business could take on one extra employee on a salary of up to £22,400 or four more on the minimum wage without paying any more national insurance contributions. That is just the thing that we should be doing.
How many businesses benefited from the Government’s previous attempt to use national insurance to stimulate the economy? My understanding is that very few did so. Why does the hon. Gentleman think that the current proposal will be any more successful? He is talking about the future, but what about the past three years?
All I know is that employers and employers’ organisations up and down the country have strongly welcomed the employment allowance. It is a tax off jobs. I remind the hon. Lady that the Labour Government were going to increase national insurance, had they got back into power. We believe in trying to get more people into work by taking costs off employers.
The Pensions Bill will help savers by ensuring that they get the benefit from everything that they save for their pension. That has not been the case in the past. The Care Bill will also help people by ensuring that they do not have to sell their homes to fund their care in old age.
The Opposition have said that this is a thin Queen’s Speech, but it is not; it contains 19 Bills. Labour Members need to be careful not to confuse legislative activity with the real business of government. A by-pass in my constituency was announced by the right hon. Member for Edinburgh South West (Mr Darling) when he was Transport Secretary in 2003. In the following seven years of the Labour Government, however, not a shovel hit the ground. Nothing was done. All Governments like to announce things, but the delivery mechanisms and speeding up the ability to get things done are what matter. The planning system takes far too long to achieve finality and get results in this country. We also need to look into the matter of judicial reviews. In 1998, there were 4,500 judicial reviews, but the number trebled over the following decade. It is absolutely right that the Prime Minister and the Secretary of State are looking at those issues to ensure that we can get things done more quickly.
What we are doing on training and apprenticeships is absolutely right: 520,000 apprenticeships have been brought into being by this Government. I am particularly pleased by what is happening on the higher apprenticeship route and by the technical baccalaureate announced by the Secretary of State for Education, which will be a type of vocational A-level. Those are very welcome indeed, as are the university technical colleges. It is also vital that we export more. We have increased our exports outside the European Union by 33% since the 2007 peak. We have done well in that regard, but there is clearly much more for us to do in those growing world markets.
Without doubt, the rising cost of living, combined with stagnating—or worse, falling—income, has to be one of the biggest worries for many people up and down the country. There is little sign of light at the end of the tunnel. People rightly feel that they are working hard and putting in the hours, but they are at best standing still and some are going backwards. Others have found themselves out of work, and the little support that they get when that happens is dwindling every day.
I find my constituency surgeries ever more heart-wrenching, given the number of people coming to see me not only because they have become unemployed, which is clearly a tragedy for those affected, but because they need help with the situation that they find themselves in after that. Some might be looking for help to start up on their own but are unable to get past first base. Others might be hoping for a more reasonable approach by the jobcentre that insists they pay the £3.60 return fare to travel to town rather than go to the centre that they could walk to in an hour. They would rather do that than spend £3.60 of their dwindling weekly budget. Others may fear that they are being discriminated against because they are over 50 and, having worked all their life, now find themselves unemployed and having to compete with graduates for jobs. Others might fear bankruptcy because of the loss of their home; they have been out of work for a year and the support they have received is now drying up. Those people are the victims of this Government’s economic mismanagement.
That is why it is even more galling that the only people who seem to have been given a break by this Government are those fortunate enough to earn more than £150,000 a year. They will benefit from the 50p tax cut. They are the very last people who should be getting such a break right now.
That is a spurious statistic. We know that the deficit needs to be paid down, but this Government have made a choice to give a tax cut to those on the highest incomes while leaving other people to pay. It is not just me who thinks that. Conservative voters and, indeed, Conservative party members up and down the country are frustrated by the choices this Government have made.
My hon. Friend makes a powerful point. Another point to remember is the disproportionate impact that this Government’s tax and benefit changes have had on the lowest earners—and on the middle earners, too.
Let me get back to members of the Conservative party. Linda Pailing, for example, the deputy chair of Harlow Conservative party—I see the hon. Member for Harlow (Robert Halfon) in his place—put it very starkly, targeting her criticism squarely at the Prime Minister. She said:
“The national swing took us down and that is purely to do with what Cameron and his cronies are doing with the national party. The voters are disillusioned with Cameron himself. They don’t like the fact that he didn’t keep the 50p tax. This has really grated and people feel here that he is not working for them, he is working for his friends.”
