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“it is right, in the interests of good and open government and public debate, that each year the Prime Minister make a summer
statement to the House so that initial thinking, previously private, can be the subject of widespread and informed public debate. Putting affordable housing within the reach of not just the few but the many is vital both to meeting individual aspirations and to securing a better future for our country”.—[ Official Report, 11 July 2007; Vol. 462, c. 1449.]
He also said that the annual target would be raised from 200,000 to 240,000 new homes in England from 2016.
At the time, The Independent newspaper ran a headline that read “Brown’s plans to build three million new homes ‘will bankrupt social housing sector in five years’.” The story quoted the National Housing Federation, which claimed that the Government’s financial predictions were based on an assumption that housing associations would fund the work by taking out huge loans that, in fact, they would be unable to afford.
What became of those plans? How close are the Government to fulfilling that pledge? Of course, it could be argued that the crisis in social housing—for it was and is a crisis—was inherited by the Prime Minister from his predecessor, who saw the number of social houses built per year fall to just over 17,000. Be that as it may, the Prime Minister was still the Chancellor at the time and he is now the man in the hot seat. I remain to be convinced that the need for social and affordable housing will be met by any of the measures outlined by Her Majesty.
All in all, many people—whether they are members of the business community or in jobs that are at risk, are unemployed or homeless, or are young couples just starting out in life together—will feel short changed. I would be hard pressed to argue that they were unjustified for feeling that way.
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. There are 44 minutes left before the wind-ups will begin and five hon. Members seek to occupy that time. Perhaps they will take a hint from that.
9.56 pm
Mr. Tobias Ellwood (Bournemouth, East) (Con): It is an honour to participate in this important debate. It is the usual debate that we have following the Queen’s Speech, but we are certainly in unusual times. The content of the speech and the ideas and the vision displayed by the Government are under scrutiny and are all the more relevant as the scale of the recession becomes apparent.
Of course, this is the second opportunity that the Government have had to lay out their store following the pre-Budget statement, which was a chance to map the course that would be taken to weather the unsettled phase of this economic cycle. It has now become apparent that this is less about economic cycles and more about political cycles. As the dust settles, we see that Labour has provided £20 billion of savings but £40 billion of taxes. The cut in VAT is being seen and treated as a gimmick and there is no common sense in increasing taxes through national insurance at the very time when businesses want a reduction in taxes.
Rumour has it that the Chancellor will be back at the Dispatch Box in the not too distant future with another idea and will probably have to borrow more money, too. He will no doubt repeat the claim that the whole crisis
started in the United States with the sub-prime market, but it was this Government who stripped the Bank of England of its historic ability to ensure that banking credit was kept within reasonable limits, this Government who allowed banks to offer massive loans and mortgages to those who could not afford them, and, of course, this Government who spent so much that they have no other choice than to borrow more money now. The result is an unsustainable debt-fuelled boom, followed by one of the biggest busts in history. I understand that the UK is now forecast to have the worst recession of all the G8 countries.
I mentioned in an intervention the other claim that the Prime Minister is keen to put forward, which is that other countries are copying the approach of weathering the recession with recapitalisation of the banks. That part is true, but whereas the £37 billion of taxpayers’ money that the Government have lent to the banks has been lent at an annual coupon of 12 per cent., that figure was about 5 per cent. in Germany or the United States. At the same time, the Government are asking banks not only to hand those loans on to small businesses but to sort out their own debts. They cannot do both, and that is why the money is stuck and why it is not getting down to the small businesses.
We have touched a lot on employment, so it would be good to take stock after the monologue we heard from the Secretary of State. We would be forgiven for thinking that things were going well, but 5 million people are still on work benefits. Unemployment is rising and is at its highest for 11 years.
10 pm
The debate stood adjourned (Standing Order No. 9(3)).
Motion made, and Question put forthwith (Standing Order No. 15),
That at this day’s sitting, proceedings on the Queen’s Speech (Motion for an Address) may be proceeded with, though opposed, until 11 o’clock.— ( Ian Lucas.)
10.1 pm
Mr. Ellwood: Two in three of all jobs created are in the public sector, according to the Financial Times today. Four in five jobs created by the Government have been given to migrant workers.
We had a brief discussion about the importance of level 3 apprenticeships. The number is down and has been falling for the last seven years, yet those apprenticeships are critical in supporting businesses’ employment and training needs. The Government are not taking us in the right direction.
More important is the worrying cultural change and the attitude of today’s youth towards work. A small but increasing number of people are growing up to believe that it is acceptable to live off the state. The economic and social significance of that is extremely serious. With limited ambitions, people do not gain educational qualifications to the same standard, skills are not obtained and the capability of the work force is diminished. If there is one failure that hangs round the neck of the new Labour project, it is that it has overseen a generation’s
declining aspiration in favour of the expectation of state support. It has never been easier for Britons to be sponsored by Government to do nothing. That is a sad indictment of where we are today. It not only costs the state more in increased handouts, but there is a loss of potential income tax, which means less money for the Government to inject in the economy.
