On this final day of debate on the Queen’s Speech, I beg to move an amendment, at the end of the Question to add:
‘but regret that the Gracious Speech fails to tackle the deepseated cost-of-living crisis with a plan to secure a strong and sustained recovery that delivers rising living standards for the many, not just a few at the top; and call on your Government to act to boost housing supply and ensure at least 200,000 new homes are built each year, introduce an independent infrastructure commission, reform the energy and banking markets to make them more competitive for consumers and businesses, make work pay by expanding free childcare for working parents, raise the value of the minimum wage over the next Parliament, introduce a lower ten pence starting rate of tax, set out reforms to ban recruitment agencies from hiring solely from overseas and put in place tougher enforcement of minimum wage laws to tackle the exploitation of migrant workers that undercuts local workers, introduce a compulsory jobs guarantee for young people and a new gold standard vocational qualification and give business a real say on apprenticeships in return for increasing their numbers to ensure that every young person gets the skills they need to succeed in the future.’.
Our economy is growing again and unemployment is falling [Hon. Members: “Hooray!”] yet we are today debating this Queen’s Speech just three weeks after local and European elections in which mainstream politics in our country was delivered a serious warning shot by the electorate—turnout was desperately low, the two main parties each failed to win even a third of the electorate, the Liberal Democrats were wiped out in most parts of the country, and the poll was topped by a party with no Members at all in this House and which campaigns to lead Britain out of the European Union. As the Leader of the Opposition said in his opening speech of this debate last week, these developments reflect
“a depth and scale of disenchantment that we ignore at our peril—disenchantment that goes beyond one party and one Government.”—[Official Report, 4 June 2014; Vol. 582, c. 15.]
All of us, in all parts of this House, know deep down that my right hon. Friend is right.
We all heard time and again on the doorstep the worries, fears, insecurity and pessimism of people up and down our country that the economic recovery is not working for them, their family and their community. After Labour’s victory in Hammersmith and Fulham, perhaps the Treasurer of Her Majesty’s Household, the right hon. Member for Chelsea and Fulham (Greg Hands) should listen more carefully to the electorate on these matters.
I will open my remarks on the Queen’s Speech and take interventions in a moment.
In the startlingly honest and blunt words—the Chancellor should listen to these words—of the Minister without Portfolio and previous Conservative Chancellor, the right hon. and learned Member for Rushcliffe (Mr Clarke),
“the populations of most European countries including the United Kingdom have not yet felt any sense of recovery.”
He is right. There is a cost of living crisis and people are not feeling the benefit. The former Chancellor is right, too, to say that we in Britain are not alone. The European elections were no triumph for mainstream parties of left or right in most European countries, with far right or populist parties flourishing. The pattern that we have seen here in Britain—growth returning, but citizens expressing their insecurity and discontent at the ballot box—was repeated in countries such as Denmark and Austria, which also have growth and falling unemployment.
That is why I say to all parts of this House, including my own, that it is a challenge to all mainstream parties that working people do not believe that they will share in rising prosperity, be able to afford a home, secure a better job or save for a decent pension.
I will give way in a moment, when I have established my argument. [Interruption.] Hon. Members should not be complacent; they should listen to this.
People have good reason to be sceptical. This stagnation in real wage growth is not just a problem of the past few years. It started in Britain over a decade ago as rapid technological change and global trade pressures put the squeeze on middle and low income households. The UK is not alone. That pattern is reflected across the developed world. Low wage and unskilled employment has grown, but research shows that traditionally middle-income, middle-class jobs in manufacturing and services have fallen as a share of total employment in all OECD countries. As the recent publicity around Google’s driverless car shows, labour-substituting technology is likely, if anything, to accelerate.
So the challenge for this Queen’s Speech and for this political generation is to show that, in the face of globalisation and technological change, we can secure rising prosperity that working people believe they can share in. Of course we have to respond to their concerns about immigration and reform in Europe, but the challenge is to get more better paid jobs for people who feel they have been left behind, and to bring in new investment, new industries and new jobs which could replace those in traditional areas where jobs have gone.
Those of us on the Opposition Benches will, with an open but critical mind, study the proposals in the Queen’s Speech on fracking, annuities, and pensions savings vehicles, but the real test against which this Queen’s Speech and the manifestos of all political parties will be judged over the next year is whether on jobs, skills, innovation and reform this generation can rise to the challenge and build an economy that works for all and not just a few.
In his quest to re-engage the electorate who have become disenchanted, I am sure the right hon. Gentleman will believe that transparency and plain speaking are important. In that spirit, will he let us know clearly what Labour’s views are on increases in national insurance for employers?
I am happy to do so. I know that my right hon. Friend the Member for Birkenhead (Mr Field), whom I respect a great deal, has a proposal, but that is not my proposal and it is not Labour’s proposal at all. We know that there are pressures in the national health service and that £3 billion has been wasted on an NHS reorganisation, but we also know that there is a cost of living crisis. People are paying hundreds of pounds more a year because of the Government’s VAT rise, and what we want to do is cut taxes for working people.
The shadow Chancellor mentioned the right hon. Member for Birkenhead (Mr Field), who was quoted as saying,
“I can’t tell you what a good meeting I had”
with the shadow Chancellor about the jobs tax. Will he take the opportunity now in the House to confirm that the Labour party does not have a plan to introduce a jobs tax?
Rule it out.
I have just given exactly that answer. That is my right hon. Friend’s plan, not mine. I remind the House that in April 2010 at the general election the then Leader of the Opposition, now the Prime Minister, said:
“We have absolutely no plans to raise VAT. Our first budget is all about recognising we need to get spending under control rather than putting up tax.”
If hon. Members want to discuss broken promises, they should have a word with the Chancellor of the Exchequer.
Let me make a little more progress, then I will give way.
Let me start by trying to find some common ground with the Chancellor on these big and difficult debates. I think we can agree that Britain has always succeeded, and can only succeed in the future, as an open, internationalist and outward-facing trading nation, with enterprise, risk and innovation valued and rewarded. We need to back entrepreneurs and wealth creation, generate the profits to finance investment and win the confidence of investors round the world. We can agree on that.
Turning our face as a nation against the rest of the world and the opportunities of global trade is the road to national impoverishment. But at a time when there are powerful forces in technology and trade, which mean that many people are seeing their living standards falling year on year, we cannot take for granted public support for that open global market vision. As the Member of Parliament whose constituency until recently had the largest BNP membership of any in the country, I know how some on the extremes of left and right see isolationism as the solution—turning inwards, setting their face against Europe and the world economy—which would be a disastrous road to take. It would be the wrong way to proceed.
We know that the zero-hours contract is one of the symptoms of change in our labour market that is causing such insecurity. My hon. Friend raises that matter because the reality is that none of us on either side of the House can afford to bury our head in the sand and ignore the legitimate and mainstream concerns of people across our country about our economy not currently working for them and their families.
The challenge for this generation is how we respond. In my view, there are two quite wrongheaded ways to respond. The first is to assume that business as usual will just do the job—that the return of GDP growth will solve the problem. I must say to the Chancellor and to Government Members—particularly to the right hon. Member for Chelsea and Fulham, given the result in his constituency—that every time they boast that their economic plan is working, I am afraid most people in our country just think they are completely out of touch. It may be working for some—a privileged few—but people say time and again, “It’s not working for me. It’s not working for my family. It’s not working for our community.” That is what they have to solve.
We have asked time and again, but will the shadow Chancellor rule out an increase in national insurance or not? I would add that businesses in Bournemouth are worried about another tax—a property owner’s tax, which is another Labour invention—so will he rule that out as well?
I am very pleased to see the shadow Chancellor has a briefing note that even has my picture on it. What he is not informed about is that long-term youth unemployment includes students. I am pleased to say that the three universities in Bournemouth are increasing their numbers. The statistic has gone up because it includes students.
I am afraid that the hon. Gentleman got that wrong last time, and he is wrong again. I am referring to jobseeker’s allowance—the claimant count—and students are excluded from the figures. I must say that it is excusable to make that mistake once, but having done it twice, his chances of getting on to the Front Bench are severely diminished.
Before those interventions, the shadow Chancellor was making an extraordinarily important speech. Does he agree that the fundamental question we face is whether the link between economic growth and the living standards of people doing ordinary jobs in our country is broken or not? Will he return to such points, because those are the issues that my constituents fret about day in, day out?
I will. This is the most vital and difficult issue. We have seen a rise in unskilled jobs in our country in recent years. That is a good thing, but it is not good enough. If that goes alongside falling living standards year on year for people not just on the lowest but on middle incomes, what will we end up with? We will end up with rising poverty among working people and record numbers of working people going to food banks, as well as rising alienation and a view that mainstream politics is not delivering. Unless Conservative Members wake up to that, they will see the consequences of it next year.
Absolutely, Madam Deputy Speaker. I am glad of that vote of approval. I am just asking for clarification and giving the shadow Chancellor an opportunity to correct himself. He, I think inadvertently, misled the House by suggesting that Bournemouth’s youth unemployment has increased; according to figures from the Library, it has reduced by 40% over the past year.
It is also completely pathetic. In the hon. Gentleman’s constituency, the number of young people aged between 18 and 24 claiming JSA who have been out of work for more than 12 months has gone up by 700%. As I said a moment ago, you either bury your head in the sand, or you face up to these big issues. We are facing up to them, but Government Members are incapable of doing so.
The shadow Chancellor is setting out a really important argument about the recent election results, the widespread disenchantment that clearly exists in Britain at the moment, and the effects of globalisation and technological change on the economy. Is it not absolutely extraordinary that while he is doing so, he is being subjected to these utterly juvenile interventions? Does he not find it extraordinary that all Government Members can do is to read out handouts from the Whips, and the idiot from Bournemouth cannot even get that right? [Interruption.]
I am trying to respond to serious issues. The reality is that, yes, after three years of flatlining, our economy is finally growing again, but net lending to small business is still falling, youth unemployment is still at record highs, wages are not keeping pace with prices and people are worse off. What I want to say is that unless we face up to that reality, we will not make progress. [Interruption.]
Order. Mr Ellwood, I can hear what you are saying. Actually, I agree that the way in which the hon. Member for Dudley North (Ian Austin) referred to you was uncalled for. You are an honourable Member of this House, and I am sure that Mr Austin wants to make it clear that that is his view.
As I said, the first wrongheaded thing to do is to bury one’s head in the sand and not to face up to the reality. We can debate the Chancellor’s record. In 2010, he said that he would balance the Budget in 2015, but the deficit will be £75 million. He said that he would make people better off, but the Institute for Fiscal Studies has confirmed that people will be worse off in 2015 than they were in 2010. He said that we would all be in this together, but he has imposed the bedroom tax on the most vulnerable, seen record numbers go to food banks and cut the top rate of income tax for those earning more than £150,000.
I will give way in one second.
My greatest concern on the agenda of how we can deliver more good jobs for the future is the Chancellor’s commitment to delivering a balanced economic recovery.
If we look at what is actually happening, it is true that the economy is growing, but within the G7, it is still only the UK and Italy that have not recovered to their pre-crisis peaks in output. With the rise in the population, it will take a full 10 years for income per head to recover to where it was in 2007. Worse than that is the level of business investment.
I am pleased that there are finally signs that business investment is starting to pick up, but as of now, we have the fourth lowest level of business investment in the European Union. Only Cyprus, Greece and Ireland are lower than the United Kingdom. Our export growth is sixth in the G7, 16th in the G20 and 22nd in the EU since 2010. Our research and development expenditure is the lowest in the G7. Lending to business is still falling. There has been a 12% fall in infrastructure output since 2010. Public investment is being cut next year. Those are not figures about which we can be complacent.
The right hon. Gentleman is talking about investment, but he is being quite selective. In respect of foreign direct investment, is he aware that the UK secured nearly 800 new projects last year—the highest ever—and that we have 20% of all FDI in the EU? Is that not a very good sign indeed?
Of course that is good news. For decades, we have been an open, global trading nation that attracts investment from around the world, and I want to keep it that way. However, complacency is not the way to make that happen. We have to face up to the reality that living standards are falling because, as the International Monetary Fund said in its report last week, our recovery is characterised by woefully low productivity growth. That is why living standards and wages are still falling, even as growth returns. Unless we face up to that challenge, we will have substantial problems.
Last year, the right hon. Gentleman said that the Chancellor should listen to the IMF. Surely, he should take his own advice. He was wrong on growth. The Government’s long-term economic plan is working. Higher taxes would lead to a more insecure Britain. In the spirit of the debate that he wants to have, surely he has to admit that he was wrong on growth.
In 2010, the Chancellor said that, by now, the economy would have grown by 12%. It has actually grown by half that amount. That is why the deficit has not come down and why people are worse off. The Chancellor would have been well advised to take the sound advice in 2010 and not choke off the economic recovery. He should take the sound advice of the IMF now and look at ways to improve housing supply and to tackle the woeful productivity performance over which he is presiding.
The Chancellor acts as though he is the only person who has delivered growth, but we already had growth when he came to power. When there was light at the end of the tunnel, he spent two and a half years building more tunnel. Finally, now that we have growth—after everyone else—he says, “Haven’t I done well?”.
My hon. Friend’s description of the historical record since 2010 is correct. However, the real issue is why we still have such low investment and why living standards are still falling. The jobs that we are creating are not delivering rising living standards for working people. We have only to look at the election results from a few weeks ago to see the potential challenge to Britain’s place in the world if we do not understand those forces.
In a second.
As I said, the first mistake is to bury our heads in the sand. The second mistake is to attempt to appease those who say that the problem is rapid globalisation and technological change and that therefore the simplest thing to do is to put up trade barriers, stop all migration to Britain and leave the European Union. That is the wrong approach as well.
We all know the depth of concern about immigration in our country, but when the Prime Minister claimed, foolishly, that he would reduce net migration to the tens of thousands, “no ifs, no buts”, he did the cause of sensible and progressive immigration reform no good at all, because he has failed. Net migration has not come down to the tens of thousands; it has stuck stubbornly above 200,000 a year. Even the Chancellor has admitted that the Government will not meet their immigration target. Sending ad vans around the country urging immigrants to go home has only undermined their credibility. That is not the right approach on this issue.
We need clear reform on this matter. We need tough new laws to stop agencies and employers exploiting cheap migrant labour to undercut wages and jobs. We need to strengthen our border controls, not weaken them. We need to ensure that people who come to this country can learn English, and we must provide the support to make that happen. We need fairer rules to make sure that people who come here contribute, cannot claim benefits when they arrive and can more easily be deported if they commit a crime. We need to reform the free movement of labour in Europe through longer transitional controls, stronger employment protection and restrictions on benefits. Those are the things that we have to do. We need reform, not posturing and pandering.
But the fact remains that too many traditional, working-class voters voted UKIP in the European elections. That is a serious problem for both political parties. Should we not now regret that there was such unrestricted immigration from eastern Europe? Can we not learn the lessons of that?
I am very happy to say to the hon. Gentleman that not having transitional controls in 2004 was a mistake, and one that we all still deal with the consequences of. The question is whether we should have allies in Europe whom we can persuade to do things better for the future or walk away from our European partners and find that we are treated with disdain in the decision-making halls of Europe. That is the real question for statesmanship and politics in our country at the moment.
Our view on that question is clear. We say that there is no future for Britain in walking away from the European Union. It is the biggest single market for the companies, regions and countries of the United Kingdom. We have to reform Europe to make it work better for Britain, but we are much more likely to win the arguments if we are fully engaged, rather than having one foot out of the door.
The Prime Minister and the Chancellor used to agree with that argument. They came though the Lobby with us in 2011 to oppose an arbitrary timetable for an EU referendum. Then, they changed their minds. The Prime Minister flounced out of a summit and decided to appease Tory Back Benchers by performing a U-turn. In the memorable words of Lord Heseltine,
“To commit to a referendum about a negotiation that hasn’t begun, on a timescale you cannot predict, on an outcome that’s unknown, where Britain’s appeal as an inward investment market would be the centre of the debate, seems to me like an unnecessary gamble.”
Fortunately, that is a matter for me, and not the hon. Lady. The clear argument that is being advanced is about the importance of that matter to the economy. As long as the right hon. Gentleman stays on that point, he is in order.
The argument that I am making is that if we as a House—those of us on the left and on the right—are to face up to the challenge of delivering more and better jobs for working people and if we are to see off the pressures for isolation and withdrawal, we cannot take the wrong-headed approach either of denying that there is a problem or of appeasing those who would try to walk away. We need a Queen’s Speech that rises to that challenge. My point is that, in putting all its energy into Europe and the referendum, the Conservative party has the wrong strategy to deal with the challenge that we face.
Just so that we can be absolutely clear, will the right hon. Gentleman make it clear from the Dispatch Box that Labour will not offer a referendum on Britain’s membership of the European Union now or in the manifesto at the general election and will therefore vote against any private Member’s Bill that proposes one?
We have said very clearly that we do not believe in an ever-closer Union. If there is any proposal to transfer powers to Brussels from London, we will have a referendum in the next Parliament. Our position is clear. We are not turning our face against a referendum. What we are turning our face against is a referendum that would destabilise our country and cause it to lose investment and jobs.
Hon. Members do not have to take my word for it: let me read the conclusion, a year on from the Prime Minister’s decision, of the Chancellor’s biographer in the Financial Times. He stated that Downing street’s three objectives for the referendum were
“to pacify Tory MPs, sap the momentum of the fringe UK Independence party and put the troublesome subject of Europe to sleep until the general election in 2015. On all scores, it failed.”
