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Debate on the Address
Jobs and Business
(11 years, 6 months ago)
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The Secretary of State for Business, Innovation and Skills (Vince Cable)
I am delighted to be able to introduce the section of the debate on the Queen’s Speech that relates to economic matters, particularly jobs and business. We will be talking primarily about Bills dealing with national insurance reductions for companies, consumer protection, and the protection of intellectual property, particularly design, as well as some of the carry-over Bills that will have significant implications in relation to banking, workplace change and reform, and shared parental leave and flexible working, which still have to be legislated for. We will also discuss some of the important social measures that have major economic implications, particularly the reforms of pensions and social care, about which my colleague the Secretary of State for Work and Pensions will speak. Of course, these are social changes, but they will have major economic consequences, notably incentivising saving and thereby contributing to long-term economic growth.
It is perhaps useful to focus on some of the comments that business groups made about this agenda. The Federation of Small Businesses responded by saying that it welcomes
“the focus on a stronger economy and measures to help small businesses to create jobs.”
The British Chambers of Commerce said:
“On balance, businesses will welcome the limited package of legislation announced in the Queen’s Speech.”
The CBI was more critical, but made this perfectly valid point, which will be at the heart of the debate:
“You cannot legislate your way to economic growth”.
Indeed, and that is why, in essence, this debate will be about economic policy rather than legislation.
We need to start with the basic economic context in which we operate. When we are writing the economic history of the past two decades, the story will be one of a spectacular boom and a spectacular bust—15 years of remarkable continued economic growth followed by the worst crash since after the first world war, the two things being intimately connected. The first requirement in approaching this subject is a certain degree of humility. We are in unprecedented conditions, and it is important to acknowledge that there is no simple or easy answer to many of the difficult issues that we have to grapple with. Risks are associated with fiscal consolidation that is too fast and risks are associated with fiscal consolidation that is too slow. There are genuine debates about the best mix of monetary and fiscal policy. There are also serious debates on how we deal with the banks in such a way that they rediscover their appetite for risk but do not do so in a way that destabilises the banking system as before. I hope that everybody in this debate, particularly the Opposition, will approach these very tricky issues recognising the very difficult context in which we operate.
Let me address a few of the questions that the Leader of the Opposition asked in his response to the Queen’s Speech. He asked about jobs, the link between jobs and wages, the very emotive but important issue of migration, and the banking system, which is at the heart of the problems we are dealing with. I will start with jobs.
We have unemployment of about 7.8% or 7.9%. That is about a third of what it was in the great depression of the 1930s, a rather comparable period in our history, but none the less worryingly high. It is useful, however, to make some apt comparisons. In the United States, which has recovered from the crisis much better than any other western country, except possibly Australia, the unemployment rate is slightly less, at about 7.6%. In France, which has had the benefit, if such it is, of a socialist Government, the unemployment rate is 10.6%. In Sweden, which is an interesting case—it is not in any sense shackled by the eurozone and it has had probably the most enlightened welfare and labour market policies of any European country—unemployment is significantly higher than in the UK, at about 8.8%.
Under this Government—perhaps even in the rather partisan atmosphere in which we debate things in this House, we should get a little credit for this—we have seen the creation of 1.2 million private sector jobs; the expansion of manufacturing employment, now at 82,000 after a period of Labour Government in which it collapsed from 4 million to 2.5 million; and private sector employment increasing six times as fast as public sector employment declined.
Mark Tami (Alyn and Deeside) (Lab)
The Government talk a lot about the growth in private sector jobs. If jobs are being created, why is the economy showing no signs of growth and just bumping along the bottom? Surely we should be producing more and the economy should be growing.
Vince Cable
That is an extraordinarily naive question in the wake of the phenomenal financial crash that we have had. I do not know whether the hon. Gentleman is familiar with the economic literature, but the econometric data suggest that after the banking crash that Britain experienced we should have lost about 50% of our GDP. We have done well to avert that. We face a difficult set of circumstances. It is a remarkable success story that in an economy that is still recovering from such a long economic heart attack, we are generating significant private sector employment growth. That is positive. Alongside that, we have seen the growth of about 250,000 new businesses, which will be the source of employment growth.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
Many of my constituents are in those new private sector jobs, but the hours are limited. Many of them want to work more than the 16 hours or so that they have been given. Has the right hon. Gentleman counted how many of the new jobs are part time, with no prospect of becoming full time?
Vince Cable
The vast majority are in full-time work. The figures show that quite clearly. It is better to be in part-time work than out of work. I hope that there will be some recognition of that.
Mr Kevan Jones (North Durham) (Lab)
Does the right hon. Gentleman recognise that when the coalition came into government in 2010 the economy was growing because of the actions of the previous Government? Does he regret cutting capital expenditure straight away and the other mistakes that were made early on, which sent the economy into depression and have caused it, as my hon. Friend the Member for Alyn and Deeside (Mark Tami) said, to bump along the bottom?
Vince Cable
I have said that the cuts in capital spending have been too deep. The Chancellor has acknowledged that and changes were made in the autumn statement and the Budget. The hon. Gentleman seems to forget that the decision to slash capital budgets by half was made by the outgoing Labour Government in 2010.
Julie Hilling (Bolton West) (Lab)
How many of the jobs that have been created are so-called workfare jobs in which people are supposedly employed but there is no pay?
Vince Cable
There is no such activity in Britain. There were cases of people working without pay and my colleague, the Secretary of State for Work and Pensions, intervened to stop that practice operating on the back of the benefits system.
We acknowledge that there is one category of people among whom unemployment is worryingly high: young people. The Leader of the Opposition focused on that issue. About 1 million young people are unemployed. That figure is worrying, but we should recall that the level of young people’s unemployment, which is approaching 20%, is virtually the same as the level we inherited.
It is also worth recalling that a third of the figure is made up of full-time students. It has always struck me as a little odd that we regard full-time students as unemployed, but that is what the statistics show. If we strip that out, there is still a significant level of youth unemployment, which is worrying.
It is useful, as I did on the wider figures, to contrast youth unemployment in this country with that in comparable countries. In France, youth unemployment is 24%, in Sweden, which perhaps should be a role model, it is 24%, in Italy it is 35% and in Spain it is 45%. The Economist, as some Members will know, has been running a series on the global problem of youth unemployment. We share that problem, but in many ways we are outperforming comparable economies.
Mr Steve Reed (Croydon North) (Lab)
I hope that the right hon. Gentleman understands that in seeking to justify the unacceptably high figures on youth unemployment he will sound incredibly complacent to long-term unemployed young people in constituencies such as mine, whose numbers over the past 12 months have increased by more than 100%.
Vince Cable
It is not complacent to acknowledge the extent to which we have serious problems, which is where I started, or to compare the country with economies that are suffering similar problems. For those who are rightly focused on unemployment among young people, the simple truth is that long-term youth unemployment rose by 40% in the boom years when the Labour party was in power. Labour Members are therefore not in a strong position to lecture us on how to deal with it.
We have focused on two policy areas to deal with the problem of youth unemployment. I am most closely involved in the growth of apprenticeships and my colleague, the Secretary of State for Work and Pensions, will talk about the other. We have all embraced apprenticeships, including, rather belatedly, the Opposition. There is a recognition among employers and young people that it is an excellent model for training. Under this Government, the number of apprenticeship starts has increased by 86%. There were 160,000 last year. There has been a 42% growth in the number of young people starting apprenticeships. We are making reforms that will improve the system further, notably the employer ownership system, under which apprenticeship training will be channelled through employers so that there is the demand for real jobs. We are also introducing a staged approach through traineeships, so that young people have a route into proper training.
A difficult area is that what has kept unemployment down in the UK is the fact that real wages have not risen. Indeed, they have fallen. That was the main focus of attack from the Leader of the Opposition. We need to understand and explain what has happened. The British economy was hit massively by the financial crisis. We are a significantly poorer country than we were before that time, although we are now recovering. The impact of that has been felt predominantly through the reduction of wages in real terms.
We are trying to mitigate that impact in two major ways. The first is by lifting low earners out of tax, which increases their disposal income even though their pre-tax income may have fallen. The effect of that is that people on the minimum wage are paying half the income tax that they paid before we embarked on that reform. We have also taken 2.7 million out of income tax altogether. Secondly, and this is my direct responsibility, we have ignored the advice from some quarters to abandon the minimum wage or to dilute it. I have followed the advice of the Low Pay Commission on the minimum wage.
One of the points that the Leader of the Opposition made in his speech—
Vince Cable
I will finish my point and then take the intervention.
The Leader of the Opposition pointed to the apparently low level of enforcement of the minimum wage and the limited number of prosecutions. That worried me at the time, so I checked the history. I discovered that in the last four years of the Labour Government, the number of prosecutions under this flagship policy was two a year. We have therefore maintained a rather similar practice.
I have asked for an interview with the head of Her Majesty’s Revenue and Customs, who is responsible for prosecutions, to establish why the level is so low, because this is a perfectly legitimate issue. I have discovered that a large number of companies are being pursued under civil proceedings, where the maximum penalty is £5,000 a year. The matter is therefore being enforced assiduously, but not through the criminal system. I will establish why we are not doing that and whether we should be doing more to underpin the rights of some of the lowest-paid people in society.
Clive Efford
The right hon. Gentleman has anticipated the point that I was going to make, which was about the alarmingly low level of prosecutions for not paying the national minimum wage. Is most of the enforcement not taking place through trade union activity?
Vince Cable
I am sure that the trade unions play a part in bringing this matter to the attention of the authorities. Every complaint is investigated. Some come from the trade unions and I welcome the role that they play.
Jim Fitzpatrick (Poplar and Limehouse) (Lab)
Further to the point that most activity surrounding non-payment of the minimum wage is conducted in the civil, rather than the criminal, courts, has the right hon. Gentleman’s Department made that information publicly available? If not, will he do that so that people can see, and a message can be sent, that the Government will not tolerate people trying to undermine the national minimum wage?
Vince Cable
The hon. Gentleman makes the same point I was making. The Government are pursuing that matter through the civil courts and there are substantial penalties. It is an HMRC task, but I take the point that we should perhaps make the message more easily available. Employers should not get away with the idea that they should ignore this.
