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House of Commons

Friday 10 May 2013

The House met at half-past Nine o’clock


[Mr Speaker in the Chair]

Debate on the Address

[3rd Day]

Debate resumed (Order, 9 May).

Question again proposed,

That an Humble Address be presented to Her Majesty, as follows:

Most Gracious Sovereign,

We, Your Majesty’s most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament.

Jobs and Business

9.34 am

The Secretary of State for Business, Innovation and Skills (Vince Cable): I am delighted to be able to introduce the section of the debate on the Queen’s Speech that relates to economic matters, particularly jobs and business. We will be talking primarily about Bills dealing with national insurance reductions for companies, consumer protection, and the protection of intellectual property, particularly design, as well as some of the carry-over Bills that will have significant implications in relation to banking, workplace change and reform, and shared parental leave and flexible working, which still have to be legislated for. We will also discuss some of the important social measures that have major economic implications, particularly the reforms of pensions and social care, about which my colleague the Secretary of State for Work and Pensions will speak. Of course, these are social changes, but they will have major economic consequences, notably incentivising saving and thereby contributing to long-term economic growth.

It is perhaps useful to focus on some of the comments that business groups made about this agenda. The Federation of Small Businesses responded by saying that it welcomes

“the focus on a stronger economy and measures to help small businesses to create jobs.”

The British Chambers of Commerce said:

“On balance, businesses will welcome the limited package of legislation announced in the Queen’s Speech.”

The CBI was more critical, but made this perfectly valid point, which will be at the heart of the debate:

“You cannot legislate your way to economic growth”.

Indeed, and that is why, in essence, this debate will be about economic policy rather than legislation.

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We need to start with the basic economic context in which we operate. When we are writing the economic history of the past two decades, the story will be one of a spectacular boom and a spectacular bust—15 years of remarkable continued economic growth followed by the worst crash since after the first world war, the two things being intimately connected. The first requirement in approaching this subject is a certain degree of humility. We are in unprecedented conditions, and it is important to acknowledge that there is no simple or easy answer to many of the difficult issues that we have to grapple with. Risks are associated with fiscal consolidation that is too fast and risks are associated with fiscal consolidation that is too slow. There are genuine debates about the best mix of monetary and fiscal policy. There are also serious debates on how we deal with the banks in such a way that they rediscover their appetite for risk but do not do so in a way that destabilises the banking system as before. I hope that everybody in this debate, particularly the Opposition, will approach these very tricky issues recognising the very difficult context in which we operate.

Let me address a few of the questions that the Leader of the Opposition asked in his response to the Queen’s Speech. He asked about jobs, the link between jobs and wages, the very emotive but important issue of migration, and the banking system, which is at the heart of the problems we are dealing with. I will start with jobs.

We have unemployment of about 7.8% or 7.9%. That is about a third of what it was in the great depression of the 1930s, a rather comparable period in our history, but none the less worryingly high. It is useful, however, to make some apt comparisons. In the United States, which has recovered from the crisis much better than any other western country, except possibly Australia, the unemployment rate is slightly less, at about 7.6%. In France, which has had the benefit, if such it is, of a socialist Government, the unemployment rate is 10.6%. In Sweden, which is an interesting case—it is not in any sense shackled by the eurozone and it has had probably the most enlightened welfare and labour market policies of any European country—unemployment is significantly higher than in the UK, at about 8.8%.

Under this Government—perhaps even in the rather partisan atmosphere in which we debate things in this House, we should get a little credit for this—we have seen the creation of 1.2 million private sector jobs; the expansion of manufacturing employment, now at 82,000 after a period of Labour Government in which it collapsed from 4 million to 2.5 million; and private sector employment increasing six times as fast as public sector employment declined.

Mark Tami (Alyn and Deeside) (Lab): The Government talk a lot about the growth in private sector jobs. If jobs are being created, why is the economy showing no signs of growth and just bumping along the bottom? Surely we should be producing more and the economy should be growing.

Vince Cable: That is an extraordinarily naive question in the wake of the phenomenal financial crash that we have had. I do not know whether the hon. Gentleman is familiar with the economic literature, but the econometric data suggest that after the banking crash that Britain experienced we should have lost about 50% of our GDP. We have done well to avert that. We face a difficult set of

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circumstances. It is a remarkable success story that in an economy that is still recovering from such a long economic heart attack, we are generating significant private sector employment growth. That is positive. Alongside that, we have seen the growth of about 250,000 new businesses, which will be the source of employment growth.

Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op): Many of my constituents are in those new private sector jobs, but the hours are limited. Many of them want to work more than the 16 hours or so that they have been given. Has the right hon. Gentleman counted how many of the new jobs are part time, with no prospect of becoming full time?

Vince Cable: The vast majority are in full-time work. The figures show that quite clearly. It is better to be in part-time work than out of work. I hope that there will be some recognition of that.

Mr Kevan Jones (North Durham) (Lab): Does the right hon. Gentleman recognise that when the coalition came into government in 2010 the economy was growing because of the actions of the previous Government? Does he regret cutting capital expenditure straight away and the other mistakes that were made early on, which sent the economy into depression and have caused it, as my hon. Friend the Member for Alyn and Deeside (Mark Tami) said, to bump along the bottom?

Vince Cable: I have said that the cuts in capital spending have been too deep. The Chancellor has acknowledged that and changes were made in the autumn statement and the Budget. The hon. Gentleman seems to forget that the decision to slash capital budgets by half was made by the outgoing Labour Government in 2010.

Julie Hilling (Bolton West) (Lab): How many of the jobs that have been created are so-called workfare jobs in which people are supposedly employed but there is no pay?

Vince Cable: There is no such activity in Britain. There were cases of people working without pay and my colleague, the Secretary of State for Work and Pensions, intervened to stop that practice operating on the back of the benefits system.

We acknowledge that there is one category of people among whom unemployment is worryingly high: young people. The Leader of the Opposition focused on that issue. About 1 million young people are unemployed. That figure is worrying, but we should recall that the level of young people’s unemployment, which is approaching 20%, is virtually the same as the level we inherited.

It is also worth recalling that a third of the figure is made up of full-time students. It has always struck me as a little odd that we regard full-time students as unemployed, but that is what the statistics show. If we strip that out, there is still a significant level of youth unemployment, which is worrying.

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It is useful, as I did on the wider figures, to contrast youth unemployment in this country with that in comparable countries. In France, youth unemployment is 24%, in Sweden, which perhaps should be a role model, it is 24%, in Italy it is 35% and in Spain it is 45%. The Economist, as some Members will know, has been running a series on the global problem of youth unemployment. We share that problem, but in many ways we are outperforming comparable economies.

Mr Steve Reed (Croydon North) (Lab): I hope that the right hon. Gentleman understands that in seeking to justify the unacceptably high figures on youth unemployment he will sound incredibly complacent to long-term unemployed young people in constituencies such as mine, whose numbers over the past 12 months have increased by more than 100%.

Vince Cable: It is not complacent to acknowledge the extent to which we have serious problems, which is where I started, or to compare the country with economies that are suffering similar problems. For those who are rightly focused on unemployment among young people, the simple truth is that long-term youth unemployment rose by 40% in the boom years when the Labour party was in power. Labour Members are therefore not in a strong position to lecture us on how to deal with it.

We have focused on two policy areas to deal with the problem of youth unemployment. I am most closely involved in the growth of apprenticeships and my colleague, the Secretary of State for Work and Pensions, will talk about the other. We have all embraced apprenticeships, including, rather belatedly, the Opposition. There is a recognition among employers and young people that it is an excellent model for training. Under this Government, the number of apprenticeship starts has increased by 86%. There were 160,000 last year. There has been a 42% growth in the number of young people starting apprenticeships. We are making reforms that will improve the system further, notably the employer ownership system, under which apprenticeship training will be channelled through employers so that there is the demand for real jobs. We are also introducing a staged approach through traineeships, so that young people have a route into proper training.

A difficult area is that what has kept unemployment down in the UK is the fact that real wages have not risen. Indeed, they have fallen. That was the main focus of attack from the Leader of the Opposition. We need to understand and explain what has happened. The British economy was hit massively by the financial crisis. We are a significantly poorer country than we were before that time, although we are now recovering. The impact of that has been felt predominantly through the reduction of wages in real terms.

We are trying to mitigate that impact in two major ways. The first is by lifting low earners out of tax, which increases their disposal income even though their pre-tax income may have fallen. The effect of that is that people on the minimum wage are paying half the income tax that they paid before we embarked on that reform. We have also taken 2.7 million out of income tax altogether. Secondly, and this is my direct responsibility, we have ignored the advice from some quarters to abandon the minimum wage or to dilute it. I have followed the advice of the Low Pay Commission on the minimum wage.

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One of the points that the Leader of the Opposition made in his speech—

Clive Efford (Eltham) (Lab): Will the right hon. Gentleman give way?

Vince Cable: I will finish my point and then take the intervention.

The Leader of the Opposition pointed to the apparently low level of enforcement of the minimum wage and the limited number of prosecutions. That worried me at the time, so I checked the history. I discovered that in the last four years of the Labour Government, the number of prosecutions under this flagship policy was two a year. We have therefore maintained a rather similar practice.

I have asked for an interview with the head of Her Majesty’s Revenue and Customs, who is responsible for prosecutions, to establish why the level is so low, because this is a perfectly legitimate issue. I have discovered that a large number of companies are being pursued under civil proceedings, where the maximum penalty is £5,000 a year. The matter is therefore being enforced assiduously, but not through the criminal system. I will establish why we are not doing that and whether we should be doing more to underpin the rights of some of the lowest-paid people in society.

Clive Efford: The right hon. Gentleman has anticipated the point that I was going to make, which was about the alarmingly low level of prosecutions for not paying the national minimum wage. Is most of the enforcement not taking place through trade union activity?

Vince Cable: I am sure that the trade unions play a part in bringing this matter to the attention of the authorities. Every complaint is investigated. Some come from the trade unions and I welcome the role that they play.

Jim Fitzpatrick (Poplar and Limehouse) (Lab): Further to the point that most activity surrounding non-payment of the minimum wage is conducted in the civil, rather than the criminal, courts, has the right hon. Gentleman’s Department made that information publicly available? If not, will he do that so that people can see, and a message can be sent, that the Government will not tolerate people trying to undermine the national minimum wage?

Vince Cable: The hon. Gentleman makes the same point I was making. The Government are pursuing that matter through the civil courts and there are substantial penalties. It is an HMRC task, but I take the point that we should perhaps make the message more easily available. Employers should not get away with the idea that they should ignore this.

Let me say a bit about a difficult area of policy in which issues of unemployment and low pay intersect: migration, which is one of the most important reforms that the Government will introduce. I was hesitant about raising the subject because it is essentially covered by the Home Office, but substantial economic issues are also involved and it is important to refer to them. I was provoked into feeling that we should debate the issue in this context because a couple of days ago I was on the radio on the “Jeremy Vine” programme. I was following a female voice that was ranting on about millions of

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illegal immigrants and the negligence of the Government in letting them all in and not deporting enough people. I thought at the time that it was some fringe party that regarded Mr Nigel Farage as a sort of soggy, left-wing liberal, but I then realised it was the Labour shadow Home Secretary, and I tried to understand where she was coming from. It says quite a lot about the Labour party’s current values that it feels it necessary to apologise for letting in foreigners, but is still reluctant to apologise for wrecking the economy.

I vividly recall a conversation I had with a constituent, shortly before the last general election. She was taking me to task for what she said were millions of illegal immigrants in the country and, rather recklessly perhaps, I decided to debate the subject with her. I asked, “How do you know?”, and she said, “Well, I see them in the high street the whole time.” I said, “Okay, but how do you know they are illegal?” She looked at me and said, “Mr Cable, why are you being so difficult? You know exactly what I mean”, and pointed up the road to the Hounslow mosque. Unfortunately, beneath a lot of the arguments about numbers, that is the prejudice we are trying to confront. We must, I think, make the case—I certainly intend to make it—for managed immigration that has a positive impact on the country, while at the same time providing the necessary level of reassurance.

Meg Hillier: Will the right hon. Gentleman update the House on his discussions with the Home Office about visas for students? The attitude of the Home Office is sending out messages that UK plc higher education is not open for business, and competition from Europe, Australia and other places is mopping up our student intake.