That must qualify as the understatement of the year. [Interruption.] I have given my view.
I ask the shadow Chancellor to answer the question that I put to him. Does he rule out offering, now or in the Labour manifesto at the general election, an in-out referendum on Europe, and will the Labour party therefore vote against any private Member’s Bill that is introduced?
The answer is no, of course we will not rule that out, because we have a clear commitment that if there is any proposal to transfer powers, we will have an in-out referendum in the next Parliament. That is our position. I gave the Chancellor the answer once, he did not listen and I gave it to him again.
Is not the reality that the Prime Minister’s attempt to appease Tory Back Benchers has failed and that it has not worked very well with the Front Benchers either? Just a few months ago, just after the Budget, the last time we had such a debate, we had read stories in the newspapers about the Education Secretary trying to undermine the leadership ambitions of the Mayor of London—it was briefed, I believe, to The Mail on Sunday at a lunch. Last week, it was the Home Secretary who was targeted by the Education Secretary, this time to The Times over lunch. The first time, the Education Secretary explained that he was tipsy. He has obviously been on the sauce again. There is a pattern here: a rival to the Chancellor tops the “ConservativeHome” leadership poll and the Education Secretary is sent out to try to stop them at all costs. Now we know that when the Chancellor and the Education Secretary have a late-night chat about the Prevent strategy, they are talking about a rather different prevent strategy from the one that we are talking about. It is pretty clear who the Chancellor has tried to prevent through all his interventions.
I am grateful. If the right hon. Gentleman’s economic message is being listened to, why did the Labour vote in Harlow decline by 20% over the past two years, and why did Labour lose three council seats in safe Labour wards? Is it not because Labour betrayed the working classes and voted against our tax cuts for lower earners, our fuel duty freeze and our council tax freeze?
I respect the hon. Gentleman and his views, but the main message of my speech so far has been a warning against complacency, and I suggest that he heeds that warning. [Interruption.] As should the right hon. Member for Chelsea and Fulham).
As I said, the challenge that this Queen’s Speech should have risen to, but did not, is how we can ensure that we generate a secure recovery that delivers more good jobs for our country. The huge disappointment was that that was not the subject of this Queen’s Speech. We know that there is no quick fix and that we have to earn our way to rising prosperity. We cannot turn our face against change, Europe and the world, but nor can we succeed with a race to the bottom whereby British companies simply try to compete on cost and the Government see their role as simply removing regulation, undermining job security and hoping it will work. That will not generate the low and middle-income jobs that we need in the future. Our view is that we can succeed only through a race to the top, by backing innovation and investing in skills, making our economy more competitive and dynamic and earning our way to higher living standards for all.
In my constituency, long-term unemployment has increased by almost 600% in the past two years and 380 people are desperately in need of some sight of the so-called recovery. What was in the Queen’s Speech that will give them any hope?
I am afraid that the Queen’s Speech missed out the key elements of a long-term economic plan that would deliver rising prosperity for all. That is the problem. We know that there is a problem with housing—demand has run ahead of supply—so where was the action in the Queen’s Speech to deliver new towns, Treasury guarantees, planning reform, affordable homes, reform of Help to Buy and a new help to build scheme, which would deliver what we need? We have lower levels of house building than at any time since the 1920s, and the Chancellor is tinkering. It is about time that he showed some leadership on housing; otherwise, the aspirational majority will not get on the housing ladder. The danger is that interest rates will rise much earlier in the recovery than they should, choking off the living standards of people across our country.
The same point applies more widely to the Queen’s Speech. On skills, where was the action to deliver a gold standard for vocational qualifications? Where was the tax on bank bonuses to ensure that every young person who is out of work for a year is guaranteed a job? Where was the action to ensure that we incentivise a non-statutory living wage, improve the minimum wage and tackle the abuse of zero-hours contracts?
Although we welcome the extra investment in child care, that will not happen until the next Parliament. It will fail to help too many families who are struggling with the costs of child care, which have gone up so much. Why will the Chancellor not increase free child care for the under-fives from 15 hours to 25 hours a week for working parents? It is a Labour policy, but it is a good policy and should be in any sensible long-term economic plan.
My right hon. Friend is absolutely right to seek to raise prosperity and ambition in this country. Is not the Government’s strategy utterly self-defeating? We now have record numbers of people in work but in poverty. Do we not need to ensure that those people have work that pays, and pays well?
I agree with my hon. Friend. I want to come to a conclusion, because many Members, particularly on the Opposition Benches, want to speak, but he is completely right. Where in the Queen’s Speech was the independent infrastructure commission to get the infrastructure we need? Where was the proper British investment bank to back small businesses? Where were those key elements of a plan that will deliver more and better jobs for working people?
There was one other reform that I was disappointed was not in the Queen’s Speech, and I urge the Chancellor to reconsider it in the next two or three weeks. We know that there are big challenges to restore public trust. Our commitment is clear: we will balance the books in the next Parliament and get the national debt falling, and we will do it in a fairer way. It is hugely disappointing that the Chancellor has not committed, as he could have done, to introduce legislation to allow the Office for Budget Responsibility to audit independently the costings of every spending and tax measure in each main party manifesto. The Chair of the Treasury Committee and the Chief Secretary to the Treasury support that; why will the Chancellor not put politics aside and do the right thing? It would be the first such independent audit ever. It is essential to restore public trust in politics and improve the nature of the political debate, and the Chancellor can still change his mind in the next few weeks and make it happen.
This is Labour’s agenda for economic change. As I have argued from the beginning of this speech, we will sustain support for an open and dynamic market economy only if we can show that it will work for all, not just some. We need radical reforms to deliver more good jobs and make work pay, in marked contrast to Tory Ministers and Back Benchers burying their heads in the sand, repeating a hollow mantra and hoping that more of the same will restore public trust. That is patently not working. We need 200,000 homes a year, a compulsory jobs guarantee, a gold-standard vocational qualification, 25 hours a week of free child care, energy market reform with a 20-month price freeze, the books to be balanced in a fair way, a proper British investment bank and an independent infrastructure commission. That is the long-term economic plan that Britain needs, and only Labour will deliver it.
I rise to support the Queen’s Speech and its many measures that back business, savers and hard-working people. The shadow Chancellor has come with a new catchphrase. He talked about a “long-term economic plan”. I think it is good; it might catch on. It has a ring to it, but I am sure I have heard it before. That is the problem with his entire speech: he could not utter the inescapable truth that Britain has a long-term economic plan, and that that plan is working.
We are attracting more investment than Germany and creating jobs at a faster rate than the United States. We are expanding more than four times faster than the Government the right hon. Gentleman admired in France, and growing faster than any major economy in the world. Of course, there is much more to do to build our exports, back our businesses, encourage savings, build homes, secure investment, build our economic infrastructure and rebalance our economy, and the Bills in this Queen’s Speech take us forward in that direction.
The Chancellor says that the economic plan is working, but who is it working for? It might be working for his friends who he used to go boozing with at the Bullingdon club, but working people in my constituency find that it is harder and harder every single month to make work pay. What will the Chancellor do to make work pay under his Government?
That is what is so revealing about the Labour party’s performance in the past half hour. The shadow Chancellor started by reading out the article in the New Statesman this morning and trying his piece on new politics, but within about 10 minutes it all descended into Bullingdon club jokes, and the hon. Member for Dudley North (Ian Austin) having to withdraw his comment. The shadow Chancellor then descended into the normal slapdash that we have got used to in the House. Incidentally, there is a striking echo of what went wrong with the Leader of the Opposition’s speech at the beginning of the Queen’s Speech debate. That is because he is unable to engage in the serious economic argument about what needs to happen in this country.
When a hard-working person in Harlow considers the economy, he will leave his house in the morning on the way to work probably knowing that his mortgage is low and fuel duty is frozen. When he gets to work he will see more people in work and more apprentices, and when he looks at his pay packet, he will see that his tax bill has been cut by hundreds of pounds.
My hon. Friend is right. By reducing income tax and increasing the personal allowance, by freezing fuel duty—something he campaigned on powerfully in this Parliament—and above all by having an economy that creates rather than destroys jobs, we are holding out the prospect of economic security and better prosperity for our country in the decade ahead. That is what we all want to secure.
I will give way in a moment, but let me make some progress. I know that about 50 Members want to speak in this debate—[Hon. Members: “Not on your side.”] Well, we will hear. No doubt Labour Members can all get up on their feet and repeat what they said last year .
I have done something that I know we are not supposed to do in this place, because I actually bothered to read what the shadow Chancellor said in the House last year. Here we are in the privacy of the House of Commons where no one is listening, but what were his pearls of wisdom? In this exact debate last year he issued a stark warning that the British economy would “flatline” unless we abandoned our plan immediately. Since he made that prediction, we have stuck to our plan and our economy has grown by more than 3%.
Last year in this debate the shadow Chancellor said that business investment would “stall”, but it has since grown by almost 9%. He told us that unemployment would rise, but since he made that prediction more than 800,000 new jobs have been created. He warned ominously that youth unemployment would rise too, but it is down by 100,000 over the past 12 months. From re-reading the speeches of the shadow Chancellor, I have discovered that he performs a very useful function. He is an infallible guide to the future performance of the British economy: whatever he predicts, we can be sure that the exact opposite happens.
I do not have the number the hon. Gentleman asks for here, but there were zero-hours contracts under the previous Labour Government and there are Labour councils that use zero-hours contracts. As those on the Labour Front Bench have pointed out, not all zero-hours contracts are bad. One measure in the Queen’s Speech that was not mentioned by the shadow Chancellor—indeed, he did not actually address the speech in his remarks—will ban exclusivity with zero-hours contracts. Labour had 13 years; the shadow Chancellor was in charge of economic policy for 13 years and could have taken such a step, but he did not. I suggest that Labour Members hold their tongues and come with the Government through the Division Lobbies as we do something about an abuse that they did absolutely nothing to crack down on.
On the topic of pearls of wisdom from the shadow Chancellor, does my right hon. Friend agree that his rather careful formulation that a jobs tax is not his argument was rather too clever by half? We did not hear from the shadow Chancellor a clear commitment that a jobs tax is not Labour’s policy now or at the general election.
My hon. Friend is right. We listened carefully, but like the Leader of the Opposition the shadow Chancellor did not rule out a jobs tax. Why? Because it is Labour’s tax of choice. That is what they did in government when they increased national insurance, and what they proposed at the general election. A couple of years ago the shadow Chancellor admitted that he would be minded to do that as a means of bringing order to the public finances—his weapon of choice is a jobs tax. That is Labour’s answer to jobs: tax them, destroy them, make people unemployed. That is why every Labour Government in history have left unemployment higher than when they entered office.
Let me make a little progress and then I will take more interventions. In a debate after last year’s Queen’s Speech—[Interruption.] I am talking about this year because last year the shadow Chancellor urged me to do something this year. In the conclusion to his speech last year, he said that the Chancellor should listen to the International Monetary Fund. He also said that
“a sensible and economically literate chancellor would heed the IMF’s advice.”
I have reflected on that advice, and I think I will listen to the IMF. I have its most recent statement from last week and it states that growth in Britain is projected to be
“the fastest among the major advanced economies.”
It says that the economy has rebounded strongly, that inflation has fallen rapidly, that growth is becoming more balanced, that we are moving towards an investment-led economy, and that that good macro-economic performance is expected to persist. It stated that the news coming out of the UK recently has been “pretty much all good”, in contrast to the shadow Chancellor’s predictions, which were pretty much all bad. It concludes that our fiscal policy—the deficit reduction plan that the shadow Chancellor bets his entire economic credibility on opposing—is the “anchor” of Britain’s stability and economic success. My answer to the right hon. Gentleman is this: I am listening to the IMF, the CBI, the chambers of commerce, the Institute of Directors, the Federation of Small Businesses and the OECD. Who on earth is he listening to?
Will the Chancellor listen to the IMF on the housing market, of which he has made a total mess? House prices are rising by 20% in London, and there is negative equity in the north. Not one property was sold for £600,000 in my constituency. Will the Chancellor now abandon the stupid Help to Buy scheme, which goes up to £600,000 for new home owners?
The shadow Chancellor says “what?” He might forget what happened in 2007-08 when the banks almost went bust because they extended housing loans that people could not afford, house prices fell, housing starts went off a cliff, and the people of Britain paid the price of an economic policy predicated on the fact that there would be no more boom and bust. The people of Britain are living with the consequences of that policy. Will he just accept now that basing an economic policy on the prediction that there would be no more boom and bust was an error of judgment?
Will the Chancellor like to tell the House how many people went into negative equity after 2007, and how that compares with the number of people—the tens of thousands—who were put into negative equity after the Conservative housing crash of 1989? If he is going to make these statements he ought to be able to make them stand up. While we are here, will he tell us—
The right hon. Gentleman’s argument seems to be, “My crash was better than your crash.” That is a brilliant argument. I will tell him the answer. He was going to remove a temporary scheme that protects people from mortgage costs when they become unemployed. I extended it year after year after year. I have extended it again in the Budget to make sure that people do not find themselves having their homes repossessed. Can I also tell him that the housing market fell by almost 20%? The price of houses fell and there were people at Northern Rock—[Interruption.] His argument is literally, “I’m sorry we messed it up, but you messed it up in the past as well.” That is an absolutely hopeless argument. I have learned the lesson from the terrible mistake—
I was wrong? This is the man who presided over the deepest recession in British modern history and the biggest banking crisis since the Victorian age. He has the nerve to get up and say to the team that is turning the country around that we got it wrong. The truth is that he is the person who got it wrong.
There was a very interesting observation this week by Charles Clarke, who was the Home Secretary when Labour were in office. This is what he said:
“we have rested a great deal on assuming that the Conservative strategy wouldn’t succeed, that ‘plan A’…would not work and that has proved to be an unwise judgment because in fact, the Conservatives have succeeded in getting the economy onto a more positive path which leaves us”—
the Labour party—
“very little place”.
It is not a catchphrase; it is a plan that has cut the claimant count in the hon. Lady’s constituency by 45%. That is a plan that is working. The budget deficit has been halved. If her argument is that we should be cutting faster or trying to get the deficit down faster, that is a novel argument because it is not one I remember being made at any one of the economic debates when she and the rest of the Labour party trooped through the Division Lobby against every single change we have made to try to bring the public finances under control.
I can understand why the shadow Chancellor does not want to congratulate those on the Government Front Bench. Does my right hon. Friend agree that the people in Portsmouth—those who have taken a risk and set up a business, and the 2,000 people who have got back into work—ought to be praised for their achievements rather than have them dismissed by the Labour party?
I completely agree with my hon. Friend. The progress being made in Portsmouth—the jobs created, the businesses set up and the support people get from their Member of Parliament—is an example of how the long-term economic plan is working for the people of Portsmouth, and how we need to go on working with that plan, rather than abandoning it.
The hon. Member for Wirral South (Alison McGovern) asked me what we can do to get the budget deficit down. I suspect that even the shadow Chancellor does not know. He tabled a motion today, although he did not speak to it. The cost of implementing it would be £14 billion. There is not a single measure in it that would reduce public spending or pay for that £14 billion price tag. It is completely incredible.
I will make a little progress and then give way.
That speaks to a broader point. The shadow Chancellor is not a naturally retiring type. He likes to get out there and meet people. He likes to go to supermarkets and shake people’s hands. The truth, however, is that he has gone quiet in recent months and we do not see him so much on the television or hear him on the radio. I think that is because he knows—or rather his party leadership knows—that they have lost the macro-economic argument. He is now losing the micro-economic argument within his own party. The Leader of the Opposition does not want to talk anymore about Labour’s spending and borrowing plans, because he knows they are very unpopular. Instead, there is a whole series of populist initiatives on price controls, incomes policies, bans on foreign investment, renationalisation, and wars on business and enterprise. The truth is that the shadow Chancellor actually spent a considerable period of time, in Opposition in the 1990s and then in office, trying to get his party to reject these kinds of things. He knows that they will lead to higher prices, lower incomes, less investment and fewer businesses.
In fact, the shadow Chancellor makes no secret, if we read between the lines of his speech today and his article in the New Statesman, of the fact that he is not in favour of trying to restrict the open economy, and that he values foreign investment coming into the country. The problem is that the message being given out by the leader of the Labour party is the complete opposite of that—it is in a completely different direction. He jumps on every single issue to make the argument, essentially, that we need a more closed economy and that there is a dangerous race to the bottom. The truth is that I think the shadow Chancellor and I agree that it would be a disaster for Britain to head down that route.
The shadow Chancellor has a macro-economic argument, which is that Britain should be borrowing and spending more, and, if necessary, increasing taxes to pay for it, but the Labour leader will not allow him to make that argument anymore, so he has gone completely silent. Normally, he is there right behind the leader of the Labour party, right behind his shoulder blades waiting to support him. Instead, he has learned a trick from his old friend the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown): when the Labour party is doing badly, losing by-elections and the like, stay quiet and disappear. That is what he has attempted to do in the past couple of months. The truth is that the threat that his economic approach represents—higher taxes, and borrowing that would destroy our public finances and push interest rates up—does not go away just because he goes away. That is the plan he would put into practice were he ever to walk through the doors of the Treasury again.
Before the Chancellor moves on, he was giving us a history lesson earlier but could we have some proper history? He was criticising the shadow Chancellor for the period when the Chancellor alleges things went wrong with the banks and lending. He himself, the present Chancellor, was urging less control and less regulation. Let us get that history right. Will the Chancellor address one issue: why is productivity failing to improve?