I could not have put it better myself.
There could have been some acceptance of the Government’s approach—at least among their own supporters—if the 50p tax cut policy had boosted confidence and stimulated economic growth, which is the only thing that could turn the situation round for those feeling the squeeze, yet it has done precisely the opposite. The approach has not only failed to address the lack of confidence in the economy but compounded the lack of confidence in this Government. What kind of right-minded Chancellor or Prime Minister would turn a blind eye to the suffering of the vulnerable and those struggling to make ends meet, slap on a VAT hike and impose a bedroom tax, cuts to tax credits and in-work support while dishing out tax cuts to those who need them least.
Will the hon. Lady acknowledge that this Government have taken 3,000 low- income people in Harlow out of tax altogether and cut taxes for 40,000 low-income Harlow residents? Why did she and her party vote against those tax cuts for lower earners?
I anticipated Members raising the issue of personal allowances, but the fact is that the Institute for Fiscal Studies has clearly shown that the overall impact of the Government’s changes to tax, credits and benefits has left the very people for whom the change to personal allowances was supposed to help worse off. People will be worse off under this Government in 2015, too.
Then comes the ultimate betrayer of the Government’s true intentions. First, someone claims Britons have never had it so good, completely downplaying the impact of the recession on those hard hit. Then, after resigning on the back of it, this person is reinstated and can now be heard extolling the virtues of starting a business in a recession on the basis that
“labour can be cheaper and higher quality, meaning that return on investment can be greater”.
I was both alarmed and enlightened to read the report in The Daily Telegraph of a leaked discussion between pollsters and the Government’s key advisers. When asked what kept them awake at night, those advisers replied “Nothing” at first, and then admitted that it was their kids’ school fees that bothered them most. If that is the main issue affecting the lives of the Government’s key advisers, that is quite indicative. Lord Young’s comments, cited above, are quite startling, showing him to be revelling in the strain that the jobs and wages squeeze is putting on people’s finances. There are 2.5 million people out of work at the moment, and nearly 1 million young people out of work, with 500,000 out of work for two years or more. That is the highest number since the end of the last Tory Government in May 1997. Since 2010, the number of unemployed people has risen. Lord Young should reflect more on that.
I am afraid that I cannot. If I do, I will run out of time.
Living standards have come under increasing pressure. Average earnings are rising at the lowest rate since the end of 2009. More worryingly, according to recent analysis of figures from the Office for Budget Responsibility by the Resolution Foundation, that squeeze on average incomes is set to continue for many years. The foundation estimates that, given the OBR’s projections, the gap between what people earn and what they would have been earning had their wages risen in line with inflation will have risen to £3,200 by 2017.
The squeeze on living standards has had a disproportionate impact in my region in the north-east. Analysis carried out recently by the northern branch of the TUC drew attention to the pay gap in the north-east in particular. It showed that since 2010, real wages had fallen by £23 per week and £1,196 per year in 10 out of 12 north-east local authority areas, and that the north-east is the poorest region in the United Kingdom. Some households have been squeezed by £4,000 more than was the case a year ago, given wage freezes, below-inflation pay rises and public sector job losses throughout the region.
What hope did the Queen’s Speech offer to the millions of people across the country who have been affected by the Government’s policies? We needed a Queen’s Speech that would create jobs and growth and give people enough confidence in the economy to invest, but the Government offered nothing. The British people deserve more.
This aspect of the Queen’s Speech—the issue of the cost of living—is essential to the Government’s fortunes, and, in my view, goes to the heart of what they are trying to do. I am in a good deal of agreement with what was said earlier by my right hon. and learned Friend the Member for North East Fife (Sir Menzies Campbell). It is what brought the coalition together in the first place.
The essence of dealing with the cost of living is, first of all, getting fiscal and monetary policy right, and I have every confidence that we are doing that. Bearing down on the deficit is the key to ensuring that we have low interest rates, and it is low interest rates that allow people to pay their mortgages, remain in their homes, and cope with the financial difficulties that they face. Many hon. Members have raised housing issues, but the key to affordable housing is for people to be able to afford their mortgages, and that is dependent on interest rates. The singular success of this Government lies in ensuring that there is confidence in the fiscal plan laid out by my right hon. Friend the Chancellor, which has ensured that interest rates have remained low and stable.
