In addition to maintaining consistently low interest rates, the Government can support business in respect of exports. In my business, if we were struggling in one
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area geographically and we found a market sector that was not doing so well, we looked elsewhere. If the UK economy and businesses are not going to grow because the UK market is flat or our partners in the eurozone are having difficulty, we need to address other markets and look to those that are growing, where often there is great respect for Britain as a brand. The Government can make it easier to export by helping to reduce the risks that companies, particularly small ones, face when trading in overseas markets. In my small business, when I was trading, we would not have given a thought to exporting. We need to change that mindset. There is some evidence that that is already happening; I have heard about that when talking to small businesses in my constituency.
UK Trade & Investment has done some great work. It supported an event on documentation run by the chamber of commerce in my constituency, bringing together advisers, bankers, linguists and others.
I have one concern, which my hon. Friend the hon. Member for Salisbury (John Glen) mentioned, about a measure that may hold back growth: the Bill to give flexibility to parents with newborn children. That is welcome for families, but such provisions can be a real headache for small business owners, because when an employee is absent, the job still needs to be done. Temporary staff are expensive, often lack knowledge about the way that a company works and may not have the right skills. I do not want to give the impression that I am against the rights of mums and dads to take much-needed time off with their newborn children, but we must have some regard to the disruption caused to small businesses.
In conclusion, the importance of the private sector, including the manufacturing sector, must not be downplayed. We need to reward success and create confidence, so that the businesses in our country can drive our economy forward.
7.33 pm
Sir Stuart Bell (Middlesbrough) (Lab): I am grateful, Madam Deputy Speaker, to be able to speak on the Gracious Speech and to follow the hon. Member for Rugby (Mark Pawsey), who made great play about private sector workers, as opposed to public sector workers. The public sector worker, of course, contributes to our society as a consumer and facilitates the private sector. I have never understood why Government Members make a distinction between those who work in the public and private sectors.
Mark Pawsey: I was not referring to workers. I was talking about the sectors in the economy as a whole and the need to rebalance the public and private sectors. I made no comment about public sector workers.
Sir Stuart Bell: I am grateful to the hon. Gentleman. It would be a fine thing if someone working in the public sector was able to move out of it into the private sector. Unfortunately, under the Government’s policies towards the public sector, 500,000 people will be made unemployed and put on the dole.
The right hon. Member for Mid Sussex (Nicholas Soames) wished to see an intellectual technology hub in the south-east. My right hon. Friend the Member for
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Birkenhead (Mr Field) wanted the same in the north-west. Middlesbrough has a leading business driver, DigitalCity Tees Valley, in the heart of the town. It has a games company, a web design company and a digital education company. Young people have embarked on such digital careers enthusiastically. Many of those young people are from far away places such as Canada and France, but some were home educated at Teesside university. That is a great credit to our university. Those people are creating one of the United Kingdom’s most vibrant digital hubs, which includes digital media, digital technology and creative businesses. I, along with others, will do all that I can to encourage and facilitate DigitalCity Business to ensure that it remains a success.
The hon. Member for Stroud (Neil Carmichael) referred to the business community. Middlesbrough is working to create a business improvement district in the heart of the town, following another 126 other towns and cities that have opted for such a district. We need the votes of the business community. If those votes come, they will provide the town with a stronger retail centre, and with a more vibrant and exciting centre that will attract people from outside the area.
Two weeks ago, the £35-million radiotherapy unit at the James Cook university hospital was opened by Princess Alexandra. The hospital is now described as one of the finest in Europe and is among Europe’s premier cancer treatment institutions.
I am glad to see the hon. Member for Redcar (Ian Swales) in his place because, as he will know, the first vessel has now been loaded up with steel from SSI UK’s Redcar plant for shipment to Thailand, a month after the blast furnace was reopened. The first shipment from Teesside consisted of 48,000 tonnes of steel slabs with a value of £18.5 million.
I am also glad to see my hon. Friend the Member for Hartlepool (Mr Wright) in his place, because Tata Steel has been awarded a major contract worth more than £100 million for its 42-inch mill, to provide gas pipelines for the gulf of Mexico. The pipelines will be manufactured and delivered in the second half of the year. Tata Steel employs more than 700 people in Hartlepool and across Teesside it has about 1,500 employees. My hon. Friend the Member for Llanelli (Nia Griffith) referred to what Tata is doing in her constituency. The company has invested £13 million in its Teesside site this year.
I will move on to the points in the Gracious Speech that relate to the European Union and the eurozone. The right hon. Member for Wokingham (Mr Redwood) made an eloquent and passionate speech on the future of the European Union, the eurozone and the euro, which seems like it was a long time ago. I was reminded of a phrase in the play “Julius Caesar”:
“men may construe things after their fashion,
Clean from the purpose of the things themselves.”
With all the dire talk today about the European Union, the eurozone and Greece, we will have to see what happens. The right hon. Gentleman put forward the novel view that a Minister—in this case the Secretary of State for Business, Innovation and Skills—can say something privately that he will not say publicly. I doubt whether that is the case with the Secretary of State or with any Minister.
The hon. Members for Solihull (Lorely Burt), for Stone (Mr Cash), and for Stroud and my hon. Friend the Member for Blyth Valley (Mr Campbell), who is no
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longer in his place, but who entertained the House and will entertain in tomorrow’s
Hansard
with his language from the north-east, talked about the European Union. The challenge for the European Union is how it can reduce deficits, create growth, and carry democracy with it. Those three elements are extraordinarily difficult.
I raised with the Prime Minister the other day the fact that on 23 May there will be a conference of all the European Union leaders. On the table at that informal conference will be a growth compact to go alongside the fiscal compact. It will be interesting to see whether the Prime Minister signs up to the growth compact, having not signed up to the fiscal compact.
The new President of France, who will be put into his new job tomorrow, talks of job creation and won his election on a programme of growth rather than austerity. It is an interesting thesis, and we will see how it develops in our own country. The EU is based on the stability and growth pact, and there will be a growth compact to go along with the fiscal compact. My prediction is that the EU and the eurozone will survive. The Greeks must make up their own minds—the sphinx must solve its own riddle, and so must the Greeks.
7.40 pm
Martin Vickers (Cleethorpes) (Con): It is a pleasure to take part in this Queen’s Speech debate. I am particularly pleased that the Queen’s Speech produces a framework that will allow Government Members to give a narrative to the Government’s aims and objectives, from which we have been somewhat derailed in recent weeks. My experience campaigning in local elections in north-east Lincolnshire highlighted the fact that between the Budget and polling day, we had lost the debate about what the Government were trying to achieve with their economic policies. We lost the argument, for example, that we were taking millions of people out of income tax, because of the Opposition’s effective campaign on the 50p tax rate.
I not only campaigned in the Cleethorpes area of north-east Lincolnshire but went into the Scartho ward in Grimsby, which I represented until last year. It epitomised the need for a new narrative from Government Members. It was classed as the safest Conservative ward in Grimsby, although anyone who knows Grimsby will know that it was the only Conservative ward, so that it is perhaps not a great achievement. Over the 30 years when I lived in the ward, it was represented by all three major parties at some time or other, and in the mid-1990s I had an enforced rest from my council experience thanks to new Labour, as it was then, sweeping all before it. The seat that was up for election a couple of weeks ago went to the UK Independence party, and that is an important message to all our parties. There is strong anti-EU sentiment in the Grimsby and Cleethorpes area, mainly for historical reasons to do with fishing, but the message should go to all parties that there was something of an anti-political feeling.
Before I move to praising the Government—I assure Ministers that I intend to do so—I take this opportunity to say that static caravans are a big part of the Cleethorpes economy. Indeed, the Lincolnshire coast is the largest centre for static caravans in the UK. The consultation period on the imposition of VAT on static caravans concludes at the end of this week. I appeal to the Government to take careful note of the damaging impact
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that the measure could have on my area. Static caravans are used as second homes and holiday homes, and because they are occupied for nine or 10 months, they effectively extend the season and boost the local economy.
I was particularly pleased that the emphasis of the Queen’s Speech, right from line one, was on
“economic growth, justice and constitutional reform.”
As an aside on constitutional reform, I hope that we move ahead with an elected House of Lords as quickly as possible. I would prefer a 100% elected House, but let us at least get an elected element into the upper House as soon as possible. It is a scandal that the only way of getting into one of our Houses of Parliament is by an appointment that my constituents would regard as very lucrative.
Duncan Hames (Chippenham) (LD): I generally support the hon. Gentleman’s observations on House of Lords reform, but does he agree that one lesson of constitutional reform is that we should not allow the best to be the enemy of the good, and that we should not take an all-or-nothing attitude?
Madam Deputy Speaker (Dawn Primarolo): Order. May I remind Members that they are not supposed to face the back of the Chamber? They are supposed to address the Chamber, and particularly the Chair.
Martin Vickers: I take note of what my hon. Friend the Member for Chippenham (Duncan Hames) says and agree with much of it.
As I said, the Queen’s Speech provides an essential framework for the narrative that the Government must put forward. I spoke on Friday to the regeneration director of North East Lincolnshire council, who said that he was reasonably optimistic about the future. I think that is partly due to the fact that the Government have shown confidence in the area by creating enterprise zones, reducing tolls on the Humber bridge, which will bring £150 million into the area, and only last week giving the go-ahead to pre-construction work on the A160 into Immingham docks. That is vital if we are to develop the area for the green economy and the offshore energy industry. The director made the interesting point that the area is not looking for Government grants, but it does need some Government investment in vital infrastructure projects such as those.
I add a caveat about regional pay, which I know my neighbour, my hon. Friend the Member for Brigg and Goole (Andrew Percy), spoke about in his contribution to the debate a few days ago. By coincidence, I was visiting the manager of a Jobcentre Plus on Friday morning at just the moment when my telephone rang, and it was a journalist wanting a comment about regional pay. I have reservations about it, and as the jobcentre manager pointed out to me, organisations in both the public and private sector have to pay premium salaries to attract specialists to the low-pay economy of northern Lincolnshire. I have had experience of that as a councillor.
I conclude by commending the report published today by the all-party group on small business. It highlights the desperate need to create enthusiasm for entrepreneurship among our young people. We go a long way towards that in the Gracious Speech, which I commend to the House.
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7.47 pm
Roberta Blackman-Woods (City of Durham) (Lab): It is a pleasure to follow the interesting speech of the hon. Member for Cleethorpes (Martin Vickers). I am not sure whether he was saying that his constituency was better off under the Labour Government, but I think he should have done.
Martin Vickers: Will the hon. Lady give way?
Roberta Blackman-Woods: I am sorry, I will not, because we are really short of time.
Despite a few reasonable measures, the overriding sense is that the Gracious Speech delivers priorities that are out of sync with those of my constituents and the rest of the country. It was more notable for what was left out than for what was included. The first line promised that the legislative programme would focus on
“economic growth, justice and constitutional reform”,
but in fact there was a complete lack of legislation to boost the economy in the north-east or anywhere else, or to address the concerns of people in my constituency and the region as a whole.
We need a plan for jobs and growth. The north-east has the highest unemployment rate in the country, with 11.6% of people of working age being without a job. Particularly worrying is the number of unemployed 16 to 24-year-olds. In County Durham, 8.6% of people in that age group are claiming benefits, and in my constituency long-term youth unemployment is up by a massive 129% on this time last year. Without strong Government action, we risk creating a generation of young people who will never experience stable employment and an economy that will take a worryingly long time to recover. It is no wonder then that business has slammed the content of the Queen’s Speech. This March, an Experian report showed that County Durham was in the top 20 areas for export potential and that businesses in the north-east, the north-west and Yorkshire and the Humber—the areas most likely to be hit by this new made-in-Downing-street recession—are doing the most to drive export growth.
Improving our infrastructure and links between the north and south is vital not only for the regions but for the British economy as a whole. Areas such as Durham are key to our international competitiveness and long-term economic success. It is therefore essential that I ask why so little Government attention has been paid to improving infrastructure in the north-east. The Government talk a lot about supporting manufacturing but where are the policies to back it up? The only thing that this coalition has manufactured is the double-dip recession. The recent welcome investment programmes in the north-east by Hitachi and Nissan were actually started under the previous Labour Government.
We saw last week that the regional growth fund is expected to deliver only 41,000 jobs—well below the 500,000 claimed by the Deputy Prime Minister, the right hon. Member for Sheffield, Hallam (Mr Clegg). What is more, those jobs cost an average of £33,000 each to create, compared with the £6,500 average under Labour’s future jobs fund. The shambles is partly due to the Government’s decision to do away with regional development agencies, which promoted and defended the interests of the regions, as One North East did so well. In particular, they should not have got rid of the RDAs without putting in place a viable alternative.