I agree with the hon. Gentleman that productivity is one of the challenges for the British economy. I have to say that if offered the choice in the early stages of a recovery between productivity improvements and increased job numbers, I would take increased job numbers because of the considerable human damage and the potential serious long-term economic damage that high unemployment can cause. I am enormously proud of the record of the British business community in creating those jobs, and of the people who have got those jobs and are holding them. I agree that we want to make our economy more productive. We do that by having an open economy where we welcome investment, support enterprise and support business. The Labour party’s policy proposals on prices, incomes, new restrictions on foreign investment, higher taxes on business and a higher corporation tax are all the wrong approach and would make our economy less productive.
Earlier my right hon. Friend mentioned Charles Clarke, who knows quite a lot about what is happening in Norfolk and will be aware that unemployment in my constituency has fallen by 660 over the last year. That is 660 families with jobs, a wage packet and hope for the future. Is my right hon. Friend aware that the vast majority of those jobs are either full time or in self-employment?
My hon. Friend is absolutely right: there has been a remarkable jobs story in Norfolk as well, supported by the economic investment we are putting into new roads in the county. I have spoken to the chamber of commerce there and seen its ideas for attracting more investment into King’s Lynn and other key centres, and I congratulate my hon. Friend on all he is doing to back business there.
Does my right hon. Friend accept that his economic strategy has seen unemployment in my constituency fall by 25% over the last four years? The Government’s decision to grant a city deal to Plymouth will create 10,000 new jobs by releasing some of the land in the dockyard.
My hon. Friend is absolutely right. The city deal, which he championed and urged on us, has a real prospect of bringing more investment and jobs to Plymouth. It is great news that work is being created in that great city and I congratulate him on all the local leadership he is showing there.
Before the Chancellor descends further into his self-congratulatory speech and quotes statistics about my constituency to me, will he confirm that the employment rate is still below pre-recession levels and that a third of the jobs in my constituency are below the living wage?
Well, yes, the employment rate is below what it was before the economy crashed and we had the deepest recession since the 1920s and ’30s, but the good news, as the hon. Lady will have noted, is that there has been a sharp rise in the employment rate in the last year—800,000 new jobs created. The employment rate now is very close to its pre-recession peak, so I would suggest that she should not make too many predictions on that front.
I am absolutely explicit that I want to get the employment rate up. I want to ensure that our schools are providing kids with the right skills, that we are creating more apprenticeships—one of the great success stories of this Government—and that we have more students coming out of our universities with the right graduate qualifications, so that we get our employment rate up even higher and achieve the goal of full employment in this country.
One of the risks that will face any economy—particularly one such as the United Kingdom’s, with a large number of financial services in it—is any risk from financial markets. As we begin to see the slow withdrawal of monetary stimulus here in the UK and in the United States, and with the eurozone heading in the other direction, we might expect to see an increase in market volatility. That is all the more reason why the financial markets in foreign currencies, commodities and fixed income should be fair and effective. Tonight at Mansion House and here in the House of Commons, I want to set out briefly the steps that the Governor of the Bank of England and I are taking.
We will bring forward enhanced criminal sanctions to punish and deter market abuse, but we will not opt into European rules, instead developing our own tough domestic powers. We will extend the senior managers regime proposed by the Parliamentary Commission on Banking Standards—so ably chaired by my hon. Friend the Member for Chichester (Mr Tyrie)—so that it covers the branches of foreign banks. We will also use the legislation we asked Parliament to pass in the wake of the LIBOR scandal to regulate further benchmarks in areas such as foreign exchange, fixed income and commodities. The new review that the Governor and I are establishing, chaired by the former deputy managing director of the International Monetary Fund, Minouche Shafik—now the deputy governor of the Bank of England—and involving the Treasury and the Financial Conduct Authority, will provide further recommendations.
Let me be absolutely clear: the integrity of the City matters to the economy of Britain. Markets here set the interest rates for people’s mortgages, the exchange rates for our exports and holidays, and the commodity prices for the goods we buy. We are going to deal with abuses, tackle the unacceptable behaviour of the few and ensure that markets are fair for the many who depend on them. We are not going to wait for more financial scandals to hit; instead we are going to act now and get ahead. We will take these steps to build resilience in our financial markets and our economy.
I greatly welcome those steps. Will my right hon. Friend reassure the House that enforcement will be based on simple principles of integrity and not create a climate of box-ticking of the kind that we saw with the now discredited Financial Services Authority, which was introduced by the last Government?
My hon. Friend is absolutely right that what we need in our regulation is the exercise of judgment, rather than just process. One of the biggest errors of judgment was the abolition of the Bank of England as an authority that would oversee systemic risks in our economy and monitor levels of debt, and the creation of the tripartite regime, which we have abolished.
One of the new features of the financial regulation landscape is the Financial Policy Committee, which is the group, independent of the Government, that looks at systemic financial risks, seeks to spot asset booms and has the tools to do something about them—something that, sadly, was completely lacking six or seven years ago. We have given the Financial Policy Committee far-reaching powers over capital ratios and mortgage standards, with powers to recommend limits on loans-to-income and even loans-to-value. That is the answer to the question about housing and the impact of housing debt on our financial system and families. I am clear that the Bank of England should not hesitate to use those powers, and any others we make available, should it see serious risks emerging in the housing market. That is a fundamental improvement in the resilience of the British economy.
I agree that we need more homes as well, and the changes to our planning system are now increasing housing supply. Planning permissions and starts are now at a six-year high. The fundamental answer to the challenge of the British housing market is to see more homes built. Frankly, I would ask the Labour party, which opposed the planning changes when they were introduced a couple of years ago, to reconsider its position and confirm that they will remain in place. And by the way, as the hon. Member for Bishop Auckland (Helen Goodman)—who I think sits on her party’s Front Bench—said that Labour should get rid of the Help to Buy scheme, let me tell her that it is helping families across the country, overwhelmingly outside the south-east of England, to buy homes that are well below the national average house price. I am proud that this Government are helping people with the aspiration of buying their own home and providing the support for families who can afford it to get on the housing ladder.
May I ask for a clarification of what the Chancellor is announcing to the House today and at Mansion House later? He wrote to the Governor of the Bank of England setting the remit for the Financial Policy Committee as recently as March. The Governor of the Bank of England wrote back to the Chancellor with his comments on the remit on 31 March. Is the Chancellor now, a couple of months later, having to add to, revise or supplement that remit? Is that a reflection of the fact that there is widespread and growing concern, including in the Bank of England, that what is happening in the housing market is destabilising, and does he regret that he did not face up to these issues earlier?
What the remit that I sent to the Financial Policy Committee said is that we need to be vigilant about risks emerging in the housing market. Last week the IMF said very clearly that there is not a credit-fuelled boom today, but we need to be vigilant, and I completely agree with that. More than that, I have created—Parliament legislated for—the system of that vigilance. The Financial Policy Committee did not exist before this Government came to office; there was no such thing as the remit that the shadow Chancellor has just referred to. We have given the Financial Policy Committee tools to look at mortgage standards, alter capital ratios and make recommendations on loan-to-income ratios and loan-to-value ratios, and I am clear that it should not hesitate to use them if it judges that to be necessary. That message goes out loud and clear from this Dispatch Box and it will go out loud and clear at Mansion House tonight.
I wonder whether the Chancellor is aware that when I worked for Northern Rock, I used to visit Newcastle and we used to see members of the Financial Services Authority leaving the chief executive’s offices and thanking him for his advice on how to do their jobs.
My hon. Friend brings his experience to bear in the Chamber. Northern Rock was the epitome of what went wrong—the 125% mortgages. It is the important link between rising house prices and mortgages that families find unaffordable if prices fall or they lose work and the risks to the balance sheets of banks that came together in a toxic combination in 2007 and 2008. The Financial Policy Committee exists to make sure that we spot those risks in advance.
Let me make a little progress, as I know many Members want to speak. I want to cover a couple of the key legislative measures in the Queen’s Speech.
I hope that the Bill to support small businesses and enterprise will receive support from across the House, as it will help those small businesses with their exports, reduce tribunal delays and open up even more Government procurement to them. We are, of course, going to help smaller businesses—and indeed all businesses—by taking under-21-year-olds out of the jobs tax altogether. That is in stark contrast to the jobs tax plan that the Labour party is developing.
Then there is the tax-free childcare Bill—a really important measure to help hard-working families. In this Parliament, we have already extended the free nursery care available to parents of three and four-year-olds to 15 hours. From this September, 260,000 two-year-olds from low-income families will be eligible for free hours as well. Now we are taking another big step forward in helping working parents. Once we pass this new Bill, all families with children under 12 will, in effect, be able to get tax relief for their child care costs—up to £2,000 of help every year for every child. That is a huge boost to working families in this country, and this tax-free child care is affordable only because of the difficult decisions we have taken to bring the public finances under control.
The Chancellor mentioned help to small businesses, but surely the help they really need is an increase in net lending to them from the banking sector, yet it is continuing to fall. How does the Chancellor explain that in the light of the funding for lending scheme, which simply does not appear to be working?
Funding for lending is now, of course, skewed away from mortgages—a decision taken by the Governor of the Bank of England and me before Christmas—precisely to start to apply some macro-prudential controls to the housing market. It is heavily skewed towards small business lending in order to address the issue of an impaired banking system, still deeply damaged by what went on six or seven years ago. The good news is that a huge amount of progress has been made since this debate last year and since last year’s Mansion House speech; we are undertaking a major restructuring of the Royal Bank of Scotland and, of course, starting to return Lloyds to the private sector. All of that will help make sure that our financial system is functioning properly and supporting businesses that want to grow and expand.
Let me make this final point before taking another intervention.
I want to conclude by mentioning a measure that the shadow Chancellor—or, indeed, the Leader of the Opposition, which is pretty revealing—did not mention at all. I refer to the pensions tax Bill, which will give people real choices about what they do with their defined contribution pension pots, and ensure that they get free and impartial guidance on those choices. We have spent the last three months in consultation, and I have met pension providers and many consumer groups. The consultation closed yesterday, and I will announce next month the details of how the freedoms and the guidance will work. We will set out the implications for defined benefit pensions, too.
We want an economy in which effort is rewarded and those who save are trusted with their pension savings in retirement. We will enshrine all this in law; it heralds a revolution in pensions based on this simple principle: “you earned it; you saved it; now you have control over your own money”. Because it is such a simple principle, because it involves trusting people and because that is popular with people, the Labour Opposition have not got a clue about how to respond to it. From the moment that the Leader of the Opposition rose to give his dismal, pre-scripted reply to the Budget, they have been completely pole-axed by it.
Unlike the right hon. Gentleman, I ran my own business in the 1980s, and I remember the pension mis-selling and how many people lost their life savings as a result of reckless Conservative legislation and a lack of proper advice. This is a very serious matter, so rather than taking cheap political pot shots, will the right hon. Gentleman tell me what exactly will be the nature of the advice given to people about their life savings before he asks them to spend it?
Well, Mr Deputy Speaker, that was the definition of a cheap political pot shot, and it rather sums up the tone of Labour Members’ approach. They started with a whole spiel about new politics and having to engage with the disenchanted, but after only a few minutes, it has swiftly deteriorated.
Let me directly answer the hon. Gentleman’s point and then I shall take a final intervention from the shadow Chancellor before winding up.
We are very clear that we want impartial and free guidance—face to face if people want it. We are talking to consumer groups such as Which?, Saga, and Citizens Advice about how to ensure that we deliver such free and impartial advice through the industry and consumer groups all working together.
We have welcomed annuities reform and the introduction of collective pension vehicles. The test for us is whether the sums will add up, whether it will cost more, whether it will work in a fair and equitable way and whether the advice and guidance will be sufficient. I put it to the Chancellor that this may be something on which we could try to get a cross-party consensus in the long term rather than play politics.
I certainly hope, in the spirit of new politics, that there will be agreement across the House and that the Labour party will support our reforms. There was no agreement on this issue when we were in opposition. My hon. Friends who were Opposition MPs at the time—when, indeed, the right hon. Gentleman was a Treasury Minister—will remember that we tried time and again to get the Treasury to open up annuities and to remove the compulsory requirement to annuitise. We remember the private Member’s Bill proposed by David Curry—and my right hon. Friend the Member for Croydon South (Sir Richard Ottaway) was involved, too—attempting to achieve this objective, with the Conservative party turning up en masse to try to deliver it. We tried. If the shadow Chancellor is telling me that he has had a change of heart and supports this measure, I can say “all well and good”. Perhaps that will help to address the disillusionment of Labour supporters that he he mentioned earlier—[Interruption.] The shadow Chancellor ends like he started. He wanted to give us a big new thing about new politics, but he cannot resist trading the blows across the Chamber.
I would argue that the best way to address people’s disillusionment is to create an economy that works for people and grows jobs for people. I enjoyed the right hon. Gentleman’s tour d’horizon of the global economy, and I certainly agree that the Google self-drive car will be an important intervention—and he will probably be one of the first customers for it.
We passed a milestone this week when we learned that 2 million new jobs had been created by our economic plan. We saw new surveys this week showing Britain attracting investment from around the world. The IMF said we would have the fastest- growing major advanced economy in the world and confirmed that deficit reduction strategy at the heart of our approach is the anchor of stability. We saw again today that the shadow Chancellor and the Labour party would be a disaster for the British economy, with more borrowing, more spending, more taxes and a war on business. In this Queen’s Speech, we reject these disastrous policies. Instead, we deliver on the long-term economic plan that is turning Britain around and offers a brighter future for all. I urge the House to support the Queen’s Speech.
Order. Many Members want to speak, so it would help to keep interventions brief. If Members continue to intervene, they will go to the bottom of the list. We are on a six-minute limit, but it will have to be reduced if we do not show consideration for others. Anything Members can do to shorten their speeches will be much appreciated.
The kindest thing that can be said about this Queen’s Speech is that it is simply inadequate to address the problems which, sadly, our country and its people still face, and about which it is evident that the Government parties are still in denial.
The Chancellor said in his speech that he had made the mistake of reading the record before coming to the House. I made the same mistake: I read the record of the Chancellor’s Budget speech on 22 June 2010. He said today that what we must now do is stick to our long-term economic plan, which is what Government Members continually say—they say it as if saying it were as good as having one—but today’s economy does not reflect the long-term economic plan that the Chancellor set out in 2010.
The Chancellor said today that the Government were “holding out the prospect”. Well, they held it out then. According to that plan, by this year debt was supposed to have fallen as a percentage of GDP, and the structural current deficit should have been eliminated. The public sector borrowing requirement should be down to £37 billion, falling to £20 billion next year. Growth this year was then projected to be 2.7%, but the plan was for growth of well over 2% in 2011, 2012 and 2013. As we all know, that simply did not happen. In other words, far from sticking to a long-term plan that is now delivering, which the Chancellor described as the “inescapable truth”, the inescapable truth is that Government Members have seen their plan and their forecasts fall to pieces around their ears.
I do not recognise the picture that the right hon. Lady is painting, given the increased number of jobs and other improvements. Does she recall the statement by the Office for Budget Responsibility that the recession was even deeper than it had seemed to be when first analysed? That means that it has been even more difficult for us to fill the hole that was left by Labour and to achieve growth. That is finally under way, but the job is not yet done.
I think the hon. Lady will find that the OBR’s argument does not account for the total discrepancy between what the Chancellor said would happen and what has actually happened. We have had the nonsense of Government Members claiming that we were wrong to say that their policies might curtail growth, when that is precisely what happened. As for the OBR, if the Chancellor is so proud of it—and I think that he has created a good institution—why does he not allow it to scrutinise our plans, rather than making up his own version?
The Queen’s Speech demonstrates the Government’s utter failure to address the difficulties that people face. The eventual return to growth has been as welcome as it was long overdue, but it is seriously alarming that Government Members do not seem to recognise the great difficulties that still confront so many. Only yesterday, we learned that Ofgem had written to the energy companies highlighting the fall in wholesale prices over the last 18 months or so, and asking them nicely if they ever intended to pass it on to their customers. Where is the legislative framework to underpin action to tackle the energy companies’ disregard for the interests of their customers?
Where are the proposals for reform of the banks, which demonstrate almost daily that for them too it is back to business as before, bonuses and all? Why is there nothing in the Queen’s Speech to address either the decline in housing starts or the increasing pressure and insecurity experienced by many tenants? And why, oh why, have no steps been taken to ease the increasingly intolerable pressures on the many people who have been forced by circumstance to rely on benefits to make ends meet? So many of those people are in work, albeit work that is low paid and insecure.
People with disabilities, in particular, are still being hit by the iniquitous bedroom tax. The Government must have been advised that people would not be able to move because there was not enough alternative accommodation. During the same week in which they introduced that tax, they cut taxes for those who were already the wealthiest.
The most noticeable aspects of the Queen’s Speech are the measures that are not in it and should be. Some of its proposals merit a cautious welcome, although as yet, in many instances, we have only the headlines. However, I want to single out the issue of pensions. I am pleased that the Chancellor mentioned it. I urge caution on all Members, but especially Opposition Members, because in this regard the Conservative party has form. Annuities have long caused concern, although an answer has not been easy to find, but the more that I listened to the Chancellor talking about giving people control of their own money and about the exciting new freedoms that were on offer—which, according to him, were heralding a revolution—the more uncomfortable I became, because, like the Conservative party, I have been here before.
