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Mr Sheerman: Does my right hon. Friend agree that social value, if combined—as it can be, and will be—with crowdsourcing and crowdfunding, will bring a real democratic renewal and a modern capitalism to our country?
Hazel Blears: My hon. Friend is absolutely right. The combination of social value and the creation of social investment through crowdsourcing, peer-to-peer lending and the activities of the Big Society Capital bank, which was a Labour idea, will take us along precisely that track.
My final example is Interserve, which employs 50,000 people and has a turnover of £2 billion. Its chief executive, Adrian Ringrose, recently committed himself to reinvesting 3% of his profits in the communities where his companies operate. That is the kind of thing that good, decent companies can do, and it can make a big difference. Such companies want to rebuild trust and secure a better reputation for big business, which has suffered from a lack of trust because of the activities of the banks and others. There is also the fact that it is good business.
The challenge for the Government is to enable that activity to become mainstream, rather than a niche activity in which only a few people engage. I ask them to think seriously about extending the Public Services (Social Value) Act 2012 to cover goods and major infrastructure. Over the next five years, we shall spend £200 billion on the really important things that we need: energy, transport—including High Speed 2—and building broadband. Why should we not include social value clauses relating to local labour and local supply chains in all infrastructure contracts? Can we not imagine the difference that that could make?
When money is tight—and it would be tight for us if we were in government— we can make a real difference by gaining extra impact from procurement and by doing business differently. We need community reinvestment, and we need to provide incentives for companies such as Interserve to do the right thing. A year ago, when I presented a ten-minute rule Bill in the House, I suggested that bankers could voluntarily put some of their income into local social enterprises. That might even make bankers popular, for goodness’ sake, and it is a very practical thing that we could do.
The Government must also support the development of measurement and metrics for social impact. There is a lot of good work going on. The Connectives Limited in Manchester, which is run by two inspirational woman accountants, has done fabulous work on social audit and accounting, but if we are to make such activity mainstream, we need to ensure that the metrics are rigorous and substantial. I should like the Treasury to do some more work on that.
In the time that I have left, I want to mention the Big Society Capital bank. It was the bank’s first anniversary last week, and I went to an event to mark it in the City. There was standing room only because there was such a huge appetite for the creation of a social investment market. The leadership of Sir Ronald Cohen and Nick O’Donohoe is first class. They have some really good ideas about how to get products to market, and about new types of bond such as social impact bonds. They are trying to persuade foundations and pension funds to invest. I welcome the Government’s consultation on
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a tax relief for social investment; I think that that is a very good idea. It could release an extra half a billion pounds into the market.
Difficult economic times demand creativity, innovation and boldness. We must get behind that, and make it happen.
4.8 pm
Mr Peter Bone (Wellingborough) (Con): It is a great pleasure to follow the right hon. Member for Salford and Eccles (Hazel Blears), who made a passionate and knowledgeable speech about social value.
Amendment (b) has been signed by 92 right hon. and hon. Members, drawn from the Conservative, Labour, Liberal Democrat, and Democratic Unionist parties. The amendment respectfully regrets
“that an EU referendum Bill was not included in the Gracious Speech.”
Members may wonder why I am speaking about the European Union on a day that was allocated to a debate on economic growth. The one thing that is certain is that there is absolutely no connection between economic growth and membership of the EU—quite the reverse. However, it is the Labour Opposition who choose the subject for each day of debate on the Queen’s Speech. On no day did they choose to debate foreign affairs, which indicates how little regard they have for international relations in general and Europe in particular. I suspect they did not want to let the House know of their divisions over Europe.
The Prime Minister would have liked to put an EU referendum Bill in the Queen’s Speech, but was blocked by the Deputy Prime Minister and the Liberal Democrats. However, yesterday the Conservative party published a draft EU referendum Bill. If this Bill can be debated in Parliament, I believe it can become law.
Mr Hood: The hon. Gentleman has just imparted some very interesting information to the House. Is he saying that the Prime Minister has told the Conservative party that he wanted a referendum Bill in this Queen’s Speech but he was stopped by the Liberals?
Mr Bone: That is exactly what I am saying.
The published Bill is short and to the point. The question is clear—
Stephen Williams: Will the hon. Gentleman give way?
Mr Bone: May I make a little progress, as I am about to quote the question?
“Do you think that the United Kingdom should remain a member of the European Union?”
If the Bill is passed, the Prime Minister could try to negotiate a European free trade area or, in other words, a common market, without all the regulations, red tape, and cost, without the EU laws, the European Court, the European Parliament, the Commission and the bureaucracy, without the £19 billion a year it costs just to be a member of the EU, and without the £30 billion-plus trade deficit with the EU each year. However, ultimately I do not believe that these negotiations will succeed, not because of the efforts of the Prime Minister, but because of the attitude of the EU elite.
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Stephen Williams: I thank the hon. Gentleman for giving way. I sometimes think there are three parties in the coalition: my party, the Liberal Democrats; the sensible wing of the Conservative party, whose Members serve on the Government Front Bench; and the hon. Gentleman’s wing of the Conservative party. However, my information is that the Conservative party did not ask for this referendum to be in the Queen’s Speech, so I think he ought to have a word with his colleagues.
Mr Bone: It is very good news that the Liberal Democrats have had a change of heart and will now allow the European referendum Bill to come forward in Government time. I appreciate that useful intervention.
In any case, once these negotiations have finished, there will, for the first time in 30 years, be a vote by the people of this country on whether we should remain in the European Union. That will happen no later than the end of 2017, but of course it may be much earlier.
Anyone who votes against the amendment in the name of my hon. Friend the Member for Basildon and Billericay (Mr Baron) is clearly opposed to a referendum on our relationship with the EU. However, if Members vote for the amendment, they are clearly supporting the prospect of an in/out referendum. If the amendment is carried, the House will, in effect, have said that the Government should bring in an EU referendum Bill. It will say to the Prime Minister that the House of Commons supports his position. It will say to the Liberal Democrats, “How dare you block the will of this House and the will of the nation?”
The Liberal Democrats went into the 2010 general election claiming that they would offer an in/out referendum on Europe. On page 67 of their extraordinary manifesto “Change that Works for You”, the Liberal Democrats said:
“The European Union has evolved significantly since the last public vote on membership over thirty years ago. Liberal Democrats therefore remain committed to an in/out referendum”.
That works for me. This change of heart is, even by Liberal Democrats standards, totally absurd.
Now I shall turn to the position of the Labour party. The Labour Opposition promised a referendum on the EU constitution before they were elected, yet as soon as they came to power, they dropped the referendum. On Europe, they are the poodles of Brussels—they roll over and do everything the EU wants, including giving away Mrs Thatcher’s hard-won rebate. They simply cannot be trusted on Europe.
The shadow Chancellor sort of indicated that Labour Members would vote against the amendment today—it was impossible to know what he thought about an EU referendum—but every Member will have to make their mind up. Members who vote against the amendment are voting against an EU referendum—[Interruption.] Colleagues from the Scottish National party will do so, and their position is clear. Labour Members who do so will also make their position clear—they are against giving the people the chance of a say on the relationship with Europe.
A vote for the amendment today would give the Prime Minister the moral authority to bring in his EU referendum Bill as a Government measure. Members of the House should vote for the amendment because it is in the national interest. It is right that after 30 years the
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British public should have their say on Europe. When Members cast their vote tonight, they should not decide on the basis of party politics. That is not why we are in this mother of Parliaments; we are here to represent our constituents and to put the country first. I know that some principled Opposition Members will support the amendment, and many principled Opposition Members will oppose it, because they do not support having a referendum. One thing is for sure: every Member of this House must vote according to their conscience, and when it comes to the vote, their constituents will know whether they are in favour of an EU referendum or against it.
4.16 pm
Mr Pat McFadden (Wolverhampton South East) (Lab): The central question since the financial crash has been how to secure recovery in tough economic times. When the election took place, economic growth had been restored and unemployment was falling, but since then we have seen precious little growth, and unemployment is rising once again. Dealing with that should have been the central purpose of this Queen’s Speech and this debate.
There are measures in the Queen’s Speech—some worth while—to help small businesses to recruit new employees, which we called for, and to extend apprenticeships, which were significantly expanded during our time in government. However, one is left with the impression that although some of the measures may be worth while, as a whole they are not equal to the depth and durability of our economic problems. In fact, the Government seem to have given up and are waiting desperately for the new Governor of the Bank of England to secure the economic growth that they have so signally failed to secure.
The Queen’s Speech seems to be more about positioning and fear of the UK Independence party than about genuinely dealing with the country’s economic problems. UKIP, however, is a movement against the political establishment as a whole. It is based on a vision of the United Kingdom as it used to be, not as it is or how it will be. I have to say to Government Members that they cannot fight nostalgia with policy or positioning; the only way to answer nostalgia is to offer a better tomorrow, rather than having an argument about a better yesterday.
The Queen’s Speech has been completely overtaken by the argument about Europe. The amendment has attracted more and more signatures, and as it has done so, the Prime Minister’s professed relaxation has become greater and greater—presumably, by 7 o’clock tonight he will be completely asleep. His relaxation is not strength but weakness, and it fools no one. It is not only about the Back Benchers; while he is in the United States arguing for a European-American trade agreement, his own Cabinet Ministers are touring the studios to say that they would vote to come out of the European Union. It all feels very familiar, and it is little wonder that John Major’s former press secretary said this week that
“there are some parallels with the back end of John Major’s premiership.
One of the differences is, that was when the Conservatives had been in power for 17 or 18 years. Now the Conservatives have only been in power in coalition for two or three years.”
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No wonder President Obama had to warn the Prime Minister this week that the UK’s influence is greater when we are engaged with and in the European Union. The notion that we can swap membership of the European Union for some other transatlantic embrace is confounded by that warning, which I hope is heard on the Government Benches.
Dr William McCrea (South Antrim) (DUP): Is it not about time that we asked the British people—that the people of the United Kingdom made the decision, rather than politicians dictating to them the future relationship with Europe?
Mr McFadden: We then come to the draft Bill. There was no talk of that beforehand, no suggestion of it in the Queen’s Speech. It is a panic response to the amendment, a failed attempt to buy off tonight’s rebels. This tells us so much about how the Government operate—short-term tactics, not long-term strategy. However, the tactics fail to buy off the rebels, who are simply emboldened and come back for more. Even this afternoon we have heard people saying, “2017 is not soon enough. We need the referendum now.”
The truth is that whether the Bill is a private Member’s Bill or a Government Bill in this Parliament, no Parliament can bind the next Parliament. The time to put legislation forward to have a referendum is before the Government want the referendum, not four or five years in advance. The tactics will not work in the short term; they will simply increase the Government’s pain. Instead of stopping banging on about Europe, the Tories are back to doing little else. That is because too many people on the Government Benches care more about this than about the country’s economic problems or about being in government.
The centrepiece of the Prime Minister’s strategy is renegotiation. We have been here before, too. Harold Wilson had exactly the same strategy in the 1970s—renegotiate, then hold a referendum. He put the conclusions to the House in March 1975. To those who have not read them, I recommend that they do so. They will find plenty about beef, butter and sugar, but nothing about fundamentally altered terms of membership.
When today’s Prime Minister is asked what he wants from the renegotiation, the only specific he mentions is the working time directive. The working time directive was already renegotiated in the previous Parliament. We dealt with the on-call issue and the preservation of the UK’s opt-out. The important thing about that is that it was done without threatening to leave the European Union. If that is all that the Prime Minister can come up with, no one will believe it. Of course the European Union needs reform. It needs to be more flexible and less rigid and it needs to concentrate more on growth and jobs. The Prime Minister has a far greater chance of achieving those goals if he is not threatening to leave at the same time. This is a broader argument about our vision of the UK. Is it to be engaged or is it to retreat into nostalgia? I know which I prefer.
4.22 pm
Ian Swales (Redcar) (LD):
I was pleased to see that the Gracious Speech mentioned tackling tax evasion, and that the Chancellor later added tax avoidance in a G8 conference interview. He often says he is proud of a
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corporation tax rate that is the most competitive in the G20. Unfortunately, large companies can easily move their profits and operations outside the G20. I want to speak about the effect that this is having on the UK economy and growth.
There is widespread bafflement about how we can have an extra 1.2 million private sector jobs and so little growth. Part of the answer is tax avoidance, because many of those workers are employed by offshore companies. For example, Amazon is growing in this country at more than 20% a year. It employs thousands of people, but its sales of £4 billion do not appear in our economy. They appear in Luxembourg. Microsoft, eBay, Google and others have large businesses in the UK but their figures do not show up either, and the Google chief executive proudly talked about avoiding $2 billion in tax last year.