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The loss of One North East has been keenly felt across the region. For instance, the announcement recently that more than 300 jobs will move to Ireland following the closure of the Kerry foods factory in my constituency is a disaster for many of my constituents, but it is only one of several closures of food processing factories in the north-east this year alone. There is no regional body to pick up this issue, to think about what can be done to improve the competitiveness of the food processing sector and, critically, to maintain and grow these jobs in the north-east, so we are seeing the loss of private sector jobs in addition to the huge loss of public sector jobs
There is no strategy either for innovation. One North East put universities at the heart of its plan for growing the north-east economy, and we needed that innovation, but it is now extremely difficult for universities to engage with economic development because of the fragmentation: we have two local enterprise partnerships, two enterprise zones, 12 local authorities, the regional growth fund, “BIS local” and further bids in several constituencies. As a result, there is no clear way for universities to engage. The Government would say that they created LEPs to take on that role, but in practice local government is bearing the brunt of the austerity measures, which means that it simply does not have the resources to create the much-needed jobs in my area and elsewhere.
7.53 pm
Anne Marie Morris (Newton Abbot) (Con): I join colleagues in welcoming the Queen’s Speech, much of which sets a good legislative reform agenda to help businesses, particularly small ones.
I shall focus on the enterprise and regulatory reform Bill and the banking reform Bill, because they are probably the proposals that will make the most difference. If we speak to any business, particularly a small business, the key points we hear are that they are over-regulated—that includes employment regulation—and that they struggle to access finance. When considering regulation, the Government need to understand what is meant by “enterprise”. That term encompasses not just large enterprises—Sainsbury’s, Tesco and the like—but the very smallest. Businesses with fewer than five employees represent 90% of businesses in this country, so when considering how to make the regulatory burden lighter, it is critical to bear in mind the size of the business trying to cope with this problem. On finance, I am delighted that we are considering a banking reform Bill and dividing retail and investment banking, but in time I would like the Government also to address access to non-banking finance, because inevitably there will always be a limit to what the banks can do.
To focus on regulation, the Government have specified—or rather the Queen did, in her speech—that the review of employment legislation will look at when things go wrong. It will also consider how to ease dispute resolution, no-fault compensation and how to ease the tribunal process. For that complex and adversarial process to be delayed for two years would be a good thing. However, I urge the Government also to review the damages that can be awarded by a tribunal. At the moment, tribunals are not constrained by the ability of the defaulting employer to pay, and in some cases the damages awarded take the business out. I also urge the Government to consider the complexity of the legislation on taking on, paying and training employees, because that is additionally burdensome. They could also look
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into the problems of the self-employed, many of whom do not benefit from schemes of the sort that are available to help those in employment.
In their initiatives to deal with unnecessary legislation and the red tape challenge, the Government have done a good job. They have identified 600 rules and regulations that they will remove or reform, and are looking at 11 sectors and six themes. I welcome that. If there was one thing they could do better, however, it would be to make it easier for small businesses to contribute to the process. If someone goes on to the website to make a contribution to the red tape challenge, they have to identify the regulation causing the problem, but many small businesses do not know the name of the legislation or regulation; they just know what its consequence is. If we can reform how the Government collect such information, it might make more contributions more successful.
The Government have done good work, but I advise them to add another theme to their red tape challenge: the challenges facing small businesses from cradle to grave—from set-up through taking on that first employer to importing and exporting. There is currently no prospect of that dimension being reviewed. There is a review of company regulation, but, importantly, not all businesses incorporate.
There has been mention of the very smallest—the micro—businesses. I welcome what the Government have done to exclude micros from new regulation, but we really need a root-and-branch review of regulation already impacting on the micros. In future, I urge the Government to consider not simply delaying the introduction of the application of new regulation, but exempting the micros. The argument is that if we start to exempt the micros, we will have two classes of business, but I do not agree. There is always a way to bridge the gap and incentivise businesses to grow. I urge the Government to look at that.
In sum, this is a good Queen’s Speech. It offers a lot for business, but the Government must be mindful of the very smallest of businesses in assessing the impact of what they are doing.
7.59 pm
Catherine McKinnell (Newcastle upon Tyne North) (Lab): It is a pleasure to follow the hon. Member for Newton Abbot (Anne Marie Morris), who made a thoughtful and considered speech. However, I must say that I disagreed with pretty much all of it.
The disappointment following Her Majesty’s Gracious Speech was tangible and widespread—“Is that it?” crossed most people’s minds. We are in a double-dip recession—the deepest since the 1930s—our living standards are declining with every day that passes, and there is little hope of growth and no confidence that things will get better any time soon, and the Government’s solution is to make it easier to sack people. It is quite astonishing, even from this Government. There was also a claim that the Government would
“strive to improve the lives of children and families.”
I consider that to be a worthy but dubious commitment, when we consider how out of touch this Government seem to be with the impact that their economic policies are having on households, and particularly on women and children up and down the country.
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Let us put the Government’s proposals in context. There has been zero economic growth over the last year, and the economy is now smaller than it was in 2010. Living standards are being squeezed to breaking point. Families are being forced to choose between petrol and new school shoes, or between a pack of ham for their children’s sandwiches and making do, for another week, with cheese spread—and those are the fortunate ones. Mums—and, I appreciate, some dads, but let us be honest: it is mostly mums—who were just managing to juggle work and child care, with the help of much- needed child tax credits, are now having to give up work, as they are unable to secure an additional eight hours a week, at a time when most employers simply are not recruiting. Consumer spending is inevitably held back, with families deciding to forgo their summer holiday or make their child do with last year’s raincoat—no one will notice the three-quarter-length sleeves. All this is compounding the downward economic spiral. Young people reaching school leaving age are choosing not to go on to university, and that goes even for those with straight As. They see a lifetime of debt and a very uncertain job market. That is what some of the brightest young people in my constituency have been saying to me. We are facing an historic loss of confidence in Britain’s economic future, and young people are not living in a bubble. They fear for the future as much as we do.
Where are the solutions? I do not agree that making it easier to sack people will get our economy growing. Before being elected to this House I practised as an employment lawyer. I advised claimants and employers, individuals and businesses, and I assisted in the running of a small business with my husband. I am therefore in a better position than many to comment on the trials and tribulations of employment legislation. Yes, it can be complicated; and, yes, it is sometimes tricky to navigate. However, it is there to ensure fairness and protect against exploitation. I was horrified by the Government’s recent decision to increase the qualifying period for claiming unfair dismissal from 12 months to two years. Why would a Government support—or worse, encourage—employers to sack people unfairly? The clue is in the title. It is not difficult to terminate a person’s employment where the reason falls into one of the categories for a fair dismissal. Why should employers be encouraged to circumvent the basic principles of fairness? It is simply an excuse for poor management. Before the banking crisis we had one of the lowest rates of unemployment in decades. The 12-month qualifying period proved no obstacle to major economic growth in the last 13 years. How can it be used as an excuse for failing growth figures now?
I accept that managing a work force is one of the biggest challenges that any employer will face. I also know that the majority of businesses want to get it right and do the right thing. The success of any business is only as secure as the people employed in it. Economic growth cannot be built on greater uncertainty in the work force. Making it easier to sack people and harder to seek redress for unfair treatment will only make people feel more insecure. The answer has to be ensuring that businesses get the support they need to manage their work forces fairly and well. Employment legislation is focused on just that: ensuring that businesses and employees use procedures that are fair. Instead of focusing on making it easier to sack people, this Government
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should focus on enabling businesses to get the help, support and advice they need. Yet all we see are business advice support services disappearing from view.
There is, in any event, no economic justification for the assertion that employment protection rights form any barrier to growth. According to the World Bank’s “Doing business” ratings, the UK ranks seventh in the world for ease of operating out of 183 countries. The OECD’s employment protection index provides a measure of the procedures and costs involved in dismissing and hiring employees. On this index the UK ranks third out of the 21 major economies, behind only Canada and the US. To claim that our inability to sack people on a whim is holding our economy back is a poor excuse for this Government’s economic failure and an even poorer solution. Creating uncertainty and fear among an already financially stretched and insecure work force will only compound our economic problems by exacerbating the lack of consumer confidence.
Businesses are crying out for funding and investment. The Federation of Small Businesses cites the lack of consumer demand as the biggest barrier to growth, with access to finance just behind it. No business is going to say, “No thank you,” to an offer to make it easier to sack people, but it is not the priority that businesses are looking for. “Work hard and stop complaining,” the Government say. I say, “Start listening.”
8.6 pm
Julian Smith (Skipton and Ripon) (Con): It will come as no surprise that I, in turn, disagree with most of what the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) said. This Government have done a lot of excellent work for British business. We have an increasingly competitive tax rate—now at 24%, but lowering by one percentage point a year until the end of this Parliament—and a 20% rate for small businesses. There is a wide range of schemes for investment, business support and business lending. The Chancellor has set the country on the right course to attract global business, and we have seen many businesses investing in Britain over the last 12 months.
From the Prime Minister’s trade missions, to Lord Green’s remodelling of UKTI, there have been great strides on exports. When they reported back to Parliament last week, British ambassadors were sizzling with ideas for British exporters. There was a £50 billion increase in exports in 2011. Exports to India were up by 37%, with 28% more sold to Thailand and 44% more sold to Indonesia. I hope that, with a rethink on runways in the south-east, British business will soon be able to maximise those opportunities further. The Government are doing a great deal for our businesses, from credit to exports, and from support to mentoring. The only frustration is that it does not always get through to every business in the land. I hope that the Minister will allow BIS to utilise all HMRC’s regular mailings, which would be a good route to get its message across.
One of the biggest issues, which a number of Members have raised, is the burdens on business from regulation. Although unsexy, the work of the Minister of State, my hon. Friend the Member for Hertford and Stortford (Mr Prisk), to reduce regulation has been significant. We can now see, Department by Department, who has done what, and, with the one-in, one-out policy, which
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regulations have been introduced and which removed. As my hon. Friend the Member for Newton Abbot (Anne Marie Morris) described, the red tape challenge will see hundreds of regulations removed.
There has also been some dull, heavy lifting at the European level. Ministers have reduced the cost and the burden of the pregnant workers directive by about £2 billion. In health and safety, the Young and Löfstedt reviews will see positive and radical action in the months ahead. As my hon. Friend also described, in the area of employment law there is a big focus reform on mediation. The two years to trial employees is a great improvement and will allow more employers to take a risk. However, companies continue to complain about the burden of employment legislation. The reason this is important—Opposition Members seem not to get this point—is not to do with some ideological issue on our side, but because we want companies to take people on and take the risk. Indeed, a MORI poll has shown that more than 50% of small businesses say that the thing putting them off taking on new staff is our employment legislation.
Unfortunately, some of the developments on this front are clogged up in coalition politics. One side believes that we should take the risk on employment rights, in return for getting more people into work; the other side believes that we should simply explain things better. We need to meet halfway and find a compromise, whether through the use of sunsetting or reviews, to achieve a change in our employment legislation. There is currently a call for evidence on simplifying the dismissal process and the introduction of compensated no-fault dismissal. Those measures should be introduced as soon as possible. They could be voluntary or incentivised, but they would give a clear route for employers to terminate employment situations.
It is not only a radical approach to regulation from the Government that is required. Quangos need to get their act together, too. I have spent the past two years trying to sort out issues relating to brown signs that have been removed from the A1 around Masham with no explanation from the Highways Agency. This has been detrimental to the hundreds of small businesses in the town, which has had no directional signs on the upgraded A1(M) for the past two years. The fact that it has taken tens of meetings with the community, its MP and councillors to fix the issue shows that our Government agencies are not responding to the needs of business. The Bill should contain a duty of engagement with business for every public quango.
On Europe, the Prime Minister, along with 11 other countries, wrote a very good letter last February to the EU Commission advocating a more radical approach to growth. When I went to Brussels about four weeks ago with the all-party parliamentary group on European reform, we raised questions about what the Commission was doing to remove regulatory burdens. One of the directors general openly admitted that the regulatory reform agenda had stalled, and another felt that our questions about removing rules meant that we did not want any rules at all. We need a British-driven agenda at the heart of Europe to look at which rules and regulations can actually be removed and how we can institutionalise deregulation at Commission level.
Greater radicalism in employment law; starting to include EU legislation in our regulatory statements; a hard-line approach to deregulation in Europe and a statutory duty on every public body to get—
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Mr Deputy Speaker (Mr Lindsay Hoyle): Order.
8.12 pm
Tristram Hunt (Stoke-on-Trent Central) (Lab): It is a pleasure to follow the hon. Member for Skipton and Ripon (Julian Smith), although I do not think that Opposition Members believe that the fundamental problem facing the British economy is an inflexible labour market. We believe the problem to be the double-dip recession that has been delivered by this Government.
