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8.54 pm
Ms Diane Abbott (Hackney, North and Stoke Newington): I am grateful for the opportunity to speak in this debate on the Queen's Speech. I wish to touch upon the effects that the economic policy outlined in the Queen's Speech will have on the poorest. Hon. Members will know that I represent in Hackney, North and Stoke Newington one of the poorest constituencies in the country, which has one of the highest levels of unemployment in the south-east. I shall examine the Government's economic policy in the light of a very important report about inequalities in health that was published last week. The inquiry was chaired by Sir Donald Acheson.
Earlier this evening, we heard the Chief Secretary advance what has become the Government's mantra: the best route out of poverty is work. Like many of the Government's mantras, that is a truism--the best route out of poverty is work. However, the Government must address, because they have yet to do so with sufficient clarity, what they will do for those sections of society who, with the best will in the world, cannot enter or re-enter the labour market. Sir Donald Acheson put it clearly in his report. He said:
The Labour party once had a policy of restoring the link between pensions and earnings. It was a sad day when that policy was dropped. Means-tested benefits--which is what the Treasury Bench is offering instead--are not a viable alternative for pensioners, in particular. More than 1 million pensioners fail to claim the means-tested benefits to which they are entitled. More than one in four pensioners who are eligible to claim extra means-tested benefits do not do so. It is not because they are silly or do not understand, it is because they are from a generation that finds claiming such benefits degrading, difficult and humiliating.
The only way to raise standards of living for the poorest pensioners in communities such as Hackney is to increase the level of the basic pension. As for encouraging people of all generations to put more money into the private pensions industry, before the Government press people to secure objectives that were once secured by the welfare state--whether it is security in unemployment, health insurance or private pensions--they must look to regulating the financial services industry. The private pensions mis-selling scandals of the 1980s revealed the structural problems in the financial services area, with commission-driven salesmen and a lack of transparency.
I come now to mothers with young children. The Government seem to be saying to mothers with pre-school-age children that, if they want to raise their standard of living and rise out of poverty, they must go to work. I am a single mother. I was back here voting and playing my part in the work of the House when my son was eight days old. It is precisely because I am a single mother and I know how hard it is to leave a small baby that I would not insist that mothers with children under school age should have to go out to work to secure a decent standard of living. At present, they do not have to make themselves eligible to work, but the trend of Government rhetoric and thinking on that matter worries me.
Despite the many good things that are being done in the name of the working families tax credit--there was a very interesting speech about that earlier--the
Government must address the fact that there are people, such as pensioners and women with young children, who will not lift themselves out of poverty by going into the workplace. We need to secure at least for those groups a decent standard of living through the benefit system.
The Government's professed goals on raising standards of living for the poor and lifting people out of poverty are admirable, but none of the measures in the Queen's Speech, including the working families tax credit and the on-going new deal programme, can be effective in the absence of growth. Those who talk about prospects for growth tend to be shouted down by Labour Members and accused of talking down the economy. It is not a question of talk; it is a question of figures. We do not need to look into a crystal ball--we need only to read the book.
Manufacturing sectors are in recession or are about to go into recession. Over time, the sectors that have a problem with the over-valued pound and interest rates will take the entire economy to the bottom of the recessionary cycle. In a recession, it is no good saying that work is the route out of poverty or talking about the new deal.
My next point relates to Europe. I am not hostile to Europe and I deplore the scarcely veiled xenophobia in the tabloid press, but it is important that we begin to have an honest debate about Europe. There may well be a political case for greater European integration and, in my son's lifetime, there may well be something approaching a federal Europe, but I deplore the dishonest debate on Europe in British politics.
Anybody who pretends that we can proceed towards monetary convergence and integration without fiscal convergence and integration following as night follows day is fooling the British public. There may be a political case for that level of economic integration and for moving towards a federal Europe, but it is wrong to pretend to the British public that there can be monetary convergence while different economies in the European Union have free-standing fiscal policies. That cannot happen. The sooner we have a more transparent and honest debate about what the move towards economic and monetary union means for the totality of economic policy, the better that will be for politics and the good name of this House.
There is much to support in the Queen's Speech, but my concern remains what it has been for the 10 years in which I have been in the House--how will the measures of the Government of the day help my constituents in Hackney? I am concerned about the lack of focus on the importance of raising basic benefits for pensioners and the poorest people.
Mr. David Ruffley (Bury St. Edmunds):
I am grateful for the chance to contribute to a debate on the Gracious Speech, which has at its core a commitment to delivering economic stability.
One of the central elements of economic stability is the Treasury's ability to set an independent tax policy. Therefore, I was particularly interested to hear the Chief Secretary say earlier that he would be tough about using the veto to prevent any harmonised tax proposals being imposed on this country. We have heard warm words from Ministers over the past couple of days in the face of a backlash from the press and public about the threat to the country's economic management arising from remarks by EU Finance Ministers and Commission officials.
Conservative Members are staggered by Ministers' complacency. They said that such comments were just a Euro-sceptic invention and that, somehow, the people on the continent who were making them were of little significance and of no consequence.
We know that there is a threat of tax harmonisation from Brussels because the Prime Minister says one thing in No. 10 briefings to the press, but Treasury Ministers say another. In the Financial Times this week, the Prime Minister said that he wanted all proposals on tax harmonisation to be considered pragmatically. He is worried that we may be left out of the game as EU partners harmonise more quickly in a headlong rush to make headway in launching the European single currency.
"For the least well-off members of society, it is the benefit system which is the principal determinant of living standards."
When I tried to put to the Chief Secretary Sir Donald Acheson's proposition that certain basic benefits must increase, he said that the report was written before the Government's Budget and our wonderful, progressive child benefit measures. That is quite wrong. Page 34 of the report discusses the Government's Budget measures in full. In the context of those measures, the report says that benefits must increase for the poorest groups. The report states:
"We believe it is important that over time benefits and pensions levels are set at a level sufficient to pay for items and services necessary for health and for participation in society."
Acheson singles out two of the very poorest groups: pensioners and women with very young children.
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