Now let us turn to the companies that are based here. The tax system encourages them to move manufacturing and other parts of their supply chain overseas. The Government’s change in controlled foreign company legislation makes this even more likely. Companies that do declare large profits here will find that they get a knock on the door from a well-paid tax partner of a large accountancy firm, who will put forward schemes whereby corporation tax can be avoided, the simplest of which is to export the profits to Luxembourg via interest payments. This is a route followed by well-known companies such as Vodafone and Pearson, owner of the Financial Times. In fact, it is done by most of our national newspapers, which might explain why media reporting of this issue is patchy at best.
If a profit-making company fails to succumb to the charm offensive of the tax partner, something more sinister is likely to happen. The next knock on the door could be from the vulture capitalists—representatives targeting an aggressive takeover of the company. Let us take a current example. The outstanding business success and growth of Betfair has led it recently to declare £247 million in profits. Its prospective suitors are CVC Capital. What will it bring to Betfair—better management; outstanding new internet technology? The clue is probably in the description of CVC as a London and Luxembourg-based venture capitalist. I am guessing that it will bring a shameless approach to exporting Betfair’s profits to avoid paying UK corporation tax. Boots and Thames Water are just two of the many companies that have been taken over and had their UK profits stripped out of the country and placed in tax havens.
The Government have themselves facilitated tax avoidance, not just through the tax framework but through their procurement and private finance initiative activity. The Green Book on PFI assessment still contains an assumption that 10% of total PFI payments, not profits, will come back to the Government in tax. This is risible when one examines the facts. The vast bulk of PFI deals now have an offshore element. HMRC’s own offices are owned in Bermuda, the Home Office HQ is owned in Guernsey, PFI schools in my constituency are 50% owned in Jersey, and, most bizarrely of all, junction 1A to junction 3 of the M40 is 50% owned in Guernsey. This is the story throughout the country. It is high time the Green Book was changed.
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The leakage of money from our tax system and the incentives for companies to operate in certain ways are bad for the economy, bad for growth and bad for individual taxpayers. I welcome the moves that the Government have already made. Let us remember that nearly all the framework was put in place or left in place by the last Government, and they compounded the problem by sucking up to their friends in the City, stripping high-level resource out of HMRC and telling it to go easy on big companies.
I hope that the Government will consider limiting offshore interest payments and closing the loopholes in Luxembourg and Holland, via our membership of the EU. They should prosecute tax evaders and expose and, where appropriate, prosecute their advisers. They should add advisers to their team who are not from big business or big accountancy firms and can speak up for ordinary taxpayers and small business, and they should increase specialist HMRC resources. Tax evasion and avoidance is a cancer in our society and I hope that the Government will keep on acting aggressively to cut it out.
4.27 pm
Mr Barry Sheerman (Huddersfield) (Lab/Co-op): The debates on the Queen’s Speech are a good time to look again at the relationship between us as elected Members and those who sent us here. I always feel that the one thing that I should be doing for my constituents in Huddersfield is to try to ensure that they have a good life, and most of us know what that entails. One of the things that make me feel that the good life is achievable is that over the years we have come closer to being a high-skilled, high-paid economy. However, in recent years we have faltered, and we must look closely at the challenges that we face, globally and internationally, that might lead to us being a low-skills, low-pay economy. There is already great competition around the world from people with high skills who are low paid, and I think of India in particular. Any Queen’s Speech debate on the economy must think thoroughly about the policies that we pursue in order to obtain the good life for our constituents, with high pay in a high-skills economy.
I quite liked some measures in the Queen’s Speech, including those relating to capital allowances and the employment allowance. It is not all bad; it is just all a bit vapid. There are some big gaps; big opportunities. We have just spent about 18 months with almost nothing to debate in the House, so there is plenty of room for a vigorous programme to get this country moving and working again.
I would have loved to see more vision, leadership and courage in the Queen’s Speech. There are so many things that we could be doing. Everyone will know of my interest in skills. I think that any Queen’s Speech at this time, when nearly 1 million young people are unemployed, should have introduced a Bill to abolish unemployment before the age of 25. It would cost only between £4.5 billion and £5 billion a year, but it would have stopped politicians condemning young people to live in the shadows of society on a bit of unemployment benefit here and a bit of housing benefit there. We could have ensured that every young person in this country was in education, training or work experience of some kind. That would have broken, and can still break, the curse of intergenerational worklessness. That is what we should have had in the Queen’s Speech.
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What is wrong? We can have high-falutin’ economics in this debate, but the fact is that I would be in favour of a little inflation and debt, rather than less. Keynes was in favour of that, and so am I. I am an economist, I am afraid, and my economics are from the London School of Economics. We had two good things there: we were pretty Keynesian in those days, but certainly not Marxist, and we believed in our motto, which was “To know the causes of things.” It means getting beneath a subject and understanding it in an intelligent way.
There are two things that I think plague us today. First, because people are so threatened, they are turning to UKIP, and the terror and fear on the Government Benches is apparent, as today’s debate has been taken over by a debate on Europe and fear of UKIP. The fact of the matter is that I have seen no major independent assessment of what the impact of leaving the European Union would be on the living standards of my constituents and on the well-being and good life of the people of this country.
Secondly—I will just throw this point in—I am a little worried about one thing that is in the Bill: HS2. It is expected to cost between £45 billion and £50 billion. That money, if invested in the northern and midland cities of this country, could transform the lives of cities that are now endangered. I will use the debates as the Bill goes through to make that point.
There were some good things in the Queen’s Speech, although there has been a bit of a diversion today, and it is sad to see the Conservative party in such a terrible state of distress, but the fact is that there could have been more content to get jobs, skills and homes into our country.
4.32 pm
Richard Drax (South Dorset) (Con): It is a pleasure to follow the hon. Member for Huddersfield (Mr Sheerman). I very much agree about the importance of apprenticeships, on which the Government are rightly concentrating. One radical solution would be to reduce welfare even further and use the money to encourage employers to employ youngsters so that we can train them and get them back into work, rather than giving them money to stay wherever they are doing nothing. That would be a radical solution, or part-solution, to our problems.
We have been talking about negotiating with Europe for some time, and I learnt from the Library today that we have failed to block a £6.2 billion hike in this year’s EU budget, a rise of 5.5% on the original plan. If that is a successful negotiation, I would hate to see a bad one. For the United Kingdom, that means an extra £800 million, taking our contribution this year to £14.7 billion.
Yesterday I heard Nick Robinson on Radio 4 describe the amendment tabled by my hon. Friend the Member for Basildon and Billericay (Mr Baron), and signed by me and others, as “parliamentary graffiti”, which I understand to be a meaningless scrawl that has no real impact. I must say that I am slightly tired of the way the press and other commentators just deride the genuine aim of looking at our relationship with the EU, which is desperately needed. Members on both sides of the House—this is what is so extraordinary—agree on that point. As I indicated at the start of my speech, despite the negotiations that go on, we simply do not succeed.
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Mr Bone: My hon. Friend is making a powerful speech. Does he agree that the problem with the BBC is that it is institutionally biased towards the European Union?
Richard Drax: After I left the BBC I think it certainly lurched to the left.
We have seen what happens when we peddle the line of fruitcakes and loonies: the electorate, who are disaffected enough with us as it is, vote for the party accused of having fruitcakes and loonies. The votes for UKIP two weeks ago only showed what thousands and millions of voters believe. They do not believe that the amendment is graffiti; they believe that we have a major problem and that we—this is why I was sent to this House—have to deal with our relationship with the EU.
The amendment is not, and we are not, attacking the Prime Minister at all. In fact, if hon. Members listen to what the Prime Minister has said, they will hear that he agrees with the amendment. We have been sent here—all of us—to look after our country’s interests and those of our constituents. It is my view, and that of many learned Members, that a renegotiation with the EU is vital. I suspect that it will not be successful, which will lead, I hope, to a referendum and the inevitable vote of “out”.
How often have I heard—I have heard it again in today’s debate—those who are opposed to leaving the EU say that we should focus instead on the economy and jobs? But that is what the EU debate is all about—it is about the economy and jobs. The hon. Member for Huddersfield turns his eyes to the ground as if to say, “Oh dear, here’s another xenophobic Euro-nutter banging on,” but that is not what I am doing; I am speaking for our country and acknowledging what the vote for UKIP showed. We have to wake up in this place.
Ian Swales: Will the hon. Gentleman give way?
Richard Drax: I will carry on, if I may.
If we do not wake up, we will lose the respect of the people of this country. I would suggest that repatriating the competences that still go to the EU, despite the treaties that have been agreed and the promises that have been made, would do more than anything else to generate jobs in this country. This is a golden opportunity that we must take if we want to restore the trust in this House and this country that was thrown away as a result of the failed promises over Maastricht and Lisbon.
What more evidence do we need that the EU is dead? It is finished. Look around! Wake up! Greece is a disaster and Spain is potentially on the brink of civil war—53% of youths are unemployed. [Interruption.] Hon. Members say, “Oh, my God!”, but there are riots in the streets and their own police are bashing youngsters over the head. This is the Europe that we now face.
Richard Drax: I will not give way, because I have only a short time left.
France is a basket case. Outside the EU, the economies of the BRIC nations—Brazil, Russia, India and China—and Asia are growing. In the past few days, President Obama has been encouraging our Prime Minister to fix the relationship with the EU. We have been trying to do that for years and years, but we have not succeeded. We
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joined the common market to trade with Europe and that is the relationship that we need and must have. Finally, this is not about nostalgia, as I think an Opposition Member has said, but about reality.
4.38 pm
Sammy Wilson (East Antrim) (DUP): It is a pleasure to follow the hon. Member for South Dorset (Richard Drax). The Democratic Unionist party endorses his views on the amendment, which we support. We believe it is important that the people of the United Kingdom should have a say about their relationship with Europe. Some of those who oppose the commitment to a referendum claim that it will somehow leave us with four years of uncertainty and that that will damage investment in the UK, but the genie is out of the bottle as far as renegotiation and a referendum are concerned. Any investor knows what will happen at some stage in the future, so there should be no difficulty in giving the people of the United Kingdom a say on this very important issue. I will concentrate on other issues that relate to economic growth, but I accept that our relationship with Europe impacts on economic growth in this country.
If we are to achieve the objectives in the Queen’s Speech of giving people job opportunities, rewarding hard work and reforming welfare, economic growth is important. If we are to create economic growth, we need proper stimulus. The Chancellor and the Government argue that we cannot borrow more in order to borrow less. That is not true. Good, solid investment in the economy would help us to grow and to pay our debts. That is not the view of those on the extreme left wing; it is the view of the IMF, which is hardly a left-wing organisation. In fact, many of its policies resonate with what is said by the Government. It is also the view of many industry organisations.
More importantly, the evidence of what has been happening in the economy bears out that view. The hon. Member for Wyre and Preston North (Mr Wallace) talked about what is happening in his constituency. Nearly every example that he gave was the result of stimulus through Government borrowing and spending to create infrastructure and produce jobs. I could give stacks of examples from Northern Ireland. There has been investment in our tourism industry. Not so long ago, we got a Barnett consequential as a result of the Government deciding to spend more money on housing. We put it into co-ownership housing, which has brought money down from the banks and has led to almost half of the houses being built in the private sector. Just a small amount of money from the public sector has created construction jobs and allowed people to pay their taxes, which adds to Government revenue and helps to pay off the deficit.
There is a strong case, even from traditional supporters of the Government, for borrowing and spending more money to stimulate the economy. The Chancellor made a big point today about the money markets. Actually, the money markets are quite relaxed about this. They are lending money to the United Kingdom on negative interest rates. There is more demand for Government bonds than supply. If there are sensible investment policies, the money can be made available. The question is whether there is the will or whether the Government have some other motive.
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I am disappointed that there is not much detail on what the Government intend to do about banking. According to the figures published by the British Bankers Association, lending by the banks in Northern Ireland has fallen substantially since 2010. We have not dealt with the banking crisis. There is not time in this debate to talk about the detail, but unless the Government grasp the nettle and decide what to do with failing banks that are undercapitalised and unable or unwilling to lend, we will not stimulate growth. I believe that there is great potential and that a Government stimulus could release the billions of pounds of cash assets that are sitting on company balance sheets, which would enable us to get growth and achieve the objectives of—
Mr Deputy Speaker (Mr Lindsay Hoyle): Order.