In the year of her diamond jubilee, I believe that Her Majesty wanted to deliver a Queen’s Speech that focused on jobs and growth. This one, combined with the Budget that preceded it, manifestly fails to deliver that, however. The Government are failing all the tests that they have set themselves, from paying down the deficit to promoting economic growth and tackling youth unemployment. We needed a plan to stimulate demand and activity in our economy, but we have failed to receive one.
As some of my hon. Friends have said, there were multiple omissions from the Queen’s Speech. Here, I should declare an interest, as set out in the Register of Members’ Financial Interests, relating to my employment in a university. It was profoundly disappointing that there was no higher education Bill in the Queen’s Speech. Higher education is a highly successful industry that is vital to our future competitiveness. Instead, we are seeing exactly the wrong way to make Government policy. They began by introducing a system of fees that had absolutely no rationale behind it and made our fees structure among the most expensive in the world. They also slashed public expenditure on our universities, which only Romania is doing elsewhere in the European area.
There has been a lack of investment in our higher education structure, and a lack of strategy. The Secretary of State suggested that these were all scare stories, but since the Government introduced the new fees structure we have seen a collapse in demand for humanities and modern language courses. The areas in which the UK has a global competitive advantage are being undermined by Government policy. We need a strategy for higher education, for innovation, for spin-outs, for intellectual property, and for the kind of university-industry collaboration that we all want to see. We have none of that in the Queen’s Speech.
Instead, we have the enterprise and regulatory reform Bill, which contains some decent measures. We would like to see faster progress on the green investment bank, and further strengthening of shareholder power, but it was disappointing not to have more on the mutual and co-operative sector. It is interesting to note that, since 2008, co-operatives have increased their turnover by more than 21%. These are successful models in a new system of political economy that we should be thinking about today, but the Queen’s Speech fails to deliver that. In particular, it would have been nice to have a system that allowed entrepreneurs to sell their companies to employees, in order to embed that system of co-operatives and mutuals in our political economy.
We also need to do more on banking reform. Many hon. Members have pointed out that the access to funds is still appalling. Industrialists in the ceramic industry and elsewhere in my constituency continually complain about the poor access to funds. Last week, we were
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honoured to host Lord Digby Jones and Lord Green in Stoke-on-Trent. We talked about UK Trade & Investment, and the failure of our industries to break into new markets. We need to focus on UKTI, but we also need to look at procurement. The Government are not thinking smartly enough about their own procurement strategy, and about how it can drive industry and manufacturing.
The truth is that, for the past 10 years, the British economy has been unbalanced. There has been an overdependence on financial services and on the south-east. Our tax base was too narrow and, when the crisis came, it hit our public finances. We all need to own up to that. We need to work out how to shift that balance in order to rebalance the economy. That could involve capital allowances for manufacturing so that it can invest in energy-efficient technology, and moves to promote combined heat and power technology and to promote gas storage. All those elements would form an industrial strategy, but such a strategy is signally lacking in this Government.
Late last year, we heard plans for the energy intensive sector. We heard talk of £250 million to allow the sector to become more competitive, but that simply has not been followed up. Instead, we still have terrible regional disparities in economic growth, which are augmented by problems with lending. The truth is that the regional growth fund is not delivering the growth that we need. We in Stoke-on-Trent are grateful for those investments that have been made, but the money is not flowing through. We have seen the figures from the west midlands, which show an absence of money pouring in.
Finally, I want to make a small constituency plea to the Chief Secretary to the Treasury. A company called Body Temple in Stoke-on-Trent sells nutritional drinks. The Government are “simplifying” VAT on such products, but I do not think that they have thought that through. They do not understand that £3 billion market, and the role that the UK can play in it. I urge the Minister to think carefully about the consultation process on that measure, essentially on business competitiveness grounds.
8.18 pm
Stephen Mosley (City of Chester) (Con): It is a pleasure to follow the hon. Member for Stoke-on-Trent Central (Tristram Hunt). At one point, I thought that he might actually admit that the problems in our economy had been generated over the past 10 years rather than at the time of the general election. He almost did that, but not quite.
Most people appreciate that if we run up a massive credit card bill, the longer it is ignored, the worse the debt gets, and the more it costs to repay. The disastrous condition of the British economy and the public finances that we inherited just two years ago cannot be underestimated, yet Labour fails to accept responsibility for the damage that it inflicted and also refuses to agree on any sensible measure to help to clear up its mess.
The decisions that this Government are taking to rebalance our economy and build for a sustainable future might not be entirely popular in the short term, but they are the right long-term decisions to take. If we compare our current economic situation with those of countries to which we were most closely linked when the coalition took office—countries such as Greece, Spain, Portugal and Italy were also borrowing massively more than they could afford—we can see the different paths
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that have been taken over the past two years. We need only to watch the news, read the newspapers or look at interest rates to see that whereas the UK can borrow today at less than 2% interest, Italy pays 5.4%, Spain over 6% and Greece over 22%. It is plain for all to see the dire straits from which we have been rescued by the Government.
Reducing the deficit must be and is the No. 1 priority of the Government. Their plan is supported by the International Monetary Fund, the OECD, the Governor of the Bank of England and the major credit rating agencies. Indeed, both the IMF and the OECD have said that without reducing the budget deficit there can be no sustained growth.
Yes, it is fair to say that growth has not been as we had hoped over the last two years. The international situation and the continuing problems in the eurozone have proved to be a drag on the UK economy, but the reality is that the tough decisions we have taken to clear up Labour’s mess have laid the foundations for long-term growth and prosperity. Consequently, the IMF now forecasts the UK to grow at twice the rate of Germany over the next year and three times faster than France. The coalition Government have set our country’s economy in the right direction, and the measures outlined in the Queen’s Speech will help to ensure that we continue with that underlying mission.
On the specific measures in the Queen’s Speech, I welcome the announcement of an enterprise and employment Bill. As the Chancellor has set out on numerous occasions, the Government have four overarching ambitions for the British economy: first, to create the most competitive tax system in the G20; secondly, to make the UK the best place in the world to start and grow a business; thirdly, to encourage inward investment and exports; and, fourthly, to create a more educated and flexible work force.
On tax, we have reduced the headline rate of corporation tax, meaning that it will fall to 22% by April 2014, with the small business rate falling to just 20%. We have scrapped Labour’s jobs tax; we have doubled entrepreneurs’ relief; and we have announced numerous measures to address the complexity of the tax system. To help businesses take off and grow, we have improved the Government’s Business Link service and we have introduced a new business mentoring programme. We have launched a national loan guarantee scheme, providing up to £200 billion-worth of guarantees, allowing banks to offer lower-cost lending to small and medium-sized enterprises.
On exports, the Government have set out major new initiatives to help more SMEs to export and to help larger companies seeking to win major overseas contracts. On skills, we have vastly expanded the availability of apprenticeships through funding incentives and the slashing of red tape. The introduction of the enterprise and employment Bill will build on the work already achieved and help to make Britain one of the most business-friendly countries in the world.
I welcome, too, the introduction of a banking reform Bill. Labour’s failure to fix the roof while the sun was shining played an enormous part in our economic downturn, and the culture of unrestrained risk practised by the banks, at the expense of hard-working savers,
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certainly made a bad situation worse. Again, building on the action taken in the first Session of this Parliament, the banking reform Bill will help to protect us from the prospect of a similar banking crash occurring in the future. The recommendations of the Vickers report are to be welcomed. It is right that banks should not be able recklessly to gamble with people’s hard-earned savings. We need proper regulation, and I look forward to the Bill being put before the House.
I warmly welcome pretty much all the Government’s programme as outlined in the Queen’s Speech. Rome was not built in a day, and our economy cannot be rebuilt in just a couple of years, but the last two years have put the foundation stones in place for a prosperous and a sustainable future. We achieved a great deal in the first Session of this Parliament, but there is still a great deal more to be done. Last week’s Queen’s Speech is an excellent step in the right direction.
8.24 pm
Chris Evans (Islwyn) (Lab/Co-op): If there were a parliamentary award for the most bizarre speech of the day, I am sure that the hon. Member for City of Chester (Stephen Mosley) would earn it. We have heard that the happy days are around the corner. We have double-dip recession, but it is okay, because it was all Labour’s fault, even though the economy was growing when Labour left power. Apparently, 1 million young people unemployed is good news. Wonderful! That is not the only thing we have heard; we have also been told that stripping people of their employment rights is the way forward. Is it not funny that when they have blamed everything else, they start blaming employment rights for our problems?
I say that the major aim of a Government of any colour should be to make this country the best place to start and grow a business. Yes, I agree that a cut in corporation tax is a good way forward. I believe that cutting red tape is a good idea, too, and I look forward to seeing more concrete proposals over this Parliament. When red tape is tackled, I hope that the Government will start to talk about tax reform. When I speak to anybody who is hoping to set up their own business, they tell me that the main barrier they face is the fear of the complex tax system that they will have to tackle. It seems strange, but the more complicated the tax system, the more there is only one winner. It is not the small business man; it is the accountant. It seems odd that small businesses have to spend time form filling when they could be chasing orders. We need to realise that, however good the Government believe they are, it is ultimately people who make businesses successful.
Talking of people, and young people in particular, we are now operating in a globalised economy. Young people in Wales will not be competing with young people from the north-east, the south-west, Scotland or Ireland; they will be competing with the Chinese, Indians and Brazilians. That is why our competitive edge is all about creating a highly skilled and highly motivated work force.
I have two friends—[Interruption.]Yes, I have only two friends; I would only have to borrow 20p and I could phone them both. The two friends in question work in the training industry. One works in further education; the other works for a training company. Both come from the old school, where it was said that
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an apprenticeship lasted four years. What they tell me worries me. My friend in FE says that some FE colleges are subcontracting training contracts to training companies, offering so-called apprenticeships that are supposed to last for three years, but saying that people can become a qualified electrician in a year. Courses that should take three years are being done in three months. All the while, people are driving around in their high-performance Mercedes and Aston Martins—no doubt bought out of the money that they should be investing in young people. This scandal is already going on, as we saw in a BBC “Panorama” programme. It should be seriously investigated, because this seems to me to be a misuse of the word “apprenticeship”.
The word “apprentice” conjures up images of the ’60s and ’70s and of young people between the age of 16 and 21 doing full-time apprenticeships and coming out as draftsmen, toolmakers or even, for the lucky few who aspired to it, with a footballing career. The problem is that people are being called apprentices nowadays when they are nothing of the sort. Why is it that of all the apprentices in this country, one in 10 is based in the supermarket Morrisons? Are they apprentices when they are working in retail? What skills are they getting? What trade are they developing?
Julian Smith: I am shocked that the hon. Gentleman does not feel that the sort of training people get in a supermarket like Morrisons would provide a very good basis for a whole range of jobs.
Chris Evans: What I would say is that that is not an apprenticeship in the traditional sense. I believe that the word “apprentice” is being misused. All that is happening is that apprenticeships are taking the place of the youth training schemes that failed in the 1980s.
This is the main point that I want to make. We must formalise the process that apprentices undergo. In the 1960s a UK training industry board formalised the apprentice system, producing training manuals and setting the standard for what apprenticeships should be. Now the definition is so muddled that we do not know what apprenticeships actually are, and that is why we must take serious action now. Recently I went to Pensord, in my constituency, where Pensord Press has launched a major apprenticeship scheme. I fear that good schemes like that will be mixed up in the scandal of our not knowing what “apprenticeships” means.
When I speak to people who take on apprentices, they tell me that they meet young people who do not have the necessary skills. They do not turn up on time, they play with their mobile phones during interviews, or they do not know how to speak to people; sometimes they swear in ordinary conversation. That worries me. I could talk for a long time about it. We need to hold a serious debate in this country about how business and education can work together.
I visited Cwmcarn high school when I worked for my predecessor, and it was launching what was described as a basic skills passport. All the children in the school would be assessed for literacy, numeracy, performance and public speaking, so that when they were interviewed by employers, they would be able to say “These are my skills: this is what I have achieved during my time at school.” It is a good scheme, and it should be rolled out throughout the country.
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Last Friday I went for a chat with people at the University of Wales, Newport, who talked of universities’ becoming hothouses for businesses. I have always said that we have massive academic resources in research, and that we should open up the universities for that purpose. Those people talked to me about the concept of an entrepreneurial university, drawing a parallel with teaching hospitals where the practitioners are lecturers and students must undergo internships as part of their qualifications. That could be applied to skills in areas such as computing, engineering and business. I do not know whether anyone has watched the documentary about Ayrton Senna, but that was made by a student at the university, or the BBC programme “Rhod Gilbert’s Work Experience”, produced by a company called Zipline Creative— another company formed by some of its graduates. We need to have that debate about business and education.