Let me say a bit about a difficult area of policy in which issues of unemployment and low pay intersect: migration, which is one of the most important reforms that the Government will introduce. I was hesitant about raising the subject because it is essentially covered by the Home Office, but substantial economic issues are also involved and it is important to refer to them. I was provoked into feeling that we should debate the issue in this context because a couple of days ago I was on the radio on the “Jeremy Vine” programme. I was following a female voice that was ranting on about millions of illegal immigrants and the negligence of the Government in letting them all in and not deporting enough people. I thought at the time that it was some fringe party that regarded Mr Nigel Farage as a sort of soggy, left-wing liberal, but I then realised it was the Labour shadow Home Secretary, and I tried to understand where she was coming from. It says quite a lot about the Labour party’s current values that it feels it necessary to apologise for letting in foreigners, but is still reluctant to apologise for wrecking the economy.
I vividly recall a conversation I had with a constituent, shortly before the last general election. She was taking me to task for what she said were millions of illegal immigrants in the country and, rather recklessly perhaps, I decided to debate the subject with her. I asked, “How do you know?”, and she said, “Well, I see them in the high street the whole time.” I said, “Okay, but how do you know they are illegal?” She looked at me and said, “Mr Cable, why are you being so difficult? You know exactly what I mean”, and pointed up the road to the Hounslow mosque. Unfortunately, beneath a lot of the arguments about numbers, that is the prejudice we are trying to confront. We must, I think, make the case—I certainly intend to make it—for managed immigration that has a positive impact on the country, while at the same time providing the necessary level of reassurance.
Meg Hillier
Will the right hon. Gentleman update the House on his discussions with the Home Office about visas for students? The attitude of the Home Office is sending out messages that UK plc higher education is not open for business, and competition from Europe, Australia and other places is mopping up our student intake.
Vince Cable
I spend a good deal of time discussing that issue with the Home Office, and I will come on to students in a moment as they are a crucial category.
In order to clear the decks for an honest discussion of this problem, we must confront the reality that some of the facts, or factoids, used in this context are deeply unhelpful. All parties and commentators use the concept of net immigration as a way of measuring what is happening on that front, but at the heart of that concept lies a logical absurdity. One reason net immigration rises is because fewer British people emigrate—one would have thought it rather a good thing that people feel comfortable living in this country and want to stay here. Net immigration declines if more British people emigrate, which one would have thought is rather a bad thing. We often operate, therefore, with a concept that gives us misleading and unhelpful conclusions.
Similarly, the biggest item in immigration—this relates to the previous intervention—and the biggest category of people regarded as immigrants are overseas students. Of course, overseas students are not immigrants; that is not why they come here. A few stay on—indeed, I probably contributed to immigration statistics 50 years ago when I married someone who was then a student at the university of York. For the most part, however, people come to the UK to study and then go home. They are not immigrants, but by way of a quirk—not in our statistics, but those of the United Nations—they are regarded as immigrants and we must acknowledge that in our debates.
Setting aside prejudices and anxieties, it is important to acknowledge that in some key areas immigration makes an important and positive contribution to the UK. The first category is the one we have just been discussing: students. Overseas students contribute about £9 billion a year to the UK economy. They also contribute in other ways, but education is one of our most successful export industries. The Government have tried to curb abuses that were taking place. People were using bogus colleges as a route to illegal immigration, and those have been closed. Once we have established the principle of legality, students make a positive contribution, and I would see a negative trend in students coming to the UK as a problem rather than an achievement.
Mr Kevan Jones
I agree with the right hon. Gentleman’s point about bogus colleges. First-class universities such as Durham rely on a lot of overseas students not only for income but to become more cultural and diverse places. Does he agree that some of the language being used gives the impression to students from the middle east and far east that they are not welcome in the UK?
Vince Cable
That should not be the case, and the Prime Minister has gone out of his way—as he did on a recent visit to India—to make it clear that we welcome valid, legal overseas student visitors to the UK. That is our policy and we are encouraging it.
Mr Sam Gyimah (East Surrey) (Con)
Will the Secretary of State confirm to the House that there is no cap on the number of students who can study in the UK if they attend and have a place at a proper university?
Vince Cable
That is true and the core of the policy. There is no cap on legal immigration for students, not just for universities but also properly accredited colleges. There is also a right to work subsequently in graduate-level employment, and I hope that that information will be made more widely available.
The second crucial group of people are those with key skills. The Government exempt intra-company transfers from the cap on immigration. There are many key individuals in management, banking and engineering specialties, and in a highly specialised economy we will have more and more demand for services of that kind. The Home Secretary has gone to considerable lengths to remove some of the impediments surrounding visas for people who are needed by British industry and are an important part of our economy.
Meg Hillier
I thank the right hon. Gentleman for giving way yet again. I am MP for Shoreditch and what the Prime Minister calls Tech City. Business after business in that area has raised concerns with me about the challenge of getting visas for key coders and programmers whom they cannot recruit in the UK because we have not yet skilled-up enough—an issue for the right hon. Gentleman’s Department. Because of the Home Office cap, businesses are struggling to get those people in. Does he have any words of comfort for those businesses about his negotiations?
Vince Cable
Yes, I do. It is, of course, important to train people in the UK where possible, and one of the drivers behind the apprenticeship programme is that of ensuring we build up our scandalously neglected skills base. Where there are genuine vacancies, it is important that people are able to move freely. If the hon. Lady is able to bring cases to my Department, we will try to work with the Home Office to ensure that those people are able to come.
The third group of people are not immigrants at all but visitors. We wish to maintain our reputation as an economy that is open for business, and millions of people come to the UK to do business, shop, visit family and friends, or as tourists. It is important that they can do that with as few visa restrictions as possible, and where there are visa restrictions, we must ensure they are dealt with quickly and effectively. The Government are currently working hard, particularly with countries such as China, to ensure that the system works better.
Finally, there is the issue of the so-called single market within the EU. When the single market was introduced, it was made clear that one core element is the so-called four freedoms: the freedom of trade in goods; the freedom of trade in services; the freedom of capital movements; and the freedom of worker movements. They are at the heart of free trade. I am often baffled by people outside the Chamber who clamour for free trade with Europe but denounce the free market, because they are the same thing.
Modern trade relationships—there are very few restrictions on physical trade in goods these days—frequently involve people moving backwards and forwards. That is the nature of modern trading relationships, and we must uphold it within the EU.
Mr Steve Reed
Does the Secretary of State recognise that many immigrants are extremely entrepreneurial? One reason the London borough of Lambeth has the highest number of new business start-ups of any borough in the country is the relatively high immigration there.
Vince Cable
That is essentially the point I am trying to make. Perhaps the hon. Gentleman can communicate his message to the shadow Home Secretary, who has a slightly different take on those things.
My essential point is that there are positives, and we need to stress them in the current atmosphere. However, we also need to provide reassurance, which is what the Government are seeking to do in two main ways. First, when people come to this country, we should acknowledge a distinction between the rights to work and to claim benefits, which is at the heart of people’s sense of citizenship and belonging. My colleague the Secretary of State for Work and Pensions will explain how we want to ensure that British citizens and not people from overseas receive benefits. The sense of abuse in that sector fuels much of the current anxiety.
The second source of concern is the belief that the laws and restrictions we have should be enforced. There are measures in the Immigration Bill to try to ensure that the private sector, particularly the property sector, plays its role in enforcing them. Those restrictions will have to be subject to a proper regulatory impact assessment and, under the one in, two out principle, they will have to demonstrate that they do not impose red tape on small business. Provided that happens, I hope the combination of actions that have been taken in respect of the benefits system and enforcing the law will be sufficient to reassure the public, or those people who are willing to be reassured, that managed immigration is very much in the national interest.
Mr Kevan Jones
The right hon. Gentleman makes a thoughtful speech and brings some balance to the argument on immigration. However, if he looks at Department for Work and Pensions figures, he will see that the majority of immigrants are in work and not claiming benefits. Of those who claim benefits, some have contributed through national insurance. Does he agree that we should look at the facts rather than feed the myths put forward by the press? One fact is that, according to DWP figures, fewer than 2% of applications are fraudulent or bogus.
Vince Cable
The hon. Gentleman is right that myth-busting is an important part of what we need to do. However, in order to deal with myth-busting, we must also deal with genuine abuses. I hope he understands that. I am grateful for his first comment—I am trying to lower the temperature of the debate and to get us to deal with fact rather than myth. I am trying to have a proper balance that recognises the very substantial economic importance of managed migration to this country alongside the measures we must take to deal with abuse.
A large part of the Leader of the Opposition’s speech was devoted to the continuing problems in banking and the financial sector, and many of the current problems with the economy relate to the aftermath of the banking crisis. We have got to a situation in which banks—partly under pressure from regulators, and partly as a result of learning from their mistakes—have moved to a position of fairly extreme risk aversion. If we are to ensure that credit flows to small business, which is the motor of the economy, that needs to change.
There is some evidence that the situation is beginning to change. Some banks, such as Lloyds, HSBC and the trade finance market, are showing positive trends, as is Barclays. The head of Royal Bank of Scotland made it clear at the weekend that he has £20 billion-worth above his liquidity buffers and capital requirements available for small and medium-sized enterprise loans. We hope SMEs take advantage of that.
However, the position we are dealing with is genuinely difficult. In the light of banks’ previous misfortunes, they are operating what I call a pawnbroker model of banking, under which people need collateral, whether a gold watch or property, to secure a business loan. That is massively inhibiting for, for example, a creative industry that does not have such collateral, or an export company that is trying to trade on the basis of orders, or simply for a good company with a good business idea and a good business plan that is unable to get into expansionary mode because of the crippling effects of bank credit restriction.
The Government are trying to deal with the problem in a series of practical steps. We clearly need to do more, but it is worth summarising some of the steps we are taking. We have a sophisticated system of developing supply chain finance—the advanced manufacturing supply chain initiative. Work is being done with Kingfisher and others in the private sector to support trade finance outside the banking system. We have a £1 billion fund that now supports non-bank finance, which is proliferating rapidly. We have crowd-sourced funding, invoice finance and non-conventional forms of lending. The Financial Services Authority and, currently, the Financial Conduct Authority, relaxed rules on the establishment of new banks. Within the next year or so, we will hopefully have a lot more banks, based on the model of Aldermore and Handelsbanken.
Probably the most important step, and one that underpins the others, is the work we are doing with the business bank. We have £1 billion of start-up capital. The first £300 million is being marketed to support new banks and long-term patient capital, which can be raised in the City, and to support equity through angel networks. A crucial test of our policy in the coming months will be the speed with which we can get that capital into the market to relieve the genuine constraints.