4.44 pm
Neil Carmichael (Stroud) (Con): It is a great honour to follow the hon. Member for East Antrim (Sammy Wilson).
This debate is about economic growth, and quite right too. It is good that the Governor of the Bank of England has signalled that growth is on its way and that inflation is likely to decline. That is a good combination. It is absolutely right, therefore, that we should focus on monetary activism.
Another important matter to which the Gracious Speech referred was supply-side reform. We still need to achieve elements of that, and we still have two years to do so. It is at the core of rebalancing the economy, so I want to say a word or two about supply chains. We labour under an illusion in our arguments about the trade deficit if we do not understand the complexity of supply chains and their importance across Europe and the globe. It is not just the finished product that matters but the components that make it, which provide added value. The Department for Business, Innovation and Skills is looking into that matter, because if we understand supply chains we will get a better understanding of why the European Union and the single market matter to us. That situation is made clear in my constituency, where Delphi makes the diesel injectors for the engines of 40% or so of heavy trucks manufactured and used in Europe. That is an example of component parts that go towards an end product making a big difference to the economy as a whole.
I move on to trade, and first to EU-US trade. We have to have a relationship between the United States and the European Union that makes sense and promotes trade. Right now, there are far too many tariffs, both the type that we know about and hidden tariffs. We have to end that, and the Prime Minister is absolutely right to talk about doing that. That is why President Obama was helpful to him in pointing out that we may as well fix our relationship before we decide to end it. That is a simple message that we have to consider.
Germany, Italy and usually France trade more than we do with India, China and Brazil, the economies with which we need to develop relationships. We have to pose the question whether leaving the EU would help us overtake the countries that would still be in it, and the answer is no. Instead, we should consider what we can do here to improve our exports rather than worry about having an alibi and a series of excuses. It is what we do
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here that actually matters. That is why it is important that UK Trade & Investment, for example, is providing the right network of support for small and medium-sized enterprises. We need to ensure that some of our SMEs are big enough to penetrate the markets that I mentioned and have the right skill sets and determination. We need to start emulating Germany’s mittelstand approach to ensure that our firms are big, robust and strategic enough to tackle export markets. If we do that in a way that signifies an intention to improve our export performance, we will succeed, but it will not be because we have abandoned our partners.
Obviously we need to renegotiate our relationship with the EU, because no form of government or system of institutions should remain unchanged and unreformed. The EU is a classic example of that. However, we have to decide what our priorities in those negotiations are and what we need to achieve. For me, it should be increased competition, both within Europe and through Europe being able to compete globally. We are in a global situation, and we cannot start arguing about some sort of family dispute. The reforms have to focus on the global scale and the need to be competitive.
One area that we need to explore is energy, because we need competition and connectivity between energy producers, especially for the benefit of consumers. I would put such topics on the agenda, but we need to reform and be positive, vigorous and confident.
4.49 pm
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op): It is a pleasure to follow the hon. Member for Stroud (Neil Carmichael). I agreed with virtually every word he said—I am sorry if that ruins his future career.
We are now in the fourth year of this Government, and during their time in office we have had flatlining economic growth, a squeeze on family incomes with a reduction of something like £2,000 per family per annum, and mounting debt, borrowing having increased by £245 billion. The growth industries are the payday loan companies or food banks, and in such a situation one might have thought we would have a Queen’s Speech that addressed those problems.
Instead, we have a Queen’s Speech that, as the Prime Minister said, contains as its flagship piece of legislation a Bill on immigration. Since then, an amendment to the speech has demonstrated that the preoccupation of a great majority of Government Back Benchers is with Europe and not issues that directly address the everyday concerns of our constituents. I looked at the Queen’s Speech and at the Prime Minister’s introductory remarks in support of it, and I could not help thinking that although some measures will be beneficial to the economy, the overall tone of its language and the way he introduced it could be profoundly prejudicial to our economic growth.
Let me start with the proposed legislation on immigration. The Prime Minister said:
“Backing aspiration means sorting out our immigration system.”—[Official Report, 8 May 2013; Vol. 563, c. 25.]
I cannot think of a more profound slur on the generation of migrants who came to my area, set up businesses, employed people and promoted economic growth in the black country. It is an insult to people such as the modern Polish worker—that demonised character—in David Manners, the Jaguar Land Rover spares company,
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which is a small business in my constituency. He uses his ability to speak Russian and Czech to work and find markets abroad for the seller of those parts, and last year he created £200,000 in extra contracts for his local company. The comments are also an insult to other countries and a repudiation of would-be students who want to come to the UK, study and contribute—at least for a limited time—to boost our economy.
We have an expanding world market in bright graduates worldwide. There were more than 4 million in the last academic year, which is increasing by 7% per year. They contribute £8 billion in this country alone. If we really want economic growth, one would think there would be a legislative and market strategy to reinforce the genuine affection that many of those students will have for this country, and their desire to use our first-class education system and research facilities to contribute to universities, local economies and the national economy.
In another quote—I cannot resist this one—the Prime Minister stated that
“from India to Indonesia, from Brazil to China. We must forge new trade deals that will bring new jobs and greater prosperity. We must use our commitment to open economies, open Governments and open societies to support enterprise and growth right across the world.”—[Official Report, 8 May 2013; Vol. 563, c. 22.]
That is at the same time as he introduces immigration legislation with the most inflammatory language, and while his Back Benchers are totally preoccupied with a policy in Europe that will marginalise us in that market.
I would like to go into these issues in more detail, but time prevents me from doing so. The core message, however, is that the headline issue in this Queen’s Speech, and the subsequent reaction of Conservative Back Benchers, is damaging to economic growth, which is the underlying issue that must be addressed to help the people of this country.
4.54 pm
Charlie Elphicke (Dover) (Con): It is a pleasure to follow the hon. Member for West Bromwich West (Mr Bailey) who is the true voice of the Labour party, particularly in his refreshing directness—we do not hear enough these days of the Labour party’s belief in open-door, unchecked migration to this country. My constituents in Dover and Deal raise migration on the doorstep time and again and say they are concerned.
Mr Bailey: Will the hon. Gentleman give way?
Charlie Elphicke: I will give way in a moment. My constituents know that 5 million people in this country could work but do not—
Mr Bailey: Will the hon. Gentleman give way?
Mr Deputy Speaker (Mr Lindsay Hoyle): Order. I am sure the hon. Gentleman will give way very shortly after he has made those comments.
Charlie Elphicke: I will give way to the hon. Gentleman in a moment.
My constituents feel that 5 million in this country could work but do not. They ought to have more investment and opportunity, and more chances to fulfil
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their potential. That is why the reforms to welfare to make work pay, the reforms to the skills agenda, the reforms to control migration, and the reforms to control, police and secure our borders are important—they give our fellow citizens more of a chance to do well and succeed in life, and to see their potential unleashed.
Mr Bailey: I thank the hon. Gentleman for belatedly giving way. His response to my speech—he has attempted to put words in my mouth that I did not say—demonstrates the exact problem within the Government. They are prejudicial and damaging to the carefully constructed and reasoned debate on immigration that we need in order to get a policy that suits our economy.
Charlie Elphicke: I thank the hon. Gentleman for his intervention. I have set out my concerns on behalf of my constituents, who raise immigration on the doorstep time and again. They simply say to me, “I want my sons and daughters to have a chance. I want to be able to get a job, do well and succeed in life.” The Conservative party is the party of aspiration and success, and the party of realising the potential that each and every one of us has. I support the Government’s reforms.
I also support the Government’s reforms on tax avoidance and evasion. Let us imagine the Labour party’s response if the Government doubled income tax and let “their chums” in big business off the hook. There would be howls of rage, and accusations that the Government are on the side of the rich and attacking the poor—accusations that they are latter-day sheriffs of Nottingham—but that is exactly what happened in 13 years of Labour government. Income tax receipts went up by 81%. The working people of this country were soaked with Labour party taxes. Meanwhile, leaving aside oil duties, corporation taxes went up by only 6%. Such is the legacy of the prawn cocktail offensive, representatives of which are in the Chamber.
The Labour Government sold the pass on fair and open competition for smaller businesses in this country in favour of large multinationals. People who work hard for a living were hit with high income taxes while large businesses were allowed to avoid taxes on an industrial scale. That is the legacy of 13 years of Labour. I am delighted that the Chancellor and the Queen’s Speech rightly take action on that.
YouGov polls show that 62% of the public consider legal tax avoidance—it is all perfectly legal, is it not?—to be unacceptable. A ComRes poll has found that 84% agree that the Government should crack down on tax avoidance by businesses operating in the UK. Indeed, 60% are prepared to call the bluff of every large corporation that threatens to disinvest from the rich, highly vibrant and successful UK market, saying that the Government should crack down on business tax avoidance even if it caused unemployment and caused some companies to leave the UK.
That is how strongly the British people feel. I feel strongly, and I was delighted to hear that my hon. Friend the Member for Redcar (Ian Swales) does, too. The Government are right to deal with the legacy of tax avoidance on an industrial scale. They are right to tackle the problem as an international problem, requiring international action. I therefore welcome the Chancellor’s
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use of the UK presidency of the G8 to take collective action to deal with tax avoidance and evasion.
In particular, we need to reform tax presence. The idea that Amazon is based in Luxembourg defies reality to the ordinary person. They look askance at Amazon warehouses from the motorway and just do not buy the idea that Amazon is based in Luxembourg. The rules need to be updated to cope with the globalised, competitive, internet-enabled world in which we live.
Mr Dominic Raab (Esher and Walton) (Con): My hon. Friend is making a powerful speech. As well as welcoming the Government’s initiative on tax evasion and tax avoidance, will he join me in lamenting the fact that criminal convictions for tax evasion plummeted to 107 in the last year of the previous Government?
Charlie Elphicke: Absolutely. We need to send a clear message that everyone should pay a fair share of taxes. We have had too much unfairness for too long.
It is also important to reform the rules on transfer pricing. Starbucks has been the whipping boy for something that is done on a consistent basis by all large international businesses—accountants call it “supply chain optimisation”. Action to tackle it would be fiercely resisted, but it is something we should do. It is not right that profit parking by international tax planners means that our Exchequer does not receive its fair share.
Part of the agenda must be a positive, engaging discussion with the European Union where we say, “Look, these are the reforms we need.” I am pleased to see that the Chancellor has been getting the Germans on board and talking to the French. Indeed, he should talk to the US, because it too is losing tax revenues. Profits that should go back to the States get parked in tax havens, so Uncle Sam loses out as well. This is an international problem that needs to be dealt with internationally.
In Europe, a key reform must be to look again at the parent subsidiary directive, which a German MEP recently described as the heartland of tax avoidance, and which is too often abused. We need to ensure that the EU works positively with member states to help to secure their tax bases. The public finances of every member state in the EU are under pressure. Every member state in the EU should see it as in their interest to take effective, international co-operative action to deal with this problem that we all face. It is high time we stood up to large international businesses and said, “We have to secure our tax base.” We have to secure a fair deal for each individual who is living in this country, so that they pay a fair share of income tax while large international corporations pay a fair share of corporation tax. We must ensure that there is a level competitive playing field for home-grown businesses, just as much as there is a level competitive playing field for international businesses. That would be the right settlement and tax framework for the UK and all our European neighbours.
5.1 pm
Mr Geoffrey Robinson (Coventry North West) (Lab):
I think that some of us who have sat through this debate find it regrettable that, to a large extent, it has been hijacked by the obsessively anti-European faction in the coalition parties. It is not that Europe is not important, but the debate is about the Queen’s Speech and a reflection on the Government’s record after three years
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in office. Rather than intruding on the private grief of Government Members caught up in their internal and agonising debates, I would much rather say to those on the Treasury Bench that, in all seriousness, they have to face up to the fact that after a full three years in office they are responsible for the economy: they are responsible for the situation we are in, and they are responsible for getting us out of it. Unless they accept that responsibility, they will never accept the measures that are necessary to find a way out of the chronic situation in which we still find ourselves.
Three years ago, after only a few months into office and after they brought in the cuts that went too far and too fast, the Chancellor was already crowing that the plan was working and the recovery was on track. We know what the recovery was meant to achieve: central to all economic policy is growth. In the three years to date, we were meant to have achieved 6% growth, but have achieved only 1.1%. I wonder whether the Government realised that what they were committing themselves to, and which after three months they thought was working, would achieve only one-sixth of their central economic objective. Those who have doubts about whether they should change course should reflect on that. Had they realised what that would achieve, they would never have embarked on it. The only way forward is to change course. Of course, as my right hon. Friend the Member for Morley and Outwood (Ed Balls) pointed out, to do that would mean going back on so much of what they proclaimed to be absolutely essential, and that is impossible for them to do.