I prepared a longer speech, but I have only 30 seconds left, so let me say just one more thing. We must be very careful when we talk about employment rights. I was a trade union official, and I do not think that we should clamp down on people who go to tribunals with trade union representatives. It is hard enough already for someone, even with a strong case, to undergo the grievance procedure. If we take the vital right to union representation away from people we will cause trouble, and we will do nothing for competitiveness in this country.
8.31 pm
Lilian Greenwood (Nottingham South) (Lab): I want to speak about my constituents’ priorities, which are unfortunately not addressed in the Queen’s Speech.
Nottingham city council and NHS Nottingham City jointly commission the Nottingham citizens survey, an annual survey of city residents which gathers views on a variety of subjects including the things that make people believe that Nottingham is a good place in which to live—such as its excellent public transport system and NHS services—and the improvements that are most needed, which include more crime-cutting, the provision of more activities for teenagers, and better job prospects for residents.
It is interesting to note that job creation made it into the top five items only this year, but it is hardly surprising. Thanks to the Government’s failed economic strategy, the UK is now experiencing a double-dip recession. More than 2.6 million people are out of work, 3,500 of my constituents are stuck on out-of-work benefits, and long-term youth unemployment in my constituency has risen by 133% in the last 12 months. Sadly, the Government will not address those priorities over the coming year.
At a time when my constituents want to feel safer in their homes and on the streets, the Government are continuing to cut funding for our police force. Last week, like many other Members, I met police officers who had come to protest about the Government’s plans. All those officers—from neighbourhood policing teams, from our city centre response team, and from intelligence and surveillance units—had front-line roles, and they had a simple message to deliver. They described the cuts as catastrophic, and told me that they no longer had the resources with which to do their job properly. How can our police forces continue to cut crime if they do not have the resources that they need?
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Opportunities for young people are also a cause for concern among my constituents. That is not surprising, given cuts in youth services, the loss of work experience opportunities and careers guidance, the scrapping of the education maintenance allowance, the tripling of tuition fees, the undermining of vocational qualifications, and the sharp rise in youth unemployment. What hope does the Queen’s Speech offer young people in my constituency? None.
I recently attended a round table at Nottingham Forest football club with business leaders and representatives of the voluntary sector and local councils to discuss skills and opportunities for young people. While there was a real collective will to work together in our city to give young people a hand up, there was also frustration about the Government’s failure to provide the support that would enable them to get on, help them to gain the skills that they needed, and create the economic conditions that would provide jobs for them to do.
As for the need to boost business and create jobs, what does the Queen’s Speech offer? Nothing. When the Government talk of reforming employment rights, they mean making it easier to sack people. At a time when families are already facing a cost-of-living crisis and consumer confidence is at its lowest level for a generation, creating further insecurity is exactly the wrong thing to do. It was not the UK’s system of employment law that sent our economy into recession; it was the Government’s decision to cut public spending too far and too fast. It is this Government’s choices that have landed hundreds of people in my constituency on the dole; it has been this Government’s choice to freeze wages, and now to threaten cuts to real incomes in the public sector by hiking up pension contributions and introducing regional pay; and it is this Government who have raised VAT to 20%, allowed train companies to hike up rail fares and cut support for the bus industry, leading to fare rises, all taking money out of my constituents’ pockets and undermining the retail sector, which is so important to Nottingham’s local economy.
So what have the Government done? Well, Nottingham has an enterprise zone, but it has still to deliver a single new job. We have yet to receive a penny from the regional growth fund, and the Government have scrapped our successful regional development agency. No wonder businesses have slammed the Queen’s Speech for failing to offer an industrial strategy or real measures to boost growth, and we are still waiting for the Government’s previous measures to make the slightest bit of difference.
So here are some questions that people in Nottingham would like the Minister to answer. How will the Government’s programmes support our city’s economic growth plan? How will they ensure that young people in Nottingham have real opportunities to obtain skills and jobs? How will the Government help boost investment in our city’s vital retail sector? How will they ensure our enterprise zone actually delivers new jobs? How will they support the growth sectors in our city’s economy—health and life sciences, digital content and low carbon—to help us attract high-skill jobs in the future? Will the Minister’s Government support investment in the midland main line for both line speed improvements and electrification? Will he ensure that Nottingham benefits from the improved connectivity offered by high-speed
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rail? Will he support the development of high-speed broadband, which is needed to boost our digital media sector? Finally, will he listen to the views of Nottingham citizens, and prioritise the needs of the many people I represent who are suffering the effects of a recession made in Downing street and this Government’s other disastrous policy choices?
Mr Deputy Speaker (Mr Lindsay Hoyle): Order. There are not many Members waiting to speak, and we have had quite a few withdrawals, so I will extend the time limit to eight minutes. I am sure that that will be welcomed by Barry Gardiner.
8.36 pm
Barry Gardiner (Brent North) (Lab): Thank you, Mr Deputy Speaker. Having spent the afternoon cutting my speech, I shall now have to cross out all the omissions—but, seriously, I am delighted by your ruling.
If asked to identify what is most surprising about the Queen’s Speech, I would have to say it is finding that this Government consider it a priority to remove the rights of ordinary working people and to make it easier to fire people—and not just to fire people, but to fire them unfairly. We have 2.7 million people unemployed, we have a double-dip recession—the first in 37 years—and we see this Government putting through legislation to make people more insecure. How does that build confidence in our economy? How does that serve to increase productivity? It does not.
That is just one part of the injustice that lies at the heart of this Queen’s Speech—which explains why so many Opposition Members have spoken about it. It is not just an unforeseen consequence, and it is not proposed merely in the mistaken belief that it will get the economy going. We recognise this for what it is: a deliberate political philosophy. It is a deliberate attack on the rights of working people, and I have to say that while one would expect that from the Conservatives, the fact that the Liberal Democrats have colluded in it in quite the way that they have is to their eternal disgrace. I hope working people will punish them accordingly.
The director general of the CBI identified a different test by which to judge this Queen’s Speech: whether it will help business to grow. He mentioned the energy Bill and the regulatory reform Bill. While he said he did not have much confidence in the regulatory reform Bill, he said he thought there was a chance that the energy Bill might help in this regard. I wish that were the case, but I fear Mr Cridland has let his optimism get the better of his customary forensic analysis. We have been promised sight of a draft Bill for pre-legislative scrutiny on 22 May —or, to be more precise, we were promised it for 20 minutes on the Department of Energy and Climate Change website on the afternoon of the Queen’s Speech, but then the commitment to the 22 May was taken down. Will the Minister responding to the debate tell the House whether, and when, that Bill will be published in draft form?
The Government’s draft Bill to reform the electricity market to deliver “secure, clean and affordable” energy will need to go a great deal further than the current four pillars set out by the Department. The Government are
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not prepared to introduce real competition into the electricity markets, because they do not dare break up the vertical integration of the wholesale and retail elements of the big six electricity companies as they fear losing the investment they so desperately need to replace the 25% of existing energy generation that will go off stream by 2020. Some £200 billion of investment is required in the energy sector and the price of that investment, in the Government’s mind, is a quiescent Government, cowering in the face of the big six and unwilling to regulate to open up the market to the competition and the free market forces that they say they believe in. The effect will be higher costs for small and medium-sized businesses and, of course, for domestic consumers.
The energy crisis facing this country will do more to undermine prosperity than anything else in the next 10 years, except perhaps the impact of the death throes of the eurozone. I am not a traditional fan of the speeches of the right hon. Member for Wokingham (Mr Redwood) and the hon. Member for Stone (Mr Cash), but today they rightly pointed out the effect on the UK of the shrinking of the European economy. It is worth reflecting on the fact that although the total amount of Greek debt owned by UK banks and the UK Government together is an eye-watering €14.2 billion, the French Government alone hold €15 billion of this debt and French banks hold a catastrophic €42 billion, giving France a €57 billion exposure. We now have a French President calling for a growth package to go alongside the financial stability and austerity measures agreed by the 25. France needs Germany and the European Central Bank to fund an ever-expanding Greek bail-out to stop the implosion of French banks. Simultaneously, France needs Germany and the ECB to provide liquidity to stimulate the growth that the new President has made his political priority. Does any Government Member seriously believe that EDF, a company owned by the French Government, will not be under Gallic pressure to invest in its home market in preference to the UK and that that will not have a dramatic impact on the investment capacity and potential in the UK over the next five years?
Only two out of the big six—Centrica and Scottish and Southern—have the UK as their primary investment focus, and what all of them look for is a clarity of purpose and a stability of regulatory regime that creates the right investment climate for long-term energy investments to achieve their expected return. This Government, in just two years, have spectacularly undermined business investors’ confidence. With the carbon reduction commitment, the Government retrospectively snatched £1 billion from business. With the North sea tax regime changes, they sent shock waves throughout not just the big oil companies, but the whole investor market. Of course, with the solar photovoltaic feed-in tariff, the Government became a laughing stock for investors. But the laughter will stop as the desperate truth sinks in that business no longer regards the UK as a stable investment regime, and the UK courts have compounded that by ruling against the Government on these issues.
That is what is going to undermine the possibility of growth in this economy: the lack of business investment in the energy markets and the way in which generation capacity will go off stream after 2017, with businesses then not just paying more for their power, but not being able to get it. That will be because this Government are failing the absolute cast-iron test of putting through
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real structural reform in the energy market. That is what business has called for, that is what business knows it is not getting and that is why business has condemned this Government for a weak and feeble Queen’s Speech.
8.44 pm
Julie Hilling (Bolton West) (Lab): I am pleased to speak in the debate, because I want to dispel the myths that are so often spoken by Government Members. If there was any doubt before the Budget and the Queen’s Speech, the Government have now made it obvious to everyone that they are totally out of touch with the real everyday concerns of ordinary people. Their only growth strategy is to take away people’s rights at work.
The economy is not in recession because of the UK’s employment rights but because the Government are cutting spending too far and too fast, hitting business confidence and choking off growth. They do not seem to understand that removing the rights of workers will only increase job insecurity, harm work force morale and productivity and lower consumer confidence. It will make things worse not better. Just like taxes on pasties, caravans and hairdressers, their proposals will hit the poorest hardest, but, funnily enough, the rich get a tax cut. Only 6% of small and medium-sized enterprises think excess regulation—all regulation, not just that on employment rights—is a barrier to growth, but there is consensus that the real problems are a depressed economy and difficulty with bank lending.
The Government are very keen on international comparisons and, according to the OECD, out of the 36 richest countries the UK has one of the lowest levels of worker protection, beaten only by America and Canada. I do not think that that is a record of which to be proud. The Prime Minister said his proposals will make it easier to hire people, but we are not all that stupid and we know that what he is really saying is that they will make it easier to fire people. He thinks that with 2.7 million unemployed and more than 1 million young people without work, making it easier to sack people will increase growth. With reasoning like that, it is no wonder we are in a double-dip recession.
Government Members seem to hold the view that it is difficult to sack people, but as a former trade union official who frequently had to tell members that they had no case with the mantra, “The law is as it is, not as we’d like it to be,” I can tell them that it is already shamefully easy to dismiss workers. The Government’s change to the qualifying period for unfair dismissal claims to two years means that almost 60% of all employees under the age of 24 are now not protected, 1.4 million part-time women workers are not protected and 32% of all black and minority ethnic employees are not covered.
If someone manages to win a case at tribunal, the average award is £4,500—hardly a fortune. The average cost of defending a tribunal, however, is £8,500 plus about £5,000 to pay off the employee. It seems obvious to me that employers should therefore obey the law, just as they would in any walk of life. If they pay their employee what they are due, treat them properly and do not discriminate, they will not end up in a tribunal.
The Business Secretary said earlier that an employer should be able to get rid of an underperforming employee, and of course they can with no changes to the current law as long as they follow simple, fair procedures.
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Having attempted to protect the jobs of such employees, I can attest to how easy it is to sack them. We have to ask what those businesses are doing, as surely they cannot reach the end of two years of employment and then say that the employee is underperforming. What is happening with their recruitment policy and with their management of that employee? If, after two years, that person is underperforming, the company should ask itself what is wrong with its business, with how it is managing those people and with the work it is asking its employees to do.
I welcome the notion of early conciliation, but I hope that there are no devils hidden in the detail. Proposals to charge workers to bring a case at tribunal, however, are fraught with problems and are yet another barrier to justice, hitting ordinary people at some of the most difficult times of their lives, just like the other measures that the Government have brought in to remove access to justice for so many ordinary people.