I listened carefully to try to establish what, if anything, Opposition Members wanted to add to the debate, because the problem is a genuinely difficult one, and because Labour presided over the banking collapse. If I understand them correctly, the big new idea is regional banking. It is a good idea, and I want it to be explained and developed. It has been forgotten that, 15 years ago, we had regional banking—they were called building societies. I have a vivid recollection of that period because I was chairman of Save Our Building Societies, working with one or two Opposition colleagues, particularly the hon. Member for Edmonton (Mr Love), to try to stop the demutualisation of building societies.
I believe demutualisation began originally with Lord Lawson, but it is worth recalling that, in the first five years of the Blair Government, we lost most of our regional banks. It is worth itemising what happened to them: Bradford and Bingley collapsed and was nationalised, and is now part of Santander; Birmingham Midshires bank is now part of Lloyds; Northern Rock in Newcastle collapsed and is now part of the Virgin group; Woolwich is now part of Barclays; Halifax is now part of Lloyds; and Alliance and Leicester is now part of Santander. We had regional banking, and it went. I would love to see it recreated, but that is like turning omelettes back into eggs. I am all ears as to how that can be done. If it can be done, I am very much in favour of it, because we need much more diversity and competition in banking.
Mr Steve Reed
I thank the Secretary of State for being so generous with his time. He talks about the banking sector as though it is wholly independent when, in fact, large swathes of it are nationalised. Why does he not use the power that that gives him to compel banks to lend more to small businesses that are seeking finance to grow?
Vince Cable
There is one major bank that has predominant Government ownership. That does not give the Government powers to lend, because there are significant independent shareholders and the hon. Gentleman will be familiar with the corporate governance problems that presents. We would like RBS to lend more, and Mr Hester explained this weekend that he has a significant amount of capital available.
Mr Chuka Umunna (Streatham) (Lab)
There has been speculation about the Government entering into a hasty sale of RBS. Will the right hon. Gentleman assure the House that the Government will look to ensure that the bank returns to a far healthier position before they contemplate privatising it? On his earlier comment, I agree about the problems that small businesses face in dealing with banks, but does he not accept that the economic outlook has also had an impact on the pressing demand for lending for small businesses?
Vince Cable
Yes, there is an issue with the demand for loans. It is not simply a question of aggregate demand in an economic sense. Many small companies have been discouraged from applying and we need to overcome that handicap. On the wider question, I know that the Chancellor is listening carefully to this debate. I read the contribution of the former Chancellor, the right hon. Member for Edinburgh South West (Mr Darling), who suggested that the key issue was value for money for the taxpayer. I agree completely.
Mr Gyimah
I thank the Secretary of State for giving way once again. Does the intervention from the hon. Member for Streatham (Mr Umunna) not highlight the confusion in the Opposition’s approach to RBS and state-owned banks? On the one hand they want the Government to compel them to lend, and on the other hand they say that the banks should return to health and make a healthy profit for the taxpayer. Those are two conflicting positions. That is why schemes such as funding for lending, which help banks get money to small businesses, are the right way forward.
Vince Cable
Funding for lending is an important and valuable step forward. As I am sure my hon. Friend would acknowledge, it predominantly affects the mortgage market rather than the SME lending market, but it is an important initiative. I do not think that we are talking about forced lending here, and we should not be talking about that; we should be talking about how we change the risk appetite of banks. Some of the Government’s key interventions, such as the enterprise guarantee scheme and the new schemes for export finance, are crucial to changing the balance of risk. They work with the grain of the market, and that is the way we should deal with this issue.
I conclude on the banking issue, because it is the big legacy problem we have to deal with, along with the enormous deficit, which is painful and difficult but on which we are making real headway. The key point is that despite those problems, some real signs of hope are beginning to emerge: we have rapid growth in private sector employment; record levels of start-ups in the private sector; a growing sense of entrepreneurial energy and commitment in the UK; and a rapid growth in exports to some of the emerging markets, where future demand lies. There is every reason to be optimistic, and the legislative programme we are setting out will reinforce those positive trends.
Mr Chuka Umunna (Streatham) (Lab)
Before I start, I should just say that I understand that my hon. Friend the Member for Hartlepool (Mr Wright) and the Secretary of State for Business, Innovation and Skills, shared a birthday yesterday. I just want to wish them a belated happy birthday so as to start on a positive note before moving on to the Government’s record since the previous Queen’s Speech. It is right for us to take stock, to look at where we are now and where we were last year, before considering Her Majesty’s Gracious Speech.
When we convened to debate the speech last year, unemployment had soared beyond 2.6 million, we were in a double-dip recession, and the Government were borrowing £150 billion more than they forecast to pay for the cost of their failed economic plan. The Secretary of State’s answer to that state of affairs was to bring forward an enterprise Bill that started with some sensible measures, but ended up becoming a Christmas tree of a Bill. It contained measures to water down the statutory remit of the Equality and Human Rights Commission, to trample over people’s rights at work, to overturn health and safety protections that have existed for more than 100 years, and to abolish—this came rather late in the Bill’s progress—the Agricultural Wages Board that protects agricultural workers. That was all done in the name of growth, without a scintilla of evidence to show how doing so would create jobs and boost enterprise.
The right hon. Gentleman then went on to co-sponsor the Growth and Infrastructure Bill. That did not even feature in last year’s Queen’s Speech, but sought, among other things, to establish a shares for rights scheme where, in return for being given shares in their employer’s company, employees would be required to sacrifice their rights at work. That was described by the Government’s own side as having all the hallmarks of being thought up by somebody in the bath. Again, no evidence was produced to show that the measure would produce growth.
There is an irony in all this. Last year, the Business Secretary had gone around saying that he did not think much of the Prime Minister’s employment law adviser, the Conservative donor Adrian Beecroft, and his proposals to run a coach and horses through people’s rights at work, which, by Mr Beecroft’s own admission, had no evidence base whatever. There is clearly a thin line between love and hate, because the Secretary of State did Mr Beecroft proud in the last parliamentary Session. That is not to say that his coalition partners should be absolved of the blame—they were all in it together, to coin a phrase. Notwithstanding the fact that what they were doing was wrong in principle, I fail to understand the politics of it. Let us take the Conservative party, a party that has not won a general election since 1992. We are told that it has a strategy of gaining 40 seats and retaining 40 of their most marginal seats at the next general election, yet 70% of those 40 seats it wishes to retain have significant numbers of agricultural workers. In fact, 10 of the constituencies most adversely affected by the abolition of the Agricultural Wages Board are Conservative marginals, including Lancaster and Fleetwood, Weaver Vale, Hastings and Rye, Sherwood, and Morecambe and Lunesdale. At the general election, we will remind every single voter in those seats of the Conservative party’s betrayal of them.
What has happened to the economy since the Government’s first two Queen’s Speeches? The Secretary of State made various international comparisons in his contribution. Since October 2010, the UK economy has grown by just 1.1% compared with the 6% forecast made by the Office for Budget Responsibility, and 3% growth in Germany and 4.3% growth in the US during the same period. Unemployment is stuck around the 2.5 million mark. A large number of those in work are working part time when they want full-time work, and people have faced an average pay cut of £1,700. Let us not forget that that was all being done in the name of reducing borrowing. We now have a situation where the Government are borrowing £245 billion more than they planned—the equivalent of the health and education budgets combined, and then some.
The Secretary of State is an economist. The reason why this strategy is failing was put very well to me, when I sat on the Treasury Committee, by a former member of the Monetary Policy Committee, Adam Posen. He highlighted the problem of the Government’s strategy. What they were attempting to embark on was an experiment. It was the most extreme consolidation embarked on by any Government in the western world at this point in a country’s recovery from the economic heart attack to which the Secretary of State referred. That is why their policy has failed.
Gordon Birtwistle (Burnley) (LD)
The hon. Gentleman says that the German and US economies have done well and have not faded like our economy. Does he accept that those two countries supported their manufacturing sector while the Labour party, when it was in charge, ran our manufacturing sector down from 22% to 9% of GDP?
Mr Umunna
I certainly accept that we want to grow our manufacturing sector, but the Secretary of State has conceded that, for example, the things we did in the automotive industry by setting up the Automotive Council have helped to increase the output of that sector. So I do not agree that we did nothing to boost manufacturing in this country.
My right hon. Friend the shadow Work and Pensions Secretary will talk later about the failure of the Government’s schemes to get the unemployed back to work.
Mr Umunna
I remind the Prime Minister’s Parliamentary Private Secretary that his boss is borrowing £245 billion more than planned. The only part of our five-point plan to get the economy growing again that would incur extra borrowing is the VAT cut, which would cost £12 billion in the short term. We advocate a VAT cut because it is the fastest way to give an injection to an economy that, frankly, has flatlined over the past three years. We have seen it work previously. During the economic downturn when we were in office, we introduced a VAT cut that we know—Institute for Fiscal Studies numbers have provided supporting evidence—helped to boost growth in the economy. That is what we need now. Of course, boosting growth would increase corporation tax receipts and income tax receipts—as more people enter work—and reduce the benefits bill.
Mr Umunna
I will make more progress.
Ultimately, for employment schemes to work, there need to be jobs for people to go into, created by businesses, and for that we need to create the conditions for businesses to expand and for wealth to be created. We need to create an environment in which businesses can grow the top line. On many occasions, the Business Secretary has pointed to how our economy is structured, which he says stands in the way of progress. I agree that we need to restructure our economy, to increase our exports and to diversify the sectors contributing to GDP—there is consensus on that—but I must say to him that blaming the Government’s predecessors starts to wear thin after three Queen’s Speeches and after three years in government. It is time that he and his colleagues took responsibility for their actions.
I have always thought that to achieve both rising and shared prosperity, we need to rethink the relationship between the Government and markets and to be far more discerning about the kind of capitalism we want in this country. We need to set aside the neo-liberal dogma propagated by some Government Members that markets are automatically efficient and best left alone. There is a lot that active Government can do to improve the healthy functioning of markets. Importantly—this is a key point—markets cannot set a strategic direction for our economy; they cannot set a direction for how we will compete and pay our way in the world—Governments working in partnership with business can do that.
Making that a reality requires a modern industrial strategy—the kind of strategies that our competitors are prosecuting with good effect—and an agenda in which the role of the Government is not to step back, but to step up; to work with businesses to create better outcomes at home; to ensure that we can pay our way in the world; and to ensure that growth is more broadly based across sectors and geographically across regions as well. We must also empower consumers as drivers in making markets work more efficiently, not only for themselves but for producers. That helps to provide the foundations for UK businesses to succeed in other markets.