An area of the economy that is suffering, and has not been mentioned yet, is tourism. It is Britain’s fifth biggest industry and of huge importance. It generates revenue of about £90 billion a year and is considered the hidden giant of our economy. Tourism is twice the size of the IT sector and four times the size of the agricultural sector, yet it is rarely mentioned. It is responsible for one in four of the new jobs created in the UK, and with 30 million visitors to the UK every year we are the sixth most popular country in international tourist tables—something of which we can be very proud indeed.
The recession is not just affecting businesses through the banking crisis, but also because fewer people are choosing to holiday and to travel from abroad to seek work in the service industries. Labour is ignoring the problems of the tourism industry. When I asked the Minister with responsibility for tourism when she last had conversations with her counterparts in the Departments for Transport and for Business, Enterprise and Regulatory Reform, and indeed the Treasury, I found that such meetings never happen. No one in the Government is looking after tourism from the Government perspective.
To make matters worse, a complicated and confusing structure is compounded by devolution. Visit Scotland does its own thing, as do Visit Wales and Visit England. Regional development agencies disperse responsibility for tourism around nine regions, to the point that in Boston, Massachusetts there are separate offices for six RDAs representing different corners of Britain, all trying to attract people to the UK. How mad is that? There is overlap that needs to be addressed, but it has not been done because no one in the Government is taking responsibility.
Another example of poor co-ordination is between the Home Office and the tourism industry. Visa costs have jumped by 130 per cent. according to the Tourism Alliance, which has led to a loss of about £160 million a year. That is bad enough, but if we look at who is coming to Britain, we see that although there were 100,000 applications for British visas from China last year, France and Germany receive 500,000 tourists from China every year. That is simply because the visa for those countries is so much cheaper.
Heathrow is another great example of a failure of co-ordination between Departments to ensure that the gateway to Britain is something of which we can be proud. The Heathrow experience is now listed as most business people’s first bad impression of Great Britain, yet no one takes responsibility for co-ordinating all the agencies, organisations and Government Departments so that we can try to correct that.
A recent report by Deloitte shows that there is an absence of proper Government support that would allow the United Kingdom to punch above its weight when it comes to tourism. The last tourism Bill to pass through Parliament did so in 1969. We are overdue an assessment of where British tourism stands. One industry
that could have been helped is the pub industry. I am sure that you, Mr. Deputy Speaker, are a supporter of your local traditional pub, as many of us are. It is in such pubs that responsible drinking takes place. Sadly, 36 of those traditional pubs shut every week. Once they are closed, they are gone for good.
What have the Government done to help those pubs? They decided to increase duty on alcohol. There are reasons why they did that, to do with tackling the booze culture, but the move affects traditional pubs across the board. Apparently, duties have gone up to negate the reduction in VAT, but when VAT goes back up again next year, will duties go back down? No. It is yet another whammy that will hit our traditional pubs.
The reduction in VAT is viewed as a joke. Many small and medium-sized businesses in the tourism industry are already offering 15 per cent. discounts, so reducing VAT by 1, 2 or 3 per cent. is negligible; it has no impact whatever. The administrative changes needed to show the reduction in VAT will cost each retailer an average of about £2,300—and the change is to be for just one year. Tourism is important to Britain, yet we are not harnessing the opportunities that British tourism could provide. That attitude will not change until the Government start to appreciate this £90 billion industry, which accounts for 1.4 million full-time employees—that is 7 per cent. of the work force—and 200,000 small and medium-sized businesses.
I shall conclude, because I know that time is against us. We enter the stormy seas of this recession poorly prepared, and we are all the more exposed as a result of failure to navigate the quickest course out of it. Instead of assisting small businesses, we are burdening them with higher taxes. Instead of helping banks to provide loans, the Government are loaning taxpayers’ money to banks at 12 per cent. interest, which means that there is no liquidity to pass on. Instead of harnessing the full economic potential of the next generation, the Government are fuelling a cultural shift towards mediocrity.
I fear that only a change in Government will invigorate people and bring about the seismic shift that is needed to reverse that flawed attitude. I hope that after that change, we will be able to rejuvenate the next generation, so that they stay in school until they are 18 not just because the Government tell them to, but because they want to; so that they seek a job not because otherwise they will lose their benefit, but because they have a skill on which they can build, that gives them a good salary and of which they can be proud. For the sake of Britain, the sooner the next general election is called, the better.
10.8 pm
Mr. Edward Timpson (Crewe and Nantwich) (Con): Thank you, Mr. Deputy Speaker, for allowing me to contribute briefly to this important debate on issues that are ever more relevant. In the six months for which I have had the honour of representing the people of Crewe and Nantwich, the issue of employment has never been far away. As the weeks have progressed, the issue has become more and more pressing.