Government Members have made various other suggestions about weakening employment protection, including removing small firms from legislation. As about 44% of private sector employment is in SMEs, that would create a second-class citizen at work and make it harder for small firms to recruit good staff.
There have been rumblings about equality legislation, but as the Fawcett Society stated:
“Cutting red tape can all too easily mean scaling back on equality. Many of the regulations being revised—such as protections from unfair dismissal—have been vital in shoring up women’s security in the workplace.
Considered against a 25 year high in women’s unemployment, watering down these kinds of regulations poses a very real threat to women’s ability to get and keep work. A healthy labour market cannot exist if women are not enabled to take their rightful part in it.”
There are also worrying things said about health and safety legislation. We have one of the lowest incidences in Europe of fatal injuries at work, but we should not be complacent, as the figures do not include those killed in road traffic accidents, members of the public killed by work activities, suicides attributed to work-related stress, or those no longer in work who die from mesothelioma or other work-related illnesses. Many people killed at work worked in small and medium-sized enterprises. Of course, there are many thousands who suffer as a result of non-fatal but often life-changing incidents. Fewer inspections and less enforcement will lead to more deaths, injuries and ill health at work. Reductions in health and safety should not be considered by any Government in a civilised society.
The Government are turning the clock back to a time when people had to choose between heating and eating, were dependent on food banks, and had to beg from their neighbours for food to feed their children, and when workers had fewer rights. It clearly is not working. They need to change course now.
8.51 pm
Jack Dromey (Birmingham, Erdington) (Lab):
Not one brick will be laid, not one home will be built, and not one unemployed building worker will be put back
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to work, because there was not one reference in the Queen’s Speech to housing, despite the grim reality that we all see in our constituencies. In our surgeries, there are ever-lengthening queues of people desperate for a decent home at a price that they can afford. They are people such as the mother from the Lyndhurst estate who came to see me to get out of an overcrowded flat where, because of the damp, her baby was for ever ill. They are people such as the unemployed building worker from Marsh lane with two young kids—a good family—who was desperate to get back to work, having been made redundant from the building industry twice in six months. They are businesses such as the small building firm in central Erdington that is on the brink of bankruptcy because it can no longer get contracts to build homes. One in four young people in my constituency is out of work. Some of the young people I met on the Castle Vale estate are keen on getting an apprenticeship in the building industry, but all of them believe that they have no hope.
Birmingham and Britain are suffering from a combination of problems. We have the biggest housing crisis in a generation. There is rising unemployment, with more than a million young people on the dole. We have a double-dip recession, made in Downing street—the first in 37 years—not least because of the 4.8% collapse in construction over the past three months. Benefit bills and borrowing are booming—the costs of failure. This is an out-of-touch Government with a miserable track record of causing misery on a grand scale. They are making the housing crisis worse by the day, but fail to recognise that the best way to build Britain out of recession is to invest in badly needed house building.
Let us look at the Government’s track record. House building is down. The Minister for Housing and Local Government said:
“Building more homes is the gold standard upon which we shall be judged”,
yet house building has fallen by 11%. Under Labour, there were 2 million new homes built; under this Government, in the past three months alone, public house building has gone down by nearly 11%. Homelessness is up. The same Minister said:
“Homelessness was what brought me into politics”,
yet there has been an increase of 14% in the number of families reporting themselves homeless, and an increase of 23% in rough sleeping. Under Labour, homelessness fell by 70%.
We have a mortgage market from which people cannot get mortgages. The Secretary of State says:
“I well remember buying my first home. The sense of ownership, pride and independence. I want more young families to be able to experience that”,
yet home ownership, under that Secretary of State, is down by 75,000. The prediction is that an unassisted first-time buyer will now be 44 before they can get a mortgage.
The private rented sector is rapidly growing in size and is about to overtake the social sector. There are many reputable landlords but too many rogues, characterised by ever-increasing rents, yet the Prime Minister stood at the Dispatch Box and said that we have seen rent levels go down, despite the fact that the Government’s own figures show that rents have risen by 3% in the private sector in all nine English regions and in 89% of local authorities.
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What we are seeing is a combination of monumental mistakes of economic management on the one hand, and grotesque unfairness on the other—monumental mistakes such as that made by the Chancellor back in October 2010, when he cut £4 billion overnight from housing investment. That led to a 99% collapse in affordable home building. As for grotesque unfairness, the 2011 figures for the new homes bonus showed that an area of high need and high unemployment such as Knowsley would get 37p per head, but the City of London would get £28 per head.
The country desperately needs homes, jobs and growth. That is exactly what a Labour Government did at a time of economic crisis—the bankers crisis back in 2008. Because we knew that we had to grow the economy and meet housing need, our kick-start programme saw 110,000 homes built and the creation of 70,000 jobs and 3,000 apprenticeships. The industry has said to me time and again that it was that kick-start programme which sustained it against what would otherwise have been collapse. That is why we propose, rightly, a repeat of the bankers’ bonus tax which could see 25,000 homes quickly built and jobs created for 100,000 young people. We also propose a temporary cut in VAT on home improvements, which would result in better homes, people employed in improving those homes, and jobs and wealth being created along the building industry supply chain.
In conclusion, there is a dramatic contrast between the politics of hope and the politics of despair. Labour represents the politics of hope. That is why the newly elected Labour council in Birmingham has committed itself to building 70,000 homes—an ambitious objective, but it is determined to meet housing need and to help build Birmingham out of recession. Stories of despair, on the other hand, are numerous, but let me tell one. A young woman who appeared recently on the Today programme wishes to remain anonymous, but I know who she is and I have spoken to her in some detail.
As a consequence of the collapse in affordable house building in London, soaring rents in the private rented sector and the Government’s benefit changes, this young woman was suffering the unimaginable. She had been married to a banker. Their marriage had broken up but they had remained close. Tragically, he died. She then lost her home. Her daughter was distraught. The mother needed her own mother to look after the granddaughter through a desperately difficult period for that family, but having been made homeless and ending up in temporary accommodation, she got a phone call on a Tuesday—she lives in Waltham Forest—saying, “We need you to go to Walsall tomorrow, Wednesday.” She was in despair over what was happening to her. She could not believe it. She said, “Me and my husband, all along we thought that the Government would stand by us at our time of need,” and they abjectly failed to do that.
The Government were warned against the consequences of their action from within Government. They chose to go down this path. Any Government who inflict pain on a citizen of this country in that way ought to be ashamed of themselves.
8.59 pm
Sheila Gilmore (Edinburgh East) (Lab):
I start by repeating something that I raised in an intervention with the Secretary of State at the outset. He repeated the oft-made claim about the number of private sector
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jobs that are being created in order to prove that the Government’s policy is working. In about January 2011, after just over six months in government, the Prime Minister told us that 500,000 new private sector jobs had been created by his Government. After another few months, he said that in the first year of his Government they had created 500,000 jobs. Now the Secretary of State tells us that in two years they have created 600,000 jobs. Presumably, if the 500,000 figure was correct in the first place, only 100,000 have been created in the last 18 months. At that rate of job creation, we will expect the next 18 months to give us about another 20,000 jobs. They cannot keep repeating the same jobs. The key fact here is that that 500,000, the Prime Minister’s original boast, was largely the result of the economic stimuli applied by the outgoing Labour Government. In other words, this Government have done virtually nothing to create private sector jobs, despite all their claims—claims that were repeated again today—that the public sector was crowding out the private sector and that was the problem.
I am not, on the whole, the kind of person who goes in for the Armageddon-like language that one sometimes hears on the left. In fact, I am usually irritated by it; language such as, “We are all going to hell in a handbasket” and “People will be walking in the streets without shoes.” Actually, I am beginning to wonder. At my surgery on Friday, two people came who had both been recently sanctioned as a result of disputed issues about non-attendance at the Work programme. Neither qualified for hardship payments because they do not have dependants. The only thing their local citizens advice bureau could tell them to do in the short term was to go to a food bank.
I did some research on food banks. The Trussell Trust, which many talk about as being a wonderful charity, on its website says that in 2011-12 food banks fed 128,687 people nationwide—100% more than in the previous year. It has more than 200 food banks nationally and it hopes to have one in every town. I do not think I am overly naive, but in my lifetime I thought that this sort of thing was history. I represented an area as a councillor for 16 years, which included a district that ticked all the deprivation indices boxes, and I do not recall a constituent telling me that they had had to resort to a food bank. The only food provision that I was aware of in Edinburgh then was some vans for the street homeless, but not for people who had simply found themselves unemployed.
It must give us food for thought that one of the most rapidly growing charities in our country is one providing food banks. That is not a criticism of the charity or those who volunteer for it; I am sure that they are doing an important job, which is obviously necessary. But what should make us angry is that there is a need for that.
John Hemming (Birmingham, Yardley) (LD): Will the hon. Lady accept that the Trussell Trust was set up with food banks in the first Blair Government?
Sheila Gilmore: I am not saying it was not set up then. I am giving its own information that in the year 2011-12, it increased the number of people it was helping by 100%.
One of those constituents has been sanctioned for six months. Unless she succeeds in an appeal shortly, she will not get jobseeker’s allowance until November this
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year. She has very little family support for circumstances in her life. Do any of us sitting here have any concept of what it is like to feel that they will have no income for that length of time? I do not think that we have any concept of what that must feel like. I have also to ask, as she does seem to have certain health and personal problems, what has happened to all the boasts about the Work programme. The Work programme was going to be so personalised. Edinburgh MPs were taken in by one of the providers and told that they would have health professionals and counsellors who would help people with complex needs. I am afraid that it does not appear to have helped that particular constituent. Someone like that is collateral damage from a Government who frequently talk as though the problem that faces this country is that there are too many people on out-of-work benefits, as if their obduracy or the fact that benefits are somehow too high is causing the economy to flatline.
Only this weekend a Scots business man, Tom Hunter, was widely quoted as saying that Scots were addicted to welfare. He had just returned from China, where the economy is booming, and explained that the biggest worry there is that people in China might suddenly decide that they wanted high levels of welfare. I find that fairly incredible. I cannot really picture the situation—Tom Hunter and, presumably, a Chinese business man discussing how the biggest threat to China’s economy is welfare—but that is what he tells us.
Apparently, it is not just workers who are not working hard enough; now their employers are not working hard enough either. We know that some of those employers are sitting on capital, but why do they not want to invest it? For those running businesses, surely the major reason why they do not want to invest their capital and earn more money is that there is no demand for their products or services. If there is no demand, we have a big problem. Simon Jenkins, writing in The Guardian on 9 May, stated:
“Europe’s collective response to the 2008 credit crunch ranks with the treaty of Versailles and German reparations among the great follies of history… Those who warned at the time that the coalition risked double-dip recession by over-suppressing demand have been proved right.”
What is the solution? Simon Jenkins, like the Opposition, thinks that the British economy needs three things: demand, demand and demand. It needs cash in pockets and cash in tills. It needs the old Keynesian salve: money in circulation. That is what our plan is about: cutting VAT, removing the cuts to tax credits in order to put money back in people’s pockets, reducing the rate of VAT on home improvements, and all those housing proposals that my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) explained so eloquently. If we put that investment into housing, we would not only give badly needed homes to the people who need them, but create the jobs that would boost demand in local economies. That is what we need to do, and there is no excuse for not doing it. In Edinburgh we have the land and the planning consents; we just need the funding.
9.7 pm
Ian Lavery (Wansbeck) (Lab):
Thank you, Mr Deputy Speaker. It is always a privilege to speak in a debate when you are fiftieth out of 50 Members, having rewritten your speech four times, for three minutes, five minutes,
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eight minutes and then 10 minutes, which is absolutely fabulous, and having listened to the discussions and heard everything you wanted to say and every punchline in your speech used by other people. I think that is called parliamentary democracy.
The country was desperate for a Queen’s Speech last week that included a boost for jobs and a boost for growth. It was interesting to see the Government come forward with a plan B at the weekend, subsection (1) of which tells businesses and hard-working people to stop whingeing and get on with it, and subsection (2) explains to them that if they do not do so the Government will change workers’ protections at work and sack them. That is the change of direction we got from the Government.
The coalition Government’s proposals outlined in the Queen’s Speech do nothing to help my constituents, particularly those looking for work, the ordinary families who are already suffering and having their living standards squeezed, and the huge number of mainly small and medium-sized enterprises and businesses that are struggling even to survive, never mind expand.
In my constituency, which was already experiencing extremely high levels of joblessness and deprivation, we have recently experienced another hammer blow, with the forthcoming closure of Rio Tinto Alcan, the largest private sector employer in Northumberland. That has been followed by announcements involving a number of small and medium-sized enterprises, including Remploy.