The hon. Member for Newcastle upon Tyne North (Catherine McKinnell) attacked the change in the highest tax rate payable, but that was, without question, the right thing for the Government to do. It is not a question of tokenism. It is not a question of saying “We will have high rates in order to punish the rich, because we disapprove of their lifestyle.” It is a question of deciding what rate of tax will raise the most revenue for the Exchequer.
Let us look back at the history from 1979 onwards. When the highest rate of income tax was 83% and the highest marginal rate on unearned income was 98%, we saw that the top 1% of taxpayers contributed only 11% of the total income tax revenue. When the rate was cut, the income generated for the Government increased. Exactly the same happened following the further cut introduced by Lord Lawson in 1988.
I entirely accept the evidence that people with low incomes are more likely to spend the money that they receive. However, money flows within the economy are not limited to expenditure. The saving of money increases deposits at banks and eases their loan-to-deposit ratios. It therefore ensures that the banks can lend more money both to prospective home owners and to businesses.
There is a view among Labour Members, which was also expressed during the Budget debates, of a very closed financial system, but that is quite wrong. There are flows within the financial system. There is a rule of money, that money must find a home. [Interruption.] It is very welcome to come to my home. If hon. Members would like to send it in that direction, I shall not say no. That is the sort of tax I could do with. However, money does find a home, and that is in generating economic activity.
The important thing for the Government to do is to lift the living standards of everybody, but we do not improve the standard of living of the poor by impoverishing the rich. That is what Labour tried when in government before and it singularly failed. If everybody gets richer, the whole standard of living of this country improves, and Government revenues increase when rates of taxation are reduced. It is thought that the ideal rate to maximise the amount of revenue for the Treasury would be 37%, so I would be keen for the Government to do this. It is a great error, for those on all sides, to put short-term political advantage or debating points above the economic benefit of this country. Therefore, we should be bold about rates to make sure that we get the revenue we need for the Government to be able to afford to do what they want to do, to keep taxation overall as low as possible, to pay down the deficit and, ultimately, to reduce the national debt. So on the fiscal side, the Government have got it right.
The other aspect of prices is the monetary side, primarily handed over to the Bank of England, but none the less with a Government target set in relation to inflation. If the monetary side were to get out of control, as we have seen historically that it can, the cost of living increases because of the monetary effect on prices. So there is a careful balance for the Government to have. This Government, unlike our continental partners, have got it right by having a tight fiscal policy and a loose monetary policy, so that liquidity is available within the economic system, but the Government part of it is bearing down on the Government’s deficit and, ultimately, on the debt. That is the right balance, and it will encourage price stability. If we did things the other way around—with tight fiscal and monetary policies—we would have a degree of austerity that is unsustainable, as our continental friends have. If we have both loose money and loose fiscal policy, we will end up with inflation that has pretty much disastrous consequences for the cost of living.
I will not give way any more because I do not get any more bonus points, so I must plough on, with apologies to the two hon. Ladies.
That deals with the fiscal and monetary side. The other part of keeping prices down is regulation, and we have heard a good deal about energy price regulation and how it affects households across the country today. My view is that the priority for my constituents is that they should have cheap energy, not that we should insist on large subsidies for theories that some people find attractive and others do not. I am more with my hon. Friend the Member for Monmouth (David T. C. Davies) than I am with the hon. Member for Brighton, Pavilion (Caroline Lucas), even before I have heard her speak, although I look forward to that. So the issue of regulation is key and, of course, that ultimately comes down to Europe.
On Europe, I will make one aside, which is that we are negotiating a free trade agreement with the EU and the United States of America. Singapore, not the largest country in the world, managed a free trade agreement with the United States in 2004. The United Kingdom would have managed to do it a good deal quicker had we not been tied in to the negotiating sloth of the European Union. Had we been doing it for ourselves, that would also have helped to bring down the cost of living, because free trade ensures that there is more competition in this nation.
Finally, on the constitutional issue of some amendments that have been proposed, I am fascinated by the idea that there is to be a free vote on the Queen’s Speech. Previously, a Queen’s Speech not being carried has effectively been a confidence vote in the Government. These constitutional innovations are extremely dubious—it would have been better if they had not happened—but as that free vote has been made available, I shall of course vote a Eurosceptic ticket.