It was in identical terms that the 1980s Tory Government sold so-called pension reforms to an unsuspecting public. That resulted in one of the greatest pension scandals of all time, the mis-selling of personal pensions. Shamelessly misleading advertising implied that if people left existing pension schemes and put their savings in the hands of the financial services experts, they could miraculously put less in and get more out. People were encouraged by the then Government to gamble with their retirement savings without their employers having to contribute, and without even the safety net of pooling their own risk—and it all ended in tears. I heard what the Chancellor said about the assurances that he had given and about whom he had consulted, and I advise my right hon. and hon. Friends to consider what he said in great detail. We have asked the Government to publish in full the assessment of the costs and risks of their proposal, but so far they have refused to do so. I hope that they soon will.
I have noticed that there is an incentive for the Government in this proposal, over and above the well-being of pensioners. The Chancellor stands to gain a few billions of pounds in extra tax. So there is something in it for the Treasury—probably rather more than there is for pensioners, in the short term—and the most careful scrutiny of the details will be required.
Over the past few days—and, today, in the excellent speech with which he opened the debate—the shadow Chancellor, my right hon. Friend the Member for Morley and Outwood (Ed Balls), has drawn attention to our proposals to raise the minimum wage and encourage the use of the living wage so that work can be made to pay; to tackle the abuses of wage and employment law that enable employers to use immigrant labour to undercut the wages and conditions of others; to set up a British investment bank and regional banks to support small businesses, which—as was pointed out earlier—our existing banks are still failing to do; and to address the crises in housing and health care. We would have seen all those proposals in a Labour Queen’s Speech. There is much along those lines that the House and the Government should and could be doing, but clearly it will not be done under this Administration.
I am sure that the House is very grateful to the right hon. Member for Derby South (Margaret Beckett) for reminding us all of the magnitude of the fantastic challenge that the Government faced when they came to office in 2010. It is just a shame that neither she nor the shadow Chancellor seized the opportunity to apologise to the House and the nation for the catastrophic destruction of the public finances and the running up of a massive deficit.
I have heard that argument in the House so many times. Indeed, the Chancellor used it today. However, there is a bit that I have missed: the bit where the right hon. Gentleman explained how the last Government also brought about the crashes in the United States and Japan, and in Spain and Italy and throughout the European Union. I am looking forward to hearing him give that explanation.
I am delighted to assist the right hon. Lady, who I know is very reasonable. The Chancellor of the Exchequer has just identified one of the causes of the problem that we faced, namely the Labour Government’s decision to remove responsibility for the supervision of the banks from the Bank of England. I know that that is the case, because I was an international banker myself. The Tory party warned the Labour Government that if they removed that responsibility from the Bank, there would be problems. [Interruption.]
Thank you, Mr Deputy Speaker.
Let me be the first Government Member to congratulate my right hon. Friend the Chancellor on sticking to his guns, and on the long-term economic programme, which has unquestionably benefited the United Kingdom—not least my constituents in Aldershot, where unemployment has now fallen to 1.8%. We have done fantastically well, and, in my view, that was undoubtedly a factor in the Newark by-election success, on which I congratulate my right hon. and hon. Friends. There is no doubt that the sheer weight of Conservative effort helped, as, indeed, did the contribution made by Patrick Mercer, who was very popular in the constituency, and had done good work over 13 years.
However, as the shadow Chancellor pointed out, we should not be lulled into a false sense of security. One of the key reasons for UKIP’s success is that it has homed in on the public’s rising concern about immigration. That concern is not new; it has existed since the 1960s. What is new is that while there was an understandable reluctance to vote for the British National party, no such inihibitions apply to UKIP.
For 50 years, those of us who have expressed concern about the impact of mass immigration on our country have been reviled and denounced as racist. All argument was effectively closed down, as perfectly decent people expressing perfectly reasonable fears were intimidated into remaining publicly silent.
Things have now changed, however. People feel that at last they can break free from the shackles of political correctness in which they have been chained. It is no longer racist to want to preserve our British way of life, our religion and our culture; it is not racist to express pride in our nation’s history and, indeed, in our imperial past.
It is not just the Conservative party that has been affected by the public’s concerns, as the shadow Chancellor’s comments again made clear. Labour has seen white working-class support desert to UKIP. Furthermore, many of those who have arrived from abroad and have integrated in our society are also concerned about the continuing flows of migration.
The main parties have to recognise the effect that this unprecedented tidal wave of migration has had on the UK, including our economy. Of course migration has not been without its benefits, some of which are only too evident on the Benches around us here, and companies such as Tata have made, and continue to make, a very valuable contribution. However, this week’s Ofsted report on Birmingham schools has revealed the extent to which people newly arrived here not only reject our values and customs, but want to impose their own on the rest of us. I have a very clear message for them: this is a Christian country, a tolerant country, we speak English, we shake hands with ladies, and open facial recognition is a key part of our culture. If they find that offensive, they should please feel free to leave and move to a country that is more to their liking—for there are plenty of repressive regimes around the world that clearly are more to the liking of people like that. As the T-shirt worn by a young man whom I saw on the underground earlier this week said: “Speak in English; Think in English; Dream in English”. I thought that was rather good advice to a lot of people in our country.
What we all need to understand is that it is numbers that are the issue. As that excellent organisation MigrationWatch has pointed out, between 1951 and 1991 the population born overseas grew by less than 2 million, yet after the election of the Labour Government in 1997 the scale of immigration increased to a level without historical precedent. Between 1991 and 2011, the foreign-born population more than doubled, increasing by 4 million. Much of this was deliberately encouraged by the Blair Government, partly, as we were helpfully told by a Labour speechwriter, Mr Andrew Neather, to rub the noses of the right in diversity.
All this has had an impact on our country. The Prime Minister has been at the forefront of the campaign to denounce the growth of Islamic fundamentalism in the UK, but there are practical challenges, too. My right hon. Friend the Chancellor mentioned the housing issue. We need to build a new home every seven minutes just to accommodate new migrants to this country. England is already the most crowded country in Europe, yet unless tougher action is taken the population will grow by 7 million in the next 15 years, 5 million of which will be attributable to immigration, which is the equivalent of the towns and cities of Birmingham, Leeds, Glasgow and Manchester.
Does my hon. Friend agree that this Government have made very significant progress in reducing migration to the UK from outside the EU? Indeed, there have been a number of big successes in that regard. However, does he also agree that the time has now come for the Governments of all countries in the EU to look again at the absolute free movement of people for jobs across the EU? The only way we can solve this problem and bring migration into some form of balance is by looking at migration from the EU as well.
My hon. Friend, with whom I have the privilege of sharing adjoining offices in Portcullis house, is entirely right. This Government have set about trying to tackle migration, not least by dealing with the legacy left by the previous Government, and we have tackled non-EU migration. My hon. Friend is right to alert the House to the extent to which our membership of the EU is inhibiting our ability to do something about that other aspect of migration, however, and I have a proposal, which I will make in winding up my contribution.
Labour’s failure to apologise for inflicting this policy on the nation, together with its failure to apologise for the destruction of the public finances, which I mentioned earlier, means it is wholly unfit to return to office. That brings me to the topic of the next Queen’s Speech. I hope with all my heart that that will be prepared by my right hon. Friend the Member for Witney (Mr Cameron) as leader of the Conservative party, elected with a clear working majority in this place. This country absolutely needs that. We cannot afford to go back to the policies of tax and spend, and running up yet more debt, as my right hon. Friend the Chancellor has reminded us again today. We have to keep reminding the British people that that is what Labour did in office and it has not yet recanted. We therefore must do our duty to the British people, which is to be returned with a clear working majority.
To get to that happy position, however, we need to convince the public that we will build on the existing measures we have put in place to contain inward migration, particularly from less affluent EU countries. We must act now. The Government should accept the unanimous recommendation of the European Scrutiny Committee to disapply the European Communities Act 1972 in relation to specific EU legislation, not least so that this Parliament can once again become sovereign and take swift action to recover control of our borders and reduce the level of burdensome regulation being imposed on us externally. If the European Court of Justice does not like that, then tough; the British people certainly will.
It is a privilege to speak in this debate. This is the last opportunity I will have to speak in a Queen’s Speech debate as a Member of this House. I have to say, however, that the Queen’s Speech we heard last week was not nearly as exciting as the first Queen’s Speech I heard in this House in 1997.
I want to pick up on a few of the comments that have been bandied around by those on the Government Benches, not least the hon. Member for Aldershot (Sir Gerald Howarth), whom I have the pleasure, of course, of following. “Tax and spend” is one comment they throw about, but they do not say what that actually means. We can look around our country and our individual constituencies and see what the spend was all about. It was about replacing schools that had not been looked after for tens of years. Many of our schools were Victorian-built, and many of our hospitals had been built at the end of the 19th century, never mind the 20th century.
I agree with everything my right hon. Friend has said, but she will also remember, as I do, Conservative Members standing up time and again and calling for schools and hospitals in their constituencies; and how they have the shameless gall to say otherwise is beyond me.
I remember it well, and there is now the mirror image of that: they are in government now, and they are calling for even more expenditure in their individual constituencies. That certainly puts a whole new slant on “Think nationally—or globally—and act locally.” It is almost as though there is no connect between the two.
I first want to welcome two elements of the Queen’s Speech, however. One is the commitment to continue to implement new powers for the Scottish Parliament, which I hope will be done within the context of a United Kingdom—the “No” badge I am wearing today has absolutely nothing to do with me not wanting anybody here to speak to me.
I also welcome the increased penalties for those not paying the national minimum wage, but I say to the Government that it is one thing to increase penalties, but it is another thing actually to enforce the law. There is absolutely no point in increasing the penalties if there is not going to be the enforcement welly behind the national minimum wage to tackle employers who are behaving illegally.
I want to concentrate on a couple of areas. One is zero-hours contracts, which the Chancellor blithely dismissed. Yes, zero-hours contracts have, of course, been with us for a long time, and, yes, they can in some circumstances be a useful resource in managing a work force, but the difference between what happened in the past and what is happening now is that zero-hours contracts have effectively become part of the mainstream in how our employment market is operating.
Let us consider a couple of companies that have a presence in most of our areas. Sports Direct has 23,000 workers, and 20,000 of them are on zero-hours contracts. That is 86% of its work force. That is not about Sports Direct having flexibility. Some 80% of Wetherspoon staff are on zero-hours contracts, too. That is not just about managing the bulges in customer numbers at certain times of the day or at the weekend, but is a policy decision by those companies to use zero-hours contracts as an employment tool. What is even worse is that having 1 million or so workers on zero-hours contracts helps to disguise the unemployment figures—[Interruption.] Is the hon. Member for Burton (Andrew Griffiths) talking to himself or does he want to intervene on me?
The hon. Gentleman was obviously so busy talking to himself that he did not hear what I was saying, which was that there are instances in which zero-hours contracts might well be suitable. However, a zero-hours contract approach is now being embedded in our mainstream way of employing people. That stokes up people’s uncertainty about their income, creates instability in their lives and leaves them unable to get finance, even for rented accommodation. Those who think that these contracts provide numerous hours’ work each week should note that, according to the Office for National Statistics, an individual who worked for just one hour within its survey period was considered to be employed. The attractive mirror image to this situation for the Government is that they can describe those people as having come off the unemployment register, creating a false figure for the unemployment in our constituencies. The previous Tory Government used to shunt people on to incapacity benefit. The present Government are using zero-hours contracts in much the same way.
The second issue that I want to address is how people can afford housing in the present environment. According to the Scottish Parliament information unit, the average pay in Scotland is £26,472. The average price for a semi-detached house in my constituency is £140,000. I know that Members who represent constituencies in the south of England might think that that is not a high price, but we must ask ourselves how on earth people are going to get a mortgage or other finance for such a house on a salary of around £26,000 a year. It just does not compute. In my area, we have strong tourist accommodation and food industries, in which the average wages have actually dropped. They now average £10,558 a year.
Taking all those factors together, we find a situation in which many people in this country do not feel that they are benefiting from the rosy picture painted by the Chancellor earlier. We do not have to move far from this Chamber to find evidence of that. I wonder how many of us think about how our low-paid workers in the House of Commons dining rooms or in the Tea Room are even managing to get into work. Some of them are on zero-hours contracts. We need to look at the long-term implications for those people.
This Queen’s Speech is, I hope, the last under this Government. I also hope that it predates a new Queen’s Speech after the general election under a Labour Government led by my right hon. Friend the Member for Doncaster North (Edward Miliband). I can find no better description of the Conservatives than that used by Disraeli. He said of Conservatism that it
“offers no redress for the present, and makes no preparation for the future.”
This Queen’s Speech fulfils both those criteria.
I welcome the Queen’s Speech. In particular, I welcome the proposals giving the Secretary of State for Environment, Food and Rural Affairs powers to introduce regulations to hold direct elections in national parks in England. Why do I think this is important? I speak from some experience as I was the chairman of the Brecon Beacons national park. The Bill refers to England, but the governance of national parks in England is very similar to that in Wales. At the moment, all members of national park authorities are appointed, not elected. This results in a democratic deficit. Members appointed by the Secretary of State represent the national interest—I can understand that—but members appointed by local authorities, often on a political basis, sometimes do not even represent wards in the national parks. Elections for local authority councillors do not often feature national park issues.
The national parks that were set up in Scotland some time after those in England and Wales do have direct elections for a proportion of the members of national park authorities. The elections have been well contested, with good turnouts, and have proved popular; but more importantly, they give people a chance to debate national park matters during a democratic process.
I believe that this proposal will strengthen the case for national parks and their purposes. The national park establishment believes that it will bring forward anti-national park candidates. It might do that, but I believe that most people who live in national parks support the principle, but wish to express a view on how their services should be delivered. This Bill will be good for national parks and for the people who live in them.
I also welcome the announcement in the Queen’s Speech that, from 2016, all new homes will be required to meet a zero-carbon standard. However, that will not deal with the existing housing stock. In constituencies such as mine, rural fuel poverty is a serious issue that can have terrible health impacts. I had hoped that new proposals would have been included to help people who are struggling with fuel bills and fuel poverty by improving our current housing stock.
The energy bill revolution has repeatedly shown that investment in a major home energy efficiency programme would deliver better economic outcomes than almost all other forms of investment. Improving homes through insulation would help to bring down people’s energy costs. It would help to keep their homes warmer and have major health and environmental benefits. Improving the quality and efficiency of our homes must be one of our top priorities if we are to tackle the growing issue of fuel poverty. We must recognise the economic, social and environmental benefits of improving our homes and establish the idea that creating homes capable of keeping people warm and healthy is the most vital infrastructure investment we can make. I trust that such a provision will appear in the infrastructure Bill.
On 28 November 2012, I congratulated the Government on introducing regulations to protect wild animals in travelling circuses and asked the Prime Minister whether he would commit to introducing a ban in this Parliament. He responded by saying:
“It is our intention to do just that. My hon. Friend is absolutely right to raise the fact that we have changed the regulations in advance of legislation, so that the clearly expressed will of this House can be met.”—[Official Report, 28 November 2012; Vol. 554, c. 219.]
Given that the Royal Society for the Prevention of Cruelty to Animals, the British Veterinary Association, the Captive Animals Protection Society and Animal Defenders International all support a complete ban on the use of wild animals in circuses, it is surely time finally to pass legislation on this issue. Twenty-seven other countries have introduced some form of prohibition on the use of wild animals in circuses, including half of the EU countries. Given the widespread support for a ban, I was concerned that there was no mention of it in the Queen’s Speech. I hope that other Members will support me in asking the Government to introduce this uncontroversial, and long overdue, legislation for a complete ban.
In 2012, the Independent Panel on Forestry published its final report to the Government on the future of England’s forests and woodlands. It called for our forests and woodlands to be revalued to take into account all the services they provide. Forests are particularly important for the local economy in rural areas. The panel’s research showed that our forests are the
“single largest provider of outdoor leisure and recreation”,
the single largest timber producer, and a vital habitat for wildlife. The report estimated that our forests
“are producing annual returns on investment estimated at £400 million”.
It suggested that the public forest estate should be defined in law as land held in trust for the nation. The Government’s response supported the suggestions, but legislation has yet to materialise. I am sure that other hon. Members would agree that action is now needed to ensure that our forests are protected for generations to come.
We heard a vigorous defence of the Queen’s Speech from the Chancellor of the Exchequer, so it is surprising that so many Conservative Members have voted with their feet and emptied their side of the Chamber, obviously lacking the confidence to speak up in favour of their own Chancellor.
A central part of the Government’s defence of their economic policies is the challenge they make to the competence of and decisions taken by Labour Governments between 1997 and 2010. I was privileged to be a senior member of the Labour Government throughout the term and I am proud of their achievements. As John Major once shrewdly observed, the only people who never make mistakes are those who never make decisions. No more than any Government, did we get all our judgments right, but overall I believe we made the correct judgments, including on the economy. The criticism the current Government make of us is not just wide of the mark; it fails to take account of the contradictory policy positions they were adopting at the time.
The first charge the Chancellor has often made is that the Labour Government did not fix the roof when the sun was shining, but we did—we had to. As my right hon. Friend the Member for Stirling (Mrs McGuire) mentioned, one of the scandals of the Thatcher and Major Governments was their palpable neglect of public services. There were hospitals and schools with leaking roofs and buckets everywhere. There were schools where the sun could literally be seen through the open roof. There is not a Conservative constituency in the country where the roofs of its schools and hospitals were not fixed by the last Labour Government, and no Conservative MP complained about that spending at the time.