Remploy factories were set up after the second world war to look after disabled people and to ensure that they could work in a particular environment and do meaningful work, but now we are looking at the closure of 54 such factories throughout the country. It is an absolute outrage that in 2012 we are about to put more than 2,500 disabled people on the dole. If anybody dares to suggest that it is the best thing for them, they had better have asked the individuals involved. I meet them regularly, and believe me, they have no future in terms of employment in this country.
The closure of Rio Tinto will have a massive and devastating impact on south-east Northumberland and what can only be described as an already fragile economy. Some 3,250 jobs will probably be lost, including 650 direct high-quality jobs and 2,600 in the supply chain. As I have said before, those are highly paid private sector jobs in an area that has already been hammered by the Government’s public sector job cuts. There will be a loss to the economy of £120 million on 2007 prices, including £60 million in the immediate vicinity of the plant. There will be an extra cost to the state of £10 million per annum in terms of state benefits and the loss of business rates.
Mr Deputy Speaker, you and many in the Chamber will have heard the saying, “It’s the economics of the madhouse,” and here we see it once again. The loss of the largest private sector company in Northumberland will be felt sharply by coalfield areas in my constituency. Of working-age adults in my constituency, 28%—one in five—are in receipt of out-of-work benefits; that is almost three times the national average. One in three children aged four or under is living in poverty. This is 2012. Those figures are absolutely damning of any Government. Let me tell you, Mr Deputy Speaker, I am ashamed to be a politician when one in three children under the age of four do not have enough even to feed their bellies to go to school. It is an absolute outrage.
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Julie Hilling: What was my hon. Friend’s view when he heard the Prime Minister say:
“You call it austerity, I call it efficiency”?
Ian Lavery: If I was not in the palace of varieties and the great hall of democracy, I would answer that exactly as I would like to.
I have mentioned public sector jobs—500,000 of them. Those jobs have not been lost. They have been torn from the economy; they have been stolen from ordinary people; they have disappeared because of the actions of this Government. Those jobs have been lost because of nothing other than the ideology of an incoming Government. We are desperate for growth, jobs and investment, but what do we have? We have a double-dip recession.
There is good news in my area, with Bernicia and Akzo Nobel having decided to locate there. That is absolutely fantastic, and I hope that it will continue, but there are problems with the regional growth fund and with not distributing money fast enough. Statistics announced at the weekend suggest that each job costs some £33,000, but that is not what it was like under the old regional development agency system. We had a shining light—a beacon—in One North East, which was providing brilliant results for the region. Sadly, though, it was abolished within weeks of the Government being elected.
If new companies are to be encouraged into our region, they need to be incentivised. Enterprise zones are fine, but if an area is not part of one and is surrounded by them, it will have huge problems, as we do in Wansbeck. The enterprise zone needs to be extended up through the Alcan site and around the town of Ashington, but the capital allowances must come with that extension. It is no good extending enterprise zones without capital allowances; it may as well not happen. I appeal to Ministers to consider extending the enterprise zone in south-east Northumberland around the Alcan site and to bring with that what capital allowances can be afforded.
We need to protect deprived areas from the effects of the discussions that are taking place in Europe about EU state aid. I urge the Government to give serious consideration to ensuring that small and medium-sized enterprises will still be able to get EU state aid after 2013. That is essential because otherwise we will have a double whammy. We also need infrastructure in south-east Northumberland in the form of the Ashington, Blyth and Tyne rail line, so that we can get to and from other areas.
The Queen’s Speech offered little to my constituents. We have done everything we can to try to get them on to an even keel. I simply ask: do this Government care?
9.16 pm
Stella Creasy (Walthamstow) (Lab/Co-op):
I was very challenged earlier when I heard the hon. Member for Blackpool North and Cleveleys (Paul Maynard)—I am sad that he is not here—demeaning the contributions of Labour Members by saying that we thought that this was a “state of the nation” debate rather than a debate on the Queen’s Speech. That struck me as a powerful example of the strong differences between Labour Members and Government Members when looking at our country. While Government Members believe that we are just
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bystanders to the crises that are unfolding across kitchen tables, in businesses and in our economies at local and national level, Labour Members believe in action. That is why we hear this Queen’s Speech and ask, “What is it doing to act on the central crisis that we now face in our economy?”
We are in a double-dip recession for the first time since 1975. Our economy, which was recovering, has slumped backwards—not by accident, but by design. What is more, there is no end in sight—no happiness to come for our constituents, who are struggling in these difficult economic times. The most optimistic pundits say that we might get growth of about 0.4 %, but the majority are gloomy, with some even saying that the economy will continue to contract. In 2010, this Government inherited an economy that was growing, thanks to an active Government who were seeking consciously and purposefully to intervene to make sure that this country pulled through the economic times we were living in—a Government who invested in our infrastructure and, yes, used temporary tax cuts and looked at how they could grow the economy. What a contrast!
That is the context in which we judge this Queen’s Speech, because two years on, things are getting worse, not better, for our constituents and for our country. A range of factors have been blamed for that situation, whether it be snow or the royal wedding; this afternoon I even heard that television was the problem. It is as though the Government cannot see what is staring them in the face—the fact that the impact of the decisions that they have made and the way in which they are dealing with the deficit has exacerbated the situation.
Whether it is about the future jobs fund, which they have had to reinstate because it is bad value for money to have nearly 1 million young people out of work, or the fact that only 30% of the cuts have taken place so far, which means that the problems are going to continue, they simply do not get “it”. “It” is a very simple issue—the crippling lack of confidence that consumers and businesses are now experiencing. I have spoken at length in this House about consumer confidence and my concerns about how consumers are behaving in the present economic situation. That is why tonight I want to talk about businesses, which cite the lack of consumer demand as the biggest barrier to growth.
Many hon. Members have talked tonight about the problems in our economy as a result of firms sitting on £750 billion worth of cash and deposits. They are not investing because they have no confidence in this Government and how they are managing the economy. All the prophecies about austerity have become real, because everybody is shutting up shop, such is the uncertainty. Businesses themselves say, “We will continue to be on the critical list until companies get their chequebooks out.” That is the problem that Britain faces and this Queen’s Speech should be addressing it.
As all hon. Members have mentioned, John Cridland, the director of the CBI, said that he wanted a Queen’s Speech to help businesses grow and create the jobs that we all want. Even the Secretary of State himself admitted that we needed a compelling vision, for our economy and for the future, that we could all fight for, but there has to be more to drive economic growth in this country than hope that the Olympics or the jubilee might do it. It is striking that the contrast between a bystander Government and an active Government is shown in the
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concept of growth. The previous Government had Ministers dedicated to a plan for growth, but it has taken this Government two years to get round to a growth plan, and what do we see? It is small beer and not the kind of thing that will challenge the £750 billion sitting there waiting, not being used. That is why businesses have been so disappointed.
Let me mention just one example. The hon. Member for South Down (Ms Ritchie) spoke passionately about our green economy—a massive growth industry that in 2009-10 was worth £116 billion. We were sixth in the global economy in this regard, but where are we now? What has happened to our green economy? What does the green investment bank really offer? It offers little to change the situation, let alone solve the problems caused by cutting off the solar panels tariff.
Yes, there are good things in the Queen’s Speech, including measures on parental leave and shareholders’ rights, but they are not the drivers of growth that we need. We need something stronger. Many hon. Members from all parties have made many serious points about things that we could do to drive growth, so let me offer some ideas that have not yet been talked about.
First, this Government need to learn from America and Germany and create a state investment bank that could lead to businesses having the cash they so desperately need. This would not be one of my speeches if I did not talk about credit and the problems caused by a lack of credit or by expensive credit. Those problems are now affecting businesses, too. There is no more damning indictment of this Government’s failure to manage our economy and support businesses than the fact that the legal loan sharks have stepped into the breach. Ministers should be ashamed that Wonga sees a business opportunity in the failure of Project Merlin. This Government could have used the Queen’s Speech to correct that. They could have intervened and set up a state investment bank—22% of small businesses say that access to finance is also causing them problems—but they did not do so.
Julian Smith: Does the hon. Lady welcome the Government’s national loan guarantee scheme, which will reduce the cost of loans to those small businesses that apply through it?
Stella Creasy: The hon. Gentleman does not understand the scale or the severity of the problems that businesses are facing in getting hold of credit, whether that is because the loan system is not working or because there has been a contraction in the amount of money in our economy in the past year. In part, that is because people are paying off loans and the banks are not lending to people—indeed, one of the banks in whose operations we have the most say, Royal Bank of Scotland, has failed substantially to do so. Whether for consumers or businesses, credit at an affordable rate just is not there to allow them to grow and give them the confidence to invest in the plant and materials that they need to help get our economy going again.
In addition, I want the Government to take seriously the role that small businesses could play in our economic revival. All hon. Members have mentioned that this evening. We know that two thirds of new jobs in economies such as ours come from small businesses—those employing
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fewer than 50 people. We needed a Queen’s Speech for small businesses, announcing an arsenal of measures to help them and a tough look at what could be done in the tax and regulatory regimes to help start-ups and small and medium-sized enterprises—perhaps even a start-up business Bill. Where was that? Where was the recognition of the different needs of small businesses, as opposed to big businesses?
We could even have gone further and used sunset clauses to give tax breaks in this financial year alone to help unlock that £750 billion—money we need to be out there, being invested in our companies and our communities. However, it is not going to be out there, because this Queen’s Speech will not deliver the kick-start that our economy so desperately needs, as shown in the picture painted by my hon. Friends the Members for Birmingham, Erdington (Jack Dromey) and for Edinburgh East (Sheila Gilmore) of the human cost of doing nothing and of being bystanders as our economy continues to deteriorate. There are consequences for our communities and our country.
This Queen’s Speech could have been a brilliant masterclass in thinking creatively and strategically about the role of Government in investing in our communities and in getting our economy to grow, but it was not. I believe the country will view the economy and the Queen’s Speech as people do when they see a toddler holding a hammer—with a deep sense of foreboding about the damage that it will do to anyone within its radius and no sense of how to stop it. I really hope that the Government will think again about both how they deal with people’s need to access credit in our communities and how they need to support small businesses. I fear that the Queen’s Speech does not meet the test that the country so desperately needs it to meet.
9.25 pm
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab): There has been a lot of doom and gloom today, I must say. I was sure that someone on the Government Benches would mention the fact that retail sales bounced back by 1.8% in March 2012. The House of Commons research paper, “Economic Indicators, May 2012”, states on page 20 that that was down to the fact that:
“Unusually high automotive fuel sales were a major contributor to retail sales growth in March.”
I think everyone in the Chamber knows why that was.
So many chief executives have been sacked in recent weeks for failing to deliver the performance promised by their high salaries that we might think the brief reference to directors’ pay in the Gracious Speech was unnecessary, or more appropriate to current Ministers. Apart from that, there was little in the Gracious Speech about business, investment, employment or growth. In fact, since the speech last week, the Government’s lack of vision for business has degenerated into an attack on entrepreneurs.
Aviva, Trinity Mirror and AstraZeneca shareholders have recently indicated that they have had enough of their chief executive officers. Why now? It is obvious that those shareholders sensed that they were beginning to lose control of the companies that they owned. The parallels between business and the Government are only negative in that respect. More importantly, is that situation just about executive pay, or is it a further
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indicator of corporate financial hoarding? Shareholders are savers who want great returns, of course, but what are the Government doing to get shareholders to increase their intention to part with their profits for further business investment? The real economic impasse is in getting companies to part with their hoarded billions of pounds, and that was not addressed in the Gracious Speech.
BT recently paid off a considerable deficit in its pension scheme. It paid £3 billion by the end of March and will make nine annual payments of £325 million. BAE Systems had a £2.1 billion cash pile, yet in the past two years it has cut 22,000 jobs, 3,000 of them in the UK, while returning £2.2 billion to shareholders. The story is similar at the oil services company AMEC, which ended 2011 with £521 million of cash and unveiled a £400 million share buy-back programme. Last year, shareholders’ dividends paid by listed companies jumped by 19% to a record £67.8 billion, according to Capita Registrars, and they are expected to hit a new high of £75 billion this year. Jonathan Bye, chairman of the Food and Drink Federation’s SME forum, says:
“Companies like Nichols have plenty of cash…the irony is that the big manufacturers are sitting on cash because they just don’t know how to use it.”
After this Gracious Speech, they still will not.
The Government’s ideological strategy is to focus on an enterprise and regulatory reform Bill that is supposed to reduce burdens on businesses by repealing unnecessary legislation and limiting state inspections. The argument is the same as ever—shrink the state, deregulate and get out of the way of the private sector. They say that it worked perfectly in the years following the 1990s recession and the early 1930s depression. It is expansionary fiscal contraction, the antithesis of Keynesian stimulus spending.