Vince Cable: I spend a good deal of time discussing that issue with the Home Office, and I will come on to students in a moment as they are a crucial category.

In order to clear the decks for an honest discussion of this problem, we must confront the reality that some of the facts, or factoids, used in this context are deeply unhelpful. All parties and commentators use the concept of net immigration as a way of measuring what is happening on that front, but at the heart of that concept lies a logical absurdity. One reason net immigration rises is because fewer British people emigrate—one would have thought it rather a good thing that people feel comfortable living in this country and want to stay here. Net immigration declines if more British people emigrate, which one would have thought is rather a bad thing. We often operate, therefore, with a concept that gives us misleading and unhelpful conclusions.

Similarly, the biggest item in immigration—this relates to the previous intervention—and the biggest category of people regarded as immigrants are overseas students. Of course, overseas students are not immigrants; that is not why they come here. A few stay on—indeed, I probably contributed to immigration statistics 50 years ago when I married someone who was then a student at the university of York. For the most part, however, people come to the UK to study and then go home. They are not immigrants, but by way of a quirk—not in our statistics, but those of the United Nations—they are regarded as immigrants and we must acknowledge that in our debates.

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Setting aside prejudices and anxieties, it is important to acknowledge that in some key areas immigration makes an important and positive contribution to the UK. The first category is the one we have just been discussing: students. Overseas students contribute about £9 billion a year to the UK economy. They also contribute in other ways, but education is one of our most successful export industries. The Government have tried to curb abuses that were taking place. People were using bogus colleges as a route to illegal immigration, and those have been closed. Once we have established the principle of legality, students make a positive contribution, and I would see a negative trend in students coming to the UK as a problem rather than an achievement.

Mr Kevan Jones: I agree with the right hon. Gentleman’s point about bogus colleges. First-class universities such as Durham rely on a lot of overseas students not only for income but to become more cultural and diverse places. Does he agree that some of the language being used gives the impression to students from the middle east and far east that they are not welcome in the UK?

Vince Cable: That should not be the case, and the Prime Minister has gone out of his way—as he did on a recent visit to India—to make it clear that we welcome valid, legal overseas student visitors to the UK. That is our policy and we are encouraging it.

Mr Sam Gyimah (East Surrey) (Con): Will the Secretary of State confirm to the House that there is no cap on the number of students who can study in the UK if they attend and have a place at a proper university?

Vince Cable: That is true and the core of the policy. There is no cap on legal immigration for students, not just for universities but also properly accredited colleges. There is also a right to work subsequently in graduate-level employment, and I hope that that information will be made more widely available.

The second crucial group of people are those with key skills. The Government exempt intra-company transfers from the cap on immigration. There are many key individuals in management, banking and engineering specialties, and in a highly specialised economy we will have more and more demand for services of that kind. The Home Secretary has gone to considerable lengths to remove some of the impediments surrounding visas for people who are needed by British industry and are an important part of our economy.

Meg Hillier: I thank the right hon. Gentleman for giving way yet again. I am MP for Shoreditch and what the Prime Minister calls Tech City. Business after business in that area has raised concerns with me about the challenge of getting visas for key coders and programmers whom they cannot recruit in the UK because we have not yet skilled-up enough—an issue for the right hon. Gentleman’s Department. Because of the Home Office cap, businesses are struggling to get those people in. Does he have any words of comfort for those businesses about his negotiations?

Vince Cable: Yes, I do. It is, of course, important to train people in the UK where possible, and one of the drivers behind the apprenticeship programme is that of ensuring we build up our scandalously neglected skills

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base. Where there are genuine vacancies, it is important that people are able to move freely. If the hon. Lady is able to bring cases to my Department, we will try to work with the Home Office to ensure that those people are able to come.

The third group of people are not immigrants at all but visitors. We wish to maintain our reputation as an economy that is open for business, and millions of people come to the UK to do business, shop, visit family and friends, or as tourists. It is important that they can do that with as few visa restrictions as possible, and where there are visa restrictions, we must ensure they are dealt with quickly and effectively. The Government are currently working hard, particularly with countries such as China, to ensure that the system works better.

Finally, there is the issue of the so-called single market within the EU. When the single market was introduced, it was made clear that one core element is the so-called four freedoms: the freedom of trade in goods; the freedom of trade in services; the freedom of capital movements; and the freedom of worker movements. They are at the heart of free trade. I am often baffled by people outside the Chamber who clamour for free trade with Europe but denounce the free market, because they are the same thing.

Modern trade relationships—there are very few restrictions on physical trade in goods these days—frequently involve people moving backwards and forwards. That is the nature of modern trading relationships, and we must uphold it within the EU.

Mr Steve Reed: Does the Secretary of State recognise that many immigrants are extremely entrepreneurial? One reason the London borough of Lambeth has the highest number of new business start-ups of any borough in the country is the relatively high immigration there.

Vince Cable: That is essentially the point I am trying to make. Perhaps the hon. Gentleman can communicate his message to the shadow Home Secretary, who has a slightly different take on those things.

My essential point is that there are positives, and we need to stress them in the current atmosphere. However, we also need to provide reassurance, which is what the Government are seeking to do in two main ways. First, when people come to this country, we should acknowledge a distinction between the rights to work and to claim benefits, which is at the heart of people’s sense of citizenship and belonging. My colleague the Secretary of State for Work and Pensions will explain how we want to ensure that British citizens and not people from overseas receive benefits. The sense of abuse in that sector fuels much of the current anxiety.

The second source of concern is the belief that the laws and restrictions we have should be enforced. There are measures in the Immigration Bill to try to ensure that the private sector, particularly the property sector, plays its role in enforcing them. Those restrictions will have to be subject to a proper regulatory impact assessment and, under the one in, two out principle, they will have to demonstrate that they do not impose red tape on small business. Provided that happens, I hope the combination of actions that have been taken in respect of the benefits system and enforcing the law will be

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sufficient to reassure the public, or those people who are willing to be reassured, that managed immigration is very much in the national interest.

Mr Kevan Jones: The right hon. Gentleman makes a thoughtful speech and brings some balance to the argument on immigration. However, if he looks at Department for Work and Pensions figures, he will see that the majority of immigrants are in work and not claiming benefits. Of those who claim benefits, some have contributed through national insurance. Does he agree that we should look at the facts rather than feed the myths put forward by the press? One fact is that, according to DWP figures, fewer than 2% of applications are fraudulent or bogus.

Vince Cable: The hon. Gentleman is right that myth-busting is an important part of what we need to do. However, in order to deal with myth-busting, we must also deal with genuine abuses. I hope he understands that. I am grateful for his first comment—I am trying to lower the temperature of the debate and to get us to deal with fact rather than myth. I am trying to have a proper balance that recognises the very substantial economic importance of managed migration to this country alongside the measures we must take to deal with abuse.

A large part of the Leader of the Opposition’s speech was devoted to the continuing problems in banking and the financial sector, and many of the current problems with the economy relate to the aftermath of the banking crisis. We have got to a situation in which banks—partly under pressure from regulators, and partly as a result of learning from their mistakes—have moved to a position of fairly extreme risk aversion. If we are to ensure that credit flows to small business, which is the motor of the economy, that needs to change.

There is some evidence that the situation is beginning to change. Some banks, such as Lloyds, HSBC and the trade finance market, are showing positive trends, as is Barclays. The head of Royal Bank of Scotland made it clear at the weekend that he has £20 billion-worth above his liquidity buffers and capital requirements available for small and medium-sized enterprise loans. We hope SMEs take advantage of that.

However, the position we are dealing with is genuinely difficult. In the light of banks’ previous misfortunes, they are operating what I call a pawnbroker model of banking, under which people need collateral, whether a gold watch or property, to secure a business loan. That is massively inhibiting for, for example, a creative industry that does not have such collateral, or an export company that is trying to trade on the basis of orders, or simply for a good company with a good business idea and a good business plan that is unable to get into expansionary mode because of the crippling effects of bank credit restriction.

The Government are trying to deal with the problem in a series of practical steps. We clearly need to do more, but it is worth summarising some of the steps we are taking. We have a sophisticated system of developing supply chain finance—the advanced manufacturing supply chain initiative. Work is being done with Kingfisher and others in the private sector to support trade finance outside the banking system. We have a £1 billion fund that now supports non-bank finance, which is proliferating rapidly. We have crowd-sourced funding, invoice finance

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and non-conventional forms of lending. The Financial Services Authority and, currently, the Financial Conduct Authority, relaxed rules on the establishment of new banks. Within the next year or so, we will hopefully have a lot more banks, based on the model of Aldermore and Handelsbanken.

Probably the most important step, and one that underpins the others, is the work we are doing with the business bank. We have £1 billion of start-up capital. The first £300 million is being marketed to support new banks and long-term patient capital, which can be raised in the City, and to support equity through angel networks. A crucial test of our policy in the coming months will be the speed with which we can get that capital into the market to relieve the genuine constraints.

I listened carefully to try to establish what, if anything, Opposition Members wanted to add to the debate, because the problem is a genuinely difficult one, and because Labour presided over the banking collapse. If I understand them correctly, the big new idea is regional banking. It is a good idea, and I want it to be explained and developed. It has been forgotten that, 15 years ago, we had regional banking—they were called building societies. I have a vivid recollection of that period because I was chairman of Save Our Building Societies, working with one or two Opposition colleagues, particularly the hon. Member for Edmonton (Mr Love), to try to stop the demutualisation of building societies.

I believe demutualisation began originally with Lord Lawson, but it is worth recalling that, in the first five years of the Blair Government, we lost most of our regional banks. It is worth itemising what happened to them: Bradford and Bingley collapsed and was nationalised, and is now part of Santander; Birmingham Midshires bank is now part of Lloyds; Northern Rock in Newcastle collapsed and is now part of the Virgin group; Woolwich is now part of Barclays; Halifax is now part of Lloyds; and Alliance and Leicester is now part of Santander. We had regional banking, and it went. I would love to see it recreated, but that is like turning omelettes back into eggs. I am all ears as to how that can be done. If it can be done, I am very much in favour of it, because we need much more diversity and competition in banking.

Mr Steve Reed: I thank the Secretary of State for being so generous with his time. He talks about the banking sector as though it is wholly independent when, in fact, large swathes of it are nationalised. Why does he not use the power that that gives him to compel banks to lend more to small businesses that are seeking finance to grow?

Vince Cable: There is one major bank that has predominant Government ownership. That does not give the Government powers to lend, because there are significant independent shareholders and the hon. Gentleman will be familiar with the corporate governance problems that presents. We would like RBS to lend more, and Mr Hester explained this weekend that he has a significant amount of capital available.

Mr Chuka Umunna (Streatham) (Lab): There has been speculation about the Government entering into a hasty sale of RBS. Will the right hon. Gentleman assure the House that the Government will look to ensure that

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the bank returns to a far healthier position before they contemplate privatising it? On his earlier comment, I agree about the problems that small businesses face in dealing with banks, but does he not accept that the economic outlook has also had an impact on the pressing demand for lending for small businesses?

Vince Cable: Yes, there is an issue with the demand for loans. It is not simply a question of aggregate demand in an economic sense. Many small companies have been discouraged from applying and we need to overcome that handicap. On the wider question, I know that the Chancellor is listening carefully to this debate. I read the contribution of the former Chancellor, the right hon. Member for Edinburgh South West (Mr Darling), who suggested that the key issue was value for money for the taxpayer. I agree completely.

Mr Gyimah: I thank the Secretary of State for giving way once again. Does the intervention from the hon. Member for Streatham (Mr Umunna) not highlight the confusion in the Opposition’s approach to RBS and state-owned banks? On the one hand they want the Government to compel them to lend, and on the other hand they say that the banks should return to health and make a healthy profit for the taxpayer. Those are two conflicting positions. That is why schemes such as funding for lending, which help banks get money to small businesses, are the right way forward.

Vince Cable: Funding for lending is an important and valuable step forward. As I am sure my hon. Friend would acknowledge, it predominantly affects the mortgage market rather than the SME lending market, but it is an important initiative. I do not think that we are talking about forced lending here, and we should not be talking about that; we should be talking about how we change the risk appetite of banks. Some of the Government’s key interventions, such as the enterprise guarantee scheme and the new schemes for export finance, are crucial to changing the balance of risk. They work with the grain of the market, and that is the way we should deal with this issue.