That brings me to my second point. I have been through what Conservative shadow Chancellors were saying in response to the Budgets and spending reviews between 2000 and 2010. Yes, there are plenty of passages of criticism, in small print, about the levels of borrowing and taxation to which the Conservatives could, and do, point, but if we look at what they were saying about the spending plans that were leading to all those improvements in their constituencies, we find that a very different story emerges. In 2004, they published a medium-term economic strategy, setting out their plans for the years to 2011-12. The Institute for Fiscal Studies published its own commentary on that, saying that if the Conservatives were to win the forthcoming general election, spending would
“still be higher”
under the Conservative plans
“than it was in every year of Labour’s first term”.
At the 2005 general election, the Conservatives’ main pitch, in the face of Labour criticism, was to reassure voters that no significant cuts would take place if they were elected. The Economist newspaper for 14 April 2005 published a major article under the heading “Much ado about nothing: The Conservatives’ spending plans are strikingly similar to Labour’s”. After the 2005 election, the reassurance that the Conservatives would not be cutting public spending continued, but in even more categorical terms. On 3 September 2007, the “ConservativeHome” website proclaimed:
“Tories will match Labour’s spending plans for the next three years”.
It highlighted an article in The Times of the same date, written by the then shadow Chancellor, which stated:
“I can confirm for the first time”—
he solemnly intoned—
“that a Conservative Government will adopt”
the Labour Government’s spending totals for the years 2008-09 to 2010-11.
I absolutely confirm that. As we have accepted, we did not regulate the banks and other financial institutes sufficiently, but the Conservatives at the time were demanding, in this Chamber and outside it, not more regulation but less. Just in case readers did not get the point of the then shadow Chancellor’s article in The Times in September 2007, its headline was “Tories cutting services? That’s a pack of lies”. All the plans for the economy—those of the Conservatives, as much as those of Labour—were knocked badly off course by the global financial crisis. But for all the insinuations we now hear about how Labour ignored the warning signs, there is not a line—not a word—of such predictions in that article, nor anywhere else in what Conservatives were saying at the time.
The Chancellor talks today of Britain’s recovery, and I am delighted that output, after the longest recession in modern history, is now close to where it was six years ago. But although he will not do this, future economic historians will, I believe, judge that part of the reason for the recovery was the wise decisions made by my right hon. Friend the Member for Edinburgh South West (Mr Darling) when he was Chancellor of the Exchequer. Let it also be remembered that, for all the Conservative efforts to rewrite history now, the average level of debt to GDP under Labour was below that of the preceding Conservative Governments and below international averages, not only for the 11 years before the recession took hold, but even when our last two years in power are included. We fixed the roofs, for both sun and storms. By contrast, the Conservatives then were calling simultaneously for lower taxation and lower borrowing but the same spending. How on earth did they think those sums would ever add up?
The whole House has great respect for the right hon. Member for Blackburn (Mr Straw), who, as always, was careful to acknowledge that the previous Labour Government did make some mistakes. One of those has been all over the newspapers this morning. It was a decision that he was closely involved in and that I voted against: the decision to invade Iraq. That has proved to be one of the single most disastrous decisions ever made in foreign policy, and we have reduced that country to chaos. There are also lessons to be learned for the future, when next we think of involving ourselves in foreign countries with military ventures, whether in Ukraine or Syria.
The right hon. Gentleman was also generous in his description of the very difficult economic decisions that both Governments have grappled with. Of course he is right to say that the roof has to be fixed, but I am sure he would accept it when I say, as a former Chairman of the Public Accounts Committee, that there were productivity declines in areas such as the NHS and that extraordinary waste was involved in the rapid increases in expenditure, particularly on health and education. I am sure that both Governments have a lot to learn about that. I agree with him that we were probably wrong to agree to commit ourselves to accepting Labour’s spending plans, which were too high, and I have consistently argued that we should have addressed the deficit even quicker. It is a matter of regret that we are still spending more than ever before. That highlights the key challenge that both parties face: we have to keep addressing this deficit.
The current Government are winning the economic argument because there remains a lack of coherence in Labour’s spending plans. The whole country realises that there has been this monumental waste and the Government are addressing it. Perhaps we could have done more and we could have done it in a better way, but we are seeking to address it. This Labour Opposition, unlike the Labour Opposition before 1997, who accepted our spending plans before 1997, do not apparently have a coherent economic message to address that. We know that elections are won on the economy.
At the moment, we cannot deny that 2 million extra jobs have been created in the private sector, and I have to say, following an intervention from the Opposition Benches, that they have not all come from ex-members of the Bullingdon club. There are a lot of ordinary people who are getting these jobs. The Opposition have to address that problem, and we have to concentrate on the economy. It was significant and a bit of an innovation that, in the Gracious Speech, the Queen often mentioned the economy.
I am extremely grateful to the hon. Gentleman for giving way and for his generosity towards me. Yes, of course I accept the 2 million figure that he mentioned, but does he acknowledge that a significant element of that 2 million, whether we like it or not, is composed of those migrants who have come in, about which he so much complains?
Yes, of course I acknowledge that, but the point I want to make is that it is by concentrating on the economy during the last year of this Government that we will establish our credibility as a party of government. What worries me is that although there is so much in this Queen’s Speech that is excellent, especially the Bill dealing with pensions, we still sometimes forget the essential lesson that, as a Conservative party and a Conservative Government, where we do conservative things and address the economy in a conservative way, we win. Where we indulge in modernising gimmicks, we stumble and start to lose. Sometimes, we forget that. When we do conservative things, such as cutting the deficit, introducing a benefit cap and attempting—not enough—to deal with immigration, we win.
I am still worried about a couple of things in the Queen’s Speech. Is it really essential, when we are trying to address record spending and difficulties in the economy, to start talking about eradicating plastic bags in supermarkets? Is that a priority? Is it essential to start talking about the recall of MPs? It may at first sight be populist and popular, but it is very difficult to administer and probably will not solve any problems. For centuries, rogue MPs have consistently been kicked out of this place, so let us concentrate on the economy.
By modernising, which the hon. Gentleman is very much against, does he mean reneging on the pledge to commit 0.7% of the gross national product to international aid, which was a manifesto promise of the three major parties in this country?
That is a manifesto promise. My views on that are well known. I have two daughters working in international development in Africa, and I am proud of the efforts that we have made on international aid. I am totally committed to spending properly on international aid, but the Department for International Development, like every other Department, must spend what we can afford to spend and what we need to spend. Frankly, it is somewhat economically illiterate to insist by legislation or by other means that a Department sets a fixed percentage of GNP on aid, health or anything else. What happens if there is a recession and the economy contracts? We could end up spending less on aid. I have consistently made that argument, but I am grateful to the hon. Gentleman for his intervention.
My point is that we must concentrate on the economy. We still face enormous challenges. It is very difficult to get to grips with some of these challenges while we are in a coalition Government. A lot has been made of immigration in this debate. The truth is that we have made a mistake—the shadow Chancellor was generous enough in response to my intervention to accept that—in allowing such high immigration from eastern Europe. We all accept that, especially when economies diverge so greatly, as happens between Bulgaria and Romania and ours. It cannot be accepted in the long term that there should be an untrammelled right of immigration from poorly performing economies to our own. We just have to accept that. Therefore, the European Union rules on this must be reformed. I should like to see legislation put in place, but it will not be possible while we are in a coalition.
We also have to address the problem of the referendum. The British people deserve a referendum. Nobody under the age of 55 has been given a referendum. It is virtually impossible to get a referendum Bill through via the private Member’s procedure. The referendum Bill should be in the Queen’s Speech. It should be a Government Bill. I say to my hon. Friends the Liberal Democrats, who are sitting in front of me, that they cannot deny the right of the British people to have a choice.
We need to address the concept of human rights. I am a great supporter of the Council of Europe and all its work; I am a member of it. The fact is that we cannot continue to have a proactive European Court of Human Rights in Strasbourg, which is defeating the efforts of the former Home Secretary, the right hon. Member for Blackburn (Mr Straw), and many others to deal with terrorism. There is much more that we need to do, which is why, for all that the coalition has achieved, we must get a clear result at the next general election. I hope from the bottom of my heart that it is a Conservative victory, so that we can address the very serious problems that still afflict our nation.
The Queen’s Speech said that the stated objective of this legislative programme was to build a stronger economy. It said that it was to strengthen the economy. The Prime Minister used many of the same phrases in his speech last week, and spoke again, as the Chancellor did today, about this fabled long-term economic plan, which is a bit like a fabled unicorn: everybody knows what is meant, but no one has ever seen one. This long-term economic plan is much the same. Anyone with any common sense would assume that a long-term economic plan was predicated on substantial above-trend growth, yet the word “growth” did not appear once in the Queen’s Speech. Indeed, the Prime Minister only uttered it twice: once to chide the leader of the Labour party, not unreasonably, and another time in response to an intervention from his own side. Why the coyness? Where is the plan for real growth in the economy? When one looks at what is proposed in this legislative programme and at what has come before, particularly in the Budget, one can see that, at its heart, this is still an austerity Government. Yes, there are some helpful Bills, such as the national insurance contributions Bill and, potentially, the small business, enterprise and employment Bill, but there is nothing that anyone can point to and say, “That will make a real difference in delivering growth in the economy.” Perhaps the Government think that mining tunnels under people’s homes without permission to carry fracked gas qualifies as a growth measure.
Why are the Government so coy? Why are they giving us this convoluted formulation of words about long-term plans and a focus on a very narrow, although helpful, policy about national insurance? It is because they have failed and they know it. Nothing the Government said last week or this week changes the underlying direction of travel or the underlying shape of the economy as described to us in the Red Book only a few months ago.
I am really interested in the hon. Gentleman’s contribution. The International Monetary Fund has confirmed that we are the fastest growing country in the G7. We have seen growth in all sectors of the economy in the past year. That must be welcomed. There is no unicorn. The only unicorn is the Scottish National party’s claims that Scotland will be better off out of the UK.
That is because we would be. Although I welcome the limited growth that we have had, the actions taken by this Government since the last election stifled and strangled the recovery for some years, and that is the underlying problem with their plan.
Let me take Scotland as an example. What the Government are proposing—this was before the Budget—is an 11% fiscal expenditure cut, a 27% cut in capital and a real terms 9.9% cut in the overall budget. This year’s Budget made that position worse, and that applies to spending Departments throughout the UK. Nothing in the Queen’s Speech changes that. Nor does it change the fact that the Chancellor told us that for 2013-14, the current account deficit would be down to 2.3% of GDP, borrowing would be reduced to £60 billion and the net debt would be at 70% of GDP. He was forced to tell us this year that the current account deficit was higher, borrowing was actually £95.5 billion and the net debt was 75% of GDP. The short-term metrics were wrong.
What about the big targets the Chancellor set for himself? They were that the debt would begin to fall as a share of GDP by this year, that the current account would be in balance next year and that the same year borrowing would be down to £20 billion. Presumably, that is what the Prime Minister meant by financial security. Of course, as we know—nothing in the Queen’s Speech changes this—the debt will not fall until 2016-17, two years late. The current account will not be back in the black until 2017-18, two years late. Public sector net borrowing in 2015-16 will not be £20 billion but £68 billion, three and a half times higher.
Although the limited recovery we have seen in the past year is of course to be welcomed—this directly answers the question asked by the hon. Member for Suffolk Coastal (Dr Coffey)—not a single one of the Chancellor’s key targets has been met and his actions, as this is an austerity Government, stifled growth and delayed recovery year on year. No amount of convoluted formulations or warm words about long-term economic plans can change that.
What are the Government planning? It is there in black and white in the Red Book, on page 20 for anybody who wants to have a look. There will be a discretionary consolidation—that is cuts, and tax rises—next year to the tune of £126 billion. That is £2,000 per person in tax rises and cuts. That is what they are planning and that is what they have signed up to.
I am interested in the hon. Gentleman’s comments on achieving growth. Presumably the skill base would need to be increased, so I take it that he agrees that cutting the college budget by £50 million would not be the way to achieve sustainable growth.
When it comes to improving education, having a record number of Scots in full-time college places is excellent; having 25,000 to 26,000 Scots starting apprenticeships every year is first class; having 32,000 Scots start university this year is the way to proceed; and having all the school exam results improve in the way they have is probably a really good start. If the hon. Lady is saying that we can do more and can do better, of course we can—any Government can—but let us not talk down success, particularly when we are trying to hold this Government to account.
The point that I was making is that what we have is not a long-term economic plan. It is certainly not sustainable and it is certainly not a recipe for the growth the economy needs. It is just more Liberal and Tory austerity. It is the same plan that has seen this Government fail on their short-term and long-term targets so far and that will fail again. If it is about financial security, there is no evidence that it will succeed. If it is about growth, the Government are not even talking about that. If it is about delivering on the needs and ambitions of the people, it is woefully inadequate. As the discretionary consolidation laid out in black and white in the Red Book is predicated on a ratio of cuts to tax rises of 4:1, we do not have a long-term economic plan but a Tory Government who seem determined once again to try to balance the books on the backs of the poor. That is not a long-term economic plan; that is a disgrace.
I am delighted to take part in this important debate on the Queen’s Speech and to congratulate the Chancellor on what he has done for our economy in the United Kingdom and particularly for the economy in Burton. I take part in the debate because I was urged to do so by one of my constituents at a thriving Burton business club lunch recently. He said to me, “Andrew, will you go into the Chamber and urge George to carry on with his long-term economic plan. Will you tell him not to listen to all that Balls?” I assume that he was talking about the shadow Chancellor.
My constituent was absolutely right, because the Government’s long-term economic plan is working for my constituents and my businesses in Burton and Uttoxeter. When I spoke to those entrepreneurs and small business men and women at Burton business club, they told me about the confidence they have in our economy. They have full order books, they are taking on new employees and they are optimistic about the future for their businesses and for our economy. If that is the case, we must continue with our long-term economic plan because in Burton it is working.
Since I became the Member of Parliament for Burton, we have seen unemployment reduce by 43%. Today’s Opposition amendment talks about opportunities for young people, but I talk about the 1,100 apprenticeships that young people in my constituency have started as a result of the policies of this Government. The Opposition talk about the need to help people in poverty, but I talk about the 900 families who now have the security of a job as a result of the policies of this Government. The plan is working in Burton.
Obviously, this debate is on the economy and I want to touch on a particular issue to do with that and with the Queen’s Speech, and that is the 900,000 people employed in the beer and pub trade. I come from the home of Britain’s brewing industry where 4,000 people are employed in beer and pubs, so this issue is hugely important for the families that rely on that important industry and not just for those who enjoy great British beer and our community pubs. I am very pleased to see in the Queen’s Speech legislation to protect our publicans up and down the country, as many Members on both sides of the House have voiced their concerns about how pubcos have treated some of our landlords. I was one of those who stood up and spoke about self-regulation, and I have to admit that I was wrong. The need for legislation has been demonstrated and I am pleased that the Government have come up with a proposal that will protect publicans and bring real transparency and openness into the system. Our pub industry will flourish as a result.
I am also pleased that Ministers recognise the dangers in the proposal for a free-of-tie option. As the Department for Business, Innovation and Skills economic report by London Economics proved, that would have closed almost 2,000 pubs virtually overnight. I am pleased that a statutory code and a regulator will give real protection to landlords and publicans, but I have some concerns. It has always been the stated aim of this Government to cut red tape and regulation, with the one in, two out rule, and I hope that they will bear that in mind when they consider the proposed costs of the adjudicator. Self-regulation costs the industry about £100,000 a year, but it is estimated that the proposal for the adjudicator will cost £5 million a year, which will be funded by a levy on the industry. We must be careful that in our desire to protect those publicans we do not set up a quango that will end up costing the industry and that will be over-burdensome.
As the Member of Parliament for Burton, where Marston’s is based, I am also concerned that its franchisees will be caught up in this. I urge the Government to reconsider whether this legislation is aimed at capturing the franchise model. It is worth while thinking about that. I am also grateful that the Government chose not to accept the proposal for a mandatory guest beer. We all recognise the concerns of SIBA, the Society of Independent Brewers, and lots of small breweries that that proposal would have hit the cask ales and Britain’s smaller breweries, and that we would have seen imported foreign lagers as the guest ale.
I commend the Government for this Bill and hope that we can see it speedily enacted without too much meddling or interference to damage it. As a result, publicans, the British beer industry and the British pub industry will thrive across the country.
I found the reference in the Queen’s Speech to the Government continuing
“to build a stronger economy and a fairer society”
absolutely incredible. It assumes that we already have a stronger economy and a fairer society, and we patently do not. We have had the worst economic recovery in 100 years. After three years where the economy flatlined, the recovery is still very fragile. We need 1.6% growth each quarter to catch up to the growth we had at the end of 2010.
What is growth based on? Once again, we are seeing the start of a housing bubble, driven by the Government’s policies, and an increase in household debt, which was up to £2.9 billion in March this year. The Tories’ 2010 manifesto stated:
“A sustainable recovery must be driven by growth in exports”.
Absolutely. Who would disagree with that? But the Government have not enabled that to happen. The trade figures remain in the red—by £22.4 billion in quarter 4 last year, which is equivalent to 5.4% of GDP. By their own measures, the Government are failing. Related to that, UK productivity is the second lowest in the G7 and 20% lower than the G7 average. That is the widest gap since 1992 and reflects a massive fall in non-financial investment.
Small businesses, which I have been campaigning for and championing since I entered the House three years ago and which employ nearly half the work force, are still feeling the pinch. The Federation of Small Businesses survey shows that access to finance and late payments are still the two biggest issues, with £30.2 billion owed to them in late payments. Although I recognise that the Government have finally responded to the issues that my inquiry into late payments identified last year and taken up some of my recommendations, it is likely that the measures will relate only to the public sector. That is not good enough and does not go far enough. We need to ensure that the Government are standing up to big businesses and doing the right thing. If they do not, we will.