Meg Hillier
Does my hon. Friend agree that the Government’s approach to funding for lending has been the polar opposite of what he has just described, and has in fact fuelled the housing market rather than helped businesses such as mine in Shoreditch? It has done nothing to deal with day-to-day finances and only touched potential loans, rather than things such as overdrafts. What would his approach be were he in the Secretary of State’s position?
Mr Umunna
My hon. Friend is right to identify some of the risks with the funding for lending scheme. The problem is that it has reduced the cost of borrowing for existing business borrowers without increasing access to finance for those other successful, profitable businesses. The other problem—this is why we advocate setting up a regional banking network, to which I shall turn in a minute—is that the scheme sees as its delivery mechanism the very high street banks that have been the problem. In fact, the transmission mechanism for many of the schemes that the Government have introduced since they came to office has been the high street banks, which have been the problem.
I will continue to discuss industrial strategy in more detail before touching more briefly, due to time constraints, on consumer issues. I do not think that the Business Secretary would disagree that in opposition he did not really share our view of the need for an active industrial strategy or even of the need for a Department, which he now runs, to be its champion—he argued for his own Department to be abolished at the time. After two years in government, however, he appears to have come round to our way of thinking, and we saw his embryonic industrial strategy published last September.
An industrial strategy consists of different elements. I have welcomed some of the sector-specific interventions that the Business Secretary has announced since the Queen’s Speech—in aerospace and with the ongoing interventions and assistance in automotive—and we will scrutinise the Bills in the Queen’s Speech closely to ensure that they support those key sectors. Another such sector is our creative industries, which were disappointed not to see a communications Bill in the programme for this Session. The point is that so much of what we have seen coming from his Department or the Treasury has been rather “piecemeal”—to use the Secretary of State’s own language—and does not meet the scale of the task at hand. As ever with this Government, if we speak to any business organisation, we hear that the problem is one of delivery.
I will focus on a few key areas and the extent to which the Queen’s Speech moves things forward. I will start where the Business Secretary finished. Of course, we must reform our banking sector, not only so our banks are made safe but primarily so that the financial services sector better serves the real economy. We have said, and he referred to this, that we should have better regulated the banks during our time in office. We did not, however, and that is a source of regret. Listening to the Secretary of State lecture us on that, I should say to him that mea culpa in that respect is due across the political spectrum. The tripartite regulatory regime that we put in place in the Financial Services and Markets Act 2000 enjoyed widespread support. In the House on Second Reading of the Financial Services and Markets Bill, the Business Secretary said:
“I want to express broad support for the Bill, whose philosophy and whose architecture of financial regulation reflect a broad consensus. I appreciate the extent to which there has been broad and extensive consultation with practitioners and with Parliament, and the fact that the Government have responded to very many of the anxieties that have been expressed.”—[Official Report, 28 June 1999; Vol. 334, c. 55.]
He went on to say:
“Like the Conservative Opposition, we shall approach the issues constructively. There is no reason to hold back the Bill.”—[Official Report, 28 June 1999; Vol. 334, c. 58.]
Kevin Brennan (Cardiff West) (Lab)
Is my hon. Friend not being somewhat unfair on the Business Secretary? After all, how can he reasonably expect consistency from a Liberal Democrat?
Mr Kevan Jones
Do we not also need a bit of consistency from the Conservative part of the coalition, which not only supported that Bill but in some cases, as with the Chancellor, wanted to go further with deregulation of the banking system?
Mr Umunna
My hon. Friend is absolutely right, and I was just about to come on to that. The Business Secretary, soon after making that statement in favour of our regulatory framework, said:
“Like the Conservative Opposition, we shall approach the issues constructively. There is no reason to hold back the Bill.”—[Official Report, 28 June 1999; Vol. 334, c. 58.]
My hon. Friend the Member for North Durham (Mr Jones) is absolutely right: neither the Conservative party nor the Liberal Democrats voted against that Bill in opposition, and yet we have had no expression of regret from them for supporting the regulatory framework that we put in place. It is about time that we heard some mea culpa from Government Members.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
Just so that the record is absolutely straight, the hon. Gentleman might like to remind us who were in government when the economy went over the edge of a cliff. Would he now—[Interruption.] The shadow welfare Secretary should just calm down. I think the hon. Member for Streatham (Mr Umunna) is capable of dealing with this himself; he does not need the shadow welfare Secretary’s assistance. Let me ask the hon. Gentleman a simple question, which my right hon. Friend the Business Secretary posed to him at the beginning. On the basis of humility, will he now get to the Dispatch Box and say to the British people that the Labour party is deeply sorry for the shambolic mess in which it left the economy?
Mr Umunna
With the greatest respect to the welfare Secretary, let me say two things. First, I have said that we have expressed regret in terms of the way in which we regulated the banking sector. However, let me also remind him that in the last two quarters of our term in office, we saw growth of 1.1%. During his time—[Interruption.] He should let me finish my sentence. If he does that, I might answer his question—I presume he wants to hear it. Did we leave him with a double-dip recession? No. Did we leave him with 2.5 million people out of work? No; so I will take no lectures from this welfare Secretary about the management of the economy.
After that excitement, let me return to banking. Reform is obviously needed, in particular to ensure that the sector provides finance to the profitable and successful small businesses that want to expand and take on more employees, but cannot access the finance that they need. That is crucial, because so many of those businesses are the ones we look to to create jobs. We know that under this Government lending to businesses is falling month on month, including a fall of £4.8 billion in the three months to February, according to the latest Bank of England figures. We know too—my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier) mentioned this—that the Government’s schemes, from Project Merlin to the national loan guarantee scheme and, now, funding for lending, have simply failed to get credit to those businesses.
Every other country in the G8 has a state-backed investment institution to tackle the problem and ensure that their small businesses can access the finance they need. That is why we have argued since early in this Parliament for the establishment of a proper British investment bank and a network of regional banks, based on the German Sparkasse model, to work alongside a British investment bank to transmit those schemes to small businesses. Those are two sensible ideas that would bring us into line with our international competitors. Indeed, I am pleased to hear that the Business Secretary agrees that it is a good thing to re-establish regional banking in this country.
We would have introduced a Bill in the Queen’s Speech to establish those bodies, yet the Government have failed to do so. Instead, what have we got? Last year, rather late in the game, the Business Secretary announced, to much fanfare at his party’s conference, that he was establishing his small business bank. The British Chambers of Commerce and the Federation of Small Businesses have said that he must get on with setting it up. Last year he came to the House and told us that his bank
“has already been established, and it will be up and running next year.”—[Official Report, 20 December 2012; Vol. 555, c. 988.]
So where is this bank? The IMF is currently in town inspecting the wreckage of the Government’s failed economic plan. I know how keen the Chancellor is to rely on its pronouncements, so I went on its website to discern how it defines what a bank does. The IMF says that the primary role of a bank is to
“take…deposits…from those with money, pool them, and lend them to those who need funds.”
I suspect that most Members would expect such a bank to be established on a stand-alone basis, with its own building like any other bank—I remember all the questions put to the Business Secretary about the location of the green investment bank, for example. However, what do we find buried in the back of one of his press releases, issued just before the Easter recess? We are told that his business bank
“is expected to become a fully operational new institution in the Autumn of 2014,”
but before then any references to his business bank
“refer to the team within BIS responsible for the development and operation of its policy and programmes before it becomes a fully operational new institution.”
Mr Umunna
I will give way to the Secretary of State shortly, so that he can explain this to us.
What we have is a floor of people—mostly made up of the Business Secretary’s civil servants—in his Department in No. 1 Victoria street that is dressed up as a bank. It is in no way, shape or form what most people would understand to be a bank, and it will be up and running not this year, as he said to the House in December, but at the end of next year at the earliest.
Vince Cable
Instead of looking for information in IMF reports, perhaps the shadow Business Secretary should look at some of the business before the House. I do not know whether he is aware that we made a written ministerial statement a few weeks ago explaining exactly where we were with the business bank. At the moment it is marketing its first tranche of funding. We have a substantial team in BIS of people with banking experience recruited from the private sector. He is welcome to come in and talk to them. I think he will find that there is a substantial acknowledgement in the small business community that what we are doing is exactly right and on target. If he wants to question our delivery more generally, he should perhaps read what I said in Edinburgh yesterday about the substantial progress we are making with the other bank, the green investment bank.
Mr Umunna
With the greatest of respect to the Secretary of State, he said that the body he was establishing was a bank and that it would be up and running this year. It is in no way, shape or form a bank as most people would understand it and it will be up and running not this year but next year. As for his green investment bank, it will not be able to borrow any substantial moneys until it meets his fiscal mandate. Also, I presume that legislation will be required to set up his new small business bank, as was the case with the green investment bank, yet there was no sign of that in the Queen’s Speech.
Vince Cable
As the hon. Gentleman may at some future stage in history occupy this role—he is obviously preparing for it—let me clarify one thing. Is he at all familiar with state aid rules? If so, he will know that under the rules of the European Union, it is necessary to obtain approval before a bank can operate fully in the competitive market of the European Union. That is why 2014 has been cited—because we respect those rules. None the less, we are using the resource we have in the short term to provide support for business. That is what we are doing.
Mr Umunna
The Secretary of State says that it is not required. We will see. I fail to understand why legislation was needed for the green investment bank but not for his small business bank, but let us see. [Interruption.] Let me tell the welfare Secretary that I would love to have a general election, because then I might be able to occupy the Business Secretary’s post more quickly than he perhaps foresees. What we hear from most small businesses is that what the Government have done to increase access to finance and resolve the issues of the banking sector for the real economy has proved to be a let down.
Let me turn to skills and training. Weakness in specific intermediate or vocational skills is a business concern and a source of competitive disadvantage for the UK compared with our neighbours. With almost 1 million young people out of work—my hon. Friend the Member for Croydon North (Mr Reed) referred to this—we must ensure that we have system that delivers people with the education and skills that our businesses need if they are to move into work. We could start by increasing the number of apprenticeships, but crucially boosting their quality too. We have heard the Secretary of State, like other Ministers, boasting about creating more than 1 million apprenticeships, but the number of 16 to 18-year-olds starting an apprenticeship in the first half of this academic year dropped by 12%. Indeed, two thirds of large companies in this country do not offer apprenticeships. We urgently need to improve on that and also protect the quality of apprenticeships, which is precisely the point made by Doug Richard and Jason Holt, whom the Secretary of State commissioned to do reports on apprenticeships.