Time is limited for all Members, so I want to concentrate on just two aspects of economic policy where the Government’s incompetence and failure is hard to explain. The first is investment. What the Government call the national infrastructure plan has been variously described by conservative organisations as “hot air”, “complete fiction” and, by the chairman of the CBI, as “lacking all delivery”. Where does this leave investment? One cannot understand the Government’s failure, because there is no cross-party debate on investment or conflict over it. Less still is there any doctrinal argument such as we have on economic growth or financial policy—on the components, predictors or causal factors of, say, bond yields in 30 years and so on. Everybody in the House I have ever heard speak on this has said, “We must have more investment,” because traditionally the UK has not invested in R and D or fixed equipment and plant as much as we should have done or as much as our competitors have done. There is no argument about that.
Stephen Barclay (North East Cambridgeshire) (Con): I am struck by the hubris of the hon. Gentleman, who is a former Paymaster General. The report on the extension of the private finance initiative by the Public Accounts Committee, which is chaired by a Labour Member, found that the previous Labour Government wasted more than £1 billion. Half, or more, of the PFI projects in the housing sector came in at double their original budget. He needs to accept his party’s record on major infrastructure projects.
Mr Robinson:
Here we go again. I do not know of any major infrastructure project that has not run over budget. As my hon. Friend the Member for Huddersfield
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(Mr Sheerman) said, let us see what happens to HS2. They all run over budget. Some terrible PFI deals were done—there is no question about it—but all Government Members ever do is say what Labour did badly. We have admitted that we did many things badly. We failed on certain things, but it will not help to get the Government’s plan going to say, “Oh, look what you did when you were in office.” Nothing could be more pathetic. That is what I am trying to get through to the Government. They are now in charge, and they now have to face up to their own failures and the things that need to be done to put them right.
I come now to what those things are. I have mentioned how the Government budgeted for 6% growth, but in fact have achieved about 1% growth. It could not get much worse than that. Under their national infrastructure plan, they have about 567 projects in the pipeline, ready to go, but in three years they have achieved seven of them, or 1.2%. Everyone agrees that these projects are good ideas, so why can they not get these things done? We own one of the banks outright—I shall come to the banks in a moment—and we have a substantial stake in another, but the Government have created their own business bank. It could be investing in some of these projects, but against a background in which bank lending to businesses has fallen by £4.8 billion in the last quarter alone, they are offering £300 million through the British business bank. It is no wonder they are not getting the projects through. It is no wonder they are failing.
Stephen Barclay: With respect to the hon. Gentleman, who is a senior Member of the House, he is just not engaging with the facts. Public investment as a share of GDP will be higher on average over this Parliament and the next Parliament collectively than under the last Government. On housing, which was my previous example, his party’s record was absolutely shocking, whereas our build to rent fund is addressing some of these issues. Action is being taken. He is ignoring his own record as a former Treasury Minister and the action that this Government are taking. It is remarkable.
Mr Robinson: The Chancellor produces that tired statistic every time we mention investment. Let us take construction. The last time the level of house building was this low was in the 1920s. Overall, the level of construction has fallen 11% in the last year. This is against a background of a chronic need for the jobs and growth that investment can supply. We need a major uplift in the level of investment. It is higher, marginally, than it was 10 years ago, but so it ought to be. It is pathetic that Government Members continue not to face up to the reality of the failure of their own programme. As long as they do not, they will not succeed. Would the hon. Member for North East Cambridgeshire (Stephen Barclay) really have embarked on this plan if he had known that, instead of 6% growth, we would end up three years down the road with 1% growth? Would he? Of course not: nobody on the Government Benches would have done that, and if they had, they would have needed their brains tested—perhaps they need them tested anyway. That is the truth of it.
Then we come to the failure of Merlin and the question of the banks. Instead of making the Royal Bank of Scotland a national bank to invest in such projects, all the Government want to do is flog it off
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ahead of time. That will be another failure to add to the long list. This is a Government of failure who will not admit it, and therefore they will not put things right.
5.10 pm
Mike Thornton (Eastleigh) (LD): May I say that just a few months ago I could only have dreamt that I would be able to follow such a distinguished and respected Member of the House as the hon. Member for Coventry North West (Mr Robinson)?
Hon. Members will be glad to know that I will be brief—I will also talk about something other than our coalition partner’s internal difficulties over Europe. My e-mail inbox—like, I imagine, everyone else’s—is filled with demands that we spend more on the health service, education, defence and so on. However, to be able to do so in the current budgetary situation requires the economy to grow faster than spending. Otherwise, the resultant increase in debt would act like a massive anchor on a ship, bringing the SS Great Britain to a shuddering halt and leaving it vulnerable to the international winds and tides of financial misfortune.
I want to consider five fundamental issues which I think the coalition is addressing. They are: jobs, jobs, jobs, jobs and jobs. Let me deal first with jobs in our small and medium-sized businesses. We are putting in place £2,000 for each business to help them to take on new staff. They include businesses as diverse as SPI Lasers, Oswald Bailey and La Fenice in my constituency. We are looking at helping young people to get jobs. Already, 1.2 million apprenticeships have started. In Eastleigh, that has meant a 65% increase in apprenticeships since we came to power.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): The hon. Gentleman will be aware that the unemployment figures came out today and that long-term youth unemployment is now more than double what it was when his Deputy Prime Minister introduced the Youth Contract. Does he think the Youth Contract is therefore working?
Mike Thornton: The Youth Contract still has a few months to go, but I think we can see that it has already been effective, and the March figures demonstrate a return to increasing employment and a reduction in unemployment. What is more, part of our work on apprenticeships is about preventing abuse of apprenticeships. We are setting out a definition of what an apprenticeship is, which will be a significant help in enabling businesses to take on more apprentices.
We have also seen an increase in jobs in manufacturing, with our continuing commitment to green energy and £5 billion of extra investment in science and high-tech. The electricity market reform alone could support as many as 250,000 jobs in that sector. Then there are jobs in the regions. I am lucky to have a very low rate of unemployment in my constituency, but a £2.6 billion investment in our regions is spurring economic growth in all our constituencies, not just mine. Finally, there are jobs through design. By making it easier for businesses to protect their designs, intellectual property rights will spur further investment in this British success story.
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What do all those schemes mean? They mean more jobs, and more jobs mean a better life for millions of people, which I am sure all of us in this House would like to see. They also mean more revenue for the Government—more funds for the NHS, the disabled and our schools. What is more, the Lib Dem initiative to increase the tax allowance to £10,000—and, hopefully, onwards and upwards—means more take-home pay for every single one of those new employees. If that is what Liberal Democrats can achieve when they are in government as part of a coalition, just imagine what we could achieve with a Lib Dem majority in this place. [Laughter.] If Members want to hear, I will tell them what: a stronger economy and a fairer society, so that everyone can get on.
5.14 pm
Emily Thornberry (Islington South and Finsbury) (Lab): I should like to begin by belatedly congratulating the hon. Member for Eastleigh (Mike Thornton) on his election to the House. I also congratulate him on his constant optimism. For the sake of the record in Hansard, I must point out how very lonely he must be on the Liberal Democrat Benches. He is largely by himself over there.
So, here we are after three years of the coalition Government. The early growth that they inherited has been strangled, and the economy is flatlining. We have terrible rates of unemployment, particularly among the young, for whom long-term unemployment continues to increase. Many of those youngsters have no hope. Living standards are being squeezed, and it is more and more difficult for people to make ends meet. Business confidence is dying, and investment is declining as a result.
The country is crying out for a change and for the Government to do something. People were looking forward to a Queen’s Speech that would show that the Government were prepared to do something, but Her Majesty might as well have stayed at home. The measures in it do not address our economic crisis at all. I am not saying that there is nothing in it for us to welcome. Reform of the Independent Police Complaints Commission is long overdue. We have yet to see what it will involve, but I hope that the commission will be improved. I also hope that a proposal for a register of struck-off police officers will be included in the legislation. I even welcome some of the changes to the Dangerous Dogs Act 1991.
Apart from that, it is hard to see how this Queen’s Speech will help the country. We need a new plan to tackle the lack of jobs and growth, but it offers us nothing. Do the Government really believe that the draft deregulation Bill will get the economy going again? Do they believe that by snipping away at red tape they will encourage the private sector to rise up like the Incredible Hulk and get the economy working? I do not think that they really believe that. They cannot believe that that is going to save the economy. Surely they do not believe that they can just sit back and do nothing. In circumstances such as these, it is surely the responsibility of the Government to take a lead, but I am afraid that the Chancellor of the Exchequer gives every sign of being a man who has decided that he cannot afford the loss of face that would inevitably accompany a change
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of course. He cannot afford to expend so much political capital on doing something new, and we are all paying the price as a result.
Henry Smith (Crawley) (Con): I take it that the hon. Lady is suggesting some sort of plan B, as offered by her party. Does she feel that the socialist model that has been pursued by President Hollande in France over the past year has led to success in that economy, given that it has now entered a triple-dip recession, compared with the growth in the UK economy?
Emily Thornberry: The difficulty is that, by carrying on regardless, this Government are killing the economy. I do not have time to go through my bundle of suggestions put forward by various economists, but Paul Krugman has said that the Government’s austerity plan is “fundamentally mad”. I was hoping to have time to read out more such views, but there is not time.
I would like, however, to use the few minutes that I have to give the Government some advice. They might listen—you never know! How about looking into housing? For example, £30 billion spent on infrastructure investment in housing—particularly affordable housing and social housing for rent—would represent 2% of GDP. The International Monetary Fund has said that the fiscal multiplier resulting from such investment could be between 0.9% and 1.7%, which could boost growth by 2.6% of GDP. That would be a short-term boost, but the TUC recently commissioned the National Institute of Economic and Social Research to look at the effect of such investment over the longer term. That research showed that such investment would continue, three to four years on, to have a positive effect on debt and GDP.
This is not just about the economy; it is also about fairness. We know that there is not enough housing. We know that people need jobs and training, and that our youngsters need something to do. They need hope. Investment in housing would provide all those things. This Government are building the smallest amount of housing of any Government; they have the worst peacetime record of doing that of any Government since the 1920s. Council house waiting lists continue to grow. If the Government continue at this rate, it will take until 2129 to build enough housing to meet the current need.
Of course, we know that the Government want to cut back on the benefit bill. They say it is wise to introduce a blanket cap without thinking about how some areas that have a desperate housing crisis will have much higher housing costs. My constituency provides a very good example. If a family of five is living in a three-bedroom house in the private sector in my constituency and someone is unlucky enough to become unemployed, the rent would be £400 a week. The question I wanted to ask the Chancellor earlier—unfortunately, he did not allow me to intervene—was this. If the rent is £400 a week and the cap is £500, what does such a family of five do? Does it live on £100 a week or not pay the rent instead? If the rent is not paid, does that mean the family is intentionally homeless, and if it does, does the council have to re-house the family? If the council does have to re-house them, but there is not enough social housing, where does the family go? Where would the Government suggest these people go? Perhaps they would go to Dover or to some of the marginal seats in outer London. Unfortunately, the Government have no
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idea of where these people should go. The tragedy of the debate so far is that there has not been enough emphasis on fairness.
5.21 pm
David Rutley (Macclesfield) (Con): The Queen’s Speech sets out a positive agenda—one that shows that Government Members are supporting hard-working people who want to get on in life and working to boost our national competitiveness to build the foundations for much needed sustainable economic growth.
The draft deregulation Bill rightly focuses on reducing the bureaucratic burden faced by all too many businesses. It is a subject on which I have campaigned long and hard during my time as a Member of Parliament. The Institute of Directors has calculated that the cost of regulation on business in this country is £110 billion a year. That is clearly too high. This Bill will make a difference by exempting from health and safety law the self-employed whose activities pose no potential risk to others. It will also give non-economic regulators a new duty—to have regard to the impact of their actions on growth. These are positive steps for businesses in Macclesfield and across the country.
Our ability to innovate has always been critical to our competitiveness. That is why it is indeed time to introduce the Intellectual Property Bill. I welcome the fact that the Federation of Small Businesses has said:
“Streamlining the patent system…will make it more cost effective for small businesses to protect their inventions.”