I conclude on the banking issue, because it is the big legacy problem we have to deal with, along with the enormous deficit, which is painful and difficult but on which we are making real headway. The key point is that despite those problems, some real signs of hope are beginning to emerge: we have rapid growth in private sector employment; record levels of start-ups in the private sector; a growing sense of entrepreneurial energy and commitment in the UK; and a rapid growth in exports to some of the emerging markets, where future demand lies. There is every reason to be optimistic, and the legislative programme we are setting out will reinforce those positive trends.

10.13 am

Mr Chuka Umunna (Streatham) (Lab): Before I start, I should just say that I understand that my hon. Friend the Member for Hartlepool (Mr Wright) and the Secretary of State for Business, Innovation and Skills, shared a birthday yesterday. I just want to wish them a belated happy birthday so as to start on a positive note before

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moving on to the Government’s record since the previous Queen’s Speech. It is right for us to take stock, to look at where we are now and where we were last year, before considering Her Majesty’s Gracious Speech.

When we convened to debate the speech last year, unemployment had soared beyond 2.6 million, we were in a double-dip recession, and the Government were borrowing £150 billion more than they forecast to pay for the cost of their failed economic plan. The Secretary of State’s answer to that state of affairs was to bring forward an enterprise Bill that started with some sensible measures, but ended up becoming a Christmas tree of a Bill. It contained measures to water down the statutory remit of the Equality and Human Rights Commission, to trample over people’s rights at work, to overturn health and safety protections that have existed for more than 100 years, and to abolish—this came rather late in the Bill’s progress—the Agricultural Wages Board that protects agricultural workers. That was all done in the name of growth, without a scintilla of evidence to show how doing so would create jobs and boost enterprise.

The right hon. Gentleman then went on to co-sponsor the Growth and Infrastructure Bill. That did not even feature in last year’s Queen’s Speech, but sought, among other things, to establish a shares for rights scheme where, in return for being given shares in their employer’s company, employees would be required to sacrifice their rights at work. That was described by the Government’s own side as having all the hallmarks of being thought up by somebody in the bath. Again, no evidence was produced to show that the measure would produce growth.

There is an irony in all this. Last year, the Business Secretary had gone around saying that he did not think much of the Prime Minister’s employment law adviser, the Conservative donor Adrian Beecroft, and his proposals to run a coach and horses through people’s rights at work, which, by Mr Beecroft’s own admission, had no evidence base whatever. There is clearly a thin line between love and hate, because the Secretary of State did Mr Beecroft proud in the last parliamentary Session. That is not to say that his coalition partners should be absolved of the blame—they were all in it together, to coin a phrase. Notwithstanding the fact that what they were doing was wrong in principle, I fail to understand the politics of it. Let us take the Conservative party, a party that has not won a general election since 1992. We are told that it has a strategy of gaining 40 seats and retaining 40 of their most marginal seats at the next general election, yet 70% of those 40 seats it wishes to retain have significant numbers of agricultural workers. In fact, 10 of the constituencies most adversely affected by the abolition of the Agricultural Wages Board are Conservative marginals, including Lancaster and Fleetwood, Weaver Vale, Hastings and Rye, Sherwood, and Morecambe and Lunesdale. At the general election, we will remind every single voter in those seats of the Conservative party’s betrayal of them.

What has happened to the economy since the Government’s first two Queen’s Speeches? The Secretary of State made various international comparisons in his contribution. Since October 2010, the UK economy has grown by just 1.1% compared with the 6% forecast made by the Office for Budget Responsibility, and 3%

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growth in Germany and 4.3% growth in the US during the same period. Unemployment is stuck around the 2.5 million mark. A large number of those in work are working part time when they want full-time work, and people have faced an average pay cut of £1,700. Let us not forget that that was all being done in the name of reducing borrowing. We now have a situation where the Government are borrowing £245 billion more than they planned—the equivalent of the health and education budgets combined, and then some.

The Secretary of State is an economist. The reason why this strategy is failing was put very well to me, when I sat on the Treasury Committee, by a former member of the Monetary Policy Committee, Adam Posen. He highlighted the problem of the Government’s strategy. What they were attempting to embark on was an experiment. It was the most extreme consolidation embarked on by any Government in the western world at this point in a country’s recovery from the economic heart attack to which the Secretary of State referred. That is why their policy has failed.

Gordon Birtwistle (Burnley) (LD): The hon. Gentleman says that the German and US economies have done well and have not faded like our economy. Does he accept that those two countries supported their manufacturing sector while the Labour party, when it was in charge, ran our manufacturing sector down from 22% to 9% of GDP?

Mr Umunna: I certainly accept that we want to grow our manufacturing sector, but the Secretary of State has conceded that, for example, the things we did in the automotive industry by setting up the Automotive Council have helped to increase the output of that sector. So I do not agree that we did nothing to boost manufacturing in this country.

My right hon. Friend the shadow Work and Pensions Secretary will talk later about the failure of the Government’s schemes to get the unemployed back to work.

Mr Gyimah: The hon. Gentleman is presenting his case very clearly, so will he give us a clear answer? Would the Labour party borrow more or less than we are?

Mr Umunna: I remind the Prime Minister’s Parliamentary Private Secretary that his boss is borrowing £245 billion more than planned. The only part of our five-point plan to get the economy growing again that would incur extra borrowing is the VAT cut, which would cost £12 billion in the short term. We advocate a VAT cut because it is the fastest way to give an injection to an economy that, frankly, has flatlined over the past three years. We have seen it work previously. During the economic downturn when we were in office, we introduced a VAT cut that we know—Institute for Fiscal Studies numbers have provided supporting evidence—helped to boost growth in the economy. That is what we need now. Of course, boosting growth would increase corporation tax receipts and income tax receipts—as more people enter work—and reduce the benefits bill.

Mr Gyimah: Will the hon. Gentleman give way?

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Mr Umunna: I will make more progress.

Ultimately, for employment schemes to work, there need to be jobs for people to go into, created by businesses, and for that we need to create the conditions for businesses to expand and for wealth to be created. We need to create an environment in which businesses can grow the top line. On many occasions, the Business Secretary has pointed to how our economy is structured, which he says stands in the way of progress. I agree that we need to restructure our economy, to increase our exports and to diversify the sectors contributing to GDP—there is consensus on that—but I must say to him that blaming the Government’s predecessors starts to wear thin after three Queen’s Speeches and after three years in government. It is time that he and his colleagues took responsibility for their actions.

I have always thought that to achieve both rising and shared prosperity, we need to rethink the relationship between the Government and markets and to be far more discerning about the kind of capitalism we want in this country. We need to set aside the neo-liberal dogma propagated by some Government Members that markets are automatically efficient and best left alone. There is a lot that active Government can do to improve the healthy functioning of markets. Importantly—this is a key point—markets cannot set a strategic direction for our economy; they cannot set a direction for how we will compete and pay our way in the world—Governments working in partnership with business can do that.

Making that a reality requires a modern industrial strategy—the kind of strategies that our competitors are prosecuting with good effect—and an agenda in which the role of the Government is not to step back, but to step up; to work with businesses to create better outcomes at home; to ensure that we can pay our way in the world; and to ensure that growth is more broadly based across sectors and geographically across regions as well. We must also empower consumers as drivers in making markets work more efficiently, not only for themselves but for producers. That helps to provide the foundations for UK businesses to succeed in other markets.

Meg Hillier: Does my hon. Friend agree that the Government’s approach to funding for lending has been the polar opposite of what he has just described, and has in fact fuelled the housing market rather than helped businesses such as mine in Shoreditch? It has done nothing to deal with day-to-day finances and only touched potential loans, rather than things such as overdrafts. What would his approach be were he in the Secretary of State’s position?

Mr Umunna: My hon. Friend is right to identify some of the risks with the funding for lending scheme. The problem is that it has reduced the cost of borrowing for existing business borrowers without increasing access to finance for those other successful, profitable businesses. The other problem—this is why we advocate setting up a regional banking network, to which I shall turn in a minute—is that the scheme sees as its delivery mechanism the very high street banks that have been the problem. In fact, the transmission mechanism for many of the schemes that the Government have introduced since they came to office has been the high street banks, which have been the problem.

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I will continue to discuss industrial strategy in more detail before touching more briefly, due to time constraints, on consumer issues. I do not think that the Business Secretary would disagree that in opposition he did not really share our view of the need for an active industrial strategy or even of the need for a Department, which he now runs, to be its champion—he argued for his own Department to be abolished at the time. After two years in government, however, he appears to have come round to our way of thinking, and we saw his embryonic industrial strategy published last September.

An industrial strategy consists of different elements. I have welcomed some of the sector-specific interventions that the Business Secretary has announced since the Queen’s Speech—in aerospace and with the ongoing interventions and assistance in automotive—and we will scrutinise the Bills in the Queen’s Speech closely to ensure that they support those key sectors. Another such sector is our creative industries, which were disappointed not to see a communications Bill in the programme for this Session. The point is that so much of what we have seen coming from his Department or the Treasury has been rather “piecemeal”—to use the Secretary of State’s own language—and does not meet the scale of the task at hand. As ever with this Government, if we speak to any business organisation, we hear that the problem is one of delivery.

I will focus on a few key areas and the extent to which the Queen’s Speech moves things forward. I will start where the Business Secretary finished. Of course, we must reform our banking sector, not only so our banks are made safe but primarily so that the financial services sector better serves the real economy. We have said, and he referred to this, that we should have better regulated the banks during our time in office. We did not, however, and that is a source of regret. Listening to the Secretary of State lecture us on that, I should say to him that mea culpa in that respect is due across the political spectrum. The tripartite regulatory regime that we put in place in the Financial Services and Markets Act 2000 enjoyed widespread support. In the House on Second Reading of the Financial Services and Markets Bill, the Business Secretary said:

“I want to express broad support for the Bill, whose philosophy and whose architecture of financial regulation reflect a broad consensus. I appreciate the extent to which there has been broad and extensive consultation with practitioners and with Parliament, and the fact that the Government have responded to very many of the anxieties that have been expressed.”—[Official Report, 28 June 1999; Vol. 334, c. 55.]

He went on to say:

“Like the Conservative Opposition, we shall approach the issues constructively. There is no reason to hold back the Bill.”—[Official Report, 28 June 1999; Vol. 334, c. 58.]

Kevin Brennan (Cardiff West) (Lab): Is my hon. Friend not being somewhat unfair on the Business Secretary? After all, how can he reasonably expect consistency from a Liberal Democrat?

Mr Umunna: What can I say? I am sure that those watching the debate will draw their own conclusions, based on our exchanges.

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Mr Kevan Jones: Do we not also need a bit of consistency from the Conservative part of the coalition, which not only supported that Bill but in some cases, as with the Chancellor, wanted to go further with deregulation of the banking system?

Mr Umunna: My hon. Friend is absolutely right, and I was just about to come on to that. The Business Secretary, soon after making that statement in favour of our regulatory framework, said:

“Like the Conservative Opposition, we shall approach the issues constructively. There is no reason to hold back the Bill.”—[Official Report, 28 June 1999; Vol. 334, c. 58.]

My hon. Friend the Member for North Durham (Mr Jones) is absolutely right: neither the Conservative party nor the Liberal Democrats voted against that Bill in opposition, and yet we have had no expression of regret from them for supporting the regulatory framework that we put in place. It is about time that we heard some mea culpa from Government Members.

The Secretary of State for Work and Pensions (Mr Iain Duncan Smith): Just so that the record is absolutely straight, the hon. Gentleman might like to remind us who were in government when the economy went over the edge of a cliff. Would he now—[Interruption.] The shadow welfare Secretary should just calm down. I think the hon. Member for Streatham (Mr Umunna) is capable of dealing with this himself; he does not need the shadow welfare Secretary’s assistance. Let me ask the hon. Gentleman a simple question, which my right hon. Friend the Business Secretary posed to him at the beginning. On the basis of humility, will he now get to the Dispatch Box and say to the British people that the Labour party is deeply sorry for the shambolic mess in which it left the economy?

Mr Umunna: With the greatest respect to the welfare Secretary, let me say two things. First, I have said that we have expressed regret in terms of the way in which we regulated the banking sector. However, let me also remind him that in the last two quarters of our term in office, we saw growth of 1.1%. During his time—[Interruption.] He should let me finish my sentence. If he does that, I might answer his question—I presume he wants to hear it. Did we leave him with a double-dip recession? No. Did we leave him with 2.5 million people out of work? No; so I will take no lectures from this welfare Secretary about the management of the economy.