The Queen’s Speech made a vague reference to a desire to ensure that it becomes typical for those leaving school to start a traineeship or an apprenticeship, but where was the jobs Bill we wanted that would have required large firms getting sizeable Government contracts to have active apprenticeships scheme, ensuring opportunities to work for the next generation? There was no such Bill. I still fail to understand why this Government will not proceed with that simple measure. Ministers released details of their plan for traineeships yesterday, which is a six-month programme of training and work experience to aid young people towards apprenticeships or employment. We will have to study the detail closely, but I note that they expect colleges to have the scheme up and running by August. That will be a challenge, given the very short notice.
On procurement, which should of course be used as part of an industrial strategy, the Government’s Bombardier decision earlier in this Parliament demonstrated their failure to account for the impact of procurement decisions on jobs and growth and on the strategic development of industrial capacity. We know that the story is the same with defence. The Government’s defence industrial strategy has been abandoned in favour of buying off the shelf from overseas. In making procurement decisions, we would take account of the impact on jobs when deciding to whom to award contracts. The French, the Dutch and the German Governments do that within EU law—the Business Secretary referred to it—and so would we. If this Government were serious about backing British industry, we would perhaps see them taking similar measures. Again, however, there was nothing about this in the Queen’s Speech.
Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)
On the question of jobs and skills, training and apprenticeships, does my hon. Friend agree that black and minority ethnic young people in our great cities have been disproportionally hit by this economic crash, making it important that any strategy around jobs, skills and apprenticeships and even access to funds for entrepreneurship has within it structures and strategies to help those BME young people?
Mr Umunna
I completely agree with my hon. Friend. Some things I support, such as the start-up loan scheme, could be of real benefit to our different diverse communities, particularly to young people and young entrepreneurs seeking to set up businesses. The problem up to now—I appreciate that James Caan is doing fantastic work on this—is that there has not been enough awareness of it. I have offered to help him raise such awareness in our different diverse communities.
Gordon Birtwistle
Does the hon. Gentleman agree that the destruction or non-acceptance of careers advice in schools—by both the previous Government and, I have to say, the present Government—is not helping young people to get into apprenticeships or further education? Does he agree that if we got professional careers advice back in our schools, more young people would be interested in doing apprenticeships rather than going to university to study subjects that in some cases will not lead to any job?
Mr Umunna
That is an extraordinary intervention from the hon. Gentleman, given the huge cuts that this Government have made to information, advice and guidance, including to careers advice. I remind the hon. Gentleman that it is his Government—and he voted for it—who have cut and destroyed Connexions. I know from experience in Lambeth in my constituency that Connexions made a massive difference.
Let me move on to infrastructure. Good infrastructure, of course, is at the heart of an industrial strategy and crucial to creating the right business climate. That is why we asked the chairman of the Olympic Delivery Authority, Sir John Armitt, to crack this issue for us.
In the Queen’s Speech, after three years of dither and delay, we have finally seen some movement on transport infrastructure in the form of the HS2 Bill. I think I speak for many business people when I say that people would like to see this Government move on aviation, too. The Government should bring forward the date for Sir Howard Davies’ review of aviation and ensure that his report is produced before the general election. We need no more dither and delay on that issue either.
Mr Umunna
I want to make a bit more progress.
With our economy flatlining, this country is crying out for investment in infrastructure to create jobs, boost confidence and strengthen our productivity and competitiveness. Both the CBI and EEF have criticised the Government for their failure to get on and deliver on infrastructure. They are right to do so. The last infrastructure pipeline update given by the Treasury showed that of their 576 projects, fewer than 5% of them were completed or operational. If they got on with delivery of those projects, we might see a pick up in construction, which fell by 2.5% in the last quarter and by 5.9% compared with last year. While the Business Secretary was on his feet, the Office for National Statistics published its latest construction output statistics, showing that all new construction work is 3.2% down on the last quarter. Why was there not more, then, in the Queen’s Speech to bring forward spending on infrastructure?
Mr Gyimah
Going back to supporting businesses, specifically in the context of small communities, will the hon. Gentleman give me a sense of whether he will support the National Insurance Contributions Bill, which would, after all, reduce the national insurance bill for every business by up to £2,000? It will affect business communities not just in the BME areas, but throughout the country.
Mr Umunna
It is funny that the hon. Gentleman should bring that up, as I was just coming on to it.
Finally, on tax and other incentives for business, we have been arguing for months for a national insurance break for micro-businesses taking on extra workers. The full scale of the failure of the Government’s initial national insurance holiday scheme was laid out for all to see by the accountants UHY Hacker Young last week when they disclosed that the scheme, which the Chancellor said would benefit over 400,000 small businesses, reached a new low in December last year, attracting only 400 applications. I thus say to the hon. Gentleman that I really hope that the National Insurance Contributions Bill in this year’s Queen’s Speech, which introduces the employment allowance—no doubt there is more detail in the paper the hon. Gentleman has with him—will prove far more successful than the Government’s scheme to date. [Interruption.] I am asked whether I support it, but I have just said that I hope the scheme proves to be far more successful than the lamentable failure of the Government’s scheme to date.
Before I finish, I want to deal with the Government’s consumer rights Bill. As I said, empowering the consumer is an important part of ensuring healthy and efficient functioning markets. The Government have included a consumer rights Bill in the Queen’s Speech. We are told that it consolidates consumer rights legislation in one place, bringing together eight pieces of legislation and covering goods, services, digital content and unfair contract terms. I agree that consumers need more clarity on their rights, but from what we have seen so far, the Government’s proposals appear to fall short of the action that we have called for to help families, to ensure a fair deal on energy prices and to tackle high rail fares, for example.
I think that the Government’s changes in this area have been muddled, as we have seen this week. First, the Government were going to abolish Consumer Focus, but now we learn that they are going to keep it in a slightly watered down form, and it will now be called Consumer Futures. It seems that it will be doing a similar job, but who knows what landscape we will be left with.
As part of our policy review, which was led by consumer champion, Ed Mayo last year, we have been planning to bolster collective action and to empower consumers so that they can club together more easily to seek redress. As the consumer rights Bill makes progress, we will press Ministers for a strong, accessible collective redress mechanism—one that mirrors the Portuguese and Australian models, which remove the legal excesses. It will not be a US-style class action, where litigation is dominant. We will address the matter in more detail when the Bill begins its passage through the House.
So there we have it: after three wasted years, we have yet another wasted chance to bring change to this country—change that it desperately needs.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
I listened with interest to what my hon. Friend said about the consumer rights Bill, to which I hope to contribute. Does he agree that this might provide a fantastic opportunity to address the disgraceful practices of the secondary ticketing market, which has now become industrialised ticket touting? Does he agree that we have a great opportunity to put fans first?
Mr Umunna
I completely agree with my hon. Friend, who has done fantastic work in this area. We will scrutinise the Bill closely and if it does not contain provisions to address secondary ticketing, we will table amendments to bring about much-needed change on this issue, which my hon. Friend has championed for a long time.
Despite the difficult economic climate, I do not doubt for one moment our businesses’ ability to overcome the hurdles in front of us. I see dynamism and innovation as I go around the country meeting so many of our entrepreneurs, which I have found to be an inspiration. I wish only that we had a Government equal to the task of helping those entrepreneurs to go on and thrive. It is clear from the Queen’s Speech that this Government are out of steam, and that until we have a general election and the chance of a Labour Government, we shall not see the kind of government that I think our businesses want and need.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. A great many Members wish to speak, and it would be helpful if speakers could show some restraint.
Christopher Pincher (Tamworth) (Con)
It is a great honour to speak in this Gracious Speech debate on jobs, and a particular honour and pleasure to be called first after the dazzling performances on both Front Benches. It is also a pleasure to follow the hon. Member for Streatham (Mr Umunna), the shadow Secretary of State, who made a typically assured and polished speech—as I am sure his Wikipedia page will shortly remind us.
I shall bear in mind your words of wisdom, Mr Deputy Speaker, and not speak for too long. I am heartened by the fact that you have not set a time limit, because on the last three occasions when I have spoken in the Chamber, I have been given just three minutes in which to do so. That certainly focuses the mind, but I assure you and the House that I shall not be speaking for three minutes or, indeed, for three hours.
I want to speak about the issue of jobs, which is important to my constituents in Tamworth. Notwithstanding the rather gloomy words of the shadow Secretary of State, and the collapse last December of a company called Drive Assist, we in Tamworth have been heartened by a downward trajectory in joblessness. I think that that will be enhanced and encouraged by the measures announced in the Gracious Speech, particularly the proposal to offer an employment allowance towards national insurance, which I am pleased to note that the shadow Secretary of State seems to support. It means that small businesses up and down the country, from Redruth to Redcar—including, importantly, businesses in Tamworth, Fazeley and the district of Lichfield—will be exempt from national insurance, which will enable them to grow and employ more people. I think that the measure will also help us to rebalance our economy, moving back from the over-reliance on the financial services sector and the public sector that was so beloved of the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) towards a more sustainable, broad-based private sector—a sector that contracted by some 730,000 places under the last Labour Government.
I was also heartened by the announcement of a deregulation Bill, because regulation is, after all, a form of tax. A small business man must be not just his firm’s managing director and sales director, but its human resources director, logistics director, financial director and IT director. Any piece of bureaucracy and administration, even a small piece, can add to the distraction and detraction from the time when he should be growing his business and selling.
Mr Kevan Jones
One example of deregulation in the Queen’s Speech is the removal of health and safety legislation relating to sole traders. Can the hon. Gentleman explain how the economy will be boosted by the exclusion of sole traders from such legislation? Will that make the workplace safer for them?
Christopher Pincher
A sole trader will be able to spend more time finding and doing work and making money, on which he will then pay tax to the Exchequer. I think that this is a very worthwhile regulatory change. I am sure that, as an old hand in the House, the hon. Gentleman will have heard many Governments down the years say that they will deregulate. I only hope that this particular Bill will have real teeth, will do what it says on the tin, and will enable business men to spend more time doing business rather than administrating.
Mr Jones
Would the hon. Gentleman be happy for a sole trader such as a plumber or even an electrician who had been allowed to have no regard for health and safety legislation to come into his home? Will this really make any difference to economic growth, and will it make the safety of the public and that individual any greater?
Christopher Pincher
I hope that it will. We shall see. However, there is certainly an argument for deregulating, and as the hon. Gentleman surely knows, the Bill will need to do what it says on the tin.