The Bill goes further by improving design protection, too. That is good news for this vital part of the UK economy, which accounts for more than 1% of gross domestic product.
As competitiveness improves, businesses will be better placed to create more jobs, and the national insurance contributions Bill clearly demonstrates the Government’s commitment to this vital task. The new £2,000 employment allowance will encourage in particular small businesses looking to take on more staff, and it will build on the Government’s proven track record of job creation, with over 1.2 million jobs created in the private sector since the election. I am pleased that we have the ambition to go further.
The Queen’s Speech sets out an important agenda that will improve our national competitiveness, but that ambition does not stop at the English channel—much to the disappointment of my hon. Friend the Member for Dover (Charlie Elphicke), who is no longer in his place. There is more work to be done within the EU and in wider international markets. As the UK’s competitiveness improves, we need British businesses exporting more. Britain needs to fall in love again with enterprise, entrepreneurs and exporting. Equally, businesses need to be more curious about exploiting opportunities overseas and follow the example of successful SME exporters such as J Tape in Macclesfield.
Trade associations and chambers of commerce should help raise awareness of the sources of support available to SMEs and they need to make sure that they are out there representing British businesses in vital growth markets such as Brazil and South Africa, where I suspect they are currently under-represented. British businesses should seize the day and make exports our business once again.
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There have been reports in recent days of a real and growing appetite among my Conservative colleagues to address our relationship with the European Union. I can categorically confirm that those reports are true. It is increasingly clear that the public want the issue to be addressed as well. They understand that it is not just about sovereignty, but poses a clear and present danger to our real economy. I am pleased that the Conservative party, alone in the House, recognises that, and will offer an in/out referendum.
Pete Wishart: We have just learnt from The Spectator that the hon. Member for Mid Bedfordshire (Nadine Dorries) is talking about a UKIP-Conservative candidacy at the next general election. How many other Conservative Members are considering that, and does it constitute a new realignment of the right?
David Rutley: Whatever the hon. Gentleman may have read in the paper, and whatever blog may be in existence, there is no plan for any such coalition.
David Rutley: Absolutely. We are categorical about that. We have a very clear plan. We are the only party in the House that is presenting proposals for an in/out referendum, and things will stay that way. On the back of that, I am confident that we can secure an outright Conservative victory.
Angie Bray (Ealing Central and Acton) (Con): Does my hon. Friend agree that it is essential for us to get the message across that only under a Conservative Government will the country have an EU referendum, and that the referendum will come after we have renegotiated our terms of membership with the EU? That is vital if we are to give people a proper choice and present them with the best options. The draft Bill that was published yesterday underlines that message very clearly.
Mr Speaker: Order. I must gently remind the House that interventions should be brief. A large number of colleagues are still seeking to contribute to the debate, and I am keen to accommodate them, but brevity is essential if I am to do so.
David Rutley: What my hon. Friend has said is absolutely right. It is crystal clear that if the public want an in/out referendum, it is only the Conservative party that will offer them the choice. That is why I support the Prime Minister’s position, and welcome the publication yesterday of the draft referendum Bill. It is entirely proper for the British people to have a right to vote and to make their views heard on this vital issue.
I am keen to see a fundamental realignment in our relationship with the European Union. Although I am half-Danish, to me our involvement with the EU is about hard-nosed economic benefit, and has nothing whatever to do with some woolly sentimentalism that others may consider important. We are not alone in Europe in wanting to bring about fundamental changes in the European Union. I recently went to the Bundestag and met members of the Christian Democratic Union and the Christian Social Union. It is clear that they too
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have concerns about the future direction of the EU. When the public can see that youth unemployment in Spain is now at 50%, it is clear that new solutions need to be found. That is critical for the United Kingdom, and vital for other member states.
The Prime Minister’s recent speech has served as an important catalyst in taking forward the debate. Urgent negotiations should follow in the months ahead. A Member asked earlier, from a sedentary position, when those negotiations should take place; they need to start immediately. Given the promise of a referendum, other member states should not underestimate our resolve. When those negotiations have been completed, it will be absolutely right to let the people have their say.
We are entirely clear and serious in our intent. The plans have been set out, and I hope that other member states will recognise that the clock has started ticking. It is time for action. The Queen’s Speech shows that we are taking action to improve our competitiveness and create jobs at home, and we need to see the same commitment to action in the EU.
5.28 pm
Natascha Engel (North East Derbyshire) (Lab): It is a great pleasure for me to take part in this final day of the Queen’s Speech debate, and to talk about the Government’s plan for economic growth. I have serious concerns about their proposals for the big infrastructure project HS2, which will mean that high-speed trains go through the northern part of my constituency, just south of Sheffield—through Staveley, Killamarsh and, in particular, the village of Renishaw.
My main objections are to the lack of information for, and consultation with, the people whom the project will affect; the lack of a coherent economic case beyond a vague promise to open up the regions; and the lack of any real information about that economic case, when £800 million of taxpayers’ money has already been spent on preparatory work, and preparation is currently being made, in the two Bills that are to come before Parliament, for the spending of at least a further £33 billion.
Some of the things I am most concerned about, however, are the complete lack of understanding about people’s lives and the communities in which they live, and the fact that regeneration projects were blighted on the very day the plans for the HS2 route were published. Even though nothing will happen in my part of Derbyshire for 20 years, people are already finding it almost impossible to sell their homes, and businesses are starting to suffer. The main business and employer in the village of Renishaw is a fabulous wedding venue for people all around south Yorkshire and northern Derbyshire. It is very famous and has been operating for many years. Even though it is 20 years before anything may or may not happen, people are already cancelling weddings there simply because of the uncertainty.
The Chesterfield canal project, which regenerates very poor parts of the constituency, has also been operating for decades. The HS2 tracks will go right over the canal, and any match funding raised for the development of the canal has already stopped. These are important economic regeneration projects that have been stopped in their tracks because of the publication of a train line route, which has not even been finalised yet, let alone built.
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This is not a “not in my backyard” argument. The tracks will go right through families’ houses, and through villages in which people have lived for many generations. They will not benefit from HS2, as the train does not stop in Derbyshire, but the HS2 project will stop all the regeneration and economic gains we have been making since the closures in the coal and steel industry.
That is not the only thing that is of concern to me. This is feeding into a far wider political problem. We say we represent these people, but they say they are not being consulted and not being allowed to have a say. In fact, we are saying we know better than they do what is good for them, but in this case we do not. I urge the Government to consult, persuade and explain, and to listen to all these people whose lives we are proposing to destroy. Until we do so, I will oppose these plans.
Mr Speaker: Order. I was going to call a Government Back Bencher, but none appears to be seeking to catch my eye at present. I therefore call Mr Michael Connarty.
5.32 pm
Michael Connarty (Linlithgow and East Falkirk) (Lab): I am very grateful to be called to contribute to this debate, particularly since some Members have decided to put Europe, which is one of my interests, firmly on the agenda.
This debate should be framed in the context of a paper passed by the Council of Europe in the last year entitled “The young generation sacrificed”, and the follow-up papers in which I have been involved. They address educational needs and opportunities for young people, the need for technical training and skills, and the right of youth to fundamental rights and access to a better life, because that is the generation we have stolen from as a result of our errors both in this country and across the EU. We should measure our Government’s wider performance alongside how that generation is treated.
In the European context, I have spent two days in Brussels and the Netherlands with the Chair of the European Scrutiny Committee, the hon. Member for Stone (Mr Cash), and others. I was astonished at the extent to which not just the EU but the eurozone are straitjackets preventing growth. We met Olli Rehn, Commissioner for Economic and Monetary Affairs, who had a blueprint, put forward on 5 December. We also met Herman Van Rompuy—one more president of Europe—who put forward a blueprint for a deep and genuine economic and monetary union in December 2012. On 29 January 2013 José Manuel Barroso, the other current president, spoke at a European conference in support of Van Rompuy’s blueprint, saying it was the only way forward. However, what it was, in fact, was a constraining arrangement in economics—in countries’ banking systems and budgets—as the Chair of the ESC said. The arrangement would be contracted and would have penalty clauses, and it would punish Governments who are already in dire straits, and the people of their countries, for not coming up to what are, in fact, the aspirations of the northern European countries, who are making so much out of the European arrangement at present.
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In fact, the statistics showed that we had a growth-free, recession-bound EU, and alongside it we have a growth-free, austerity-choked UK economy. As we have heard, even in these times, our deficit against the EU has gone up to £72 billion, which represents more than £1.25 billion every week. These countries are in a bad condition, but we are still in a worse condition. Oddly, the G7—our Prime Minister was there—reported how happy it is with the arrangements for the EU to continue to squeeze and choke these people, but that contradicts what the Chancellor said today. What he said about the ECOFIN meeting suggests that there would appear to be an argument against how the EU is performing and constraining people. I do not know who is telling the truth—was he just making his speech because of the leadership bid in the background, was he playing to the dissidents on his Back Benches, or was he genuinely saying that an attempt is being made in Europe to unlock that terrible arrangement set up in response to the eurozone crisis?
The crisis is a eurozone one. Everyone we spoke to did not talk about the countries in the south being a danger to the EU; they said that they were a danger to the euro. The euro has become the symbol of what they are doing to others to punish them, because the euro is more fundamental than the European project, and that really worries me. There is a growing meanness of spirit in what is being talked about in the EU: people are to be punished because the euro is being threatened. That is very strange, and it is certainly not what I voted for when I voted yes in the referendum to join the EU. There are serious questions to answer here, because I do not think the renegotiation being talked about by the Prime Minister has anything to do with that—it is on the fringes. His renegotiation is to do with justice and home affairs and Schengen agreements; it is not about the fundamentals of the European project, which is now an economic project driven by the euro and not by the interests of the people of Europe.
I wish to remark on some things in the Queen’s Speech, one of which is apprenticeships. We must be frank about them. Apprenticeships are now talked about by McDonald’s, which has them—in-service training for six months constitutes an apprenticeship. Tesco and Sainsbury’s say that they have apprenticeships, too, but these are not apprenticeships. The reality is that 60% of the skills shortages are in non-graduate technical skills—we are not training proper apprentices to do the jobs that need to be done.
Secondly, my constituency contains a large petrochemical industry that is losing money hand over fist; it is burdened by massive energy taxation that is not paid by the rest of the world, and even has a 5% to 10% disadvantage against the EU. What is there in the Queen’s Speech to remove those burdens from our industries to let them take people on? If those burdens are not addressed, we will not deal with the problem in the beginning, that of the youth who have been betrayed by this Government and, basically, by the European project.
5.37 pm
Kelvin Hopkins (Luton North) (Lab):
First, may I say how much I enjoyed the speeches of the hon. Members for Dover (Charlie Elphicke) and for Redcar (Ian Swales), and their comments on tax evasion and tax avoidance? I have been raising those issues for more than a decade in
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this House, and we are now starting to take them seriously. If we collected the tax that is owed, we would go a long way towards solving any spending problem we have. The speech made by the hon. Member for East Antrim (Sammy Wilson) was also first class, and I agree with what my hon. Friend the Member for North East Derbyshire (Natascha Engel) said as well.
I want to focus on the economy. Clearly, austerity is failing, and I was among those who predicted its failure. Early in the life of this Government, I quoted Paul Krugman and his view that the Government were going in precisely the wrong direction. What Britain needs is a reflationary programme, not austerity, with a boost to public spending in specific target areas. We have 2.5 million people unemployed, so it is logical that additional spending should be directed to areas of high labour intensity: construction and the public services, which are precisely the areas that have suffered the most savage Government cuts. Construction output has fallen by 12% since 2010 and by 20% since 2008, and thousands of jobs have been cut in the public services. Jobs in construction and the public services have the added advantage of pumping additional economic demand primarily into the domestic economy, so maximising the reflationary multiplier effects to boost growth. Reducing unemployment quickly and substantially will cut the bill for benefits, raise tax revenues and bring down the Government’s spending deficit into the bargain. Moreover, the kind of jobs created by such a programme will go to those whose marginal propensity to consume is high, thus putting their newly increased income straight back into the economy as they spend their new wages. If, indeed, additional borrowing is required—it may not be required if we just collect the taxes we are owed—the kick-start should not be expensive. I do not think reflation will be a problem. Interest rates are in any case very low so the costs of borrowing are also very low.