I should like to concentrate on the final two words of the Gracious Speech, which, unfortunately, give the impression of having been tagged on the end, almost as an afterthought. Those words are “climate change”; I am sure that I will not disappoint the hon. Member for North East Somerset (Jacob Rees-Mogg) in what I am about to say.
The forthcoming legislative programme shows that the Government are failing in their first duty—to protect citizens—precisely by failing to address the causes of the worsening climate crisis. They are ignoring warnings, even from conservative bodies such as the World Bank, that without far more urgent and radical cuts in emissions, global temperatures will rise by an average 4° or more by the end of the century, with devastating impacts as a result.
If the throwaway line at the end of the Gracious Speech really does mean that progress on climate change will genuinely be part of the UK’s G8 presidency, then of course I welcome it, not least following reports that the Government have been blocking the attempts of the French and German Governments to give the issue a high priority.
However, for the Prime Minister to suggest that the Government are successfully taking sufficient action to deal with climate change is simply dishonest. I do not use that word lightly, but if we are to have a chance of avoiding the worst of climate change, politicians of all parties and countries will have to get a lot more honest—honest about the scale of the threat that we face and the scope of the changes that we need to make.
Just last week, for the first time in human history, the concentration of carbon dioxide in the atmosphere passed the milestone level of 400 parts per million. The last time so much greenhouse gas was in the air was several million years ago, when the Arctic was ice-free, savannahs spread across the Sahara desert and the sea level was up to 40 metres higher.
The difference between 399 and 400 parts per million may be small in its impact on the world’s living system, but it is overwhelming in its symbolism of our collective failure to put the future of the natural world and its people above immediate self-interest and to tell the truth and admit that reliance on fossil fuels is not compatible with the urgent action needed on climate change. Given the role that fossil fuel lobbyists play in influencing policy, including being seconded into Departments to draft it in the first place, I am also deeply disappointed that the Bill to introduce a register of lobbyists has been dropped from the Government’s plans.
If coalition Ministers are comfortable in their state of denial about the climate crisis and their cosy relationships with the fossil fuel industry, whose core business models are incompatible with keeping global warming below 2°, let it be on the record that young people in particular certainly are not. We can see that in the reaction to the Education Secretary’s attempts to remove climate change from the curriculum for the under-14s and we saw it last week when the fossil fuel divestment movement came in the shape of huge opposition to a new partnership between Oxford university and Shell—a partnership that would have been about getting yet more fossil fuels out of the ground. We see it, too, in the concern that I am sure is manifest in many hon. Members’ inboxes from people still lobbying for there to be a clear decarbonisation target in the Energy Bill, not just promises that that might be looked at in 2016.
If I am disappointed that we heard only one mention of climate change in the Gracious Speech, I am even more disappointed by the lack of meaningful action on fossil fuels. Ministers must be honest with themselves and the public and admit that, if we are serious about avoiding the worst impacts of climate change, the vast majority of fossil fuel reserves must be left in the ground.
If the options were either nuclear or more and more fossil fuels, obviously nuclear would be the least worst option. But that is a false choice that we are not facing. There are plenty of technologies out there that need further support—solar, wind, geothermal and many others that are now coming to be equal in terms of price parity. We do not need to go down the nuclear route, which is hugely expensive as well as dangerous. We do not need to go there, so why would we? Why not use the technologies that we know will get our emissions down and keep the lights on much more cheaply, effectively and safely?
I turn to a report published last month by Carbon Tracker. It makes the point that we cannot go on using more and more fossil fuels. As Lord Stern explains in the foreword,
“most fossil fuel reserves are essentially unburnable because of the need to reduce emissions in line with the global agreement”
to keep temperatures below 2° warming. That 2° warming is the first critical number in the Carbon Tracker report. Governments around the world have agreed that we should not exceed that level of warming. There is already an increase of 0.8° in the atmosphere, so we are getting close to 2°, and 0.6° is locked into the atmosphere. If we are not careful, we will get to 2° very fast, and many people believe that 0.5° would be a safer threshold.