The Queen’s Speech also refers to measures to support intellectual property. If we are to focus on and support the extremely important design businesses in our country, we need to help them to protect their intellectual property from countries and businesses that would rather borrow, steal and copy knowhow than buy it.
I hope that the measures will help my constituent Mr Ken Clayton, a photographer who fears that changes proposed, he says, by civil servants will mean that photographs on Facebook and on BBC websites will be automatically stripped of their metadata and will become “orphan works”. As a result, he says,
“individuals and companies will be free to use such photographs with no reference to the person who took the photographs and will be able to license them without any payment to the photographer.”
I hope that when we come to debate the Bill, Mr Clayton will be reassured by it.
The Secretary of State, who is no longer in the Chamber, made a very balanced speech about immigration and the role that it plays in relation to jobs. Although the last Government created many jobs—some 1.5 million, I believe—a staggering 98.5% were soaked up by migrant labour. If we are to get the many people in the country who are trapped in dependency back into work, or in many instances into work for the first time, we must not only reform welfare so that it will always pay to work, but deter those who may wish to come to this country and provide a low-cost alternative, which would be a cost to our work force, and would put a strain on our infrastructure, services and housing, which would be a cost to the taxpayer.
I hope that, while the Opposition may ask some searching questions when the immigration Bill is debated—as they have tried to do this morning—they will support it in the end. I think that if they do not, they will find themselves on what the broad mass of the British people consider the wrong side of the argument.
The Secretary of State referred to the importance of infrastructure. I am pleased to note that the Energy Bill is to be carried over. After a decade of neglect, it is essential for us to invest in our energy infrastructure—in power stations, especially nuclear stations, and in the transmission infrastructure that conveys energy around the country. It is important for investors to see that both major parties in the House, and indeed our Liberal Democrat coalition colleagues, support the regulatory system.
Meg Hillier
The hon. Gentleman has made a good point, but does he not agree that the withdrawal of some of the potential funders of our future nuclear provision was partly caused by wobbles in the coalition Government on this issue? Has he any stronger messages for his coalition partners?
Christopher Pincher
That is rather rich coming from the hon. Lady, given that for years there was no proper investment in our energy infrastructure and a moratorium on the building of a fleet of new nuclear stations. I hope that the time that it has taken to get the Energy Bill into this House and then into the other place is symptomatic of a desire on both sides of the House to build a robust Bill that will stand the test of time. We need it to make clear to investors that the regulatory changes we have made and the framework we have established will not change, and that they can put their money behind it.
I also hope that the Bill will help the shale gas industry and bust the myths surrounding it, because shale gas is capable of creating create new jobs in our country. Providers such as Cuadrilla say that they want more than an end to the moratorium, which has in fact now ended, and a new licensing round, which is to take place. They also want the Government to support their reasonable planning applications. That will mean we do not have so much wrangling about planning, so that exploratory drilling can be done to find out whether we have beneath our feet 200 trillion cubic feet of shale gas—perhaps there is more—which will be enough to cater for our needs for a century. That would help reduce our exposure to the volatility in international hydrocarbon markets, and would mean we had stable energy prices for domestic consumers and businesses, which would be good for jobs.
I will not end my speech without mentioning High Speed 2, to which the shadow Secretary of State referred, calling for the project to be implemented more swiftly. There will be time enough to discuss the hybrid Bill and its provisions. There is no doubt that the development of HS2 as a major infrastructure project will create jobs—if we shift concrete up and down the country, we will create jobs—but I trust the Government will also recognise the jobs and businesses that may be damaged by HS2: those that are in its direct route. In my constituency there are many such companies and businesses, including Joy McMahon’s racing stables, Packington hall farm and manor, which has been managed by the Barnes family for generations, and Jonathan Loescher’s accounting businesses. These are all small businesses, and they are all now blighted by the proposals to build that railway line. I therefore hope the Government will introduce their HS2 paving Bill swiftly and ensure that it contains clear, quick and commensurately generous compensation measures so that such businesses in my constituency—and in that of my constituency neighbour, my hon. Friend the Member for Lichfield (Michael Fabricant), who spoke eloquently and passionately about HS2 yesterday—are properly compensated.
With that caveat, I shall conclude by saying I welcome the job provisions in the Gracious Speech. They will contribute to the development of a more modern and flexible work force in this country. They will ensure that we have the skills for work and the right attitude to work, and I trust they will bring forward another army of entrepreneurs who want to work for themselves.
Jim Fitzpatrick (Poplar and Limehouse) (Lab)
It is a pleasure to follow the hon. Member for Tamworth (Christopher Pincher), and I am pleased he had more time than his usual three minutes. Given that he agrees with the Opposition policy on national insurance contributions for small and medium-sized enterprises, perhaps he should be allowed to speak for longer more often. I also agree with him about shale gas. He made some excellent points, and it is good that the Government are moving on that. I would take him to task on his points about immigration, however. From my understanding of yesterday’s debate, of the five proposals in the immigration Bill, three are already law and two are going to be put out to consultation. I assure him that we will look very closely at the immigration Bill.
I join the hon. Gentleman in commending my hon. Friend the shadow Business Secretary for his trademark cool, thoughtful and constructive contribution. It was a perfect counter to the misplaced quiet optimism of the Secretary of State; I commend him on his quiet optimism, but I do not think there is evidence to support the idea that the proposals in the Gracious Speech will bear fruit.
Like the hon. Member for Tamworth, I hope not to detain the House for too long. I am grateful for being called to speak, particularly as I was not present for the Queen’s Speech itself, and nor was I here in the afternoon for the speeches that addressed it, as I had a health appointment in the morning and then attended one of the inaugural events for the commemoration of the battle of the Atlantic in the afternoon. As a former Vice-Chamberlain of Her Majesty’s Household, however, in years past it was part of my duty to the House not to be here for Her Majesty’s speech. It is therefore not unusual for me to be absent when Her Majesty turns up. I should tell the House that my experience of being held hostage in Buckingham palace—on behalf of Members, and in order to protect the safety of the sovereign—was slightly unnerving. When I discussed that with the head of the armed forces at the time, Sir Mike Jackson, and expressed the anxiety I had felt about the experience, he said to me, “Jim, you shouldn’t have worried.” I said, “Shouldn’t I have, Mike?” He said, “No, no; if anything had happened to Her Majesty, we would have made it quick—we would have just shot you.” That was not the most reassuring message I have had from Her Majesty’s armed forces, but I am sure he was being entirely serious and would have faithfully carried out those actions.
I missed yesterday’s debate as I was on an Industry and Parliament Trust visit to the ports of the great river Humber. I visited Hull, Immingham and the other Humber ports and heard about the plans for them. There is a planning application with the Secretary of State and I wish them well with that, because Green Port Hull is a very important piece of our shipping infrastructure, and is important for the development of wind farms in the North sea. It will be extremely important, and it is one of the projects that we want to see progressing as quickly as possible.
To try to catch up on what had been happening during my absences, I naturally turned to The Daily Telegraph, which is my usual paper of choice, of course—as we all know, we have great newspapers in the UK, but the Telegraph is my paper of choice. I was somewhat shocked when I read the column by the deputy political editor, Mr James Kirkup, which said this of the Gracious Speech:
“If politics is the art of the possible, then the Queen’s Speech makes clear just how little is possible for a coalition Government entering its fourth year”.
The article concluded:
“This low-key Queen’s Speech is a taste of things to come. The Coalition’s high noon moment has passed: the sun is now setting on this Government.”
I wish that were so, but sadly we have at least another two years of them to come.
Mr Kirkup was not outdone, although Louise Armistead reported in the “Business” section of The Daily Telegraph that the Prime Minister
“was accused of squandering his ‘last chance’ to unleash growth measures…The Institute of Directors (IoD) said the Queen’s Speech was a ‘missed opportunity’ for the Coalition to kick-start the economy”.
Especially from The Daily Telegraph and the IoD, who one would have thought would be cheerleaders for the Government, those are not the most complimentary comments.
I am very pleased to be here to raise some constituency issues and to support Labour’s alternative Queen’s Speech. For Poplar and Limehouse, the three big issues are employment, housing and the cost of living—which are very close to three of the six measures in our alternative Queen’s Speech, along with our plans for finance, banking and immigration, all of which were covered so ably by my hon. Friend the shadow Business Secretary.
On jobs, in my constituency there are 1,320 young people under 25 years of age claiming jobseeker’s allowance. The recent rise in long-term youth unemployment saw an extra 40 people out of work for more than a year in Tower Hamlets. In total, that is 275 local families who are concerned about their son or daughter being on benefits and not in work. My hon. Friend outlined the measures that would be in the jobs Bill we want to introduce, with a compulsory jobs guarantee paid for by a bank bonus tax. That could help 275 young people in Poplar who have been out of work for more than two years. As has been said from our Front Bench on a number of occasions, people would have to take up those jobs or lose benefits.
On housing, Tower Hamlets has more than 23,000 people on its waiting lists. It is one of the most overcrowded boroughs in the country. I was at an event this morning organised by Curtin and Co. at which Professor Tony Travers from the London School of Economics delivered a speech on London’s housing economy. Curiously, the event was held at the Savoy, somewhat in contrast to the topic under discussion. Professor Travers said the private rented sector is in need of “pretty significant regulation”. I have dealt with casework in Poplar and Limehouse about landlords who have withheld deposits, rented accommodation that has been far below standards and tenants who have been caught in financial difficulty due to hidden fees. That is one aspect of housing. More importantly, using housing and house building to kick-start the economy would provide jobs and address the real needs in my constituency and across the country.
Another problem that we have—unsurprisingly it is not exclusive to Poplar and Limehouse—concerns consumer issues. High energy costs and rail fares are two issues that affect people across the country. Our consumer Bill, outlined by my hon. Friend the Member for Streatham (Mr Umunna), would create a tough new regulator, abolishing Ofgem, and would require the energy companies to pool power, to open up the market and put downward pressure on prices. It would force energy companies to put all over-75s on their cheapest tariff, helping those who benefited to save up to £200 a year. It would introduce a new legal right for passengers to get the cheapest ticket for their journey and introduce strict caps on fare rises on every route. Those are basic protections for the consumer that are long overdue.
Like other right hon. and hon. Members across the House, I have received countless e-mails from constituents over many months on issues that did not appear in the Queen’s Speech, such as the plain packaging of cigarettes. The Under-Secretary of State for Health, the hon. Member for Broxtowe (Anna Soubry),was in her place at the beginning of the debate. She has championed that measure and strongly supported it whenever it has been debated, and many of us wish her success in trying to persuade the Government to introduce plain packaging for cigarettes, as that would undoubtedly save lives, as it has elsewhere in the world.