After that excitement, let me return to banking. Reform is obviously needed, in particular to ensure that the sector provides finance to the profitable and successful small businesses that want to expand and take on more employees, but cannot access the finance that they need. That is crucial, because so many of those businesses are the ones we look to to create jobs. We know that under this Government lending to businesses is falling month on month, including a fall of £4.8 billion in the three months to February, according to the latest Bank of England figures. We know too—my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier) mentioned this—that the Government’s schemes, from Project Merlin to the national loan guarantee scheme and, now, funding for lending, have simply failed to get credit to those businesses.

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Every other country in the G8 has a state-backed investment institution to tackle the problem and ensure that their small businesses can access the finance they need. That is why we have argued since early in this Parliament for the establishment of a proper British investment bank and a network of regional banks, based on the German Sparkasse model, to work alongside a British investment bank to transmit those schemes to small businesses. Those are two sensible ideas that would bring us into line with our international competitors. Indeed, I am pleased to hear that the Business Secretary agrees that it is a good thing to re-establish regional banking in this country.

We would have introduced a Bill in the Queen’s Speech to establish those bodies, yet the Government have failed to do so. Instead, what have we got? Last year, rather late in the game, the Business Secretary announced, to much fanfare at his party’s conference, that he was establishing his small business bank. The British Chambers of Commerce and the Federation of Small Businesses have said that he must get on with setting it up. Last year he came to the House and told us that his bank

“has already been established, and it will be up and running next year.”—[Official Report, 20 December 2012; Vol. 555, c. 988.]

So where is this bank? The IMF is currently in town inspecting the wreckage of the Government’s failed economic plan. I know how keen the Chancellor is to rely on its pronouncements, so I went on its website to discern how it defines what a bank does. The IMF says that the primary role of a bank is to

“take…deposits…from those with money, pool them, and lend them to those who need funds.”

I suspect that most Members would expect such a bank to be established on a stand-alone basis, with its own building like any other bank—I remember all the questions put to the Business Secretary about the location of the green investment bank, for example. However, what do we find buried in the back of one of his press releases, issued just before the Easter recess? We are told that his business bank

“is expected to become a fully operational new institution in the Autumn of 2014,”

but before then any references to his business bank

“refer to the team within BIS responsible for the development and operation of its policy and programmes before it becomes a fully operational new institution.”

Vince Cable rose

Mr Umunna: I will give way to the Secretary of State shortly, so that he can explain this to us.

What we have is a floor of people—mostly made up of the Business Secretary’s civil servants—in his Department in No. 1 Victoria street that is dressed up as a bank. It is in no way, shape or form what most people would understand to be a bank, and it will be up and running not this year, as he said to the House in December, but at the end of next year at the earliest.

Vince Cable: Instead of looking for information in IMF reports, perhaps the shadow Business Secretary should look at some of the business before the House. I do not know whether he is aware that we made a written ministerial statement a few weeks ago explaining exactly where we were with the business bank. At the moment it

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is marketing its first tranche of funding. We have a substantial team in BIS of people with banking experience recruited from the private sector. He is welcome to come in and talk to them. I think he will find that there is a substantial acknowledgement in the small business community that what we are doing is exactly right and on target. If he wants to question our delivery more generally, he should perhaps read what I said in Edinburgh yesterday about the substantial progress we are making with the other bank, the green investment bank.

Mr Umunna: With the greatest of respect to the Secretary of State, he said that the body he was establishing was a bank and that it would be up and running this year. It is in no way, shape or form a bank as most people would understand it and it will be up and running not this year but next year. As for his green investment bank, it will not be able to borrow any substantial moneys until it meets his fiscal mandate. Also, I presume that legislation will be required to set up his new small business bank, as was the case with the green investment bank, yet there was no sign of that in the Queen’s Speech.

Vince Cable: As the hon. Gentleman may at some future stage in history occupy this role—he is obviously preparing for it—let me clarify one thing. Is he at all familiar with state aid rules? If so, he will know that under the rules of the European Union, it is necessary to obtain approval before a bank can operate fully in the competitive market of the European Union. That is why 2014 has been cited—because we respect those rules. None the less, we are using the resource we have in the short term to provide support for business. That is what we are doing.

Mr Umunna: But the reality is that the Secretary of State’s bank will not be up and running before the next general election, because if legislation is required, as seems likely—he did not really address that point—

Vince Cable indicated dissent.

Mr Umunna: The Secretary of State says that it is not required. We will see. I fail to understand why legislation was needed for the green investment bank but not for his small business bank, but let us see. [Interruption.] Let me tell the welfare Secretary that I would love to have a general election, because then I might be able to occupy the Business Secretary’s post more quickly than he perhaps foresees. What we hear from most small businesses is that what the Government have done to increase access to finance and resolve the issues of the banking sector for the real economy has proved to be a let down.

Let me turn to skills and training. Weakness in specific intermediate or vocational skills is a business concern and a source of competitive disadvantage for the UK compared with our neighbours. With almost 1 million young people out of work—my hon. Friend the Member for Croydon North (Mr Reed) referred to this—we must ensure that we have system that delivers people with the education and skills that our businesses need if they are to move into work. We could start by increasing the number of apprenticeships, but crucially boosting their quality too. We have heard the Secretary of State, like other Ministers, boasting about creating more than

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1 million apprenticeships, but the number of 16 to 18-year-olds starting an apprenticeship in the first half of this academic year dropped by 12%. Indeed, two thirds of large companies in this country do not offer apprenticeships. We urgently need to improve on that and also protect the quality of apprenticeships, which is precisely the point made by Doug Richard and Jason Holt, whom the Secretary of State commissioned to do reports on apprenticeships.

The Queen’s Speech made a vague reference to a desire to ensure that it becomes typical for those leaving school to start a traineeship or an apprenticeship, but where was the jobs Bill we wanted that would have required large firms getting sizeable Government contracts to have active apprenticeships scheme, ensuring opportunities to work for the next generation? There was no such Bill. I still fail to understand why this Government will not proceed with that simple measure. Ministers released details of their plan for traineeships yesterday, which is a six-month programme of training and work experience to aid young people towards apprenticeships or employment. We will have to study the detail closely, but I note that they expect colleges to have the scheme up and running by August. That will be a challenge, given the very short notice.

On procurement, which should of course be used as part of an industrial strategy, the Government’s Bombardier decision earlier in this Parliament demonstrated their failure to account for the impact of procurement decisions on jobs and growth and on the strategic development of industrial capacity. We know that the story is the same with defence. The Government’s defence industrial strategy has been abandoned in favour of buying off the shelf from overseas. In making procurement decisions, we would take account of the impact on jobs when deciding to whom to award contracts. The French, the Dutch and the German Governments do that within EU law—the Business Secretary referred to it—and so would we. If this Government were serious about backing British industry, we would perhaps see them taking similar measures. Again, however, there was nothing about this in the Queen’s Speech.

Ms Diane Abbott (Hackney North and Stoke Newington) (Lab): On the question of jobs and skills, training and apprenticeships, does my hon. Friend agree that black and minority ethnic young people in our great cities have been disproportionally hit by this economic crash, making it important that any strategy around jobs, skills and apprenticeships and even access to funds for entrepreneurship has within it structures and strategies to help those BME young people?

Mr Umunna: I completely agree with my hon. Friend. Some things I support, such as the start-up loan scheme, could be of real benefit to our different diverse communities, particularly to young people and young entrepreneurs seeking to set up businesses. The problem up to now—I appreciate that James Caan is doing fantastic work on this—is that there has not been enough awareness of it. I have offered to help him raise such awareness in our different diverse communities.

Gordon Birtwistle: Does the hon. Gentleman agree that the destruction or non-acceptance of careers advice in schools—by both the previous Government and, I

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have to say, the present Government—is not helping young people to get into apprenticeships or further education? Does he agree that if we got professional careers advice back in our schools, more young people would be interested in doing apprenticeships rather than going to university to study subjects that in some cases will not lead to any job?

Mr Umunna: That is an extraordinary intervention from the hon. Gentleman, given the huge cuts that this Government have made to information, advice and guidance, including to careers advice. I remind the hon. Gentleman that it is his Government—and he voted for it—who have cut and destroyed Connexions. I know from experience in Lambeth in my constituency that Connexions made a massive difference.

Let me move on to infrastructure. Good infrastructure, of course, is at the heart of an industrial strategy and crucial to creating the right business climate. That is why we asked the chairman of the Olympic Delivery Authority, Sir John Armitt, to crack this issue for us.

In the Queen’s Speech, after three years of dither and delay, we have finally seen some movement on transport infrastructure in the form of the HS2 Bill. I think I speak for many business people when I say that people would like to see this Government move on aviation, too. The Government should bring forward the date for Sir Howard Davies’ review of aviation and ensure that his report is produced before the general election. We need no more dither and delay on that issue either.

Mr Gyimah rose

Mr Umunna: I want to make a bit more progress.

With our economy flatlining, this country is crying out for investment in infrastructure to create jobs, boost confidence and strengthen our productivity and competitiveness. Both the CBI and EEF have criticised the Government for their failure to get on and deliver on infrastructure. They are right to do so. The last infrastructure pipeline update given by the Treasury showed that of their 576 projects, fewer than 5% of them were completed or operational. If they got on with delivery of those projects, we might see a pick up in construction, which fell by 2.5% in the last quarter and by 5.9% compared with last year. While the Business Secretary was on his feet, the Office for National Statistics published its latest construction output statistics, showing that all new construction work is 3.2% down on the last quarter. Why was there not more, then, in the Queen’s Speech to bring forward spending on infrastructure?

Mr Gyimah: Going back to supporting businesses, specifically in the context of small communities, will the hon. Gentleman give me a sense of whether he will support the National Insurance Contributions Bill, which would, after all, reduce the national insurance bill for every business by up to £2,000? It will affect business communities not just in the BME areas, but throughout the country.

Mr Umunna: It is funny that the hon. Gentleman should bring that up, as I was just coming on to it.

Finally, on tax and other incentives for business, we have been arguing for months for a national insurance break for micro-businesses taking on extra workers. The

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full scale of the failure of the Government’s initial national insurance holiday scheme was laid out for all to see by the accountants UHY Hacker Young last week when they disclosed that the scheme, which the Chancellor said would benefit over 400,000 small businesses, reached a new low in December last year, attracting only 400 applications. I thus say to the hon. Gentleman that I really hope that the National Insurance Contributions Bill in this year’s Queen’s Speech, which introduces the employment allowance—no doubt there is more detail in the paper the hon. Gentleman has with him—will prove far more successful than the Government’s scheme to date.


I am asked whether I support it, but I have just said that I hope the scheme proves to be far more successful than the lamentable failure of the Government’s scheme to date.

Before I finish, I want to deal with the Government’s consumer rights Bill. As I said, empowering the consumer is an important part of ensuring healthy and efficient functioning markets. The Government have included a consumer rights Bill in the Queen’s Speech. We are told that it consolidates consumer rights legislation in one place, bringing together eight pieces of legislation and covering goods, services, digital content and unfair contract terms. I agree that consumers need more clarity on their rights, but from what we have seen so far, the Government’s proposals appear to fall short of the action that we have called for to help families, to ensure a fair deal on energy prices and to tackle high rail fares, for example.

I think that the Government’s changes in this area have been muddled, as we have seen this week. First, the Government were going to abolish Consumer Focus, but now we learn that they are going to keep it in a slightly watered down form, and it will now be called Consumer Futures. It seems that it will be doing a similar job, but who knows what landscape we will be left with.

As part of our policy review, which was led by consumer champion, Ed Mayo last year, we have been planning to bolster collective action and to empower consumers so that they can club together more easily to seek redress. As the consumer rights Bill makes progress, we will press Ministers for a strong, accessible collective redress mechanism—one that mirrors the Portuguese and Australian models, which remove the legal excesses. It will not be a US-style class action, where litigation is dominant. We will address the matter in more detail when the Bill begins its passage through the House.

So there we have it: after three wasted years, we have yet another wasted chance to bring change to this country—change that it desperately needs.

Mrs Sharon Hodgson (Washington and Sunderland West) (Lab): I listened with interest to what my hon. Friend said about the consumer rights Bill, to which I hope to contribute. Does he agree that this might provide a fantastic opportunity to address the disgraceful practices of the secondary ticketing market, which has now become industrialised ticket touting? Does he agree that we have a great opportunity to put fans first?