Then, of course, we had the Government’s arrogance about what they would do about public borrowing. They claimed that they would clear the deficit by 2015, but we are not even halfway there yet, and they are still borrowing £190 billion more than they planned.
Associated with the fragile recovery are the effects of unemployment and employment. The unemployment rate is above pre-recession levels, and employment rates are below pre-recession levels. I still have major issues with how the figures are distorted by the inappropriate sanctioning that is a policy in the Department for Work and Pensions.
Does my hon. Friend share my concern—it was one of the points I wanted to raise with the Chancellor when I was attempting to intervene on him—that more than 1 million people who are unemployed do not appear on the claimant count of which he is so proud? They represent more than 47% of the total number of the unemployed. There appears to be no knowledge of what is happening with these individuals and why they are finding it so difficult to get jobs. It clearly cannot be benefits dependency, because they are not on benefits.
Absolutely. My hon. Friend highlights another issue with how information on claimants and people not receiving payments is being missed. We should be doing as much as we can to expose those issues.
I mentioned the employment rate still being below pre-recession levels. The jobs that have been created since 2010 tend to be insecure, part time, low paid and on zero-hours contracts. The number of people on short-term contracts has increased twentyfold since 2010 to 1.65 million, 655,000 of them involuntary. Increases in the number of temporary jobs account for more than half the rise in employment. Nearly one in five, or 1.46 million people, work part time because they cannot get full-time work. That is the highest underemployment since 1992. Four out of five new jobs, and one in three of those in Oldham, pay below the living wage.
Another issue is the geographical spread of the so-called recovery. Since 2010, 79% of new jobs have been created in London, with another 10% in nine urban centres outside London.
In the limited time available, I want to talk about the inequalities this Government are presiding over. All those employment and unemployment effects are happening at a time when the Government have made specific policy decisions on increasing the top rate of tax for people with incomes of more £150,000, but average wages are down £1,600 a year. The analysis by the Institute for Fiscal Studies shows that the net effect of tax and benefit changes for an average family is a loss of more than £900 since 2010, while bank bonuses have soared by 83% and top-to-bottom pay ratios in the FTSE 100 stand at 300:1.
We are already seeing the impact in access to food banks: this week’s Oxfam report, “Below the Breadline”, shows that 20,247,042 meals were given to people in food poverty in 2013-14 by the three main food aid providers—a 54% increase on 2012. Another recent Oxfam report, “A Tale of Two Britains”, highlighted the growing gap between rich and poor, with five of the richest families in the UK wealthier than the bottom 20%, or 12.6 million. That follows a raft of other reports—for example, from the Equality Trust.
The gap matters—it really does. It matters because, as overwhelming evidence shows, society as a whole benefits from being fairer and more equal in areas ranging from life expectancy and mental health to educational attainment, social cohesion and social mobility. It is worrying that we are seeing further increases in premature deaths in deprived areas compared with more affluent ones. According to a report published in May, people in Manchester are twice as likely to die early as people in Wokingham, yet as I mentioned in Prime Minister’s questions yesterday, last December the Government scrapped the health inequalities formula that Labour introduced in office to ensure that NHS resources were allocated according to need, and which the analysis proves has been effective.
A fairer, more equal society also benefits our economy. Again, there is overwhelming evidence from a range of sources that inequality causes financial instability, undermines productivity and retards growth.
Order. It will be obvious to the hon. Members in the Chamber that a great many still wish to speak this afternoon and there is very little time left. After the next speaker has concluded, I will reduce the time limit to four minutes. I appreciate that this makes it difficult for Members who have prepared speeches, but if everyone is to be given the opportunity to speak, we simply cannot have more than four minutes. I call Andrew Selous.
There seems to be a degree of amnesia among Opposition Members about the scale of the great recession presided over by the last Government and which this Government are having to deal with. That recession cost the British economy £112 billion, and it cost 750,000 people their job. On Labour’s watch, youth unemployment increased by nearly half, long-term unemployment almost doubled in just two years, 5 million people were left on out-of-work benefits, and in one in five households no one was working. We have made improvements, although of course we want to go further, but it is worth remembering the scale of the difficulties this Government have had to deal with in the past four years.
Government Members believe in high-skill, high-value jobs. That is why we are so passionate about our apprenticeship programme and about the university technical colleges we are introducing. It is why we are so passionate about our young people gaining the best skills and about improving school standards. That is the way to get pay increases, to defeat poverty and to deal with the cost of living issues facing our constituents.
In my constituency, I see employers rising to the challenge. I see B/E Aerospace in Leighton Buzzard now employing some 540 people, Honeytop Speciality Foods developing a new factory, and Care Group, a company from India, setting up a new factory on the Woodside estate in Dunstable. In India, that business has taken on a significant number of disabled people, and its delightful chief executive plans to do the same in this country—let no one say that capitalism cannot have a human face and a heart.
The jobs figures in my constituency show that there has been a 40% fall in the overall claimant count for jobseeker’s allowance in the past year and a fall in unemployment of 54% for 18 to 24-year-olds, 35% for those over 50, and 39% for those who have been out of work for more than 12 months. Of course, we have further to go—we want everyone to have a job—but that is not bad progress, given the scale of the challenges with which we were left.
We have a Prime Minister who has said at the Dispatch Box that he would like to see a minimum wage of £7 an hour. More companies are paying the living wage. I remind Opposition Members that it took a Conservative Mayor of London to introduce a living wage in London, and a Conservative Secretary of State for Work and Pensions to make sure the cleaners in the Department got the living wage. That did not happen under the previous Government.
What would a socialist Government look like? We do not have to imagine it, because we can just look across the channel, where we will see higher rates of unemployment, much lower rates of business start-up and a whole host of French entrepreneurs, such as Mr Guillaume Santacruz, crossing the channel to set up business here. He has said:
“Where will I have the bigger opportunity in Europe?”
Of the UK, he has said:
“It’s more dynamic and international, business funding is easier to get, and it’s a better base if you want to expand.”
He has left socialist France to come to a majority-Conservative-led Britain to expand his business.
My hon. Friend is absolutely right. We sometimes miss the point that what we should concentrate on is not the tax rate, but the amount of tax the Exchequer gains. Economic history has shown over a long period that lower rates of tax tend to generate more tax revenue, as they inspire entrepreneurs to create more businesses and expand them.
I am proud that we have a Government who are rising to the infrastructure challenge facing this country. We have heard a lot about infrastructure. My area has waited for a crucial bypass for 60, 70 or even 80 years. I have watched the town in which my constituency office is located, Dunstable, and the neighbouring town of Houghton Regis being throttled by excessive traffic congestion for many years. It has had a dreadful impact on businesses there. Even though permission was given for the road in 2003, not a shovel hit the ground during the whole 13 years under the previous Labour Government. I can tell hon. Members that diggers are now on the ground in my constituency and the road is going to get built. There will be relief for the people of Dunstable and Houghton Regis, who waited a long 13 years under the previous Government for nothing at all to happen.
We have the courage to make sure that people can get on trains in the morning and do not arrive at platforms that are already full. We have not built a new railway line since the Victorian era, but it is this Government who have the courage to rise to the infrastructure challenge.
We have also shown courage on pensions. Have not Opposition Members received letters from their constituents telling them how appalling the annuity market has been and how the projections of their future pensions were on the floor, cut by more than half? Were they not concerned by that? We on the Government Benches were, and, as the Chancellor said earlier, many of us came in Friday after Friday to try to get private Members’ Bills through to do something about it. Of course, Labour Members did not trust our constituents to spend their own money wisely. Oh no, they did not want to do that—they wanted to control it. I am proud to be serving in a Government who trust people with their own money. As the Chancellor has said, they have earned it, they have saved it and they have the right to have control over it. That is exactly what we should be doing.
Those are all very good things. Of course, there is further to go. The way to deal with the cost of living and help people pay their bills is more jobs, more better paid and highly skilled jobs and a high value-added economy. We are going in the right direction. We are creating more jobs, and Government Members want them to be well paid and highly skilled, and that is what we will continue to try to achieve.
Listening to the Chancellor, I think the Tory attack lines for the next election are pretty clear. They go like this: “Labour left a dreadful economic mess, which we had to clear up the way we did. It’s been painful, but we were all in it together. We always had a long-term economic plan, and now it’s come good and we have a strong economic recovery.” What unites all of those claims is that every one of them is utterly false.
Labour did not leave an economic mess—the bankers did. In the Labour pre-crash years, the biggest deficit was 3.3% of GDP, whereas the Thatcher and Major Governments ratcheted up bigger deficits in 10 out of their 18 years. Although Thatcher-Major achieved a surplus in two years, Blair-Brown achieved a surplus in four years.
We were not all in it together. Average wages have fallen 7% since the crash, while, according to The Sunday Times rich list published a month ago, the richest thousand persons in the population have increased their wealth in this short period—they have actually doubled it—to just over half a trillion pounds.
In so far as the Chancellor had any long-term plan at all, it was to shrink the public sector in order to enable the private sector to expand into it, but, of course, that did not happen. Of the 1 million jobs that have allegedly been created, two thirds are self-employed on a pittance and almost all the rest are insecure, low paid and on zero-hours contracts. The fact is that virtually none of them are full-time jobs on or near the median income.
As for the present recovery, it is far too dependent on consumer debt to last and it cannot be sustainable. If we look at all the sources of demand—wage levels, productivity, business investment and exports net of imports—we see that they are all dramatically negative.
The biggest fib in the Tory lexicon is that the Tories had to clear the huge deficit by prolonged austerity. They did not. The then Labour Chancellor’s two stimulatory Budgets in 2009 and 2010 brought the deficit down sharply from £157 billion in 2009 to £118 billion in 2011—a reduction of nearly £40 billion in just two years. The present Chancellor’s austerity Budgets have slowed the reduction to a trickle and it has reached £108 billion this year—a reduction of £10 billion over three years. There is not much doubt there about the quickest and best way to cut the deficit.
What should be done? Initially, with private investment flat on its back, we need public investment to promote growth, directed in consultation with industrial leaders at energy, transport and IT infrastructure and at house building and laying the foundations for a low-carbon economy.
How will it be paid for? With interest rates at 0.5%, a hefty investment package of £30 billion could be purchased from the markets at the bargain-basement rate of £150 million a year, which would be enough to generate more than 1 million jobs—proper jobs—within two years.
It could, however, be done without any increase at all in public borrowing. A further £25 billion to £30 billion tranche of quantitative easing could be directed not at the banks, as it has been before, but at agreed industrial projects; or the publicly owned banks, RBS and Lloyds, could be instructed to prioritise their lending to industry, rather than speculation abroad or on property; or the very rich, who have monopolised 90% of the gains since the crash, could be subject to a special super tax to help contribute to tackling the nation’s debt, which some of them helped to create and from which they have benefited the most.
It is a great honour to contribute to this debate on the Gracious Speech. Some Members have made their final contribution to such a debate, certainly in this House, but I am sure that some will reappear in the other place.
It is fair to say that the Queen’s Speech is an attempt to build on the Government’s good efforts over four years in order to make our country continue its journey towards a fairer society with a long-term economic plan. Unemployment, long-term unemployment and youth unemployment are all down. That is far from the misery that was predicted several years ago. Nevertheless, I am sure that the Chancellor would be the first to admit that we have not tackled the deficit as quickly as we would have liked. Of course the issue is that, as the Office for Budget Responsibility pointed out, the recession was deeper than was initially realised, and therefore it is taking longer to get out of.
Given the amendment we are considering and the guidance given earlier, I cannot talk about some of the Bills in the Queen’s Speech, but there is one that I think will be iconic and will I am sure receive the support of the whole House: the Modern Slavery Bill. I will keep to the guidance, but it is important that instead of having just a budget debate, we continue to consider the ideas that we will all contribute to in the next 10 months.
Earlier, the hon. Member for Huddersfield (Mr Sheerman) put a question to the Chancellor, to which my right hon. Friend replied, in which he rightly pointed out that productivity is not recovering. As the Chancellor said, however, to some extent choices have to be made. It is fair to say that keeping people in work—indeed, having more people in work—is probably a better choice at this moment in time, which will then allow us to focus on the productivity challenge that all of us in this country need to address in order to keep our economic plan going. However, that challenge is not unique to our country, which is why we continue to seek reform at the European Union level.
The Bills that we have put forward include the small business Bill. One of the things that the Government have been trying to do is to remove some of the barriers to growth, while enabling some of the activities that they would like to see. We will see that with export finance, and with finance being targeted at small businesses and the help in that sector. There is also the important measure adding a deregulation target—a commendable element that I think we will all enjoy passing.
Of course, there are important measures to help people with work and the cost of child care; child care payments will be addressed in the Child Care Payments Bill. The National Insurance Contributions Bill is really important. I am sure that many Members of this House have examples of companies having done the wrong thing, and we will set that right, just as we will on issues such as zero-hours contracts and removing the exclusivity clause.
On the infrastructure Bill, I welcome some of the plans related to housing. I give a cautious welcome to the Nationally Significant Infrastructure Projects regime, with Sizewell C hopefully being built in my constituency. However, I want to ensure that the voice of the community is still part of that NSIP regime, as it should be.
There is no doubt that the economic plan is working. In my own constituency, unemployment is now at 604, which is the lowest it has been since December 2007. These are all good things, but the journey is only halfway completed. That is why I am confident that the British public, having seen five good years of government, will make the right decision next May and allow us to propose another Queen’s Speech in 12 months’ time.
This Queen’s Speech comes at a time when the public’s faith in politicians, here in Britain and in Northern Ireland, is nearing rock bottom, and many of the reasons for that lead directly back to the subject of today’s debate and today’s amendment, which I support—everyday living standards. The economy, accompanied by austerity measures, has meant less money in people’s pockets.
It is not comfortable for people in Northern Ireland to hear the Tory-led Government crow in this House about the positive state of the economy and claim that there has been a miraculous recovery, because that is not what people are experiencing and it is far removed from the everyday reality for most families. People feel that no matter how hard they work, their lot will not get any better, and a large proportion of them remain trapped in low-wage temporary contracts that offer no security and little hope, while those who cannot find work are repeatedly vilified.
The rising levels of inequality—highlighted recently by the Governor of the Bank of England, no less—and an economy in which pay freezes are common and wages fall far below inflation, are hurting people right across Northern Ireland. Low and stagnant pay rates are endemic, with 26% of employees in Northern Ireland being paid below the living wage level. That percentage is higher than for any region in England, Scotland or Wales.
Just last week, the Northern Ireland Council for Voluntary Action held a conference specifically on the problem of in-work poverty, at which it was revealed that working households now make up a majority—some 52%—of those in poverty. We are told by the Government not to worry, because they are “rebalancing the economy” and boosting the private sector. Any such boost to the private sector would be welcome, but as it stands Northern Ireland has the lowest private sector wage level of any region within the UK. We must ask not only what private sector development there is but what kind it is. It must provide sustainable, stable and fairly paid jobs.
That is all compounded by the high bills that people continue to face for food, electricity and fuel. In Northern Ireland, we pay even more for our energy than people in other UK regions. There have been decreases in the cost of oil on the global market, but people do not see that reflected in their bills. They see prices go up at the drop of a hat but never seem to fall, an issue that just this week Ofgem has asked energy companies to explain.
In my party, we are in no doubt that the current cost of living crisis is hitting the majority of families right across Northern Ireland, and we ask the Government at this late stage to ensure that that situation is rectified in the last year of this Tory-led coalition. If it is not, more people will be totally placed in peril, and at great financial disadvantage.
Thank you, Madam Deputy Speaker, for calling me to speak. This is the first time that I have been called to speak in a debate on the Gracious Speech since being elected as an MP in 2010, and since we are debating the final Queen’s Speech in this Parliament before the next general election perhaps it is the last occasion that I will have a chance to be called; whether I have a further opportunity is a matter for the voters in Montgomeryshire next May. Anyway, thank you, Madam Deputy Speaker, for calling me today.
The Prime Minister began his speech at the beginning of this debate last Wednesday by telling the House that the most important task facing the coalition Government during the next year is continuing the work of restoring our economy. That is absolutely the right approach. There are 11 interesting and important Bills in the Queen’s Speech, but underpinning everything that the coalition Government should focus on in the next year is economic recovery.
While I emphasise the important aim in the Gracious Speech of continuing in a determined way with the task of economic recovery, we should acknowledge what has already been achieved. It is far more than many of us would have expected and it has certainly defied the consistently dire predictions that have been made by the Opposition during the past four years; indeed, my right hon. Friend the Chancellor today listed some of those predictions, which have been shown to be completely false. In particular, the falling levels of unemployment and the rising levels of employment have been nothing short of miraculous. Only yesterday, the employment figures for May were published. Unemployment fell by 161,000 in May. Since 2010, more than 2 million jobs have been created.
In May the number of unemployed people in my constituency fell to 647—just 2.1% of the economically active—which is 270 fewer than a year ago, and 33 fewer than in April. Those are astonishingly good figures, and they are reflected in constituencies right across the UK.
Montgomeryshire is blessed with many dynamic small and medium-sized enterprises across the range of sectors. Over the past few weeks I have visited several of them, accompanied by Ministers from the Wales Office team. We visited Sidoli, Invertec and T. Alun Jones in Welshpool, Makefast, Stagecraft, Quartix and Trax in Newtown, and last Thursday I joined a celebration at Stadco in Llanfyllin as that outstanding company received the Jaguar Land Rover quality standard award. Those businesses, which are mainly in manufacturing, are growing solidly, providing new jobs and creating apprentices, demonstrating their confidence in Britain and in the Government’s long-term economic plan. The last thing they need is a national insurance jobs tax, which the shadow Chancellor so studiously refused to rule out earlier today.