We have had two years of this already. Despite the evidence provided by the double-dip recession, of which Opposition Members forewarned, the resounding message of the Gracious Speech is “more of the same”.
Sheila Gilmore: It is interesting that my hon. Friend mentions the parallel with the 1930s. One parallel that worries me is that, as in the 1930s, there is a huge difference between different parts of the country. Does that perhaps explain why so many members of the Government are apparently unaware of the effects of the recession—they represent parts of the country that are not suffering as badly as others?
Tom Blenkinsop: My hon. Friend makes an excellent point. Before the general election, the now Prime Minister stated that the north-east economy needed serious rebalancing. Actually, the north-east is the lead region for exports, with more than £13 billion a year. If the Labour Government got everything so economically wrong, why, despite the overarching burden of the public sector, has the north-east managed to beat every other region in the country? I am bemused, foiled and perplexed by that one. The Prime Minister might want to come to the Dispatch Box on Wednesday and explain it to the workers of Alcan and other industrial workers in the north-east let down by the current economic policy.
Business investment is actually shrinking, and in the final three months of 2011 fell by a whopping 5.6%. It is the single biggest drag on economic growth, with a
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negative gravitational pull of 0.5%. Business investment is still more than 15% below its pre-recession peak in 2008. Unlike in the 1990s recovery, when private sector hiring employed four people for every one public sector job cut, business recruitment is extraordinarily weak. For evidence of that, we only have to look at the private sector last year. Admittedly, it took on 226,000 staff in full-time but mostly part-time positions, yet figures from the Office for National Statistics show that 270,000 public workers were laid off. The Government’s official forecaster, the Office for Budget Responsibility, said that 2012 should be the year of the business renaissance. Of the weak 0.7% growth the OBR expects the UK to eke out over the next 12 months, 0.6% is scheduled to come from business investment—the single largest contributor.
We have been here before. Last year, the OBR forecast that business investment would deliver 6.7% growth, but it did not. Instead, it shrank by 2%. According to the Bank of England, 2012 is not looking very encouraging either, despite the OBR’s optimism. Its recent agents survey for February found that
“investment intentions continued to weaken, suggesting little growth in spending on capital over the next 12 months”.
That is mirrored by Barclays Capital’s Simon Hayes, who said that the OBR’s projections required a level of spending not seen in 30 years.
Essentially, my point is that the Queen’s Speech does not introduce any policy or legislation to enable this Parliament to get hold of the £750 billion of cash under the corporate mattress to invest in Britain and ensure we have a genuine rebalancing of our national economy.
9.31 pm
Rachel Reeves (Leeds West) (Lab): This has been a valuable debate on Her Majesty’s Gracious Speech, with 44 speeches from the Back Benches, which reflects the concerns raised in all our constituencies about jobs, business and growth. We heard 26 speeches from the Opposition and 18 from Government Members. My hon. Friend the Member for Wansbeck (Ian Lavery) said about 20 minutes ago that at this stage in the evening it is difficult to say anything new, given that so many people have made the points already. We have heard several thoughtful and provoking interventions. We even had a song from my hon. Friend the Member for Blyth Valley (Mr Campbell), which livened up our afternoon.
Mr Ronnie Campbell rose —[Laughter.]
Rachel Reeves: I am happy to take an intervention if my hon. Friend wants.
The Chief Secretary to the Treasury and the Government have serious questions to answer after this debate, because there remains concern about the stewardship of the economy. As my hon. Friends said, particularly my hon. Friends the Members for Bethnal Green and Bow (Rushanara Ali) and for Huddersfield (Mr Sheerman), my right hon. Friend the Member for Birkenhead (Mr Field) and my hon. Friend the Member for City of Durham (Roberta Blackman-Woods), there is a lack of vision, leadership and imagination in the Queen’s Speech on the economy and business. The hon. Member for Cleethorpes (Martin Vickers), too, said that the Government needed a new narrative.
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The facts are undisputed. Our economy is in recession—the first double-dip in four decades—with unemployment rates too high and business investment too low, although to listen to some speeches from Government Members we would think that the economy was booming, with businesses spoilt for choice over whether to invest. In contrast, we have heard excellent speeches from Members on both sides of the House about the concerns raised by our constituents. We heard particularly powerful contributions from my hon. Friends the Members for Llanelli (Nia Griffith), for Houghton and Sunderland South (Bridget Phillipson), for Newcastle upon Tyne North (Catherine McKinnell) and for Edinburgh East (Sheila Gilmore)—on the human stories behind the raw statistics, sound and successful businesses shutting up shop because no one is buying, families facing rising bills, rents and mortgage payments while wages are not keeping pace, school leavers and university graduates losing hope as months on the dole turn into years.
However, the Government’s legislative programme seems utterly disconnected from those realities. There was no mention of the new jobs that we need, and nothing to turn round the crisis of more than 1 million young people being out of work. The modest measures that the Government have claimed will help struggling families and businesses are turning out, under examination, to be woefully inadequate to the task with which we are confronted. Perhaps it is because, as the Foreign Secretary said yesterday, the Government think that it is just not their responsibility and that the reasons for the recession are to be found not in their own failure, but in the fact that the rest of the country is just not working hard enough. That is a view backed up by the Business Secretary, who referred to the Foreign Secretary’s remarks as “commercial diplomacy”, and by the hon. Member for Salisbury (John Glen), who criticised businesses for their ill-advised criticism of Government policy. I am not surprised that the Foreign Secretary’s comments have been met with incredulity by small business owners, who are working every hour of the day to keep their books in balance.
Julian Smith: Does the shadow Minister welcome the £50 billion increase in exports in 2011 from the UK to international destinations?
Rachel Reeves: I am sure that businesses welcome the fact that sterling has depreciated, which has made it easier to export, but that is because of the Bank of England’s decision to cut interest rates, under the last Government, and quantitative easing, also under the last Government.
We have seen another example of how out of touch Government Members seem to be with the reality facing businesses, families and young people. School leavers and graduates are filling out dozens of job applications week after week—should they be working harder? Millions of people who would work extra hours if the work was available; families feeling more squeezed by the month, worried sick about how to make ends meet—is it their fault that we are back in recession? Should they be working harder?
Let us remind ourselves—for the Government seem to be in denial—that the backdrop to this debate is the first double-dip recession that the UK has experienced
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in 37 years, an outcome that the Government assured us would not happen. However, less than two years after boasting that the British economy was
“out of the danger zone”—[Official Report, 15 December 2010; Vol. 520, c. 901]
and was now a “safe haven” from the storms raging through the global economy, the Government have succeeded in steering us into a recession of their own making. They have tried to blame the instability of the eurozone, but I point them to the European Commission’s spring forecast, which says of the UK economy:
“The main cause of weakness in 2011 was household consumption, which contracted for four consecutive quarters…Investment, which had been expected to contribute positively to growth, actually fell by 0.6% in the final quarter of 2011 and by 1.2% over the year.”
Indeed, contrary to Government claims that storm winds from the continent blew their plan off course, the European Commission confirms that for the UK:
“Net exports were the main source of growth in 2011, contributing 1% to GDP growth.”
We should therefore be in no doubt and under no illusion: this is a recession made in Downing street.
With the eurozone now teetering on the brink of another downward spiral, the real worry is that we have yet to feel the full effect on the UK of the economic turbulence on the continent. The Business Secretary is right to warn that the worst may be yet to come, which makes it all the more serious a failure to have put the UK economy in such a weak position to withstand further deteriorations in financial market confidence and export demand. As my right hon. Friend the shadow Chancellor warned over a year ago, when a hurricane is brewing, we do not rip out the foundations of the house, but that is exactly what the Government have done, and the hurricane is now gathering force.
Let us look at what this recession means for jobs and business in our country. The latest jobs figures show that unemployment remains at a 17-year high. Youth unemployment is at more than 1 million—an issue raised in today’s debate by my hon. Friends the Members for Birmingham, Selly Oak (Steve McCabe) and for Birmingham, Erdington (Jack Dromey) and by my right hon. Friend the Member for Knowsley (Mr Howarth). The number of 18 to 24-year-olds claiming dole for more than six months has gone up by 115% over the past year. The number of those claiming for more than 12 months is up by 213%. In the Prime Minister’s latest desperate dissimulation, the austerity he is inflicting on the country is now called simple efficiency. However, I do not see anything efficient about presiding over rising youth unemployment, as my hon. Friend the Member for Walthamstow (Stella Creasy) also pointed out.
There is surely no greater waste than the waste of youth unemployment. It is a waste of talent and of life chances that will cost our economy and our Exchequer for decades to come, as the commission headed by my right hon. Friend the Member for South Shields (David Miliband) set out so lucidly in its report. There is no more egregious an example of Government mis-spending than the billions that they are spending on benefits—the cost of their own economic failure. They are now borrowing £150 billion more to cover rising benefit bills and the loss of tax revenues as businesses go out of business.
Julian Smith: Will the hon. Lady give way?
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Rachel Reeves: I have already given way to the hon. Gentleman once this evening.
Meanwhile, caught between the pincers of a squeeze on lending and horrendous trading conditions, more and more businesses are going under. The Government cannot create jobs, but, as hon. Members on both sides of the House have said, they can and should do more to create the right environment for job creation. That is what has been so lacking in the Budget and in the Queen’s Speech.
Figures released by the Bank of England last month show that, in February, bank lending to companies fell by £4 billion—the sharpest drop for more than two years. Meanwhile, the Nationwide consumer confidence index fell by nine points last month. The inevitable result is that insolvencies are rising and rising. In the last three months, we saw 4,303 insolvencies in England and Wales alone—an increase of 4.3% on the same period a year ago, and the highest figure since 2009. The lack of policies for growth were highlighted today in thoughtful contributions from my right hon. Friend the Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) and my hon. Friends the Members for Blyth Valley and for Wansbeck.
The businesses that are staying afloat are doing so by battening down the hatches. The latest industrial production numbers show a further decline, and we now know that construction output fell by 4.8% in the first quarter of this year, suggesting that the initial estimates of first quarter GDP, if anything, understated the extent of the economy’s contraction. But the truth is that, whether they are revised up a decimal point or two, or down, the statistics only confirm what we should already know from talking to families, businesses and young people in our constituencies.
Families and businesses desperately need the Government to get a grip and get us out of the deep hole that they have dug us into. Instead, we have a programme of Bills that lack any sense of urgency or, indeed, relevance to the reality of life for most people in this country right now. The Prime Minister and his Cabinet seem to be living in a parallel universe. Indeed, the only person whose employment prospects the Prime Minister seemed to care about was the head of News International. I can tell him that the million people who have lost their jobs since he came to power do not need a text message telling them to keep their heads up. They need a real plan for jobs and growth, and a Government working night and day to find ways to help them to get by and to get on in life.
This Government give the impression that there is nothing they can do, and that we should just resign ourselves to years of hardship while waiting for something to turn up, but the reality is that a Government who really cared could do so much more to make a difference to the lives of our constituents. Labour Members have made proposals that could help to turn our economy around, and that could help businesses struggling to break even and families struggling to make ends meet. Why will the Government not implement a national insurance holiday for small firms taking on extra workers, to help businesses struggling to survive and young people desperate to get into work? Why will they not bring forward investment in vital infrastructure projects, so that we could create new jobs in the construction sector at the same time as securing our future economic strength?
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Why will the Government not reverse their damaging VAT rise? That would boost business and consumer confidence, and kick-start the growth that we need to get the deficit down. Why have they refused to repeat the tax on bank bonuses, so that money squandered on bonuses by banks that are not doing their bit to get our economy growing could be clawed back and put to better use, funding 100,000 jobs for young unemployed people and the construction of 25,000 new and affordable homes?
Why have the Government not taken the opportunity of this Queen’s Speech to announce legislation that could protect and improve the living standards of families feeling the squeeze—for example, by creating a more competitive energy market, with guaranteed low tariffs for 4 million people over the age of 75, by stopping train operators clobbering commuters with high fares, and by empowering consumers with new rights against rip-off surcharges by banks, airlines and pension providers? As my hon. Friends the Members for West Bromwich West (Mr Bailey) and for Stoke-on-Trent Central (Tristram Hunt) have said, why was there no Bill in the Queen’s Speech on higher education or on co-operatives? What do we get from this Government? Just the hope that something will turn up—a hope that their own inaction and inadequacy will spur the British people to greater efforts.