There is, however, a serious problem with such a reflationary programme. Although construction and the public services have minimal import content, meaning that additional spending goes initially into the domestic economy, the additional spending will quickly begin to suck in imports and Britain already has a massive and growing trade deficit, largely with the rest of the EU. The figures are stunning. We had a deficit on the current account in 2012 of minus £57 billion, up from minus £20 billion the year before. The goods deficit was more than £106 billion in 2012, more than £2 billion a week. The bulk of this deficit is with the EU 27 and rose from £4.8 billion in January this year to £5.1 billion in February, on course for a deficit of more than £60 billion this year and possibly £70 billion, as was said before. This is a massive problem.
There is a goods deficit with the rest of the world too, up to £4.3 billion in February from £3.4 billion in January, so the deficit is not just with the EU, but the EU is the major problem. Britain therefore has a desperate trade problem that can be solved only by rebuilding and expanding the UK manufacturing sector. It is a shocking fact that manufacturing as a proportion of GDP in the UK is half that in Germany, and it is no surprise that we have a gigantic trade deficit specifically with Germany.
This phenomenon is not new, of course. I have with me a copy of a pamphlet published 24 years ago by the Institute for Public Policy Research called “The German
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Surplus”. Even then, there was a massive problem that had grown quickly over that decade. It was just such trade imbalances that Keynes knew would cause economic damage and, if they were not addressed, would ultimately cause serious economic and political tension between economies and between nations. The 1944 Bretton Woods conference decided to provide for essential devaluations by deficit countries, and Keynes proposed too that countries with large trade surpluses should be required to revalue their currencies. The latter proposal was rejected by the US, but the necessity of appropriate exchange rates was recognised. This is why the euro is such a disaster and is doomed to fail.
Mercifully, Britain avoided the euro trap and is able to flex its exchange rate. However, it is glaringly obvious that we need to depreciate our currency to become competitive again and to maintain an appropriate exchange rate so that we can rebuild our manufacturing industry. We have seen manufacturing deteriorate over several decades and we need to reverse that trend.
5.42 pm
Henry Smith (Crawley) (Con): Thank you, Mr Speaker, for unexpectedly calling me in this debate. It is a great pleasure to follow the hon. Members for Luton North (Kelvin Hopkins) and for Linlithgow and East Falkirk (Michael Connarty), both fellow members of the European Scrutiny Committee. I very much enjoy the time we spend on that Committee, the worthwhile discussions and debates and the evidence that we take from witnesses. However, on this occasion I disagree with them both about our economic growth.
Listening to some of the contributions earlier this afternoon from the Opposition Benches, including the remarks of the former Paymaster General, the hon. Member for Coventry North West (Mr Robinson), one would be forgiven for thinking that this country had not been left with the highest peacetime deficit that we have ever witnessed in our history. It is remarkable that in three relatively short years not only has that deficit been paid down by a third, but we see economic growth starting to come through. Compared with our competitors—France has gone back into negative growth and back into recession and Germany has seen economic growth of only 0.1%—the latest growth figure of 0.3% is a remarkable testament to the very difficult and invidious decisions that this Government have had to make in clearing up the crisis that was left by the Labour Administration.
Fortunately, evidence of economic growth is coming through in my constituency. Today’s unemployment statistics in Crawley showed that in April unemployment fell to 3.4%, although I appreciate, as someone who has previously been unemployed, that it is 100% of a problem for each individual who makes up that statistic. That figure represents a fall on the previous month, and a fall on this time last year. Earlier this year, I was honoured to open a new production line at Vent-Axia in my constituency, which represented jobs coming back to Crawley from China—a sign of growing confidence in the British economy. I congratulate Gatwick airport on its significant infrastructure investment of £1 billion to upgrade its terminals, making that an attractive international trade destination, which is to the benefit not only of my local economy but of the UK economy.
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In the brief time I have, I want to touch on the issue of the eurozone and the future of the EU, and the significant drag that that has had on this country’s economic growth. It is an example of a political project, which essentially is what the EU is, rather than largely an economic project, which is what it should always have been. The resulting eurozone crisis means that demand in the eurozone is down and therefore demand for British goods is down. Despite that, our Government’s performance in engendering economic growth is remarkably impressive. I was pleased in the last Session to serve on the Growth and Infrastructure Bill Committee, and am pleased to see in the Queen’s Speech further measures to reduce regulation and burden on business. If we give the people of this country a choice on our future membership of the EU, we can further free ourselves to ensure that economic growth and our competitiveness as a global, free-trading nation, a bridge between our historic links in the Commonwealth and our proximity to Europe, will mean that this country has a far brighter future.
5.47 pm
Pete Wishart (Perth and North Perthshire) (SNP): In the few minutes available to me, I want to confine my remarks to amendment (b). When the history books are written and we come to the chapter that describes and explains the UK’s exit from the EU, this week will go down as an important and significant week. After this week, the UK’s departure from the EU becomes almost unstoppable.
The UK, already a surly, sulky, semi-detached member of the EU, always available to offer some withering criticism to one of its few remaining allies within the EU, already halfway out of the exit door, is like some sort of staggering drunk looking for the oblivion of last orders, on its way out chanting, “We are the famous United Kingdom. No one likes us. We don’t care.” That is the reality of the UK within the EU. Its exasperated, declining number of allies in the EU do not know whether to boo, cheer or sing hasta la vista, such is the state and condition of the UK’s membership of EU.
It is clear that the UK is on its way out. It will either be out on the basis of the salami-slicing favoured by the Prime Minister—let us renegotiate a new terms of entry, which will obviously be rejected by most of its European allies—or, more likely, it will be wrenched out following the yes/no referendum plan by the Government, in a sort of in-your-face Barroso gesture from the UK electorate. What we actually have is an irresistible momentum for the UK to be taken out of the EU.
Of course, the EU was not even mentioned in the Queen’s Speech—that now appears to be an unfortunate oversight—but it is centre stage, because we are entering a new Session of Parliament, the UKIP session. It is the age of Farageism, a desperate creed characterised by an obsession with departure from the EU and with immigrants. It is an unpleasant, intolerant, neo-liberal creed with a disdain and hearty contempt for minorities. That is what will underpin this Session of Parliament, because the Government know that UKIP will win the next European election.
That is not my country and I do not want it. I want my country out of all that. My country is very different. The reason UKIP does not do well in Scotland, and the reason there is the lone panda of one Conservative
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Member in the Scottish Parliament, is that that agenda simply does not chime with the collectivism and the social attitudes and values of Scotland. That is why UKIP got less than 1% of the vote in the most recent Scottish parliamentary elections. I am proud that my country is so different from the one we observe south of the border. I hope that England and the rest of the United Kingdom do not go down that road, but they are entitled to have the Government they vote for, just as my nation is entitled to the Government we vote for.
There is now the real prospect of a party whose members the Prime Minister refers to as fruitcakes, loonies and closet racists having a share in the running of the United Kingdom. What will the Government do to ensure that does not happen? They have tried to name-call and disparage, but that has not really worked, given UKIP’s success in the local elections. They could try to buy UKIP off, but that would not work either. They are absolutely stuffed. My advice to the Government is that they had been doing all right and should have stuck with the hoodie-hugging and huskie-mushing new Conservatism. They simply could never out-UKIP UKIP, which is the master of European obsession and grievance. They should stick to their guns and ensure that they are different from UKIP.
It used to be said that Scottish independence would lead to Scotland being taken out of the European Union. Not many people are saying that now.
Henry Smith: Does the hon. Gentleman think that an independent Scotland would have to join the euro, or does he want to keep the British pound?
Pete Wishart: The hon. Gentleman is not on particularly steady ground when it comes to the debate on Scottish membership of the European Union. To answer his question, we will not be joining the euro but instead will follow Sweden’s example.
The Scottish people are observing two futures. In one future they remain shackled to the United Kingdom, which will become increasingly shackled to an intolerant, right-wing agenda. The hon. Member for Mid Bedfordshire (Nadine Dorries) has already said that she will have a joint UKIP-Conservative candidacy at the next election. I do not know how many more Conservative Members will adopt that stance. What we are seeing is a realignment of the right. All I have heard from the 1922 committee, which has not been very pleasant recently, with all the disagreements about Europe, is that there is a faultline running through the Government. The Scottish people have a choice: they could have that future, or they could have their own future, determined by them and based on their values.
Kelvin Hopkins: The hon. Gentleman is making the case that Euroscepticism is an entirely right-wing view. In fact, across Europe the majority of Euroscepticism is on the left, among socialists, trade unionists and working-class people.
Pete Wishart: That might be true, but that is not how it is being demonstrated politically.
What we have observed is a total realignment. There are two different countries, and one is emerging south of the border with increasing UKIP results. It is absolutely certain that UKIP will win the next European election,
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and Conservative Members should be very careful about all that. They are right to be wary, because it could deprive them of office. I do not know what will happen, but Scotland has a choice—thank goodness—to do something different. We can remain shackled to an increasingly right-wing United Kingdom, almost relaxed about its continuing decline, or we can decide to have a future of our own, a future determined by the Scottish people, based on our social values and the type of community we want to develop and grow. We can choose to be a consensual and helpful friend in Europe, rather than one that likes to criticise, is semi-detached, does not really enjoy being there and is on its way out. Thank goodness we have that choice.
I know the type of future that my fellow countrymen and women will choose. They will opt to ensure that their future is in their hands. They will determine the type of Scotland they want: a Scotland standing proud in a coalition of nations around the world. That is the country I want and I am absolutely certain that that is what my fellow Scots will choose next year.
5.54 pm
Jack Dromey (Birmingham, Erdington) (Lab): This is a Queen’s Speech that does not begin to rise to the challenges facing our country, that lacks ambition and that is so thin in content it could have been written on the back of a fag packet, had the Prime Minister not given in and shelved plans for plain packaging of cigarettes. It was vetted by a dubious Australian spin doctor, who deleted any reference to a measure on curbing the activities of lobbyists.
This is a Queen’s Speech from a failing Government presiding over the toxic combination of a flatlining economy and the biggest housing crisis in a generation. House building is down and housing completions are at their lowest since the 1920s. Homelessness is up; it fell 70% under Labour and has risen 30% under this Government. We have a mortgage market in which young couples in particular struggle to get mortgages, and a rapidly growing private rented sector characterised by insecurity over quality and ever-soaring rents.
I see first hand in my constituency the consequences of the Government’s failure, including the lengthening queues at my surgery of couples desperate to get mortgages and couples desperate to keep a roof over their heads. A building worker in Kingstanding burst into tears when he said he was desperate to get back to work, but could not do so—80,000 building workers like him have lost their jobs under this Government.
Mr Douglas Carswell (Clacton) (Con): Does the hon. Gentleman think that the answer to this problem might be even more cheap credit—perhaps a British version of Fannie Mae and Freddie Mac? What does he think we should do to sort out the lack of availability of mortgages?
Jack Dromey: No, I do not believe that we should take the same approach as Fannie Mae and Freddie Mac in Britain. I will come in a moment to our proposal.
Three admirable young people in Castle Vale in my constituency told me recently that they were desperate to do an apprenticeship in the construction industry, as
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their dads and uncles had done, but they could not get one. R&C Williams, an excellent local building company, is surviving despite the problems in the construction sector. Nevertheless, its managing director told me that the previously successful companies run by his two best friends have now gone out of business.
I also see in my constituency the working poor—people on minimum wages and whose wages are being held down and sometimes cut—who end up having to claim housing benefit as their rents go up. It is a startling statistic that 10,000 households a month now go on to housing benefit, because struggling families cannot afford to pay their rent. Such things are pushing up the benefits bill, as is rising unemployment in the west midlands. The number of people unemployed rose in the last quarter by 16,000 to 253,000, which is up by 26,000 over the past year.
That is why Labour proposes urgent action now. The building of 100,000 homes would put 80,000 building workers back to work, create apprenticeships for young people who desperately want a future, lead to wealth in the supply chain—all those who manufacture bricks, glass and cement—and add 1% to GDP. The lesson of history is that our country has never had sustainable economic recovery after events such as the depression, the war and every recession since the war other than when there has been a major programme of public and private house building, and that is why Labour’s amendment proposes action to do precisely that.
Andrew Gwynne: Is not the set of measures mentioned by my hon. Friend in stark contrast to the Government’s own NewBuy scheme? We were promised that 100,000 families would have access to cheap mortgages, but only 1,500 families were able to take up that initiative.
Jack Dromey: My hon. Friend is right. The Government have a miserable track record of promising the moon and failing to deliver. I will say more about that in a moment.