The second number is the 2,795 gigatonnes of carbon dioxide that industry figures indicate are locked up in the known, proven coal, oil and gas reserves around the world. Finally, the figure of 565 gigatonnes is the amount of CO2 that research by the Potsdam Institute for Climate Impact Research identifies as remaining in our carbon budget for the period 2011 to 2015. In other words, we can safely burn only one fifth of known fossil fuel reserves and still keep within the global carbon budget, as the International Energy Agency confirmed in its recent report.
Many people will suggest that carbon capture and storage is the way out of this problem. However, even if CCS were deployed in line with an idealised scenario by 2050, that would extend fossil fuel carbon budgets by only about 125 gigatonnes, which is equivalent to only 4% of the total global budget. CCS is not likely to come online in any serious way until at least 2030, by which point the carbon budget may well have been used up.
The implications of all this are clear. First, the decarbonisation target needs to be in place. We need to make sure that we do not have a second dash for gas. Most crucially, Ministers must require extractive companies to include the greenhouse gas emissions potential of fossil fuel reserves as part of an update on company reporting regulations. If they do not, there is a real risk that our financial markets will have a carbon bubble worth an estimated $16 trillion globally. Because we are so over-exposed in the UK given the global role played by London, our financial centre, in raising capital, there is great concern that companies are inflating their worth because of these reserves.
I rise to support the Gracious Speech.
Without any shadow of a doubt, we live in a global economy. We have heard many speeches about the cost of living based on the domestic policies that are set nationally, and there is indeed an important debate to be had about that. However, like my hon. Friend the Member for New Forest East (Dr Lewis), I regret the fact that we will not discuss international affairs during the debate on the Gracious Speech.
An escalation of issues in the middle east would have a very detrimental effect on the cost of living in this country. Many hon. Members have talked about the cost of energy—oil and gas—in this country and the increase in fuel poverty. The stark truth is that that could increase only if we were to move towards a more militarised conflict across the middle east. There are serious concerns about Iran’s nuclear ambitions, but that does not mean that we should take a unilateral decision, or a decision with any other nation, to take military action against that country. The mere suggestion of moving forward there could result in oil price rises across the world that would have a deep impact on the people of this nation, without a single bullet being fired.
We do not get any oil from Iran; we got only 2% before the EU embargo came in. However, a vast majority of the oil coming into this country comes through the Straits of Hormuz, and if the oil traders believe that there is a threat to those shipping lanes, oil prices will inexorably rise. We must remember that oil is bought three months in advance of when it is sold. If the oil traders believe that there may be difficulty in getting that oil out of the Gulf and into our country, oil prices will increase, and that will affect every aspect of the cost of living in this country. It is not just about the straightforward issue of fuel prices. If we are on a bus we have to get a bus ticket, or if we are on a train the electricity has to be generated to run it. The price of oil affects the price of food in our shops, which has to be transported there using fossil fuels. That shows why we should have discussed the effects of international affairs on this nation during our debates on the Gracious Speech.
I do not think I am the only Government Member who seriously questions the wisdom of relaxing the EU arms agreement on Syria. If history has taught us anything over the past 10 years, it is that picking a side and arming it will rarely lead to a useful outcome for world stability. If we side with the opposition in Syria, who are we actually siding with? Many companies in this country that employ many people are now banking with Israeli banks, and that has a direct influence on their strategic fiscal capability. Do we seriously want to empower an opposition that has some, let us say, interesting people on the Islamic fundamentalist side who are right next door to a country that the vast majority of Arab countries would like to see removed from the face of the map? That instability, linked with Iran talking to Hezbollah and a change in the dynamic in Syria, could have a direct consequence on the ability of companies to operate in this country.
Would my hon. Friend also like to make an observation on whether the task of humanitarian intervention has been made that much more difficult by the way we went about it in Libya? We said that it would be a very limited, no-fly-zone-type intervention, but we ended up intervening much more directly on one side, and in a strictly military way, in a civil war?
I am grateful to my hon. Friend for raising that point. That is a recent example of a country that we helped to liberate, but it led to issues for our embassy and that of the US. That paints a picture. However good the intentions to solve a crisis may be, the question is: what comes next?