On international development, the absence of any legal status for the figure of 0.7% of GDP as aid is disappointing. UK taxpayers are very generous, but they want transparency, accountability and the targeting of aid.
Ms Abbott
Does my hon. Friend agree that that it is a touch suspicious that Lynton Crosby becomes the Prime Minister’s chief political adviser, Lynton Crosby’s consultancy firm was on a retainer from British American Tobacco to fight plain packaging, and plain packaging, which the Minister responsible for public health supports, disappears from the Queen’s Speech?
Jim Fitzpatrick
I have read the reports referred to by my hon. Friend about the connections of the Prime Minister’s adviser. My hon. Friend is very experienced at being attacked in the media, and I am glad that she has decided to have a go at the Government’s attack dog, because he will perhaps focus on the fact that she raised the issue and I did not. She makes a very good point, however, and I am sure that it has not been lost on many people out there that there might be a connection, although No. 10 says that that is a load of nonsense.
I was talking about international development aid and the expectation that the coalition might have enshrined in law spending 0.7% of GDP as our aid budget. I commend the coalition for sticking to the target. Many of us, perhaps unfairly, were surprised, but this is one of the coalition’s big successes, and I commend the coalition for it. I also commend the Government for the fact that we are trying to focus and target the aid and to use UK non-governmental organisations. We have some fantastic NGOs in the UK, including War on Want, Oxfam, Christian Aid, Muslim Aid and others, that we can use to ensure that the aid gets to where we want it to go and reaches people in need, rather than Governments who might want to spend it on other projects. The coalition is on the right track, but we would have liked the 0.7% figure to be enshrined in law.
Let me mention two other minor issues, which are perhaps less significant but are none the less constitutionally important. A register for lobbyists is missing from the Queen’s Speech, but it has been promised by the Government for some time. The public want to see greater transparency and accountability in this House and there is some disappointment that that measure has not been introduced.
Finally, a measure on the recall of MPs has been promised by the Government on a number of occasions. Such a measure would be supported on both sides of the House and would reassure the public that they have greater control over their elected representatives. I do not think that we have anything to fear from that, but the one or two Members who cross the line ought to have something to fear. Such a measure would easily get cross-party support and would not be difficult to pass into law.
I shall draw my remarks to a close; I said that I did not want to retain the House for too long, and I do not want this to be another broken political promise. As I said at the beginning, The Daily Telegraph and the Institute of Directors said that this was a missed opportunity—it is another missed opportunity. As my hon. Friend the Member for Streatham said, the economy is flatlining. Growth is much slower than is needed, borrowing is way up and, with the greatest of respect to the Secretary of State for Work and Pensions, the welfare bill is still rising.
This will be a lost decade without a change. We need a new direction, we need new policies and, in reality, we need a new Government.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
It is a pleasure to follow the hon. Member for Poplar and Limehouse (Jim Fitzpatrick) who, with his usual enthusiasm, delivered an entertaining and informative speech.
I want to mention a number of issues this morning. Although not all of them are covered by the subject of today’s debate, it is important that we get them on the record. I want to discuss three main areas, and then to propose one in which we as a Government could go further. There is no doubt that we face huge challenges as a country, and the biggest challenge remains our economy. It colours everything that we do and it is the backdrop to every decision we make.
It is worth reiterating the facts of the toxic inheritance we acquired when we came into government. We were running a deficit of 11% and had borrowed the equivalent of £1 million a day for the past 4,000 years—since the pyramids were topping out. We must deal with that. We are dealing with it and we are tackling it, but there is no doubt that the waters are choppy. Rather than talking down our economy, which we so often take great glee in doing, we need to start talking it up and looking for some of the positives that we can find out there. The fact that there are 1.25 million new private sector jobs is a positive, as is the fact that there are more people in employment than ever before.
Mr Kevan Jones
The hon. Gentleman talks about talking down the economy, but what did the coalition Government do in their first six months if not talk down the economy? They tried to scare people, saying that if we did not take the draconian action they have taken, our levels of debt could be on a par with those of the likes of Greece.
Stephen Metcalfe
My understanding is that our levels of debt are on a par with those of Greece as a percentage of GDP. They certainly were at the time. Yes, when we came into government—
Stephen Metcalfe
Shall I answer the hon. Gentleman’s first point before I take a second intervention?
The hon. Gentleman’s other point was about our explaining to people when we came to power the inheritance we were left and the measures we had to take to tackle it. I was slightly confused earlier this morning when listening to the hon. Member for Streatham (Mr Umunna) who said that the only additional borrowing that Labour had mentioned was the VAT cut, which would add an additional £12 billion to the overall borrowing we have identified. I assume that means that he would stick to every spending plan we have in place. Our spending plans have resulted in spending reductions across Departments, every single one of which have been opposed by the Opposition. I am slightly confused about their current line. Do they agree with the cuts and just want to borrow an additional £12 billion to cut VAT, or are they saying that they do not agree with the cuts, that they will backtrack on all that and that they will raise additional taxation?
Mr Umunna
As the hon. Gentleman has asked the question, the first thing to say about our five-point plan for growth and jobs is that it is a plan to stimulate the economy now. The ridiculous argument made by Government Members is that if we are voting against things, that has nothing to do with their choices and decisions. It is important to remind him of that. I think that people resent his Government giving people who earn millions of pounds a huge tax cut while ordinary people in his constituency suffer because of what his Government are doing. It is about the choices one makes.
Stephen Metcalfe
People in my constituency are suffering because of the toxic economic inheritance we acquired when we came into government. [Interruption.] I am sorry; it is simple. If we had not inherited the largest deficit in the developed world and a huge debt, we would not need to make the decisions that we are making now. We never hear a credible alternative from the Labour party; we just hear opposition.
Stephen Metcalfe
I shall move on.
I shall structure my remarks around the national insurance contributions Bill and what more we can do to support business, but first I shall mention two issues that are of great importance to my constituents. Along with the economy, one of the issues that we struggle with is what we should do about immigration, and how we should handle that quite sensitive issue. We have to get the balance right. Undoubtedly, as a nation we have benefited from immigration. We are a global trading nation; we have sat at the heart of world economic development for very many years, and people come to this country to add to our economic vibrancy. But I share with my constituents a concern about how we handle that fairly—how we achieve a balance. Some of the announcements made in the Gracious Speech will be very welcome. It strikes a sensible balance between my constituents’ rights and those of migrants or immigrants who then commit a criminal offence. It seems to strike people that the pendulum often swings too far in support of the perpetrator rather than the victim.
We are a fundamentally fair nation. We are respectful, we are tolerant, and we believe in fair play, but we do not believe that a person who abuses that tolerance has a right to remain here. I am therefore very pleased with some of the announcements in the Gracious Speech, and I hope the Bill will demonstrate to my constituents that we are tackling a serious problem. They really do not understand how people who break the law here are able to continue to benefit from our good standards of respect for them. Those people should return to their own country when they break the rules here; they forfeit the right to stay.
Bob Stewart (Beckenham) (Con)
On that point, I am sure my hon. Friend will agree that if people advocate breaking the law—by making death threats, for example, against people of this country—they should be put on the list to leave as soon as possible.
Stephen Metcalfe
I thank my hon. Friend for his intervention; I could not agree with him more. If appropriate measures do not exist, we should put them in place, and if they are there, we should remind our judiciary to exercise them.
My constituents will be pleased to hear that we are taking action on antisocial behaviour. When I came into office in 2010, I pledged to my constituents that I would look at tackling antisocial behaviour with them. In my constituency I organised an antisocial behaviour conference, which was attended by a Minister and at which we brought together councillors, the council and local residents to talk about their experience of antisocial behaviour. It is the scourge of many of our estates and town centres, and the description often belies its seriousness. It can make people’s lives a living hell. I am very pleased to see that we are recognising that and taking greater action to streamline the process for tackling it.
I do not want to demonise young people, who often get put in the frame for being responsible for most antisocial behaviour. Just because they are young and meet their friends in the street does not mean that they are committing antisocial behaviour; we should remind people of that. However, when such gatherings turn into antisocial behaviour we need to tackle it, and fast; and we need to give councils or the police the necessary power to do so. The most difficult issue that I am presented with at my surgery is that of neighbours creating problems for each other. I hope the Bill will make it easier to tackle antisocial behaviour caused by neighbours.
Thirdly, I want to discuss our economy and business. At this point I should declare my interests. I am a shareholder in a small business and worked in a small business throughout my career. Consequently, everything that I say about small business will probably benefit not only the business that I was involved in but many businesses across the country.
For too long we have focused on the public sector, and we have focused too much of the private sector into one area—banking, on which we have relied too much. I am pleased that there has been a push towards rebalancing our economy. I am also pleased that there has been significant growth in private sector businesses over the past three years—up 250,000. In south Essex, where I represent Basildon and Thurrock, the number of new businesses is up nearly 9% on last year—three times the regional average. There is a lot going on down in my patch. We are doing well in terms of job creation. DP World—Dubai Ports—is creating the London Gateway container port, which will generate 12,000 new jobs, but there is much more to be done. Many small businesses throughout my constituency are still trying hard to make ends meet. They will particularly welcome the measures announced for the national insurance contributions Bill. Anything that cuts the cost of doing business must be welcomed.
I will be honest: small businesses are struggling out there. It is tough. Rising costs, changing trends, changes on the high street, the rise of the internet, and ever-changing technology mean that small and medium-sized enterprises face ever-increasing challenges, yet they persevere in trying to make ends meet. I make a plea to the Government on their behalf: please keep listening to them; keep your ears open, and please, please remember that many small businesses act as a social service to their employees. They recognise that their employees are one of their greatest assets and do all they can to nurture and support them. They do not abuse them; they recognise that their future prosperity lies with their employees. I hope that, as a result of the changes announced for the national insurance contributions Bill, those small businesses will be encouraged to take on even more employees in the coming months.
There is still a significant challenge out there. If small businesses, the lifeblood of our economy, are to prosper they need access to easy, cheap finance. The Government have moved a significant distance. They have brought forward many initiatives to address the issue, but there is still a significant problem. Many of the initiatives address issues of access—some are those of cost—but I do not think that any yet address both. Banks are taking too risk averse an approach to lending and we must intervene to change that. Too many banks find ways of demonstrating lending while supporting those who do not necessarily need it. While we can show that lending is up, I am not convinced that it is getting to the right destination.