Mr Umunna: I completely agree with my hon. Friend, who has done fantastic work in this area. We will scrutinise the Bill closely and if it does not contain provisions to address secondary ticketing, we will table

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amendments to bring about much-needed change on this issue, which my hon. Friend has championed for a long time.

Despite the difficult economic climate, I do not doubt for one moment our businesses’ ability to overcome the hurdles in front of us. I see dynamism and innovation as I go around the country meeting so many of our entrepreneurs, which I have found to be an inspiration. I wish only that we had a Government equal to the task of helping those entrepreneurs to go on and thrive. It is clear from the Queen’s Speech that this Government are out of steam, and that until we have a general election and the chance of a Labour Government, we shall not see the kind of government that I think our businesses want and need.

Several hon. Members rose

Mr Deputy Speaker (Mr Lindsay Hoyle): Order. A great many Members wish to speak, and it would be helpful if speakers could show some restraint.

10.49 am

Christopher Pincher (Tamworth) (Con): It is a great honour to speak in this Gracious Speech debate on jobs, and a particular honour and pleasure to be called first after the dazzling performances on both Front Benches. It is also a pleasure to follow the hon. Member for Streatham (Mr Umunna), the shadow Secretary of State, who made a typically assured and polished speech—as I am sure his Wikipedia page will shortly remind us.

I shall bear in mind your words of wisdom, Mr Deputy Speaker, and not speak for too long. I am heartened by the fact that you have not set a time limit, because on the last three occasions when I have spoken in the Chamber, I have been given just three minutes in which to do so. That certainly focuses the mind, but I assure you and the House that I shall not be speaking for three minutes or, indeed, for three hours.

I want to speak about the issue of jobs, which is important to my constituents in Tamworth. Notwithstanding the rather gloomy words of the shadow Secretary of State, and the collapse last December of a company called Drive Assist, we in Tamworth have been heartened by a downward trajectory in joblessness. I think that that will be enhanced and encouraged by the measures announced in the Gracious Speech, particularly the proposal to offer an employment allowance towards national insurance, which I am pleased to note that the shadow Secretary of State seems to support. It means that small businesses up and down the country, from Redruth to Redcar—including, importantly, businesses in Tamworth, Fazeley and the district of Lichfield—will be exempt from national insurance, which will enable them to grow and employ more people. I think that the measure will also help us to rebalance our economy, moving back from the over-reliance on the financial services sector and the public sector that was so beloved of the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) towards a more sustainable, broad-based private sector—a sector that contracted by some 730,000 places under the last Labour Government.

I was also heartened by the announcement of a deregulation Bill, because regulation is, after all, a form of tax. A small business man must be not just his firm’s

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managing director and sales director, but its human resources director, logistics director, financial director and IT director. Any piece of bureaucracy and administration, even a small piece, can add to the distraction and detraction from the time when he should be growing his business and selling.

Mr Kevan Jones: One example of deregulation in the Queen’s Speech is the removal of health and safety legislation relating to sole traders. Can the hon. Gentleman explain how the economy will be boosted by the exclusion of sole traders from such legislation? Will that make the workplace safer for them?

Christopher Pincher: A sole trader will be able to spend more time finding and doing work and making money, on which he will then pay tax to the Exchequer. I think that this is a very worthwhile regulatory change. I am sure that, as an old hand in the House, the hon. Gentleman will have heard many Governments down the years say that they will deregulate. I only hope that this particular Bill will have real teeth, will do what it says on the tin, and will enable business men to spend more time doing business rather than administrating.

Mr Jones: Would the hon. Gentleman be happy for a sole trader such as a plumber or even an electrician who had been allowed to have no regard for health and safety legislation to come into his home? Will this really make any difference to economic growth, and will it make the safety of the public and that individual any greater?

Christopher Pincher: I hope that it will. We shall see. However, there is certainly an argument for deregulating, and as the hon. Gentleman surely knows, the Bill will need to do what it says on the tin.

The Queen’s Speech also refers to measures to support intellectual property. If we are to focus on and support the extremely important design businesses in our country, we need to help them to protect their intellectual property from countries and businesses that would rather borrow, steal and copy knowhow than buy it.

I hope that the measures will help my constituent Mr Ken Clayton, a photographer who fears that changes proposed, he says, by civil servants will mean that photographs on Facebook and on BBC websites will be automatically stripped of their metadata and will become “orphan works”. As a result, he says,

“individuals and companies will be free to use such photographs with no reference to the person who took the photographs and will be able to license them without any payment to the photographer.”

I hope that when we come to debate the Bill, Mr Clayton will be reassured by it.

The Secretary of State, who is no longer in the Chamber, made a very balanced speech about immigration and the role that it plays in relation to jobs. Although the last Government created many jobs—some 1.5 million, I believe—a staggering 98.5% were soaked up by migrant labour. If we are to get the many people in the country who are trapped in dependency back into work, or in many instances into work for the first time, we must not only reform welfare so that it will always pay to work, but deter those who may wish to come to this country

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and provide a low-cost alternative, which would be a cost to our work force, and would put a strain on our infrastructure, services and housing, which would be a cost to the taxpayer.

I hope that, while the Opposition may ask some searching questions when the immigration Bill is debated—as they have tried to do this morning—they will support it in the end. I think that if they do not, they will find themselves on what the broad mass of the British people consider the wrong side of the argument.

The Secretary of State referred to the importance of infrastructure. I am pleased to note that the Energy Bill is to be carried over. After a decade of neglect, it is essential for us to invest in our energy infrastructure—in power stations, especially nuclear stations, and in the transmission infrastructure that conveys energy around the country. It is important for investors to see that both major parties in the House, and indeed our Liberal Democrat coalition colleagues, support the regulatory system.

Meg Hillier: The hon. Gentleman has made a good point, but does he not agree that the withdrawal of some of the potential funders of our future nuclear provision was partly caused by wobbles in the coalition Government on this issue? Has he any stronger messages for his coalition partners?

Christopher Pincher: That is rather rich coming from the hon. Lady, given that for years there was no proper investment in our energy infrastructure and a moratorium on the building of a fleet of new nuclear stations. I hope that the time that it has taken to get the Energy Bill into this House and then into the other place is symptomatic of a desire on both sides of the House to build a robust Bill that will stand the test of time. We need it to make clear to investors that the regulatory changes we have made and the framework we have established will not change, and that they can put their money behind it.

I also hope that the Bill will help the shale gas industry and bust the myths surrounding it, because shale gas is capable of creating create new jobs in our country. Providers such as Cuadrilla say that they want more than an end to the moratorium, which has in fact now ended, and a new licensing round, which is to take place. They also want the Government to support their reasonable planning applications. That will mean we do not have so much wrangling about planning, so that exploratory drilling can be done to find out whether we have beneath our feet 200 trillion cubic feet of shale gas—perhaps there is more—which will be enough to cater for our needs for a century. That would help reduce our exposure to the volatility in international hydrocarbon markets, and would mean we had stable energy prices for domestic consumers and businesses, which would be good for jobs.

I will not end my speech without mentioning High Speed 2, to which the shadow Secretary of State referred, calling for the project to be implemented more swiftly. There will be time enough to discuss the hybrid Bill and its provisions. There is no doubt that the development of HS2 as a major infrastructure project will create jobs—if we shift concrete up and down the country, we will create jobs—but I trust the Government will also recognise the jobs and businesses that may be damaged by HS2: those that are in its direct route. In my constituency

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there are many such companies and businesses, including Joy McMahon’s racing stables, Packington hall farm and manor, which has been managed by the Barnes family for generations, and Jonathan Loescher’s accounting businesses. These are all small businesses, and they are all now blighted by the proposals to build that railway line. I therefore hope the Government will introduce their HS2 paving Bill swiftly and ensure that it contains clear, quick and commensurately generous compensation measures so that such businesses in my constituency—and in that of my constituency neighbour, my hon. Friend the Member for Lichfield (Michael Fabricant), who spoke eloquently and passionately about HS2 yesterday—are properly compensated.

With that caveat, I shall conclude by saying I welcome the job provisions in the Gracious Speech. They will contribute to the development of a more modern and flexible work force in this country. They will ensure that we have the skills for work and the right attitude to work, and I trust they will bring forward another army of entrepreneurs who want to work for themselves.

11.2 am

Jim Fitzpatrick (Poplar and Limehouse) (Lab): It is a pleasure to follow the hon. Member for Tamworth (Christopher Pincher), and I am pleased he had more time than his usual three minutes. Given that he agrees with the Opposition policy on national insurance contributions for small and medium-sized enterprises, perhaps he should be allowed to speak for longer more often. I also agree with him about shale gas. He made some excellent points, and it is good that the Government are moving on that. I would take him to task on his points about immigration, however. From my understanding of yesterday’s debate, of the five proposals in the immigration Bill, three are already law and two are going to be put out to consultation. I assure him that we will look very closely at the immigration Bill.

I join the hon. Gentleman in commending my hon. Friend the shadow Business Secretary for his trademark cool, thoughtful and constructive contribution. It was a perfect counter to the misplaced quiet optimism of the Secretary of State; I commend him on his quiet optimism, but I do not think there is evidence to support the idea that the proposals in the Gracious Speech will bear fruit.

Like the hon. Member for Tamworth, I hope not to detain the House for too long. I am grateful for being called to speak, particularly as I was not present for the Queen’s Speech itself, and nor was I here in the afternoon for the speeches that addressed it, as I had a health appointment in the morning and then attended one of the inaugural events for the commemoration of the battle of the Atlantic in the afternoon. As a former Vice-Chamberlain of Her Majesty’s Household, however, in years past it was part of my duty to the House not to be here for Her Majesty’s speech. It is therefore not unusual for me to be absent when Her Majesty turns up. I should tell the House that my experience of being held hostage in Buckingham palace—on behalf of Members, and in order to protect the safety of the sovereign—was slightly unnerving. When I discussed that with the head of the armed forces at the time, Sir Mike Jackson, and expressed the anxiety I had felt about the experience, he said to me, “Jim, you shouldn’t have worried.” I said, “Shouldn’t I have, Mike?” He said, “No, no; if anything

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had happened to Her Majesty, we would have made it quick—we would have just shot you.” That was not the most reassuring message I have had from Her Majesty’s armed forces, but I am sure he was being entirely serious and would have faithfully carried out those actions.

I missed yesterday’s debate as I was on an Industry and Parliament Trust visit to the ports of the great river Humber. I visited Hull, Immingham and the other Humber ports and heard about the plans for them. There is a planning application with the Secretary of State and I wish them well with that, because Green Port Hull is a very important piece of our shipping infrastructure, and is important for the development of wind farms in the North sea. It will be extremely important, and it is one of the projects that we want to see progressing as quickly as possible.

To try to catch up on what had been happening during my absences, I naturally turned to The Daily Telegraph,which is my usual paper of choice, of course—as we all know, we have great newspapers in the UK, but the Telegraph is my paper of choice. I was somewhat shocked when I read the column by the deputy political editor, Mr James Kirkup, which said this of the Gracious Speech:

“If politics is the art of the possible, then the Queen’s Speech makes clear just how little is possible for a coalition Government entering its fourth year”.

The article concluded:

“This low-key Queen’s Speech is a taste of things to come. The Coalition’s high noon moment has passed: the sun is now setting on this Government.”

I wish that were so, but sadly we have at least another two years of them to come.

Mr Kirkup was not outdone, although Louise Armistead reported in the “Business” section of The Daily Telegraph that the Prime Minister

“was accused of squandering his ‘last chance’ to unleash growth measures…The Institute of Directors (IoD) said the Queen’s Speech was a ‘missed opportunity’ for the Coalition to kick-start the economy”.

Especially from The Daily Telegraph and the IoD, who one would have thought would be cheerleaders for the Government, those are not the most complimentary comments.

I am very pleased to be here to raise some constituency issues and to support Labour’s alternative Queen’s Speech. For Poplar and Limehouse, the three big issues are employment, housing and the cost of living—which are very close to three of the six measures in our alternative Queen’s Speech, along with our plans for finance, banking and immigration, all of which were covered so ably by my hon. Friend the shadow Business Secretary.