That is not to say that we should shirk our responsibilities towards humanitarian aid. More than 1 million refugees are flooding out of Syria into Jordan alone, a country that is ill-equipped to deal with that number. We will eventually be called upon to help with that humanitarian crisis and it is important that we will, again, be there for our fellow man. I come back to the point that, when we debate the cost of living in this country and the Government’s programme over the next year, we should also discuss international issues, because, importantly, they are interlinked with everything we do.
In 1983, when I was a child of just six or seven years of age, the film “Threads” was made. I watched it recently and am sure that a number of other Members have also seen it. It is set in Sheffield in the 1980s in the aftermath of a nuclear holocaust. It is a sobering film and it should be watched. What struck me about it is that those who made the decisions that caused the wars to take place did not feature in the film. Indeed, given that it was set in Sheffield, the decisions were being made 190 miles away in London and elsewhere in the world. That is the point I am trying to make: we have to take notice of the innocent people on the ground and of the impact of our decisions.
We live in a highly volatile world and have to be very careful about how we move forward, and it is regrettable that the debate on the Gracious Speech has not given us the opportunity to address these issues, which could have such a fundamental impact on our cost of living.
It is a pleasure to follow the hon. Member for Elmet and Rothwell (Alec Shelbrooke), although I do not think that the spot price of oil should be the determining factor in whether we intervene in a country where 70,000 people have been slaughtered and 1 million more have been made into refugees. That should not have been a consideration in Libya either.
The centrepiece of the Queen’s Speech, with respect to the cost of living, should have been a strategy for growth. That was sadly missing from the rag-bag of old ideas that we have seen before. Contrary to what was said by the hon. Member for North East Somerset (Jacob Rees-Mogg), who is no longer in his seat, under this Government, the debt to GDP ratio will have gone up from 55% in 2010 to 85% in 2015, debt is rising by £245 billion and we have lost our triple A rating. The idea that all is rosy in the garden is farcical.
What we need is growth. To his credit, the Prime Minister is in Washington trying to negotiate an EU free trade deal with the United States. At the very same moment, the Eurosceptics—or should I say Euroseptics—are busy undermining that prospective agreement with a great trading partner. That is very sad.
My hon. Friend is making a powerful point about our international position. Does he share my concern over the figures from the Office for National Statistics that came out today, which show that the UK has plummeted to 12th in the league table of household incomes? That shows that not only are people suffering, but we are falling behind our international neighbours and competitors.
That is a key point.
We are always hearing that everything is all right in the UK and the problems are someone else’s fault. The EU does have problems, but there are emerging opportunities in China, India, Brazil and elsewhere. The Queen’s Speech should have provided a strategic platform for international trade to help us access the newly emergent and massive middle classes who want to take our consumer goods and who form the basis of inward capital investment. But no, we are busy being the one nation, fish and chip shop, Eurosceptic Britain—the nation of shopkeepers that Napoleon described us as. It is frankly pathetic. The Conservatives are not fit to be in government.
Between 1997 and 2008, we saw growth of 40%. Not enough Labour Members stand up and defend that. If our debt to GDP ratio is going from 55% to 85%, how can we sort it out? One way is to cut debt and to stamp on the poor for the recklessness of the bankers, which is what the Tories are doing. The other is to increase GDP so that the ratio goes down. Under Labour, GDP went up by 40% up to 2008. In 2008, my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown) and President Obama put together the fiscal stimulus. The EU’s fiscal stimulus was 2% of GDP. In the United States, it was 5% of GDP. Indeed, the United States put in $2 trillion of quantitative easing, whereas the EU put in nothing. Britain did put in something, but we still have the economics of austerity here and in Europe. In the United States, where the economy was stimulated, growth is projected to be 3% in the next year. In the EU, it is projected to be 1%. Why was nothing done about that in the Queen’s Speech?
We have seen the emergence of massive youth unemployment. In Greece, the rate is more than 60% and in Italy it is 38%. In Greece, people are moving towards the Nazis and extreme communists. In Italy, 25% of people voted for a comedian. I notice that that is the same percentage of people who are voting for UKIP here. The British National party’s support has gone up fourfold from 1% to 4%. The response of the Tories is to run for the hills and emulate UKIP.