There is growing demand for urgent action to stimulate the building of affordable housing from organisations ranging from the National Housing Federation to the CBI. There is a chronic lack of confidence not only in the economy, but in the Government’s housing policies. There have been four “Get Britain Building” launches and 300 separate initiatives, and yet the sorry saga of failure continues.
We now have Help to Buy. We are in favour of helping people to realise the dream of buying their own home. However, a powerful report by the Treasury Committee described the scheme as “unconvincing” and said that it was likely to push property prices up and unlikely to produce the significant lift in the supply of new homes that is badly needed. There is also the bitter irony that Help to Buy will help millionaires, fresh from their tax cut, to buy a second home worth up to £600,000—an absurd anomaly that stands to this day. There is one law for the rich and one room for the poor because of the bedroom tax.
That leads me to my concluding remarks. The Chancellor spoke earlier about the need to get benefits down, ignoring the reality that it is soaring rents and unemployment that are pushing benefits up. He has engaged in the most disgraceful debate that divides our country between shirkers and strivers. Only yesterday,
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Lord Freud said in a speech that people affected by the bedroom tax should—I kid thee not—get a job or sleep on a sofa. What would he say to the severely disabled couple who came to see me who can no longer sleep in the same room, but whose son has moved out? Because they have a “spare room”, they have to pay the bedroom tax. It is an immoral tax that will cost the taxpayer more because there will be a higher housing benefit bill as people are pushed out into the private sector and disabled people will be forced to move from adapted homes to unadapted homes that will then have to be adapted by local authorities and housing associations.
Instead of doing what they should be doing, the Government are seeking to divide the nation. They are driving more and more people into the trough of despair. The essential difference between them and us is this: they divide the nation, we will build one nation.
6.2 pm
Margot James (Stourbridge) (Con): I welcome the Queen’s Speech, especially the Bills that will drive growth and help businesses in my constituency. Manufacturing companies will welcome the capital allowances and companies of a certain size and charities will welcome the national insurance rebate. Everyone, including businesses, will welcome the fairer taxes and the Government’s commitment to tackling corporate tax avoidance.
I am delighted that the UK is now one of the 10 most competitive countries in the world in which to do business, according to the World Economic Forum. We must capitalise on our improved competitiveness by exporting more to the rest of the world outside the European Union. Our recent success is demonstrated by the two-thirds increase in our exports to China, India and Brazil over the past two years.
In the debate about our membership of the European Union, some people, including Lord Lawson, have argued that we need to extricate ourselves from the European Union to capitalise on the opportunities in the rest of the world. I disagree with that. We should be capitalising on the opportunities in the rest of the world as well as, not instead of, doing the bread-and-butter business that we already do with the European Union.
I liken that situation to running a business. I ran a service company for 15 years and we were always trying to balance our efforts to generate new business with the need to look after our existing business. That is always a tension. It is the same for the country. We have 45% of our exports going to the EU, and we need to look after that business in difficult times, but at the same time we need to go after the new business. That is why, out of the top 20 markets that UKTI is prioritising for Government support for exports, only one, Poland, is in the EU. All the rest are in the rest of the world, and that is as it should be.
The EU is fundamentally about the economy, growth, improving competitiveness and jobs. Throughout Europe, we need to improve our competitiveness. As my right hon. Friend the Chancellor said earlier, Chancellor Merkel stated at the beginning of the year that Europe accounts for 7% of the world’s population and 25% of its GDP, yet 50% of its social spending. That cannot go on in the EU and Britain.
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The Prime Minister’s strategy of negotiating a new settlement with the EU and a change within it, has to be about improving the competitiveness of all member states. There has already been some success over the past two years. Britain has been extricated from the EU bail-out funds, we have a better policy on fisheries, we have managed to make some progress on the EU budget—not as much as we would like, but at least we have had no real-terms increase in the multi-annual financial framework for the first time ever—and there is starting to be some movement on regulation.
Regulation is a key matter. I am talking about not just employment law but all regulation. Businesses in some areas of my constituency are considering relocating their manufacturing outside not just the UK but the EU as a whole to become more competitive, and that problem has to be tackled. However, we will not tackle it by rubbishing the Government’s strategy of reforming the EU, which is the path that many in the press want to lead us down. We should give the Prime Minister our backing, because his strategy rests on change being delivered throughout the EU—change that will benefit all member states, not just Britain. That is the basis on which our strategy of negotiating change in the EU will succeed.
6.7 pm
Yvonne Fovargue (Makerfield) (Lab): There may have been concentration today on a certain topic in the Queen’s Speech, but in Makerfield it is the economy, the cost of living and jobs that concern my constituents the most. Without confidence in the economy and job security, they will not spend, and without spending the economy will not thrive. I stress that there need to be real jobs with real opportunities. When I last checked the universal jobmatch site, 45 of the 67 sales jobs that were advertised within 10 miles of Wigan were self-employed catalogue distribution jobs, many of which demand an up-front fee.
I welcome the consumer Bill of Rights, which has been proposed to simplify and consolidate consumer law. If people are to spend, it is important that they are free from misleading and aggressive practices and have access to proper redress if they have been ripped off. They should not have to go through tortuous legal processes because of grey areas. Last year, Citizens Advice found that three quarters of consumers had had a problem that was covered by existing consumer rights, and 94% of them had complained but only 10% were successful. Improvements are needed, and I hope that the consumer rights Bill will be amended so that consumers understand their rights, are clear about what to expect and are given a time scale within which they can expect redress.
One notable omission from the consumer rights Bill, and from the Financial Services (Banking Reform) Bill, is action on lead generators and the marketing texts that people receive. Some companies, particularly in the high-cost credit sector, for example Cash Lady, do not provide the service themselves but simply gather details and pass them on to lenders. The consumer is often not aware who their lender is until they get the paperwork. They do not know whether the company from which they are buying is in a trade association or has a code
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of practice that they can use if there is a problem. They think they are taking out a loan with one company when they are actually taking it out with another.
The consumer Bill of Rights aims to provide transparency, which I would like to see extended to all products and services. Particularly in the high-cost credit sector, consumers do not always know the full implications of their agreement. How many, for example, would agree to a continuous payment authority if they knew that it gave the lender unlimited powers to dip into their bank account at any time and for any amount? Such a power also militates against the rigorous affordability checks required.
Another area contributes hugely to the strength of our economy but is often overlooked: the humble bus. A excellent report was launched this week by Pteg entitled “The case for the urban bus”, and it describes the contribution that buses make to the economy. Bus networks generate more than £2.5 billion in economic benefits, about £1.3 billion of which reflects user benefits from access to jobs, training, shopping and leisure opportunities. The remaining £1.2 billion of benefits accrues to other transport users and society at large through decongestion, reduced pollution, lower accident rates and productivity. The overall economic benefits are around five times higher than the amount of public funding going to the bus networks, and the bus industry has a turnover in excess of £5 billion, much of which is ploughed back into regional economies through the supply chain and consumption expenditure by staff.
Public expenditure on bus networks is therefore likely to have a large and direct impact on regional economic growth. It helps the economy by contributing to flexible labour markets and by increasing the number and range of jobs accessible to workers, in particular less-skilled workers who are likely to have less access to a car. However, the bus service operators grant has been cut, and there are fears that it might be under threat in the next spending review. Instead of salami slicing the BSOG—an easy target—I urge Treasury Ministers to read the report and recognise the contribution that the bus makes to the economy. It might be the Cinderella of the transport service, but it is used by the highest numbers of our constituents—more than any other mode of transport—and we must look at the benefits that the service accrues, instead of cutting it willy-nilly.
6.12 pm
Shabana Mahmood (Birmingham, Ladywood) (Lab): I am grateful for the opportunity—albeit time-limited and short—to contribute to the debate on the Gracious Speech. We as a country face huge challenges, and those faced by my constituents and the people of Birmingham are acute. My constituents are getting poorer and my constituency has the highest rate of unemployment in the country. Youth unemployment is at 8.4% in Ladywood, and long-term unemployment has gone up. More and more of my constituents are dependent on food banks that operate in my constituency, and my advice surgeries are inundated with people who cannot make ends meet and for whom simply keeping a roof over their heads and putting food on the table is a serious struggle. That is the reality of 21st-century Britain after three years of this Government.
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Given the scale of the challenge faced by the country, and the reality of what the last three years have meant for my constituents, we needed a change of direction in the Queen’s Speech and bold action to kick-start our economy—we desperately needed a jobs Bill. We have an unemployment emergency in this country and there are simply not enough jobs to go around. Instead of acting quickly and decisively as required by such an emergency, the Government are content to trundle along at a pedestrian pace, doing a bit here and not going quite far enough there, as if they have all the time in the world—or, more likely, two years to kill before the next general election.
My constituents, however, do not have the luxury of time to waste. The Government do not realise that each day one of my constituents remains unemployed there is a clear and present danger to their chances of ever being able to find work, and the longer that goes on, the more likely it is that they will be for ever on the fringes of the labour market. As individuals, my constituents will pay a heavy price, but so will the country. A lost generation is not only a tragedy for those unfortunate enough to be among their number, but frankly it does not come cheap. My constituents were crying out for a jobs Bill—something that would have given a chance of work to young people who have been unemployed for more than a year, and a compulsory jobs guarantee for the long-term unemployed who have been out of work for more than two years. The scale of the challenge demanded that, but the Government failed to deliver.
I am also disappointed that the Government’s proposals contained no reference to using public procurement to boost apprenticeship places. Again, that is a missed opportunity to put a rocket booster under apprenticeship policy. The Government have real power in the market—they are the UK’s biggest consumer—and should use it strategically and for the good of the country. In March, the Government voted against the Opposition’s plans to use public procurement contracts worth more than £1 million to create apprenticeship places. The Government could make a difference. I do not understand why they will not accept my point and weave it into procurement policy. It is no good them praying in aid EU law, because other European countries have been able to take into account the impact of procurement decisions on the local economic environment and remain within its confines.
In the absence of an effective, speedy and decisive response to the emergency we face, we in Birmingham are still trying to make a difference. My hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart) deserves special mention for the work she has spearheaded on the Birmingham Labour party policy review of education and skills in our city. The review culminated in a process to create a Birmingham baccalaureate, which will embed in the core school curriculum both generic employability skills and sector-specific skills in areas where Birmingham hopes to grow. I hope that, with the process we have embarked on towards a Birmingham baccalaureate, we can address the skills disconnect in our city, and move to a position in which young Brummies are first in line for the jobs that are created in our great city.
In addition, the greater Birmingham and Solihull local enterprise partnership and the city council await the spending review in June to see how much money the Government will put into the single local growth fund.
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However, the Government’s approach to regional growth so far has created uncertainty, deterred investment, and held back regional and local economies. I agree that local areas should have the powers and resources they need to get growth going and create jobs, but devolution should not be used as a cover for even deeper cuts.
I welcome any progress we can make in Birmingham, working with the council, the LEP and other stakeholders to address our skills gap and get more Brummies into work, but we will not achieve the jobs revolution we need without the Government taking bold and decisive action. That is why a plan for jobs and full employment should have been at the heart of the Queen’s Speech. The Queen’s Speech failed to deliver it. My constituents, Birmingham and our country deserve better.
6.17 pm
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): I am grateful for the opportunity to contribute to the last day of debate on the Gracious Speech.
I want to talk about this chaotic Government’s shambolic attempts to revive our flatlining economy. The Government are running on empty. When it comes to the questions the British people most want answered, they have nothing to say. On our flatlining economy, where is the plan for growth? On building more homes, 130,000 construction workers are out of work, but new home completions are at the lowest level since the 1920s.
What assistance is there for small businesses when 1,600 firms in my constituency are crying out for help? I agree with many of the tax evasion and avoidance concerns raised earlier by the hon. Member for Redcar (Ian Swales). When an estimated £120 billion is lost to our economy every year, how can the Government believe that it is a bright idea to slash 10,000 staff from Her Majesty’s Revenue and Customs?
On the increase in child poverty, the explosion in food banks and, worst of all, unemployment, I have felt as if I am in a parallel universe sitting in the Chamber today. I remind Government Members that more than 2.5 million people are without a job, and that 900,000 have been without a job for more than a year—the highest long-term unemployment since 1996. That is nothing short of a crisis, but for this Prime Minister, this Chancellor and this Government, it appears that unemployment is a price worth paying. They have not met the 4,100 people in my constituency who cannot find work—more than a quarter of them are young people. It is an abomination that one out of every five 16 to 24-year-olds are not in employment, education or training.