Over recent months the Opposition have made much of the cost of living—they have done so again today—as if Labour’s management of the economy had nothing whatsoever to do with it. Experience teaches us that the only way to create sustainable increases in wages is through the marketplace, through the pressure created by competition for good, well-trained employees who are willing to work. Therefore, it is absolutely right that the coalition Government continue with their brilliantly successful economic plans all the way up to the general election.
In the 20 seconds remaining I want to say that my constituency is rural and depends largely on farming. Currently, the cost of living is being seriously affected by what is happening to the dairy industry. The Government need to tackle that issue and understand why imports are coming in and why the supermarkets are not accurately labelling theme.
It is not at all surprising that Government Members want to talk about the “long-term” economic plan, because that diverts attention from the failure of the short-term, one-Parliament economic plan that we were told about extensively in 2010 and 2011, which they said justified many of the measures taken. Interestingly, it is clear from some of the contributions we have heard since last week, particularly the contribution from the hon. Member for South West Bedfordshire (Andrew Selous), that such economic growth that we have managed to see over the past year appears to have been stimulated by public investment. He talked about railways and a bypass. That sounds like a Labour policy: public investment to create private sector jobs. Actually, it is our economic plan that is being successful.
Does it matter whose economic plans did or did not work? Many people would say, “Oh, get on with it. We have to move forward.” But it is important, and in two particular ways. One way has to do with the fragility that still exists in the economy. I want to mention an issue I raised in an earlier intervention: the growing gap between the unemployment rate and the claimant count. When Government Members talk about falling unemployment in their constituencies, they are actually talking about the claimant count. When they greet anything Opposition Members say with, “By the way, the hon. Member should be aware that unemployment in her constituency has gone down by 20%”, they are talking about the claimant count. Some 47% of those who are unemployed are not in receipt of jobseeker’s allowance. That is 1 million people.
What is happening to those people and to the economy within which this is taking place? A lot of them clearly cannot get jobs, which suggests that this great recovery is not as healthy as the Government claim. Perhaps it differs by geographic area. From the point of view of the economy, this is particularly important, but it is also particularly important for the individuals involved—we must never forget that. Some of them will have a working partner, although not necessarily a very well-off one. They need only relatively small part-time earnings to lose jobseeker’s allowance after six months, because after that they will not qualify for the income-related benefit. Remember that that household has already lost one income, due to losing one of its two jobs, so it has a much reduced income and then it loses £72 a week in jobseeker’s allowance. That household’s buying power and standard of living has dropped catastrophically. What is happening to those people?
Some of those people are in an even more vulnerable position. I will illustrate that with the case of a constituent who came to me who had no income because he had been sanctioned for six months having been declared fit for work. He has a learning disability of a considerable nature and could not cope with the conditionality of jobseeker’s allowance. He just gave up and stopped claiming because he could not cope with it any longer. He was being supported by his parents, who were living on retirement pensions. How many more people are there who have just dropped through the so-called safety net? I think that the Government should be worrying about that, because of what it is telling us both about our economy and about individual cases. I would like the Government to look into that with some urgency.
Looking at what has been happening over the past months and years, I am impressed by the desire of Members in all parts of the House to see a fairer society built on a stronger economy. The difference is in how we achieve that. We have seen that we need to concentrate on providing jobs, apprenticeships and training for young people.
In Eastleigh, youth unemployment is at its lowest for five years, not four. There are 125 young claimants, or 1.5%. That is still too high but it is a great improvement. The increase in training and apprenticeships is particularly important. We have hit about 3,000 new apprenticeships, and these are real apprenticeships, not some sort of fake training jobs. This is the way to go. If we want to create a fairer society, we need to train people, educate them and help them get the jobs they need.
Work must be worthwhile, and one of the ways to ensure that is through the Liberal Democrat policy—yes, it is a Liberal Democrat policy—of increasing the tax allowance to £10,500 a year. It is not enough, though. We need to increase that to make sure that no one on the minimum wage pays income tax. I did a rough calculation. The tax allowance would be £12,500 a year. I look forward to that happening soon.
In the time remaining, I want to look briefly at housing. One of the things for which we have been hugely criticised was the help to buy policy. I was talking to the Council of Mortgage Lenders just two days ago. Of the 19,393 equity loans taken so far, only 1,000 were in London. The vast majority were for first-time buyers, and the vast majority were for houses of less than £200,000, not £600,000. The scheme is doing exactly what it was meant to do—that is, allowing young people from an ordinary family with a small deposit to buy a house, improving on the situation that has existed for several years, where people had to be rich or have rich parents to be able to get together a deposit to buy a house. Of course the Governor of the Bank of England is right that we should keep a sharp eye on the scheme to make sure that it does what it was meant to do, and not what is claimed. It is vital that we continue to build more houses. I hope the housing associations can be targeted to allow them to provide the bulk of this housing.
On the subject of housing, a long-time bugbear of mine is stamp duty. Why on earth do we have a stamp duty with a cliff edge and a shelf? Up to £125,000 people do not pay a penny. If they buy a house at £125,000 + 1p, they suddenly pay £1,250. That is absurd. If the Treasury would like to find out from me how we can reform this in a totally revenue-neutral and fair way, please pick up the phone and call me. It is very simple and easy to do.
One of the things that my constituents do not like is the sort of debate that we have had today. They watch it on television and think, “What on earth is going on?” We live in one of the wealthiest countries in the world; we have the sixth largest economy; and we are highly successful in so many ways, under both the present Government and the previous one. My constituents look at the Queen’s Speech, but do not see how it relates to the reality of their existence.
As a social and economic entity, we have changed vastly over the years. This year, we remember the wasted lives of the 1914-18 war, when 16 million young men died. Since that time, and since the second world war, this country has changed dramatically. Nationally and in my constituency—we in Huddersfield are the average—about 8% of people now make anything in manufacturing. The manufacturing sector is very small but highly efficient. It is growing, but as it does so, it increasingly uses sophisticated machinery and fewer skilled workers.
We have an hourglass economy, with a large number of very skilled people who are doing very well, but many people with traditional jobs and a fair number of skills who have been squeezed out of such occupations, while people with few skills are having a bleak time and will have a bleaker time in future.
So much of this Queen’s Speech fails to address the fact that so many Members of Parliament, especially Opposition Members, but—let me be generous—Government Members as well, came into the House to get a good life for people. Many people in our country are not getting a chance to have a good life; they are certainly not doing so in Huddersfield. What we need to have and what should have been in the Queen’s Speech is an emphasis on the difficult things, such as homes and housing. A whole bunch of cowards on these Benches—I say this nicely, because I do not want to be brought up before the Speaker—will not face the fact that nimbyism and the green belt are preventing houses from being built so that people can have a decent place in which to live. When are we going to recognise that?
When will we invest more in skills, putting real investment in our further education sector and in genuine apprenticeships that last longer than a year and fit people for future jobs, not present ones? The fact is that we have a good skill base, but it is not big enough. If we are not careful and if we are not brave and courageous, we will not have the skills relevant to keep our companies in the premier league.
Our constituents do not like the argy-bargy that we have all the time. We would be much better agreeing on lots of the stuff that comes before the House for us to discuss. Universities are an example. We must settle on the fact that the present way of funding our universities is putting them all in danger. They are absolutely the jewels in the crown of our skill base and our educational system, but they are under threat.
In this Queen’s Speech debate and during the last year up to the election, we must prioritise skills, education and homes. I could write the Labour manifesto. That is what we need to do. It is what this Queen’s Speech is missing, and what we will replace in a year’s time.
I am pleased that the debate is about living standards because it gives me an opportunity to make the link between rising living standards and improved democracy. That link has been made many times before, notably by the celebrated Power commission, later by the economist Richard Layard, and later still in a very wide-ranging study by Harvard university. In their different ways, they all established that rising living standards boost the public appetite for democracy, and that boosted and strengthened democracy in turn stimulates an increase in and boosts living standards. The link is unavoidable.
One element of the Queen’s Speech is a commitment to introduce a recall system. In theory, that would certainly improve our democracy and therefore lead to rising living standards. I say “in theory” because the Government’s current proposal falls so short of genuine or meaningful recall as to be meaningless. However, the House will at least have the opportunity to make profound amendments to the Bill, and I very much hope that it does.
Recall was promised by all three parties before the last election. They felt obliged to make that promise on the back of the expenses scandal that rocked the House, and it presented an easy, democratic and simple solution. Effectively, recall means enabling voters to remove underperforming MPs if at any time they lose the confidence of the majority of their constituents. It could not be more straightforward: if enough constituents sign a petition in a given period of time, they earn the right to hold a referendum to ask whether constituents want to recall their MP, and if a majority want to recall their MP, there is a by-election. There is a natural safeguard in that the threshold would, in an average constituency, require 14,000 constituents actively to visit the town hall and sign a petition during an 8-week period. Recall would put people in charge, allowing them to replace their MP if a clear majority want to do so.
The public understood that they had finally been promised a reform that might empower them, but then the election happened. I am afraid to say that the Labour Opposition went quiet on the issue, and the coalition Government began to weave small print through their promise. The current proposal is for a form of recall that can happen only by permission of the Standards Committee, and its criteria are so narrow as to make it entirely meaningless.
People are already angry with politicians—the signs are everywhere—but hon. Members should try to imagine how voters will react when they discover that they have been duped by this pretend recall Bill, this illusion of reform. It is extraordinary that even if the Bill becomes law, an MP could switch parties, fail to turn up once to Parliament or even go on a two or three-year holiday without qualifying for recall. At the very first scandal, voters will learn that they have been tricked. The anger that they feel will dwarf—
Order. The hon. Gentleman, with some ingenuity, has done well to keep in order and speak to the amendment. I trust that, in the final minute of his speech, he will conclude with reference to the specific matters in the amendment.
I will certainly do my best, Madam Deputy Speaker.
Even if people do not realise it yet, at the very first scandal, they will realise that they have been duped. Even before the Bill has been put to the test, 170,000 people have signed a petition saying that they want the real deal—not this thing that the Government are offering. Unlock Democracy has said that, given a choice between this Bill and no Bill, it would go for no Bill, because it thinks that the Bill represents a step back.
I understand why the Government have done this. The Deputy Prime Minister has talked about kangaroo courts and vexatious campaigns, but he is wrong. Where recall happens around the world, there is not one example of a successful vexatious recall campaign. There could not be one here, because it would require so many people—14,000 people—to be persuaded to join a vexatious campaign. We know that that is simply not possible in our constituencies.
I am going to run out of time. I simply ask Members to consider how the Government’s proposal might work. It is much more worrying than true and genuine recall.
That was the week that was, as we used to say in the ’70s and ’80s. To echo the comments of my hon. Friend the Member for Bolsover (Mr Skinner), this is the last throw of the dice for the coalition Government. The numbers certainly have not come up for the working people of the UK and, in particular, the young people of this country, who are working in terrible environments that should have gone with the bygone years.
There are problems with zero-hours contracts and the minimum wage. Those people do not have a voice in the workplace because the coalition Government have tried to silence the voice of the trade unions as much as possible. That is the coalition Government’s whole agenda.
There is bogus self-employment, particularly in the construction industry, where people are being asked to pay double national insurance—as employees and as employers. That is a complete sham.
I have never openly admitted to being an admirer of the Tory party, but one thing I do admire the Tories for is that when they get into power, they deliver for their own. They do not just talk about that in rhetorical terms; they deliver it. That is what the Queen’s Speech was about—delivering for their friends in the City and elsewhere.
Unfortunately, I have to say that the Labour Government could have done far more for working people in this country than they did in their 13 years in office. With one or two exceptions, they did not fulfil the ambitions that people had for them; they did not have the hunger or the aspiration to take them forward.
I am pleased that the current Labour leader is talking the language that people understand and that people want to hear. I am confident that, if he continues using that kind of language, we will see the return of a radical Labour Government. There is a great appetite out there for change. That was certainly reflected on the doorstep during the European elections, when it pained some of us to be told, “Youse are all the same. There’s no difference between youse.” The days of the Labour party tinkering at the edges are gone, and my right hon. Friend the Leader of the Opposition is taking us in the right direction.
Mention has been made of food banks. Personally, I think that it is a stain on all our characters that there are food banks in this country. When we pose at food banks for press releases, there should be a big sign at the front saying, “I’m sorry.” We have subjected people to using food banks through our policies and we cannot blame anyone other than ourselves.
One of the most positive policies of the last Labour Government was the introduction of the minimum wage. However, we have dined out on that for long enough. We now need to see the living wage. I am proud to say that my local authority, Renfrewshire council, is not only introducing the living wage for its employees, but using its procurement processes to tell its suppliers, “We will no longer give you the contract simply because you employ cheap labour.” It is trying to instil the standards that it upholds among its suppliers.
The other people who are walking free are employers who encourage migrant workers to come to this country to undermine and undercut indigenous workers’ terms and conditions, which causes all sorts of problems in communities. The senior executive members of the big companies go back to their leafy suburbs and leave the rest of us to get on with it. My right hon. Friend the Leader of the Opposition talks about irresponsible capitalism, and that is what we need to stop in this country. We need to stop the exploitation of migrant workers at the expense of our indigenous workers.
I am grateful to you, Madam Deputy Speaker, for allowing me to speak this stage of the debate. May I give my apologies for leaving early? I have arranged to meet some constituents with a Minister immediately after my speech.
The amendment calls for the creation of a recovery to ensure increased living standards for the many, and we can achieve that by growing our economy. It is growing in my constituency, as is shown partly in the claimant count statistics—we are at 50% of the 2010 level, with a fall of one third over the past year. Much of that has been achieved through our great location at the centre of England, with excellent road and rail connections. In particular, the Government are improving the junction of the M1 and M6 at Catthorpe, which makes my constituency attractive to business. Substantial development of both industrial and residential property is taking place, as the Prime Minister remarked when he arrived by train at Rugby station to travel along the M6 to the manufacturing technology centre at Ansty. He saw the substantial new housing and industrial development that is coming forward.
The MTC is itself a success story in supporting manufacturing, and a big theme of this Government’s work has been a rebalancing of our economy. That is how we can create growth and improve living standards. Let us not forget that the manufacturing sector of our economy halved in the 13 years of the last Government. In my constituency, we are making things. Only a few weeks ago, I went to Rosyth to see the new aircraft carriers, which are propelled by motors built by GE Energy in my constituency.
A company called Automotive Insulations is also a superb success story in the manufacturing supply chain. It produces acoustic and thermal insulation for the motor industry, a sector that is growing fast, with customers including Jaguar Land Rover and Bentley. It has doubled its turnover to £12 million in the past year and won awards through GrowthAccelerator, including its “Game Changer” award. Its business has grown, and its staff told me only a year or two ago of the need for new premises. I was able to introduce them to my proactive Conservative-controlled local authority, which introduced them to a developer who is completing new premises for the company as we speak.
A proactive local authority is also incredibly important for the second theme mentioned in the amendment that I wish to refer to—the need to boost house building. In Rugby, we are building houses. We have just granted consent for 6,200 new homes at the Rugby radio station site, and there has been substantial local support for it. It has been a matter of when, not whether, the development will take place, because there has been effective consultation and engagement with local residents. I hear time after time from developers who want to develop in Rugby about the professional and positive approach of planners in my constituency. Other local authorities could take up that approach. I add that my local authority has been diligent in ensuring that it has an up-to-date local plan. Many of the problems that occur elsewhere arise because of the lack of a local plan.
In the last few moments of my speech, I will refer to plastic bags—with my hon. Friend the Member for Richmond Park (Zac Goldsmith) sitting behind me. I was disappointed to see the provision in the Queen’s Speech, because plastic bags make up a tiny part of this country’s litter and household waste. Most bags are used many times before they are put to another use—for instance, as bin liners. It is a great disappointment that the matter was included in the Queen’s Speech.
“What planet does the Chancellor live on?”, said the Stockland Green mother. “Does he begin to understand people like me? My husband has been made redundant three times, and each time the new job is on a lower rate of pay. Do they know, up there, what life is like for us down here?”
That goes to the heart of what the shadow Chancellor said earlier about an era of discontent and disconnection. There is discontent because life is hard for most of my constituents. Living standards are squeezed and people are worried about their kids and concerned about vested interests—energy companies, for example—taking advantage of them. They say to me time and again, “Jack, it just ain’t fair.” The disconnection is because there is mistrust of politics and politicians, and incredulity when people are told that recovery is under way. Time and again I hear, “Recovery—what recovery?” My constituents say to me that this Government simply do not understand their lives, because for too many of them, life is hard and there is insecurity in the world of work. I meet constituents on zero-hours contracts and those in the building industry who complain about being undercut. One said, “Jack, they are exploiting the migrants and undercutting us.”
My hon. Friend is absolutely right. One of the people I met was a young lad of 22. He said, “Jack, I’ve just had a baby. We are trying to bring up our kid as best we can but I cannot plan from one week to the next because of my zero-hours contract.” A woman, Rachel, poured out her heart to the Leader of the Opposition on the Castle Vale estate about what life is like trying to bring up a young child on the minimum wage. There is insecurity at home. One in two people in Stockland Green in my constituency live in the private rented sector and most cannot plan from one year to the next where they send their kids to school or manage their households budgets, because like Cathleen they have contracts that last six months at a time.