Why has support for UKIP gone up? The first reason is that the Prime Minister has given it credibility by saying that he will hold a referendum. People who used to say to me when I knocked on their doors, “You must be joking. We’ve got millions of jobs involved in trade with Europe. It’s the platform into China, India and the United States”, are now thinking, “Hold on. Cameron’s offering us this option, so it must be a credible choice.” That gives oxygen to UKIP.
Obviously, I disagree with that. I do not agree with a referendum, but if the overwhelming majority of people in Britain want one, I accept that we should have one. I am simply saying that the case for a referendum has been whipped up because of the Conservatives’ fear of UKIP. They have fed it red meat, and it is coming back for more.
It is the same with immigration. Everyone is going, “Oh no, there’s too much immigration. It’s terrible, isn’t it?” However, immigration was part of the reason for our economic growth. We prematurely let in some of the people from Poland who would have been able to come here anyway, and meanwhile Germany is saying that it needs more immigrants to pay for the generation that is growing old. We obviously need to manage immigration properly and carefully, but we should consider that 6% of immigrants are on benefits compared with 16% of indigenous people.
We are providing ammunition for people to blame immigrants, and what was in the Queen’s Speech? Private landlords and health providers will have to find out whether someone is an immigrant and whether they are legal. What will be the easiest test of that? “Are you white or are you black?” It is institutional racism. We are feeding the UKIP voters by saying, “The austerity problems aren’t Tory austerity problems, they’re because of all the immigrants.” Is that helping anyone and creating a united and strong Britain with a one nation future? No, it is creating a weak, divided nation of people who are being crushed by the Tories, and the poorest are blaming the immigrants. It stinks.
I am grateful to the hon. Gentleman, not least because I am married to an immigrant and fully support the Government’s policies.
The hon. Gentleman mentioned a statistic, but 100% of indigenous people in Britain are entitled to receive benefits. What percentages of those who have emigrated here are entitled to receive them? I do not know, but it is much lower than 100%, so the statistic that he gave is inaccurate.
I certainly do not accept that. My basic point about the cost of living, which is what we are talking about, is that the bottom 10% of people in Britain spend 37% of their money on food, energy and housing costs, whereas for the top 10% it is less than half that proportion at 17%. As basic costs escalate, benefits are squeezed and the overall amount of money that people have is crushed, including their working tax credit and the like, and the people right at the bottom can barely survive while the people at the top are laughing. It is all very well saying that the rich are paying more, but the wages of the top 10% have gone up by 11% in the past two years.
I am not even talking about the 5% tax giveaway, but what a laugh that is, with the Government saying, “Oh, we’ll raise more from a 45p rate than a 50p rate.” People on the top incomes can move their income between tax years, so that is why there will be a lower take. There will be a behavioural change. If the 50p rate was ongoing, we would raise more. Indeed, some people already pay 50%, because those who pay 40% also pay 12% in national insurance, so their marginal rate is already 52%. The only difference is that they do not have accountants. It stinks. The reckless bankers, who were two-thirds responsible for the deficit in 2010, are being rewarded in their pay packets while the poorest are being squeezed and we are giving a bit to the squeezed middle.
As I have knocked on doors around Halesowen and Rowley Regis over the past five years, a common theme has come up time and again. My constituents, and I suspect those around the country, have been looking for reassurance that the Government are on their side as they go out to work and try to do the right thing and take responsibility for themselves and their families.
Many families in my constituency are starting to see things get better. There are now 3,000 more of my constituents in work than there were before the general election. For many, however, things are still a struggle. They want to see evidence that the Government understand that things are tough for them and their families. They want action to make things a little easier, and they want to have confidence that, at the very least, their Government will not make things unnecessarily difficult.
I am pleased that the Energy Bill has been carried over. It will give legislative force to the requirement on energy companies to put customers on the cheapest tariff to meet their needs. When the Prime Minister announced that the Government would ensure that energy consumers were put on the cheapest available tariff, the Opposition’s reaction was that it could not be done, presumably because they knew that when they were in government they had lacked the political will to make it possible. They then changed to arguing that it would not be done—presumably because they knew they would not have done it—and they now seem to argue that it is not worth doing. The truth is that it could be done, it is being done, and it will benefit many of our constituents, particularly the most vulnerable.