I am sure that none of us in the House wishes to see our constituents struggle as a result of losing their job or livelihood, and I am sure that we all do what we can to prevent that from happening, but one of the harsh
realities of a recession is large-scale unemployment, and that seems particularly to be the case in this recession. A Local Government Association report suggests that there will be 230,000 job losses in the north-west by December 2010. In Crewe, there have been recent job losses in the public sector. There is the closure of local post offices and the imminent closure of the Royal Mail sorting office, with the loss of 600 jobs. As of last week, the third-largest Her Majesty’s Revenue and Customs office in the north-west was to close, with a loss of up to 80 jobs. In the private sector, the car, manufacturing and retail industries are all prominent, with the likes of Bentley, Bombardier, Focus DIY, Woolworths, MFI and others all feeling the crunch in the current conditions, which will have a significant impact on the local economy.
Crewe is synonymous with the rail and motor industries, which continue to provide the backbone of the local job market together with, in more recent years, the retail and service sectors. As the recession bites, there is an opportunity not only to secure the short-term survival of those industries and businesses but to prepare them for long-term sustainable recovery. I agree with the Government, albeit not necessarily on their suggested implementation, that we have been presented with an opportune moment to invest in the training and skills necessary to see us through the short and the long term. There is a huge dearth of skills, particularly in the engineering sector, which has been recognised by the Secretary of State himself. In Crewe, Bentley has 3,500 employees, and runs a successful apprenticeship scheme that it intends to expand, despite the downturn. Bombardier, LNWR, Freightline and other railway industries that are part of the Crewe railway network have waited a long time to ensure that their apprenticeship schemes are full, and they all have long waiting lists of people who want to join the industry.
On 10 November this year, the Minister for the North West said:
“The challenge we face is that within the next decade, large numbers of unskilled jobs will be replaced by high-skilled ones. We must ensure that the north-west workforce is not left behind.”
That is precisely why, with others—I am glad to see the Under-Secretary of State for Innovation, Universities and Skills, the hon. Member for Birmingham, Erdington (Mr. Simon), on the Front Bench, as he was involved in the Westminster Hall debate on the issue—I have advocated the overwhelming case for a national railway skills academy in Crewe that is employer-led and meets the short and long-term needs of an industry that is getting back on its feet and is on the rise. This could not be a better moment, from the Government’s perspective and for the Opposition, for such an initiative to be put into practice.
Not all the employment difficulties are a direct result of the downturn. The public sector work force in Crewe have been hit hard by the closures that have been announced of the Royal Mail sorting office and the HMRC office, both of which are unconnected to the credit crunch. Both consultations began before the economic crisis, yet the Government have seen fit to continue with that folly, despite the need for those jobs in future. As a consequence of the independent Lyons review of public sector relocation, the Government recognised the need for the transfer of civil service jobs from London and the south-east to the regions, and the review said:
“The Government is committed to improving the efficient delivery of public services, boosting regional economic growth
and bringing government closer to the people, through greater decentralisation and devolution.”
By making those announcements on HMRC and Royal Mail in Crewe, however, they have done the exact opposite. They have started to centralise those systems, taking away local jobs and services at a time at which they are most needed.
In July 2003, the then Minister for Employment and Learning said that
“recent job losses in the north-west make co-ordinating the response by Government, education providers and local communities essential”.
It appears in Crewe, however, that the Government have not learned that lesson, and good-quality public sector jobs have been lost, with no proper consultation with the local community. Along with that, there is a loss of valuable local knowledge and expertise, which will have a direct effect on local families and businesses.
The two Government Departments responsible for the restructuring of both Royal Mail and HMRC worked independently of each other, with no apparent thought given to the overall consequences for the local economy, which flies in the face of the concept of joined-up government and of a co-ordinated approach.
The Government’s response to the vehement and united campaign to keep open the HMRC office in Crewe was particularly depressing for two reasons. First, by moving local public services away from local people, the Government are doing the exact opposite of the commitment given in response to the Lyons review. Secondly, by not pursuing a local strategy to deal with the recession, places such as Crewe are being hit disproportionately. In a town that still relies heavily on its manufacturing and motor industries, the opportunity to keep efficient, dedicated, valuable, local public sector staff in work has been missed. That would have softened the blow and given the local economy of Crewe and Nantwich the platform on which to rebuild. It is not too late for both Government Departments to grab that opportunity.
10.15 pm
Mr. Phil Willis (Harrogate and Knaresborough) (LD): It is always a joy to sit in on debates and hear so many speeches from hon. Members in all parts of the House who bring to bear what is happening in their constituencies. The hon. Member for Crewe and Nantwich (Mr. Timpson) did exactly that from his own perspective.
I was struck earlier by the comments of the hon. Member for Bolton, South-East (Dr. Iddon) when, as he always does in the House, he gave a staunch and steadfast defence of British science and argued strongly for continued investment in it. His comment about what we should not do during the recession was interesting. If one point that I make tonight should be taken on board it is that we must not cut back our investment in science, particularly in basic research. It is basic research that creates the bullets to fire at wealth creation, with the advantages that that brings.
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