On jobs, in my constituency there are 1,320 young people under 25 years of age claiming jobseeker’s allowance. The recent rise in long-term youth unemployment saw an extra 40 people out of work for more than a year in Tower Hamlets. In total, that is 275 local families who are concerned about their son or daughter being on benefits and not in work. My hon. Friend outlined the measures that would be in the jobs Bill we want to introduce, with a compulsory jobs guarantee paid for by a bank bonus tax. That could help 275 young people in Poplar who have been out of work for more than two years. As has been said from our Front Bench on a number of occasions, people would have to take up those jobs or lose benefits.

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On housing, Tower Hamlets has more than 23,000 people on its waiting lists. It is one of the most overcrowded boroughs in the country. I was at an event this morning organised by Curtin and Co. at which Professor Tony Travers from the London School of Economics delivered a speech on London’s housing economy. Curiously, the event was held at the Savoy, somewhat in contrast to the topic under discussion. Professor Travers said the private rented sector is in need of “pretty significant regulation”. I have dealt with casework in Poplar and Limehouse about landlords who have withheld deposits, rented accommodation that has been far below standards and tenants who have been caught in financial difficulty due to hidden fees. That is one aspect of housing. More importantly, using housing and house building to kick-start the economy would provide jobs and address the real needs in my constituency and across the country.

Another problem that we have—unsurprisingly it is not exclusive to Poplar and Limehouse—concerns consumer issues. High energy costs and rail fares are two issues that affect people across the country. Our consumer Bill, outlined by my hon. Friend the Member for Streatham (Mr Umunna), would create a tough new regulator, abolishing Ofgem, and would require the energy companies to pool power, to open up the market and put downward pressure on prices. It would force energy companies to put all over-75s on their cheapest tariff, helping those who benefited to save up to £200 a year. It would introduce a new legal right for passengers to get the cheapest ticket for their journey and introduce strict caps on fare rises on every route. Those are basic protections for the consumer that are long overdue.

Like other right hon. and hon. Members across the House, I have received countless e-mails from constituents over many months on issues that did not appear in the Queen’s Speech, such as the plain packaging of cigarettes. The Under-Secretary of State for Health, the hon. Member for Broxtowe (Anna Soubry),was in her place at the beginning of the debate. She has championed that measure and strongly supported it whenever it has been debated, and many of us wish her success in trying to persuade the Government to introduce plain packaging for cigarettes, as that would undoubtedly save lives, as it has elsewhere in the world.

On international development, the absence of any legal status for the figure of 0.7% of GDP as aid is disappointing. UK taxpayers are very generous, but they want transparency, accountability and the targeting of aid.

Ms Abbott: Does my hon. Friend agree that that it is a touch suspicious that Lynton Crosby becomes the Prime Minister’s chief political adviser, Lynton Crosby’s consultancy firm was on a retainer from British American Tobacco to fight plain packaging, and plain packaging, which the Minister responsible for public health supports, disappears from the Queen’s Speech?

Jim Fitzpatrick: I have read the reports referred to by my hon. Friend about the connections of the Prime Minister’s adviser. My hon. Friend is very experienced at being attacked in the media, and I am glad that she has decided to have a go at the Government’s attack dog, because he will perhaps focus on the fact that she

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raised the issue and I did not. She makes a very good point, however, and I am sure that it has not been lost on many people out there that there might be a connection, although No. 10 says that that is a load of nonsense.

I was talking about international development aid and the expectation that the coalition might have enshrined in law spending 0.7% of GDP as our aid budget. I commend the coalition for sticking to the target. Many of us, perhaps unfairly, were surprised, but this is one of the coalition’s big successes, and I commend the coalition for it. I also commend the Government for the fact that we are trying to focus and target the aid and to use UK non-governmental organisations. We have some fantastic NGOs in the UK, including War on Want, Oxfam, Christian Aid, Muslim Aid and others, that we can use to ensure that the aid gets to where we want it to go and reaches people in need, rather than Governments who might want to spend it on other projects. The coalition is on the right track, but we would have liked the 0.7% figure to be enshrined in law.

Let me mention two other minor issues, which are perhaps less significant but are none the less constitutionally important. A register for lobbyists is missing from the Queen’s Speech, but it has been promised by the Government for some time. The public want to see greater transparency and accountability in this House and there is some disappointment that that measure has not been introduced.

Finally, a measure on the recall of MPs has been promised by the Government on a number of occasions. Such a measure would be supported on both sides of the House and would reassure the public that they have greater control over their elected representatives. I do not think that we have anything to fear from that, but the one or two Members who cross the line ought to have something to fear. Such a measure would easily get cross-party support and would not be difficult to pass into law.

I shall draw my remarks to a close; I said that I did not want to retain the House for too long, and I do not want this to be another broken political promise. As I said at the beginning, The Daily Telegraph and the Institute of Directors said that this was a missed opportunity—it is another missed opportunity. As my hon. Friend the Member for Streatham said, the economy is flatlining. Growth is much slower than is needed, borrowing is way up and, with the greatest of respect to the Secretary of State for Work and Pensions, the welfare bill is still rising.

This will be a lost decade without a change. We need a new direction, we need new policies and, in reality, we need a new Government.

11.15 am

Stephen Metcalfe (South Basildon and East Thurrock) (Con): It is a pleasure to follow the hon. Member for Poplar and Limehouse (Jim Fitzpatrick) who, with his usual enthusiasm, delivered an entertaining and informative speech.

I want to mention a number of issues this morning. Although not all of them are covered by the subject of today’s debate, it is important that we get them on the record. I want to discuss three main areas, and then to propose one in which we as a Government could go further. There is no doubt that we face huge challenges

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as a country, and the biggest challenge remains our economy. It colours everything that we do and it is the backdrop to every decision we make.

It is worth reiterating the facts of the toxic inheritance we acquired when we came into government. We were running a deficit of 11% and had borrowed the equivalent of £1 million a day for the past 4,000 years—since the pyramids were topping out. We must deal with that. We are dealing with it and we are tackling it, but there is no doubt that the waters are choppy. Rather than talking down our economy, which we so often take great glee in doing, we need to start talking it up and looking for some of the positives that we can find out there. The fact that there are 1.25 million new private sector jobs is a positive, as is the fact that there are more people in employment than ever before.

Mr Kevan Jones: The hon. Gentleman talks about talking down the economy, but what did the coalition Government do in their first six months if not talk down the economy? They tried to scare people, saying that if we did not take the draconian action they have taken, our levels of debt could be on a par with those of the likes of Greece.

Stephen Metcalfe: My understanding is that our levels of debt are on a par with those of Greece as a percentage of GDP. They certainly were at the time. Yes, when we came into government—

Mr Jones rose

Stephen Metcalfe: Shall I answer the hon. Gentleman’s first point before I take a second intervention?

The hon. Gentleman’s other point was about our explaining to people when we came to power the inheritance we were left and the measures we had to take to tackle it. I was slightly confused earlier this morning when listening to the hon. Member for Streatham (Mr Umunna) who said that the only additional borrowing that Labour had mentioned was the VAT cut, which would add an additional £12 billion to the overall borrowing we have identified. I assume that means that he would stick to every spending plan we have in place. Our spending plans have resulted in spending reductions across Departments, every single one of which have been opposed by the Opposition. I am slightly confused about their current line. Do they agree with the cuts and just want to borrow an additional £12 billion to cut VAT, or are they saying that they do not agree with the cuts, that they will backtrack on all that and that they will raise additional taxation?

Mr Umunna: As the hon. Gentleman has asked the question, the first thing to say about our five-point plan for growth and jobs is that it is a plan to stimulate the economy now. The ridiculous argument made by Government Members is that if we are voting against things, that has nothing to do with their choices and decisions. It is important to remind him of that. I think that people resent his Government giving people who earn millions of pounds a huge tax cut while ordinary people in his constituency suffer because of what his Government are doing. It is about the choices one makes.

Stephen Metcalfe: People in my constituency are suffering because of the toxic economic inheritance we

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acquired when we came into government.


I am sorry; it is simple. If we had not inherited the largest deficit in the developed world and a huge debt, we would not need to make the decisions that we are making now. We never hear a credible alternative from the Labour party; we just hear opposition.

Mr Kevan Jones rose—

Stephen Metcalfe: I shall move on.

I shall structure my remarks around the national insurance contributions Bill and what more we can do to support business, but first I shall mention two issues that are of great importance to my constituents. Along with the economy, one of the issues that we struggle with is what we should do about immigration, and how we should handle that quite sensitive issue. We have to get the balance right. Undoubtedly, as a nation we have benefited from immigration. We are a global trading nation; we have sat at the heart of world economic development for very many years, and people come to this country to add to our economic vibrancy. But I share with my constituents a concern about how we handle that fairly—how we achieve a balance. Some of the announcements made in the Gracious Speech will be very welcome. It strikes a sensible balance between my constituents’ rights and those of migrants or immigrants who then commit a criminal offence. It seems to strike people that the pendulum often swings too far in support of the perpetrator rather than the victim.

We are a fundamentally fair nation. We are respectful, we are tolerant, and we believe in fair play, but we do not believe that a person who abuses that tolerance has a right to remain here. I am therefore very pleased with some of the announcements in the Gracious Speech, and I hope the Bill will demonstrate to my constituents that we are tackling a serious problem. They really do not understand how people who break the law here are able to continue to benefit from our good standards of respect for them. Those people should return to their own country when they break the rules here; they forfeit the right to stay.

Bob Stewart (Beckenham) (Con): On that point, I am sure my hon. Friend will agree that if people advocate breaking the law—by making death threats, for example, against people of this country—they should be put on the list to leave as soon as possible.

Stephen Metcalfe: I thank my hon. Friend for his intervention; I could not agree with him more. If appropriate measures do not exist, we should put them in place, and if they are there, we should remind our judiciary to exercise them.

My constituents will be pleased to hear that we are taking action on antisocial behaviour. When I came into office in 2010, I pledged to my constituents that I would look at tackling antisocial behaviour with them. In my constituency I organised an antisocial behaviour conference, which was attended by a Minister and at which we brought together councillors, the council and local residents to talk about their experience of antisocial behaviour. It is the scourge of many of our estates and town centres, and the description often belies its seriousness. It can make people’s lives a living hell. I am very pleased to see that we are recognising that and taking greater action to streamline the process for tackling it.

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I do not want to demonise young people, who often get put in the frame for being responsible for most antisocial behaviour. Just because they are young and meet their friends in the street does not mean that they are committing antisocial behaviour; we should remind people of that. However, when such gatherings turn into antisocial behaviour we need to tackle it, and fast; and we need to give councils or the police the necessary power to do so. The most difficult issue that I am presented with at my surgery is that of neighbours creating problems for each other. I hope the Bill will make it easier to tackle antisocial behaviour caused by neighbours.

Thirdly, I want to discuss our economy and business. At this point I should declare my interests. I am a shareholder in a small business and worked in a small business throughout my career. Consequently, everything that I say about small business will probably benefit not only the business that I was involved in but many businesses across the country.

For too long we have focused on the public sector, and we have focused too much of the private sector into one area—banking, on which we have relied too much. I am pleased that there has been a push towards rebalancing our economy. I am also pleased that there has been significant growth in private sector businesses over the past three years—up 250,000. In south Essex, where I represent Basildon and Thurrock, the number of new businesses is up nearly 9% on last year—three times the regional average. There is a lot going on down in my patch. We are doing well in terms of job creation. DP World—Dubai Ports—is creating the London Gateway container port, which will generate 12,000 new jobs, but there is much more to be done. Many small businesses throughout my constituency are still trying hard to make ends meet. They will particularly welcome the measures announced for the national insurance contributions Bill. Anything that cuts the cost of doing business must be welcomed.

I will be honest: small businesses are struggling out there. It is tough. Rising costs, changing trends, changes on the high street, the rise of the internet, and ever-changing technology mean that small and medium-sized enterprises face ever-increasing challenges, yet they persevere in trying to make ends meet. I make a plea to the Government on their behalf: please keep listening to them; keep your ears open, and please, please remember that many small businesses act as a social service to their employees. They recognise that their employees are one of their greatest assets and do all they can to nurture and support them. They do not abuse them; they recognise that their future prosperity lies with their employees. I hope that, as a result of the changes announced for the national insurance contributions Bill, those small businesses will be encouraged to take on even more employees in the coming months.