Labour would rightly offer a guaranteed job for all young people who are out of work for more than a year, paid for by a bankers’ bonus tax. Labour Members understand that spending cuts that push young people into poverty are not savings—they are a cast-iron guarantee of increased welfare spending and higher borrowing, and of an entire generation being thrown on the scrap heap.
Nigel Adams (Selby and Ainsty) (Con): Will the hon. Lady give way?
Luciana Berger: I would love to take the hon. Gentleman’s intervention, but I am conscious that there are still hon. Members who wish to speak.
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The Government should be doing everything they can to get people into work—that is what should be keeping the Government up at night. I have been looking closely at those on the Front Bench and I do not see dark circles under Ministers’ eyes. I do not want to see just any kind of work. We need sustainable, high-quality jobs where employees are respected.
The Queen’s Speech states that the Government are
“committed to building an economy where people who work hard are properly rewarded.”
That is an aim I applaud, but it is not the reality for too many of my constituents. We have seen a massive increase in precarious employment: zero-hours contracts, temporary contracts and agency workers. One million people working part time want to work full time, and there is downright exploitation. There can be no clearer example of that than the experience of my constituent Sophie Growcoot. She is 20 years old, and she and her colleagues have been ruthlessly exploited by one of the most well known companies operating in the UK.
Sophie thought that she had landed her dream job when she was hired to join a Ryanair cabin crew after an intense recruitment process. It was not until she started that she learned she would not be paid for all the hours she put in, only the time when a plane she was working on was in the air. That meant not a penny for every pre-flight briefing she attended, nothing for sales meetings, nothing for turnaround time when a plane was on the ground between flights, and nothing for the hours waiting on the tarmac during delays and flight cancellations. She was only paid for four days each week, and on the fifth day she had to be available on unpaid standby, ready to come in at a moment’s notice but not receiving any payment if not called in. Sophie was told that she had to take three months of compulsory unpaid leave each year, and was forbidden from taking another job during that time. If she wanted to leave within nine months of joining the company, she had to pay Ryanair a €200 administration fee. To add insult to injury, she had to pay a staggering £1,800 to her employer for compulsory training.
Last year, Ryanair recorded profits of just under half a billion pounds. How can its chief executive, Michael O’Leary, think it is fair or acceptable for his company to be profiting on the back of poorly treated staff like Sophie? As her situation grew worse, Sophie knew that there were no other jobs out there for her.
6.22 pm
Graeme Morrice (Livingston) (Lab): l have to say that, having listened to the Queen’s Speech last week and the Chancellor today, I am still more convinced that, sadly, the Government’s remarkably thin legislative programme is a further reminder that this is a Government out of ideas, out of touch and just watching the clock tick until the next election.
How many signs have the electorate got to send before the Government recognise what is very much evident: that they have got it horribly wrong and need to think again before it is too late? The Government’s measures do not go anywhere near far enough in tackling the desperate and growing crisis facing the country. Populist slogans and easy mantras might satisfy narrow partisan audiences, but they do not fulfil the responsibility of government.
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Nowhere is the Government’s insubstantial approach more evident than on their stance on economic growth. That is a matter of great regret. This is the Government’s third Queen’s Speech since the general election and all we have had is three years of failure: low growth, falling living standards and rising borrowing. Despite even manifestly failing their own tests for economic success, the Prime Minister and his Government are ploughing on regardless with a failed economic plan.
While the Government scrabble around for a coherent agenda, I warmly endorse the overall stance of my right hon. Friend the Member for Doncaster North (Edward Miliband), who has set out what would be in our Queen’s Speech: six Bills with a relentless focus on the economy, clearly demonstrating that growth and jobs are our No. 1 priority. It is sad to see the cavernous gap between the perfectly sensible and laudable proposals outlined in the Opposition’s alternative plans, and the half-hearted and half-baked measures from the Government.
In reality, the coalition has reached the limits of what the parties can achieve together, so all we get is this minimalist approach with only 15 Bills proposed. What was left out was almost as revealing as what was left in. With just two years to go, the Government have no answers and nothing to say on tackling the crisis in youth unemployment; nothing to back small businesses struggling to get credit; nothing on living standards at a time when families’ energy and other household bills are rising out of reach; nothing on housing at a time when new home completions are at their lowest level since the 1920s; nothing to stop the undercutting of wages by tackling the exploitation of immigrant labour; and nothing on growth.
I would have liked from the Government a substantial infrastructure programme for social housing. Getting house building moving again, along with home improvements, is one of the biggest catalysts to growth. We also needed something for young people and jobs. We cannot force people into a framework that says, “Work is better for you than welfare,” if there is no work to go into. A jobs Bill would get the 17,000 Scots, for instance, who have been unemployed for more than two years back to work. I want to see cheaper energy too. People are paying too much for their gas and electricity, and living standards are being squeezed. An energy Bill could have tackled rip-off energy companies and ensured that Scotland’s 400,000 over-75s were put on the lowest tariffs.
This is an uninspired, non-responsive Government who are too dogmatic to admit that they are on the wrong track. They are burying their heads in the sand while our economy struggles and the public suffer. This absentee Prime Minister has no ambition and little drive to change the country for the better. I said at the outset that I thought the Government’s approach might appease some, but now I am not even sure about that. The British people deserve better. They want leadership and decisive action, but all we seem to have is a Prime Minster who used to “agree with Nick”, but who is now “agreeing with Nige”, and, as we have witnessed, a Tory party reverting to type with its obsession with retreating from Europe at the expense of everything else.
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I appeal to Government Members to wake up and smell the coffee; to consider the evidence and listen to our constituents, including hard-pressed working families struggling to make ends meet and the most vulnerable in society; and to devote this time to getting people back to work, getting our economy growing again and bringing the change our country needs. If they will not do that, we will.
6.27 pm
Mr William Bain (Glasgow North East) (Lab): The country is still in the midst of the longest slump for 140 years. We need to generate 2.6% of GDP and more than 900,000 jobs to match the output and employment rates we achieved before the financial crisis struck. Four years into what should have been a recovery, we have unemployment locked at an unacceptable 2.5 million, under-employment among young people at nearly one in five, construction output falling, the IMF describing Britain’s economy as severely demand-constrained, and the OECD saying that our society is increasingly unequal. Yet what has the country seen in this debate today? It has seen an out-of-touch Chancellor, an isolated and absent Prime Minister, a decaying coalition and a weak Queen’s Speech that cannot meet the aspirations of our people. A governing coalition riven with divisions over Europe, welfare and child care cannot unite the country on jobs and growth.
The Gracious Address should have contained measures to inject demand into the economy and offer hope to our struggling construction and manufacturing sectors, but instead it simply compounds the Chancellor’s obstinate refusal to use fiscal policy to ease the pressures on ordinary households. Only this morning, the Office for National Statistics revealed that in the first quarter of this year, pay excluding bonuses rose at its lowest level since 2001, at a mere 0.8%. The OBR’s March fiscal outlook reveals that the decline in real-wage forecasts since December would cost ordinary households a further £200 this year, which is more than four times what the Government are handing back through their increase in the personal tax allowance. The squeeze on incomes is tightening its grip on millions of households, and without an easing of that burden by the Government, the day of real recovery will remain far off.
A Gracious Speech that was focused on the issues of the country, rather than on managing fractures within the coalition, would have contained a jobs Bill to help 2,000 young people in Scotland who have been out of work for more than two years to get back into work.Even with a modest fall in joblessness today, more than 11% of the working-age population in my constituency is unemployed, which is utterly unacceptable. We know from our friends and neighbours the scarring effect that long-term unemployment has on people’s health and, if they can find another job after that period of unemployment, their earnings and job satisfaction. In the UK, 18 to 24-year-olds are now 10% less likely to be in work than they were in 2008. We should be following the successful example of countries such as Sweden with a jobs guarantee—initially for people out of work for two years or longer, but eventually extended to those jobless for a year or more—that would be paid for by a tax on bank bonuses and by limiting the pension tax relief that top rate taxpayers receive to 20p in the pound.
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A Queen’s Speech that was focused on the issues of the country would also have contained a financial services Bill to reform our banks, creating a default power to separate investment banking from retail banking—if needed—to stabilise the economy, and new regional-based banks to boost investment and lending to our small and medium-sized enterprises.
Families in Scotland are losing £28.63 a week on average through the cumulative effects of this Government’s welfare and wages policies. That should have been addressed in this Queen’s Speech by cutting VAT, to put an average of £450 a year back into the pockets of 67,000 voters in my constituency. There should also have been a consumer rights Bill, to help nearly 6,400 over-75s in my constituency to receive an average £200 reduction in their energy bills this year.
We need a one nation Government who will build an economy for everyone in our society, not just—as is increasingly happening—for people at the top. We need that one nation Government as much in Glasgow as in every nation and region of our United Kingdom.
Madam Deputy Speaker (Dawn Primarolo): I call Andy Sawford to speak. Could I ask you to resume your seat at 6.35 pm to enable the wind-ups to start?
6.32 pm
Andy Sawford (Corby) (Lab/Co-op): I am pleased to have the opportunity to speak in this debate, albeit briefly. It is six months today since I was elected as the Member of Parliament for Corby in east Northamptonshire, which is an incredible honour. Fresh from those doorsteps, I can say that the people in my constituency told me that they wanted action on our economy and action to protect our vital local services. It is to address those areas of policy that they elected me to be their representative, and it is against those priorities that I have considered the Queen’s Speech.
Since the day I was elected six months ago, 324 more people in my constituency have been made unemployed. Sadly, the Chancellor has ignored the message that he was sent by my constituents. He continues to ignore the impact of his policies on my constituents. When this Government took office, 2,009 people were unemployed in my constituency. That was far too many people, but of course we were coming out of a global economic recession. The figure now stands at 2,852. Youth unemployment, which we know rose after the global economic recession—it was far too high and we were doing everything we could to reduce it, with programmes such as the future jobs fund—stood at 590 in my constituency when this Government took office. The figure is now 770. One more person in my constituency has become unemployed each day in the time that this Chancellor and this Prime Minister have been in office.
We have heard what keeps the people at the heart of this Government awake at night: they lie awake worrying about how to pay the school fees. Even if the coalition parties do not care about the tragedy of unemployment for the people who are out of work and their families in my constituency and in other constituencies, perhaps they could be encouraged to see the economic folly of their policies. This Government are spending £21 billion more on keeping people out of work, rather than introducing policies that help people to get back into work. I wish that instead of lying awake at night worrying
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about the school fees or the latest factions in the Eurosceptic right, they worried about the young unemployed people and the 2,800 people who are out of work and desperately looking for work in my constituency. I wish the Government would stop stigmatising those people and calling them shirkers, when I know how hard each and every one of them I meet and speak to on the doorsteps or in my surgeries is looking for work.
After three years, this Government have no answers. They have nothing to say. I wanted to see a jobs Bill that would put in place a compulsory jobs guarantee, a finance Bill to kick-start our economy and a consumers Bill. I also wanted to see measures to deal with the housing market. In particular, had I had more time today, I would have said more about the real potential of co-operative housing solutions. There are already important co-operative models in the rented sector, but we also need to introduce more intermediate market housing.
6.35 pm
Chris Leslie (Nottingham East) (Lab/Co-op): I thank my hon. Friend the Member for Corby (Andy Sawford) and my many other hon. Friends for their consistently strong arguments about the shortcomings of the Gracious Speech. It is a Queen’s Speech that lacks vision, substance and coherence. It lacks any answers to the big challenges that Britain faces. As such, it is entirely typical of this pitiful excuse for a Government. It is as though they could not be bothered to think through the legislation that is needed to get our economy moving, perhaps because their minds were elsewhere. We know where their minds were. Downing street has been caught in the headlights. It is fixated with internal party management and is frantically trying to hold it all together, when what we really need is a Prime Minister and a Chancellor who can focus relentlessly on the weaknesses in our economy and on the action needed to kick-start growth. They are so distracted, however, that they have lost sight of the things that matter most to the British people.
Youth unemployment still stands at nearly 1 million, and the Work programme is so useless that the number of young people on the dole for more than a year has tripled since it was introduced. At the spending review in 2010, the Chancellor said that there would be at least 6% economic growth by now, but we have seen barely more than 1%. As my hon. Friends have pointed out, house building is at its lowest level since the 1920s, yet the Government housing scheme offers a better subsidy for second home buyers than for building new homes. The construction sector is collapsing on this Government’s watch, but only seven projects from the list of 576 in their infrastructure plan are actually completed or operational. That is pathetic.