As a humble Back Bencher, I hesitate to pick faults in the way Ministers choose to communicate the Government’s achievements, but the message that a series of freezes in fuel duty represents help for drivers tells only half the story. Motorists will, of course, be the most obvious direct beneficiaries of getting fuel costs under control, and drivers in my constituency will, on average, be £170 better off than they would have been had the Government gone ahead with the increase in fuel duty planned by the Labour party. However, I cannot help but think that that message sells the Government short. Transport costs are a significant part of the cost that families pay in shops, particularly for food, and they have a real impact on the cost of living for motorists and non-motorists alike. Poor grain and fruit harvests last autumn have created significant pressures on food prices globally, and the Government’s action to prevent fuel costs from needlessly rising and adding to those pressures will help to stop spiralling food prices that could hit hard-working families hard.
What does the hon. Gentleman make of the National Farmers Union’s repeated call over the past few months for an extension to allow seasonal agricultural workers from beyond EU borders—places such as Moldova and Bulgaria—to come to the UK and pick the crops in the fields because of that issue of affordable food? How does that tie in with the Government’s thinking on immigration?
I thank the hon. Gentleman for his intervention but my constituency contains, I think, half a farm, so I am not qualified to speak on the matter he raises. Like the measures contained in the Budget, the action the Government are taking will provide significant help for families in my constituency, and I shall be proud to support them.
I understand that it is this year’s fashion to talk about matters that we wish had been included in the legislative programme, and if I may make one plea to Ministers, it would be to add my voice to those of right hon. and hon. Members—led by my hon. Friend the Member for Harlow (Robert Halfon)—who are calling for measures to stabilise fuel prices to be taken further. With wholesale prices having fallen from their peak, it would be a good time to revisit the idea of a fuel duty stabiliser to protect families and businesses from some of the damaging effects of volatile fuel prices. Should the Government return with such plans, I am sure they would enjoy not only the support of the House but—more importantly—they would make a real difference to our constituents.
The positive action that the Government are taking to address the cost of living stands in stark contrast to the record of the previous Government, although that is hardly surprising. Why would a party that had convinced itself that it had abolished boom and bust worry about rising prices? A Government who believed that the benefits of boom would not be followed by the crisis of bust were happy to assume that they could go on handing out enough in benefits and tax credits, and that a policy of uncontrolled immigration would provide enough cheap labour to keep service costs low. The Leader of the Opposition may have started to talk about energy costs, but he cannot hide from the fact that when he was the Cabinet Minister responsible for such matters, he stood by while the margins of energy suppliers soared.
I am pleased to support the Government’s legislative programme, and in particular actions to keep the cost of living under control. People in Halesowen and Rowley Regis who work hard and want to get on but who have been finding things tough can see that these measures will help to make things a little easier. They can see that this Government are on their side.
I should like to address housing, which hon. Members on both sides of the House must start to take seriously. In 2012, the Institute for Public Policy Research showed that, in the current spending review, nearly £95 billion will be spent on housing benefit compared with just £4.5 billion on building affordable housing. That means that for every £1 spent on affordable housing, £19 will be spent on housing benefit. We should therefore not be surprised that the housing benefit bill has been rising. We accept that, but the problem is that the Government have not analysed the reasons for it, and have decided to address housing benefit spending by trimming bits of money off recipients of housing benefit here and there. For those individuals, those bits of money are not insubstantial. For somebody on £71.70 a week, losing £12 a week because they have to pay it towards their rent is extremely significant in their cost of living. The policy does not make sense for the country or for those individuals.
In the 1970s, 80% of housing expenditure was for building houses—very little was spent on rent subsidy. As a result, many working people, including people in relatively low-waged jobs, had affordable housing in which to live. They therefore did not need to claim benefits. No wonder people say, “Too much goes on benefits.” The money is going in at the wrong end.
The previous Labour Government did not address the problem in the way that I, as a councillor active in housing, would have liked. Many Labour Members have said that for some time. I was pleased that the shadow Secretary of State for Work and Pensions said recently in an article in the Evening Standard that one principle of the next Labour Government would be to redress that.
My hon. Friend will know that the cost of housing benefit has doubled in the past 10 years to about £20 billion, but is she aware that 70% of the increase is because of private sector rent increases? Does that not make her case for building more affordable housing, not just crushing the poor?