There is still a significant challenge out there. If small businesses, the lifeblood of our economy, are to prosper they need access to easy, cheap finance. The Government have moved a significant distance. They have brought forward many initiatives to address the issue, but there is still a significant problem. Many of the initiatives address issues of access—some are those of cost—but I do not think that any yet address both. Banks are

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taking too risk averse an approach to lending and we must intervene to change that. Too many banks find ways of demonstrating lending while supporting those who do not necessarily need it. While we can show that lending is up, I am not convinced that it is getting to the right destination.

I would encourage the Government to consider using their borrowing powers—the trumpeted 2%, depending on the length of the bond—to borrow and lend directly to businesses. The announcement of the business bank is very welcome, but I fear that with an arrival date of late 2014 and only £1 billion available, it may be too little, too late. I am 100% behind the Government’s debt and deficit reduction plans and 100% behind the approach that they are taking, but we must put all our energy into finding ways to make access to finance easier, whether through lending at the rate at which we borrow or even subsidising it and lending at 0%. Lending a business £100,000 at 0% over a couple of years would cost a sum similar to the employment support allowance of £2,000 and it may well deliver significant economic growth and job creation. This is not unheard of. The Government already operate similar schemes. The Insolvency Service operates a scheme that supports businesses when they need to make difficult decisions to keep them in business. I would like the Government to explore how they might make access to finance easier.

The one thing that I am sure of is that only this Government and only those on the Government Benches have the drive, the energy, the commitment and the understanding to do what is right for this country, whether for small businesses, our own constituents, large businesses or the wider society. I am confident that only we will be able to sort out the toxic inheritance that we acquired and do the right thing. I hope that when the next election comes, we will be able to reap the benefits of that for the whole country.

11.31 am

Mr Kevan Jones (North Durham) (Lab): The hon. Member for South Basildon and East Thurrock (Stephen Metcalfe) has just spoken about talking the economy down. I know it was three years ago, which seems a long time, but we need to remind people of who in 2010 was talking this country’s economy down—it was the Chancellor of the Exchequer and this coalition Government. They expressed the ridiculous notion that without the draconian cuts that they brought in, which the Business Secretary said earlier they now recognised were a mistake, we would end up with an economy like that of Greece. We heard the nonsense, which was repeated by the hon. Member for South Basildon and East Thurrock, about the fact that we had the largest debt in the developed world.

Let us look at the facts. In 1997 the Labour Government inherited a debt to GDP ratio of 42%. At the beginning of the financial crisis in 2008 that had been reduced to 35%, so irrespective of the Prime Minister’s claim in opposition that we were not mending the roof while the sun was shining, that is exactly what we were doing, which left us in a strong position to weather that financial crisis. The deficit that we inherited in 1997 was 3.9%. That was nearly halved by 2008 to 2.1%. The hon. Member for South Basildon and East Thurrock throws around figures suggesting that we had the largest debt. In cash terms, yes, but for the millionaires in the House—

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I do not know whether there are any in the Chamber today, although there are plenty in the Front-Bench team of the Conservative party—

The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Alistair Burt): Not guilty.

Mr Jones: I accept that.

If one looks at the debt of a millionaire in cash terms, of course it will be larger than that of someone who is earning the minimum wage. To compare the size of the UK economy to that of Greece takes no account of that.

We need to recognise who talked the economy down and who took the disastrous decision in those early days to take demand out of the economy. We were growing, as the shadow Business Secretary, my hon. Friend the Member for Streatham (Mr Umunna), rightly said. That destructive early cut, along with talking the economy down, sucked confidence out of the economy. Getting that confidence back is very difficult. Clearly, many people, and certainly those in my constituency, are very cautious about what they are spending.

Let us have this debate based on the facts. I accept that we in the Labour party missed a trick. We were self-obsessed for nearly six months as we selected a new leader of the party, so we did not rebut the nonsense that was put out at the time.

The Business Secretary said, strangely, that the Queen’s Speech is not the mechanism for getting the economy going. I find that remarkable. This is a lost opportunity. The Queen’s Speech was so thin on substance that it could be marketed by WeightWatchers. There is nothing in it that will help the 20% of young people who are in long-term unemployment. My hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick) spoke about a lost decade. That is so, and we need to remind the House that that has consequences for individuals. The 20% who are now unemployed—and their number is increasing—will have their lives affected for ever. We must recognise the human cost behind the statistics. The problem will not be solved for those individuals in the short term and will have long-term implications for constituents such as mine and those of my hon. Friend that will need to be addressed in the long term.

Ms Abbott: Does my hon. Friend agree that there will be not just a lost decade but a lost generation? Academics have said that young people graduating now from college and university who do not go into employment can look forward to a future always on the fringes of the employment market.

Mr Jones: Indeed. It is even worse because those who are graduating now are burdened with the debt of student loans, which the Deputy Prime Minister, when he was fighting the general election, said he would not bring in. I worry about those individuals. In the north-east of England, after the destruction of heavy industry under the previous Conservative Government, I saw how whole communities were written off. My fear is that we are writing off a whole generation of young people to long-term unemployment amid low levels of economic growth.

In the Queen’s Speech, as in much that the Government are doing, one has to look at the detail of the proposals. A lot of that is presented for the headlines, but it is

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worth looking at some proposals which do not have a great deal of substance to them. I shall refer first to the Mesothelioma Bill. Before I was elected to the House, I was a full-time trade union official and legal officer for the GMB. I dealt daily with people who were suffering from the effects of exposure to asbestos. It is heartbreaking to speak not only to the individuals who know there is a death sentence hanging over them, but to the families that they leave behind. Some of the victims are older, but many are young. It is a terrible disease. Some people can be exposed to quite high levels of asbestos and not have long-term health effects, but others are affected.

This country’s approach to asbestos-related issues has been a national scandal. After the second world war the Government wrote to employers organisations saying that exposure to asbestos was dangerous to health. Was anything done? No. We continued for many decades to deny that there would be any health effects. Successive Governments’ response to the issue is a shame and a scar. If the disease had affected middle-class communities in leafy Surrey, for example, it would be a front-page headline in every paper—it would be a national scandal. But because it is concentrated in the north-east and other poor communities who do not have the strong voice that other communities have, the victims have been overlooked.

The Bill builds on what the previous Government intended. We proposed setting up the employers liability bureau and a tax on insurance companies to pay for the individuals who developed asbestos-related disease and who could not trace the insurance companies of now-defunct employers. The Bill was trumpeted as a great step forward. Even a great journal such as The Shields Gazette announced:

“Asbestos victims across South Tyneside are set to share in a £355m compensation bonanza.”

Well, I just wish that local papers would write stories the old-fashioned way by having a journalist who actually understands the issue, rather than, as seems to be so common now, simply responding to press releases.

If we look at what is proposed, we see that it is nothing of the sort. First, it covers only those individuals who developed mesothelioma after 24 July 2012, so a whole group of mesothelioma victims and their families will get no compensation at all. Secondly, it does not cover other asbestos-related diseases like lung cancers, asbestosis and pleural plaques, so there is a group of individuals who, even after that date, will get no compensation at all. Even for the victims who will qualify for the scheme, there will only be a flat fee of 70% of the average compensation payout.

Also, the scheme will take no account of an individual’s circumstances. One of the youngest victims I dealt with as the union’s legal officer was 46 years old and had three young children. Under the scheme, if he could not prove who the insurance companies were, that would not be taken into consideration. That needs to be amended as the Bill goes through. It is important to remember that it is the trade unions that have fought over many years to ensure that those individuals get the compensation they are entitled to.

One wonders whether this scheme does not represent a very good deal for the insurance companies—I think that it does. The Union of Construction, Allied Trades and Technicians has worked to expose the fact that,

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simply by coincidence, from October 2010 to September 2012 Lord Freud, the Minister responsible for the scheme, met the Association of British Insurers, Aviva, Royal Sun Alliance and Zurich on no fewer than 14 occasions. That shows how effective their lobbying has been in limiting their exposure to the scheme, and that needs to be changed.

Jim Fitzpatrick: My hon. Friend makes an important point. As a former asbestos worker, from my time in the London fire brigade, I know a number of former colleagues who have died as a result of this disease. The medical evidence on asbestos has been known since 1928. I am very disappointed by what he is saying, because I did not realise that there has been some attempt to manipulate the story. When I read the headline about a compensation Bill, I thought that it was good news, but he is suggesting that it might not be as good as it is being presented in the media. We will have to look at that very carefully.

Mr Jones: Like a lot of the things the Government do, we have to take the shiny wrapping off carefully and look at the contents. In so many areas we find that there is either very little in it, or a stinking mess of incompetence, which is now becoming a trademark of the Government.

Stephen Pound (Ealing North) (Lab): If I may interrupt my hon. Friend’s unwrapping for a moment, he is probably the best qualified of all Members to link the armed forces and the problem of asbestos. I urge him to look at those men—they are mostly men—who served in the Royal Navy in the ’50s and ’60s and often had to use flash hood protectors, which were imbued with asbestos. Looking at that issue has been very difficult in the past because of the confidentiality of procurement.

Mr Jones: We made some progress on that when in government in relation to Crown immunity and the fact that people can now access war pensions for such things, but it is very difficult. It is easy to argue that their exposure to asbestos was quite limited, but it can still cause some debilitating diseases. The proposals do not represent a great victory for victims.

The deregulation Bill has been trumpeted as something that will remove the burdens on business and civil society in order to facilitate growth. The great idea seems to be that sole traders will somehow be exempt from health and safety legislation. We wait to see how that will generate growth. It will also create some problems. For example, will we have a two-tier work force on certain sites, with some people having, quite rightly, to follow sensible health and safety legislation, which was put in place to protect not only them but the public, while others will be able to do what they want? As I asked the hon. Member for Tamworth (Christopher Pincher) earlier, if I invite an electrician into my house as a sole trader, will I be signing up to the fact that he can completely ignore any type of health and safety legislation, whether in relation to me, my family or anyone else?

Stephen Metcalfe: The point that the hon. Gentleman is making would be a fair one if it was accurate, but the actual wording refers to exempting the self-employed from health and safety law where they pose no potential

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risk of harm to others. That addresses the point he has just made, because an electrician working in his house could cause harm to others and so would have to comply with all the regulations relating to the work being undertaken. The purpose of that part of the Bill is to prevent the ridiculous amount of records that have to be produced and kept when people work for themselves.

Mr Jones rose—

Mr Deputy Speaker (Mr Lindsay Hoyle): Order. We need short interventions, because they are taking up a lot of time and many more Members wish to speak.

Mr Jones: I would be intrigued to know which piece of health legislation would not be covered by the proposal. Again, I think that it is simply one of the issues that have been trumpeted by certain Members on the deregulatory wing of the Conservative party, who have clearly been prevented from pursuing the worst excesses of Beecroft by the Liberal Democrats. I just think it is complete nonsense.

On immigration, I consider the announcements in the Queen’s Speech to be a knee-jerk reaction from the Prime Minister to the threat he sees from his Back Benchers and from the UK Independence party. We have heard a lot of strong language about a crackdown on migrants, and in relation not only to migration but to access to health care and benefits. I understand that a ministerial group on immigration has been meeting, but it has not yet come up with a great deal because most of the plans that have been put forward have been blocked. The Health Secretary has been saying that we have a problem with health tourism, but he cannot tell us how much it costs.

The only real legislation put forward on immigration is secondary legislation that will enshrine the rules on deporting foreign prisoners and on getting private landlords somehow to check whether their tenants are entitled to be in the country. The first one is already law and so will affect nothing, and I do not see how the second can work without some type of registration scheme. Also, it will not apply to the bulk of immigration in this country, which it is threatened will come from Romania and Bulgaria, because that will be perfectly legal.

It is interesting that Nigel Farage says that he is now the heir to Thatcher. I remind Members that it was Margaret Thatcher who signed the Single European Act in 1986, which allowed the free transfer of labour across Europe. These proposals will have no effect. The Prime Minister is trying to act tough, but in practice he can do very little about the transfer of EU migrants. In many ways that transfer of labour has been good for British people, because many people in the north-east who were made redundant when the shipyards closed now work all over Europe, making a contribution not only to the economy of those countries but here.

My hon. Friend the Member for Poplar and Limehouse referred to the fact that we are at the fag-end of this Parliament. I have to say that the Business Secretary looked very unhappy this morning. He reminds me a little of the father of the bride at a shotgun wedding who is now going round saying, “I told you it wouldn’t last very long.” The Prime Minister obviously has a problem with his children on the Back Benches who are now in open revolt. It will be very interesting to see how

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it all ends. The lack in this Queen’s Speech of a positive economic stimulus over the next two years will add to the misery that is being faced day in, day out by many thousands of people in this country, many in my constituency.