This is a legislative programme that falls well short of what is needed. We need investment flowing into energy-efficient infrastructure and green technologies. Instead, we get a green investment bank that has nothing to invest. We need action to bring responsibility and restraint to the boardroom, ending unjustifiable pay packages that reward failure, but the Government’s proposals fall far short of what is needed. While this Government state that the priorities of the Queen’s Speech are economic growth, deficit reduction and help for businesses, there is nothing to boost bank lending to small businesses, nothing to help hard-pressed families and nothing to turn around the tragic rise in youth unemployment.
In conclusion, we heard great claims for this legislative programme—a Queen’s Speech that was supposed to mark the re-launch of this coalition, a plan of action that the Prime Minster said was about supporting growth and business, and giving a helping hand to families and those he called the “strivers”. The reality is, however, that people are striving to find anything in this programme that lives up to the rhetoric. This is a Government whose idea of a growth strategy is giving a tax break to millionaires, while cutting tax credits for those working for modest wages.
Having choked off the recovery and taken our economy back into recession, the Government who first blamed the snow, then the royal wedding and the eurozone now seem to be blame everyone but themselves for not working harder. The truth is that it is this Government who need to work harder. It is time the Prime Minister started taking responsibility for the recession he has created. It is time the Prime Minister started taking responsibility for turning our economy around. Yet there is precious little in this legislative programme to suggest that the lessons have been learned, and precious little to stop the economy from sinking further into recession. There is no sign that the Government understand the scale of the task before them, and nothing to reassure the businesses and working people of this country that we have a Government who are up to the job that now confronts us.
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9.46 pm
The Chief Secretary to the Treasury (Danny Alexander): This has been a good debate, with many contributions from all parts of the House. I would particularly single out the contributions of my hon. Friends the Members for Solihull (Lorely Burt) and for Skipton and Ripon (Julian Smith), and of the right hon. Member for Birkenhead (Mr Field), who I see in his place.
Towards the end of the debate, the hon. Member for Wansbeck (Ian Lavery) said how difficult it was to prepare his speech in the light of the fluctuating lengths of speeches allowed for Back Benchers. It is perhaps a bit like dealing with a fluctuating economic forecast. Nevertheless, the hon. Gentleman made some important points, and I would like to respond to a couple of them. In particular, he spoke about the need for enterprise zones in Northumberland. As his hon. Friend the Member for Blyth Valley (Mr Campbell), who is sitting next to him, already knows, if a strong case can be made to include a particular area such as the land around the port of Blyth in the north-east local enterprise partnership, as it was at the time of last year’s autumn statement—it should be noted that some enhanced capital allowances might also be available—it should be made, and we will listen very carefully to it. The hon. Member for Wansbeck was right to say that these enterprise zones can play a role in helping to support economic development in places affected by the sort of job losses that he described in his constituency. I urge him to work with the LEP to make that case.
Mr Ronnie Campbell: I am led to believe that a scheme from the port of Blyth has been put forward to the Minister. I hope he now has it on his desk.
Danny Alexander: Not only has a scheme from the port of Blyth been put forward, but the inclusion of several areas of land around the port in the enterprise zone was referred to at the time of the autumn statement. I gather that a discussion is going on within the north-east local enterprise partnership about the sites on which it would like to see the enhanced capital allowances deployed. I think the hon. Member for Wansbeck had a view about an additional site that he would like to be included in the enterprise zone. I encourage him to work with the LEP to make that case, as I said. I hope he will take the opportunity to present that argument to the Government in due course.
The hon. Member for Blyth Valley also expressed support for the green investment bank, whose establishment is one of the key measures in the Queen’s Speech that could play a part in boosting the economy. I do not know whether he did so in song, because I was not present for his speech. Given the potential importance of the renewables sector to his part of the world, I hope he agrees that the bank could contribute to the investment that it needs, and that the substantial £3 billion capitalisation that we provided for it in the spending review will enable it to invest in precisely the sectors that he mentioned. Those sectors were also mentioned by many Government Members who recognised that the green investment bank was an important initiative, as, indeed, is the regional growth fund.
Listening to the shadow Business Secretary talk about the regional growth fund, I concluded that he had picked up the wrong end of the stick, although I must
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add in fairness that his tone was not reflected in speeches on the subject from other Members on both sides of the House. The National Audit Office report made it clear that the fund had created or protected some 328,000 jobs, which is a good use of public funds. What is more, as the hon. Gentleman will see from the evidence that has been provided, for every pound that we are spending on the regional growth fund, some £6 of private investment is being unlocked. In many cases in which public money has not yet started to flow, private investment is already taking place because businesses know that they have access to the fund. I think that that is a great success story about support for investments throughout the country. Certainly we on the Government Benches are very proud of what the fund is achieving, which is why we chose to give it additional resources last year.
Catherine McKinnell: I thank the Chief Secretary for giving way, and also for his generosity in addressing some of the concerns expressed by Members representing constituencies in the north-east. The regional growth fund would also be useful in providing access to European regional development funding. Has the Chief Secretary an update for north-eastern Members on the £120 million that is yet to be drawn down?
Danny Alexander: The hon. Lady has made an important point about the use of European regional development funding, which we have been considering in connection with the regional growth fund. I am afraid that I cannot give her an update on funds for the north-east, but I will ensure that the Minister responsible for such matters writes to her with one.
Mr Umunna: The facts that I gave earlier about the regional growth fund came straight out of the National Audit Office report. Am I right in saying that the Chief Secretary has denied that the report said that only about 41,000 jobs could be created under the scheme? Was I also wrong in stating that the report was very clear about the fact that, in some cases, the cost of each job would be up to £200,000?
Danny Alexander: On the second point, the hon. Gentleman is clearly wrong.
Mr Umunna: That is what the report said.
Danny Alexander: If the hon. Gentleman will stop heckling from a sedentary position and listen to the answer for once, I will do my best to deal with his question.
In the individual case in which the £200,000 figure was given, it was given before the due diligence phase, as a Member whom I could not identify has just pointed out from a sedentary position. If the project reaches its final stages, it will involve a cost per job much closer to the average. The 41,000 figure was a mechanical estimate for which a model was used, whereas the 328,000 figure that I gave is based precisely on information provided by successful applicants on the number of jobs that will be created and safeguarded by the regional growth fund. I think that, rather than sneering at the fund, the hon. Gentleman should recognise the important contribution that it is making, and the important contribution to economic recovery that is being made by the private sector businesses that it is supporting.
Mr Umunna: Will the Chief Secretary give way?
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Danny Alexander: I will give way once more, but then I must make some progress.
Mr Umunna: Following the first two rounds, what percentage of the successful bidders are still awaiting their moneys?
Danny Alexander: I do not have that information to hand. However, the point I made earlier, which he ignores, is that in many cases where the regional growth fund has been awarded, the private investment takes place well in advance of the public funds being needed. The measure he seeks to use of who has received public funds is therefore not necessarily the best measure of the investment that has taken place, quickly stimulated by the award of regional growth funds. If he looks around the country, he will see many examples of private sector businesses that have been awarded moneys from the regional growth fund and have started their investments well in advance of public funding arriving, because that is how their projects have been planned. If he were doing his job properly, he would understand that that is the way in which many businesses operate.
We have also heard a number of comments about the banking Bill. Indeed, strong support for that Bill was expressed on both sides of the House, and there was support, too, for the strong recommendations of the Independent Commission on Banking.
Mr Redwood: Has the Chief Secretary noticed the latest forecast, which says total City bonuses are likely to be only £2.3 billion this year, as opposed to £11.5 billion at the peak, under the Labour Government? Will he consider representations in favour of a bankers’ bonus tax in the light of how little revenue it will raise compared with the original forecast?
Danny Alexander: I was about to come on to the mess that the Labour party made of our economy, but the right hon. Gentleman’s question causes me to bring those remarks forward. One of the most calamitous failures of the last Labour Government was the complete failure to regulate the financial sector and to control the excesses that built up in the banking system, and the figures he gave are just one example of that. The banking Bill will implement the reforms that are necessary to deal with some of the excesses and, more importantly, to protect the taxpayer and the British economy from the sorts of problems that previously arose. It was very striking that in neither Labour Front-Bench speech did we hear any apology for the previous Government’s failure to regulate the banks properly, just as we heard no apology for the mess they made of our public finances and the many other mistakes they made, too.
Rachel Reeves: Will the Chief Secretary give way?
Danny Alexander: No. I have given way to the hon. Lady’s Front-Bench colleague three times, and I am now going to press on. I have only two minutes left, and she used up plenty of time.
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There were a number of speeches about the groceries code adjudicator, including by the hon. Member for Macclesfield (David Rutley) and my hon. Friend the Member for St Ives (Andrew George), who played an important role in promoting the idea of the GCA and rightly welcomed the fact that the Government will take that forward. A number of comments were made, especially by Opposition Members but also from the Government Benches, on the enterprise and regulatory reform Bill. By and large, its measures on directors’ pay were welcomed, although concerns were expressed, particularly by Labour Members, about the proposals on employment law. The hon. Member for Bolton West (Julie Hilling) made that a key point in her speech, although I noticed that she welcomed the substance of the measures in the Bill, which are to do with providing more options before a tribunal is reached to enable complainants to resolve their case without the need to go through what she rightly describes as an often painful and expensive process. It is important that those measures are carried forward, and they will make a difference for many small businesses.
The economic context was an important theme in this debate, and Members on the Government Benches are fully aware that addressing the key issues is no easy task in the current economic climate, not least because of the crippling legacy the last Government left to us: a decade of unbalanced growth that left the UK one of the most indebted countries in the world; a decade that resulted in our having the most highly leveraged financial system of any major economy; and a decade that meant the UK entered the economic crisis with the highest structural deficit in the G7. All that meant that the UK was one of the hardest hit countries in the world when the crisis came.
Our recession was among the deepest and our deficit among the largest, which means that our challenge to deliver a sustainable recovery is among the greatest. Let me remind the House that when this Government came into office we inherited the largest peacetime Budget deficit this country has ever faced and the largest forecast deficit in the G20—larger than those of many of the countries mired in the sovereign debt storm in the euro area. It is only because of the decisive and immediate action we took that we have sheltered the UK from the worst of that debt storm.
The measures in the Queen’s Speech represent part of a bold and wide-ranging programme of economic reform: a strategy to rid the economy of the debt burden left by the previous Government; a strategy to secure our stability at a time of global instability; and a strategy that puts private sector enterprise, ambition and innovation at the heart of our recovery. It is the right recipe to clean up the mess that the Labour party left us and to bring this country back to sustainable prosperity.
10 pm
The debate stood adjourned (Standing Order No. 9( 3 )) .
Ordered, That the debate be resumed tomorrow.
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Riot (Damages) Act
Motion made, and Question proposed, That this House do now adjourn.—(Greg Hands.)
10 pm
Mr David Lammy (Tottenham) (Lab): I am very grateful to have the opportunity today to debate this issue, which is very important to my constituents and, I suspect, to many others in London. All of us in this House tonight, and others beyond, have insurance. We value our homes, our possessions and all the things we have worked hard to accumulate, and it is natural that we seek to protect them. Insurance exists to cover unforeseen events. Some events are more unforeseen than others. Although burglaries, house fires and floods are unfortunate in the extreme, they are all possibilities that insurance is intended to cover and they are, to some extent, foreseeable.
Living in a stable democracy such as ours, it is often easy to take the rule of law for granted. Last August, we saw that rule break down, with rioters destroying the homes and businesses of their neighbours, robbing them of not only their property, but their livelihood. In that context, it is the role of the police to maintain order, so it is to the police that we look when that has failed and we have paid the price for failure. Were the police and the state not to foot the bill, the costs would be passed to individuals and traders. That would result in rising premiums and entire communities losing out. It was not the fault of those who saw the riots, so it is right that the state helps to bring them back to a position where they can get on with their lives.
This evening, I wish to discuss four issues, the first of which is the overly bureaucratic and unprofessional manner in which the Riot (Damages) Act 1886 has been administered. The second is the hypocrisy of Ministers, the Mayor of London and even the Prime Minister himself in promising to support Tottenham’s riot damages—
Mr Speaker: Order. May I say to the right hon. Gentleman that he should not refer to identified Ministers using the word “hypocrisy”? He is a versatile individual and he has an extensive vocabulary. I am sure that he can find another way to make his point, and I trust that he will now do so.
Mr Lammy: I am grateful for that, Mr Speaker. May I therefore refer to the extreme inconsistency between the statements made to this House and the promises made to victims shortly after the riots by those I referred to, and what we actually see taking place?
The third issue I wish to discuss is that, under the coalition that champions the big society, philanthropic donations are now counted against riot compensation claims. Finally, I wish to draw attention to the differential treatment afforded to the Metropolitan police compared with that offered to police authorities in Merseyside, Manchester and Salford.