Some people are struggling to buy a home, such as the young family who came to see me and said, “We’re desperate to buy a home, Jack, but we simply cannot afford it. It costs six or seven times what we earn combined to buy a home in this area.” Others struggle to maintain their living standards. One family said, “We’re worse off now than we were in 2009, and for us, holidays are a thing of the past.” Barbara and Jim Brown are struggling, and they are typical of so many of my constituents who can no longer afford to pay their energy bills. Local businesses are struggling to get loans from banks. One civil engineering company said, “Jack, it would be easier to break into my bank than get a loan from it”.
Mums and dads are anxious about their sons and daughters, such as the wonderful woman in the Castle Vale area who said, “I love my son, Jack. He’s got learning difficulties and he has never worked. He is desperately frustrated and I want to see him get on.” Now, at last he is getting on. Why? Because Birmingham city council’s youth jobs fund has funded a job for him in the upcycle project. You should see the smile on his face, Madam Deputy Speaker.
The council has also driven an apprenticeship programme with 1,500 apprentices thus far. The biggest builder of homes in Birmingham is tackling some of the problems in the private rented sector and driving the living wage to transform the city into a living wage city. However, faced with the biggest cuts in local government history, what can be done by local government is important but limited.
In conclusion, the message from this debate is this: if people want an economy that works, decent wages that reward hard work, a higher minimum wage, a living wage and an end to undercutting; if they want security in their home or the security of knowing they will be able to buy a home, and if they want the next generation to get on, including building a new generation of badly needed homes, creating jobs and apprenticeships—the kind of wonderful young apprentices I see at Willmott Dixon in my constituency; if they want to be confident that they can heat their home, and to have an honest Government who will not promise the moon but will move mountains on their behalf, stand up for them and be on their side; and if they want a Government who are fair, without the grotesque contrast between the tax cut for millionaires and the bedroom tax being introduced on the same day; if they want a Government who will reverse that and put the burden on the broadest shoulders and abolish the bedroom tax, and if they want a strong economy and fair society, they want a Labour Government.
The Government were formed with one overarching purpose: to get our economy back on its feet, building a framework for jobs and restoring some sanity to our nation’s finances. Nowhere was this need greater than in the black country in the west midlands.
The previous Government promised to put an end to boom and bust. For families in Halesowen and Rowley Regis, they delivered on one half of that pledge. Even before the start of the great recession, gross value added in Dudley and Sandwell collapsed from 88% of the national average in 1997 to just 74% in 2008. As the prosperity gap between the black country and the south-east grew out of control, the number of private sector jobs in the west midlands actually fell under the previous Government. If the boom bypassed the black country, the bust hit families hard in Halesowen and Rowley Regis.
Now, four years of action from this Government—one might call it a long-term economic plan—have helped to turn things around, and many families in Halesowen and Rowley Regis are starting to see the benefits. Yesterday’s jobs figures showed unemployment falling more quickly in the west midlands than anywhere else in the country, with 80% of the increase in jobs being full-time positions. In my constituency, the number of people who are out of work has fallen by more than a third since the election. Some 2,000 more people in Halesowen and Rowley Regis are in work, helping to ensure a stronger future for them, their families and the country as a whole. Thanks to the year-on-year increases in personal allowances, 30,000 of my constituents are now able to keep more of what they earn for themselves and their families, and 3,000 people on low incomes no longer have to pay any income tax at all. Things are still difficult for a lot of families and we still need to do more to make sure that everybody benefits as the economy recovers, but the evidence is strong that things are getting better. People in Halesowen and Rowley Regis literally cannot afford to return to the mistakes of the past.
A Government cannot be judged by the weight of legislation they propose, but by the impact their actions have on the country. There is more to commend in this Queen’s Speech than we have time to discuss, but the small business, enterprise and employment Bill will make it easier for businesses in Halesowen and Rowley Regis to compete, to invest and to grow. A few days after the Budget, I was pleased to welcome the Chancellor to Cube Precision Engineering in my constituency, a young company that has grown from a staff of six to a team of more than 37. The day after the Budget, Cube placed an order for a new £325,000 machining centre to allow it to grow further, increase exports and create new jobs. The Bill will help more businesses to access the finance they need to invest in their own growth.
The measures in the Queen’s Speech build on the achievement of the Government’s long-term economic plan: helping businesses to create jobs, increase our skills base and build prosperity; supporting families with child care costs when parents return to work to make sure that it pays for them to work and our economy is able to benefit from their skills and potential; and encouraging workers to save for their futures by allowing them more choices over how they save and more freedom over how they use their money. This is the programme of a Government who have already delivered a lot, but who recognise there is still a lot more to do. This is a Queen’s Speech that I am very proud to support.
An economic recovery for whom? My constituents still struggle. Many are on part-time hours or zero-hours contracts, and those who are in work see their wages stagnating. The Prime Minister wants people to believe that the economy has picked up, but that is not the experience of many of my constituents. Many still feel the pressure and worry about their future and job security.
Recent updated statistics from the Office for National Statistics found that there are 1.4 million zero-hours jobs in the UK, even though Ministers claimed as recently as September last year that there were just 250,000. The ONS also found that in a further 1.3 million contracts, employees were given no hours at all during a sample two-week period.
Wages for my constituents in Preston remain below the north-west and UK averages. The average weekly wage in Preston in 2013 was £370—£110 less than the north-west average and £150 less than the average in the rest of the UK. The latest figures show that UK-wide pay growth has slumped to 0.7%, which is sharply down from 1.7% last month and well below inflation, at 1.8%. The Government need to raise the minimum wage and introduce the living wage. I am proud that Preston city council was one of the first councils in the country to implement the living wage, from the beginning of September 2011.
The standard of living for my constituents in Preston and many others in the north-west has not improved under this Conservative-led Government. Child poverty is above the national and regional average, at 28.7%. Life expectancy in the north-west is below the national average. For men it is 77.4 and for women it is 81.5, compared with 80 for men in the south-east and 83.8 for women. There are 2,295 people in Preston—around 5%—claiming jobseeker’s allowance. In Preston and elsewhere, there are huge amounts of hidden unemployment, among people who have received sanctions on their benefit claims and also those who have been claiming for over six months who happen to be married to someone who is in work. Although unemployment figures have dropped, the number of people on part-time or zero-hours contracts is at an all-time high, while 17.8% of children in the north-west live in workless households.
In the Queen’s Speech, the Government pledged to increase apprenticeship places to 2 million, but as I have argued in the past, they cannot say what type of apprenticeships they will be. Unskilled jobs such as stacking shelves in the local supermarket are of course welcome, but they are not replacements for good, high quality apprenticeships that give high training and added value in industry, such as at BAE Systems, which is near my constituency and has excellent training, or Westinghouse, another major company that also provides excellent training.
This Government have promised a great deal; they have delivered very little. The Queen’s Speech is a shadow of what it should have been if the Government were genuinely ambitious for the people of this country.
It is a great pleasure to speak in this debate about the economy and the cost of living, which are central to the Government’s mission, as expressed by the long-term economic plan, which includes a number of factors that are critical to the long-term plans of this country as a whole. One is, obviously, reducing the deficit; another is making sure we have more skills and more infrastructure, along with the overall aim of rebalancing the economy.
That is of great importance for my constituency in Stroud valleys and vale, because we have more than 9,000 people working in manufacturing and engineering. That is one of the reasons why I have launched the festival of engineering and manufacturing, to put a focus on that heritage and the prospects of the sector as a whole. It is also critical to ensuring that young people have opportunities and make themselves aware of the examinations and other processes that they might like to pursue to benefit their careers.
But there is more to do, and that is one of this Government’s missions, now and after the next general election. For one thing, we need an infrastructure that enables people to get out and about and to work. In my constituency, that means improving connections with other parts of Gloucestershire—for example, by moving the railway stations to ensure that people can get to Bristol from Stroud and so forth. These are useful ideas that add up to a strengthening of an already vibrant economy that is ready for the next challenges.
The other thing we need to do is strengthen our provision of skills. Again, we have some plans in my constituency. We want to establish, in effect, a unit in a now disused part of Berkeley Magnox power station—which is now decommissioned—to provide skills for green technology for renewables and also nuclear technology. That is all good news for young people who want jobs and want to do well.
I drew the attention of the Prime Minister to the third issue I want to raise when I took him to Renishaw—a really powerful firm in my constituency, employing nearly 4,000 people, with hugely innovative and impressive products. It is a kind of Mittelstand type of firm. We need to see more of them in this country—certainly in the valleys and vale—and we need to encourage them to grow and seek to introduce even more research and development.
There are two areas worth thinking about here. The first is the taxation system, and we need to enable people to think long term without being bedevilled by short-term planning systems in taxation. They need to think beyond the horizon, which is something that our competitors, notably Germany, are often able to do. We need to adjust our taxation system to enable Mittelstand-type firms to thrive. So, too, we need to see measures to improve access to capital. That is why I am so pleased with the proposed Bill to achieve that, which we shall debate in due course.
The other big issue is ensuring that our supply chain is responsive enough to deal with the continuity of growth. We have already established centres to promote the aerospace sector and the automotive sector, all of which is good.
In conclusion, if we want to increase living standards, the answer is increased productivity. The issues I have highlighted—part of the long-term plan as an overall strategy—are precisely the tools to do the job, and the Government are continuing to work on them.
As predicted, the Chancellor’s remarks this afternoon made much of his “long-term economic plan”, but the original 2010 version of an export-led recovery, of increased business investment and of a shift to a new kind of economy has simply not happened. To compensate, the Government have fallen back on a good, old-fashioned, British housing bubble and consumer spend splurge as a recipe to see them through to the general election—pumping up the feel-good factor and praying that nobody notices that living standards are still sliding for huge swathes of our constituencies across the United Kingdom. This form of growth is not sustainable; it is a high-risk strategy.
The Chancellor was prodded into talking about productivity, and the hon. Member for Stroud (Neil Carmichael) was quite right to emphasise that should be a priority. The problem is that our productivity gap is now wider than it has been over the last 20 years, following the flatlining of the economy over the last seven years. It is not just the recession that has caused the decline. According to the Office for National Statistics, by comparison with our international competitors, output per hour worked in the UK is 21% lower than the average for the other six members of the G7. This is the biggest productivity shortfall since 1992, and according to an alternative measure, the gap in output per worker is now a horrifying 25%. Although we expect output to pick up this year, poor productivity has stifled earnings growth and squeezed real incomes. That shows what should be the priority in the ever-more competitive world that we face.
UK companies are sitting on some of the largest cash reserves of any western economy, but at the same time, according to a report from the Department for Business, Innovation and Skills, we have a
“sustained, long-term pattern of under-investment in public and private research and development…and publicly funded innovation.”
The UK’s total investment in R and D has been relatively static at 1.8% of GDP. In America, it is 4%, while in France and Germany, it is well over 2% and they are aiming to get to 3%. This is a new world in the 21st century. If we do not innovate and do not develop products, we are going to fall behind and our tax base will go along with it.
The Government will point out that they created a number of industrial forums for debate and decision making, and a series of industrial papers came out last year. The sector councils for the automotive and aerospace industries have been formed for many years and are industry-led, but the other councils have met on only a handful of occasions, do not have public-facing websites and are basically turning into glorified talking-shops. That needs to stop soon.
It is not surprising that the Chancellor refused to give way to me when he began to talk about the housing market, because I might have pointed out to him that the average—mean—annual salaries of those who have been able to take advantage of his second version of the Help to Buy scheme are £80,000 in London and £49,000 nationally. In other words, we are using taxpayers’ money to help those in the top income decile to buy houses that are already overpriced, while pricing more people out of the market. There is no solution for those on the lowest incomes, and no solution for those who are renting; they are still left behind.
We need to hear about a programme that meets the key priorities of the majority, but that has certainly not happened today.
I fear that the amendment contains several new Labour clichés that make me nostalgic for the Blair and Brown years. Delivering rising living standards for the many, not the few, making work pay—the only one that is missing is “an end to boom and bust”.
Of course, new Labour did not deliver any of those things, but it did deliver the biggest peacetime borrowing deficit that the country has ever seen. I regret to say that Labour has not learnt anything in the last 12 months. According to the House of Commons Library, it has made £29 billion worth of unfunded spending commitments. As for making work pay, this is the party that refused, in the House, to back the benefit cap. Labour Members are quite happy for those on benefits to earn the equivalent of £40,000 a year before tax.
The amendment refers to child care. Of course that is very important for some of my constituents, especially working mothers. That is why we are introducing a Bill that will deliver 20% of child care costs—up to £10,000 per child, which is worth up to £2,000 per child per year—to working families. Moreover, 85% of the child care costs of families receiving universal credit will be covered.
What are we doing to support small business, the biggest deliverer of the 1.7 million extra jobs that have been created since 2010? I do not know what the Labour party is doing, but, as well as cutting the “jobs tax” by providing an employment allowance of £2,000 a year, we have come up with a Bill that will raise the maximum fine for employers who do not pay the minimum wage, and will ban the exclusivity that currently prevents people who are on zero-hours contracts from working for other employers.
Housing has been mentioned. It is true that we need more brownfield sites to be built on by residential developers, and our Infrastructure Bill will cut the red tape surrounding unneeded public sector land that is not being returned to planning permission territory. It will also reduce energy costs, which are a key component of the cost of living, by ensuring that shale extraction takes place across a wider area and more rapidly.
Finally, let me draw the House’s attention to an omission. I do not know whether it is due to slack drafting on the part of Opposition Front Benchers or to their general disdain for pensioners, but the word “pensioner” does not appear once in the amendment. We are introducing two Bills to deal with the fact that about 12 million of our fellow citizens are not saving enough to provide for an adequate retirement income. Our private pensions Bill will create collective pension schemes to ensure that more people can gain access to affordable pensions, while our pension tax Bill will bring about the most revolutionary change in pension provision that the country has seen for more than half a century. Crucially, it will allow individuals not to be compelled to buy annuities at 75, but to have true freedom in relation to the pot of money that they have built up during their working lives.
The plan is working. Labour has no plan. We should just keep on going.
Order. Although Members have been very well disciplined and have kept their speeches extremely short, there are still many Members waiting to speak and we are running out of time. I must therefore reduce the time limit to three minutes.
I will speak very quickly, Madam Deputy Speaker.
For ordinary people in Easington, east Durham and the north-east of England, things are getting harder, not easier, under this Government. Hard-working people are on average £1,600 a year worse off. Families are paying £300 more on their energy bills. At a time when people are working longer and harder for less, raising a family in Easington, as elsewhere in the country, has become more difficult as child care costs have risen by almost a third.
My good friend and near neighbour my hon. Friend the Member for Wansbeck (Ian Lavery) raised a very interesting point at Prime Minister’s questions yesterday. He asked the Prime Minister about the number of children who were living in poverty in households where someone was working. The figure was one in three. Indeed, two thirds of young people in poverty live in a working household. The Prime Minister did not address that question.
Members on the Government Benches tell us that employment is the route out of poverty, but for many parents hard work is not even enough to provide an acceptable standard of living for their children. In the north-east, full-time workers are now £36 a week less well-off than they were a year ago. The link between economic growth and living standards has been broken. The assumption that as the economy grows wages would grow too no longer holds water under the policies being pursued by this Government. I am very pleased the Labour party has pledged to raise the value of the minimum wage over the next Parliament and to move towards a living wage for businesses that can afford to pay it, and to introduce a lower 10p starting rate of tax. We can only have a successful economic recovery if it is felt throughout society, and the problem with the Government Front Bench—including, with all due respect, the Chancellor—is that the economy is only working for small clusters of privilege. It is not working for the vast majority of people, certainly not in my constituency.
I wanted to raise some issues in relation to the young unemployed and those who are not in employment or training, but I am afraid there is not time. What the public require is an economy that works for them, not just the few, and a Government prepared to deal with the real issues affecting their lives.
In 1997 the Labour Government were elected to the theme tune “Things can only get better”, but in my area they were about to get a lot worse. The Teesside Development Corporation was immediately scrapped and after 13 years of neglect, Redcar and Cleveland was judged independently to have the weakest economy in the country, and Middlesbrough had the second weakest.
Now with a successful local enterprise partnership, Government money pouring in, unemployment in my constituency down by 916 in the last year and manufacturing up, we can see the fruits of some investment coming through. Tonight when I get off the train I will be going past the new £39-million biologics manufacturing centre near Darlington station and on Monday we will be signing the Tees valley city deal, which I hope will act as a brake to those Labour people who think the Tees valley should always be run from Newcastle.
The Government are making the wealthy pay more. Against any year under the last Government, the wealthy are paying much higher taxes on their income, capital gains, pension contributions and spending. This week we passed clause 110 of the Finance Bill, which holds the inheritance tax threshold at £325,000.
I will just make a few comments about the Opposition amendment. We cannot take any lessons about house building from a party that reduced house building to the level of the 1920s by the time it left office and took 421,000 social houses out of circulation while the waiting lists were going up by 740,000—it is a shameful record. Labour also thinks we can make the energy industry more competitive by freezing prices, but unfortunately that will freeze investment and freeze out new entrants. I have tried in vain to find an organisation outside the Labour party that thinks the energy price freeze is in the interests of consumers. I will gladly take an intervention from anyone who can name such an organisation.
I support the living wage and helped to launch a campaign in Parliament. The Living Wage Foundation has praised the Liberal Democrat tax cut of £700 because it makes the living wage more achievable. The living wage is worked out from a net figure, so tax reductions do help. Interestingly, the Oppositio