11.49 am

Gordon Birtwistle (Burnley) (LD): It is a pleasure to make a contribution to the debate on the Gracious Speech, which was delivered earlier in the week. I want to talk about the economy, particularly in relation to apprenticeships and trainees.

I intervened on the shadow Secretary of State about rebalancing the economy, and he accepted that we have to do that. He did not comment when I asked him why the previous Government reduced the 22% of GDP that came from manufacturing to 9%, and how they managed to do that. Rebalancing our economy is vital to get this country out of the financial mess we are in, because we cannot rely on the City and the service sector to pull us out. We came into government three years ago with the manufacturing sector representing, as I said, 9% of GDP. Thankfully, that proportion is now growing.

Unfortunately, we do not have enough people in this country to do the jobs that the manufacturing sector is going to need. It is anticipated that over the next 20 years the civil aerospace sector will be ordering $7 trillion to $9 trillion-worth of new aeroplanes. Many of the parts and engines for those aeroplanes are manufactured in the UK. That will almost double the aerospace industry in the UK, but as things stand we will not have the skills to deliver those products to the industry. That is a big problem.

Mark Hendrick (Preston) (Lab/Co-op): The hon. Gentleman will know that Barnoldswick, which is not very far from his constituency, has a major manufacturer of aerospace blades for Rolls-Royce engines. Why do not Rolls-Royce and other similar companies working in the aerospace sector take on and train more apprentices to meet the demand he is talking about?

Gordon Birtwistle: I can tell the hon. Gentleman that I was pleased to visit the Rolls-Royce training facility in Derby only a couple of weeks ago, and I was delighted to see the millions of pounds of investment being put into it. Rolls-Royce has picked up the story and is getting on with it.

There has been a lack of apprenticeships and training, certainly in engineering, in which I have been involved all my life, for the past 20 years. We cannot have someone who is an apprentice today assembling aeroplane engines tomorrow. It is a long process. The Government have started that process with the apprenticeships scheme, and over the next few years we will be able to deliver on this. It is very difficult to train apprentices to become skilled people who can deliver what is needed for $9 trillion-worth of aeroplanes over the next 20 years, but we must get on with it. Thankfully, we have made a start, although we are not moving fast enough.

We quickly need to resolve the situation with the national aerospace supply chain centre, which has been agreed by the Government but for some reason is stuck in the Whitehall mandarins division. Having been here for three years, my view of what goes on behind the scenes with the mandarins is that it seems

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like “Yes, Prime Minister”. I watched that series on television and thought, “No, it can’t be like that”, but actually it is. We come here and listen to all the statements about what we are doing, and then it is still being done 12 months down the line. Setting up the national aerospace supply chain centre must be a priority, and I hope that it is located at the Samlesbury site of BAE Systems. I hope that the proposed national skills centre will be set up at the same site. That centre will train 600 apprentices a year for the aerospace industry, for United Utilities, and for the shale gas industry—another industry coming through in the north-west that will need skilled people.

Bob Stewart: Many people who learn trades in the armed forces have a problem translating their qualifications into civilian life. We could do more to equate armed forces qualifications from places such as Cosford with those that are required in the aerospace industry, because there are people who could easily move into that industry.

Gordon Birtwistle: My hon. Friend makes an excellent point. I was about to move on to the oil industry, to which former members of the armed forces make a substantial contribution. I was on an oil rig in the North sea about 12 months ago and quite a number of ex-military personnel were working there. The medical officer was an ex-Army officer and some of the cooks in the restaurants were ex-Army personnel. It is good to see that they are making such a contribution.

The oil industry, which is more or less a forgotten industry, contributes billions of pounds to economy. One national oil company is about to invest $11 billion in the North sea. The site is about 100 km off the coast of Scotland, but every bit of kit is being provided from overseas. That is an outrageous scandal. That kit should be produced in the UK. Unfortunately, we do not have the companies to do that any more because we have let them disappear over the past 20 years. The previous Government let them disappear without batting an eyelid because they thought that the financial sector could bail us out of anything.

Mr Kevan Jones: The hon. Gentleman is speaking complete and utter 100% rubbish. If he goes to the north-east of England or to Scotland, he will see first-rate British companies that are providing not only hardware for the oil industry, but vital support.

Gordon Birtwistle: Exactly; once the kit has been provided, the support comes from those companies. No company on the north coast of Scotland can build a 17,000-tonne jacket or a topside that weighs more than 45,000 tonnes for the North sea. Those pieces of kit are being built in Spain and South Korea.

Mr Jones: If the hon. Gentleman goes to the technology park at Walker in Newcastle, he will see that 80% of the world’s under-sea umbilical cable is built by two companies in the north-east. That is a success story not just for the north-east, but for UK plc. I am sorry, but his notion that there is no productivity in this country for the oil and gas sector is complete rubbish.

Gordon Birtwistle: I refer the hon. Gentleman to what I said earlier about major structures. I agree that sub-sea equipment is built here. I used to own an engineering company that still builds sub-sea equipment. However, we can no longer build major structures.

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Mr Jones: That’s not where the money is!

Gordon Birtwistle: I do not want to have that debate across the House, Mr Deputy Speaker.

I will move on to trainees and apprenticeships, and the national shortage of skilled people for the jobs of the future. I was told yesterday that of the £106 million budget for the National Careers Service—bear in mind that 1 million young people are out of work— £84.5 million is spent on people over 25, £15 million on prisoners and £5 million on offering careers advice to young people. I think that that is the wrong way round. We should be spending at least half the money on getting young people into the jobs of the future and a little less on people over 25 years old and prisoners. I was shocked to hear that we spend three times more money on careers advice for prisoners than on careers advice for young people who are leaving school. That is outrageous and I hope that the Government will look at it. We need to increase the number of apprenticeships and traineeships to provide people with the skills and the jobs that will be required for this country’s economy in the future.

11.59 am

Mark Hendrick (Preston) (Lab/Co-op): I rise to speak about jobs and businesses, and in particular about those serious issues in our country that the Queen’s Speech has done—and will do—little to alleviate. Unemployment in Preston is currently about 7%, and a great deal of existing employment is low paid. With the measures that the Government are trying to introduce to make issues of health and safety less important and make things easier for employers, being in employment will clearly be a risky business. We recently commemorated the international recognition of workers who have lost their lives or fallen ill while in employment, yet we also have a Government who are making it more likely that employees will fall ill while in work.

At its lowest point, about 1,400 people in Preston were on jobseeker’s allowance. There are now about 4,000, which is very bad. Lots of young people are coming to my surgery complaining about being sanctioned, supposedly for not trying hard enough to find a job, but in fact very few vacancies are available in Preston. For those who are applying for jobs to be told that they are not trying hard enough is, in my view, adding insult to injury.

There are good industries—the hon. Member for Burnley (Gordon Birtwistle) mentioned aerospace, which is a good industry in north-west England, focused particularly on Lancashire. It is doing great things to train young people and get them into work. Westinghouse provides nuclear rods for the nuclear industry, but there are not enough such companies. Although I welcome the Government’s aerospace strategy and we are doing well in that area, we have unfortunately seen a gradual decline in many industries, particularly in consumer electronics and for a lot of consumer goods, and those industries and jobs have left this country to go to other shores.

The Business Secretary said that we cannot legislate our way to economic growth, but is not the Enterprise and Regulatory Reform Act 2013 a way of legislating to promote economic growth? We must be able to create

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the conditions to allow that growth, and the Business Secretary’s earlier response on the creation of more than 1 million private sector jobs was interesting. Why has that not resulted in any significant growth? He did not say—this was left to one of my colleagues—that it is because many of those jobs are low paid or part time, and that is why they are not contributing to the growth we would like to see in this country.

As we teeter, as we saw, on the brink of a triple-dip recession, let us cast our minds back to before the general election in 2010. The Labour party had a programme that would have got rid of the deficit over two terms, and halved it after the first. This Government promised to wipe out the deficit in one term. What we saw beforehand was a programme that would have benefited this country in a great way being pooh-poohed. When we said there would be a double-dip recession—[Interruption.] The Minister is chuntering from a sedentary position. If he would like to intervene, I invite him to do so.

The Minister of State, Home Department (Mr Jeremy Browne): I am grateful for this unexpected opportunity. I was pointing out that the previous Prime Minister promised the House that he had abolished boom and bust. I therefore do not understand how the hon. Gentleman can be talking about a bust, given that the previous Government eradicated the possibility of Britain ever having a bust again, according to the previous Prime Minister.

Mark Hendrick: I thank the Minister for his intervention and he will, of course, note that the last recession in 2008—[Interruption.] Again, he is chuntering from a sedentary position, but I will try to answer his question. He will remember that the economic crisis and recession in 2008 was caused by external shocks, principally starting in the US housing market where financial products were wrapped up in very unsafe debts. That caused financial contagion around the world. The recession was an international one, not a home-grown one, such as the ones under previous Conservative Governments and the coalition Government. That is how the deficit came about. In the Labour Government’s wisdom, they thought it right to bail out the banks. Otherwise, people would have gone to cash tills and no money would have come out, and there would have been no finance to keep the economy moving. They now get the blame for an international problem—the problem was not home grown, unlike the recessions under the previous Conservative Government.

The Labour Government were accused—[Interruption.] The Minister chunters again from a sedentary position, but I will let him intervene.

Mr Browne: I am grateful for a second opportunity to intervene. The previous Prime Minister did not say, “I have abolished boom and bust,” adding in brackets, “Unless there are people who lend irresponsible mortgages in the United States of America.” He said, “Labour has abolished boom and bust.” I remember sitting in the House hearing him make that boast the whole time. We now hear that boom and bust is all about international factors. Why does the Labour party not take responsibility for building up the massive deficit when it promised it had abolished boom and bust, no caveats, full stop?

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Mark Hendrick: We do not need caveats. The Labour Government will not take responsibility for the housing market in the US. The Minister says that we blamed international factors, but the current Government try to blame the eurozone for the current deficit, which is absolutely ludicrous. The policies they introduced when they came to power in 2010 were such that a second dip was likely. We told them a second dip was likely, and that is what happened. We have nearly had a third dip.

The 1 million jobs in the private sector that the Government keep bragging about are low-paid jobs, many are part time, and they are doing nothing to contribute to growth in this country. As we can see, growth is flatlining.

The Government talk about the growth of more than 100,000 apprenticeships. The hon. Member for Burnley was perfectly correct on the excellent apprenticeships offered by companies such as BAE Systems, Rolls-Royce and many other good companies up and down the country. When I was an apprentice—I am sure he was an apprentice in his day—apprenticeships generally took three or four years, and apprentices had to gather lots of skills and relevant qualifications. Some of the so-called apprenticeships that the Government label as such are weak and involve very little in the way of qualifications. Some apprenticeships are in things such as cake decoration or hairdressing. We need hard skills in high-tech, high added-value industries to get this country back in growth and back to being a power in the industrial world, but they are not the skills involved in what the Government label the 100,000-plus apprenticeships.

Gordon Birtwistle: Yes, I was an apprentice engineer, and apprentices then did three or four years, but I have friends who are apprentice hairdressers and a relation who was an apprentice baker. It is wrong to decry the skills available. It might not take three or four years to learn them because of technology, but people work hard for those skills and deliver a service with them afterwards.

Mark Hendrick: I would go along with that, but we are not comparing like with like. I am saying that an apprenticeship over four years that leads to a highly skilled job with well respected qualifications is very different from what is on offer. In the past, those positions have not traditionally been called apprenticeships.

Bob Stewart: I and I was born in Preston and I understand and agree that that area of Lancashire has huge potential for apprenticeships. I am sure the hon. Gentleman and the hon. Member for Burnley (Gordon Birtwistle) agree that we should put apprenticeships at the same level as the requirement for university education. We should have a huge drive on apprenticeships to get our young people into a qualification so that we can take advantage of the future economy of the world.

Mark Hendrick: I totally agree with the hon. Gentleman.

Taking people out of income tax is great, and we want to take people out of income tax, but how many people have lost tax credits? Many people who have been taken out of income tax will find, particularly if they have children, that they are not better off.