I would encourage the Government to consider using their borrowing powers—the trumpeted 2%, depending on the length of the bond—to borrow and lend directly to businesses. The announcement of the business bank is very welcome, but I fear that with an arrival date of late 2014 and only £1 billion available, it may be too little, too late. I am 100% behind the Government’s debt and deficit reduction plans and 100% behind the approach that they are taking, but we must put all our energy into finding ways to make access to finance easier, whether through lending at the rate at which we borrow or even subsidising it and lending at 0%. Lending a business £100,000 at 0% over a couple of years would cost a sum similar to the employment support allowance of £2,000 and it may well deliver significant economic growth and job creation. This is not unheard of. The Government already operate similar schemes. The Insolvency Service operates a scheme that supports businesses when they need to make difficult decisions to keep them in business. I would like the Government to explore how they might make access to finance easier.
The one thing that I am sure of is that only this Government and only those on the Government Benches have the drive, the energy, the commitment and the understanding to do what is right for this country, whether for small businesses, our own constituents, large businesses or the wider society. I am confident that only we will be able to sort out the toxic inheritance that we acquired and do the right thing. I hope that when the next election comes, we will be able to reap the benefits of that for the whole country.
Mr Kevan Jones (North Durham) (Lab)
The hon. Member for South Basildon and East Thurrock (Stephen Metcalfe) has just spoken about talking the economy down. I know it was three years ago, which seems a long time, but we need to remind people of who in 2010 was talking this country’s economy down—it was the Chancellor of the Exchequer and this coalition Government. They expressed the ridiculous notion that without the draconian cuts that they brought in, which the Business Secretary said earlier they now recognised were a mistake, we would end up with an economy like that of Greece. We heard the nonsense, which was repeated by the hon. Member for South Basildon and East Thurrock, about the fact that we had the largest debt in the developed world.
Let us look at the facts. In 1997 the Labour Government inherited a debt to GDP ratio of 42%. At the beginning of the financial crisis in 2008 that had been reduced to 35%, so irrespective of the Prime Minister’s claim in opposition that we were not mending the roof while the sun was shining, that is exactly what we were doing, which left us in a strong position to weather that financial crisis. The deficit that we inherited in 1997 was 3.9%. That was nearly halved by 2008 to 2.1%. The hon. Member for South Basildon and East Thurrock throws around figures suggesting that we had the largest debt. In cash terms, yes, but for the millionaires in the House— I do not know whether there are any in the Chamber today, although there are plenty in the Front-Bench team of the Conservative party—
Mr Jones
I accept that.
If one looks at the debt of a millionaire in cash terms, of course it will be larger than that of someone who is earning the minimum wage. To compare the size of the UK economy to that of Greece takes no account of that.
We need to recognise who talked the economy down and who took the disastrous decision in those early days to take demand out of the economy. We were growing, as the shadow Business Secretary, my hon. Friend the Member for Streatham (Mr Umunna), rightly said. That destructive early cut, along with talking the economy down, sucked confidence out of the economy. Getting that confidence back is very difficult. Clearly, many people, and certainly those in my constituency, are very cautious about what they are spending.
Let us have this debate based on the facts. I accept that we in the Labour party missed a trick. We were self-obsessed for nearly six months as we selected a new leader of the party, so we did not rebut the nonsense that was put out at the time.
The Business Secretary said, strangely, that the Queen’s Speech is not the mechanism for getting the economy going. I find that remarkable. This is a lost opportunity. The Queen’s Speech was so thin on substance that it could be marketed by WeightWatchers. There is nothing in it that will help the 20% of young people who are in long-term unemployment. My hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick) spoke about a lost decade. That is so, and we need to remind the House that that has consequences for individuals. The 20% who are now unemployed—and their number is increasing—will have their lives affected for ever. We must recognise the human cost behind the statistics. The problem will not be solved for those individuals in the short term and will have long-term implications for constituents such as mine and those of my hon. Friend that will need to be addressed in the long term.
Ms Abbott
Does my hon. Friend agree that there will be not just a lost decade but a lost generation? Academics have said that young people graduating now from college and university who do not go into employment can look forward to a future always on the fringes of the employment market.
Mr Jones
Indeed. It is even worse because those who are graduating now are burdened with the debt of student loans, which the Deputy Prime Minister, when he was fighting the general election, said he would not bring in. I worry about those individuals. In the north-east of England, after the destruction of heavy industry under the previous Conservative Government, I saw how whole communities were written off. My fear is that we are writing off a whole generation of young people to long-term unemployment amid low levels of economic growth.
In the Queen’s Speech, as in much that the Government are doing, one has to look at the detail of the proposals. A lot of that is presented for the headlines, but it is worth looking at some proposals which do not have a great deal of substance to them. I shall refer first to the Mesothelioma Bill. Before I was elected to the House, I was a full-time trade union official and legal officer for the GMB. I dealt daily with people who were suffering from the effects of exposure to asbestos. It is heartbreaking to speak not only to the individuals who know there is a death sentence hanging over them, but to the families that they leave behind. Some of the victims are older, but many are young. It is a terrible disease. Some people can be exposed to quite high levels of asbestos and not have long-term health effects, but others are affected.
This country’s approach to asbestos-related issues has been a national scandal. After the second world war the Government wrote to employers organisations saying that exposure to asbestos was dangerous to health. Was anything done? No. We continued for many decades to deny that there would be any health effects. Successive Governments’ response to the issue is a shame and a scar. If the disease had affected middle-class communities in leafy Surrey, for example, it would be a front-page headline in every paper—it would be a national scandal. But because it is concentrated in the north-east and other poor communities who do not have the strong voice that other communities have, the victims have been overlooked.
The Bill builds on what the previous Government intended. We proposed setting up the employers liability bureau and a tax on insurance companies to pay for the individuals who developed asbestos-related disease and who could not trace the insurance companies of now-defunct employers. The Bill was trumpeted as a great step forward. Even a great journal such as The Shields Gazette announced:
“Asbestos victims across South Tyneside are set to share in a £355m compensation bonanza.”
Well, I just wish that local papers would write stories the old-fashioned way by having a journalist who actually understands the issue, rather than, as seems to be so common now, simply responding to press releases.
If we look at what is proposed, we see that it is nothing of the sort. First, it covers only those individuals who developed mesothelioma after 24 July 2012, so a whole group of mesothelioma victims and their families will get no compensation at all. Secondly, it does not cover other asbestos-related diseases like lung cancers, asbestosis and pleural plaques, so there is a group of individuals who, even after that date, will get no compensation at all. Even for the victims who will qualify for the scheme, there will only be a flat fee of 70% of the average compensation payout.
Also, the scheme will take no account of an individual’s circumstances. One of the youngest victims I dealt with as the union’s legal officer was 46 years old and had three young children. Under the scheme, if he could not prove who the insurance companies were, that would not be taken into consideration. That needs to be amended as the Bill goes through. It is important to remember that it is the trade unions that have fought over many years to ensure that those individuals get the compensation they are entitled to.
One wonders whether this scheme does not represent a very good deal for the insurance companies—I think that it does. The Union of Construction, Allied Trades and Technicians has worked to expose the fact that, simply by coincidence, from October 2010 to September 2012 Lord Freud, the Minister responsible for the scheme, met the Association of British Insurers, Aviva, Royal Sun Alliance and Zurich on no fewer than 14 occasions. That shows how effective their lobbying has been in limiting their exposure to the scheme, and that needs to be changed.
Jim Fitzpatrick
My hon. Friend makes an important point. As a former asbestos worker, from my time in the London fire brigade, I know a number of former colleagues who have died as a result of this disease. The medical evidence on asbestos has been known since 1928. I am very disappointed by what he is saying, because I did not realise that there has been some attempt to manipulate the story. When I read the headline about a compensation Bill, I thought that it was good news, but he is suggesting that it might not be as good as it is being presented in the media. We will have to look at that very carefully.
Mr Jones
Like a lot of the things the Government do, we have to take the shiny wrapping off carefully and look at the contents. In so many areas we find that there is either very little in it, or a stinking mess of incompetence, which is now becoming a trademark of the Government.
Stephen Pound (Ealing North) (Lab)
If I may interrupt my hon. Friend’s unwrapping for a moment, he is probably the best qualified of all Members to link the armed forces and the problem of asbestos. I urge him to look at those men—they are mostly men—who served in the Royal Navy in the ’50s and ’60s and often had to use flash hood protectors, which were imbued with asbestos. Looking at that issue has been very difficult in the past because of the confidentiality of procurement.
Mr Jones
We made some progress on that when in government in relation to Crown immunity and the fact that people can now access war pensions for such things, but it is very difficult. It is easy to argue that their exposure to asbestos was quite limited, but it can still cause some debilitating diseases. The proposals do not represent a great victory for victims.
The deregulation Bill has been trumpeted as something that will remove the burdens on business and civil society in order to facilitate growth. The great idea seems to be that sole traders will somehow be exempt from health and safety legislation. We wait to see how that will generate growth. It will also create some problems. For example, will we have a two-tier work force on certain sites, with some people having, quite rightly, to follow sensible health and safety legislation, which was put in place to protect not only them but the public, while others will be able to do what they want? As I asked the hon. Member for Tamworth (Christopher Pincher) earlier, if I invite an electrician into my house as a sole trader, will I be signing up to the fact that he can completely ignore any type of health and safety legislation, whether in relation to me, my family or anyone else?
Stephen Metcalfe
The point that the hon. Gentleman is making would be a fair one if it was accurate, but the actual wording refers to exempting the self-employed from health and safety law where they pose no potential risk of harm to others. That addresses the point he has just made, because an electrician working in his house could cause harm to others and so would have to comply with all the regulations relating to the work being undertaken. The purpose of that part of the Bill is to prevent the ridiculous amount of records that have to be produced and kept when people work for themselves.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. We need short interventions, because they are taking up a lot of time and many more Members wish to speak.
Mr Jones
I would be intrigued to know which piece of health legislation would not be covered by the proposal. Again, I think that it is simply one of the issues that have been trumpeted by certain Members on the deregulatory wing of the Conservative party, who have clearly been prevented from pursuing the worst excesses of Beecroft by the Liberal Democrats. I just think it is complete nonsense.
On immigration, I consider the announcements in the Queen’s Speech to be a knee-jerk reaction from the Prime Minister to the threat he sees from his Back Benchers and from the UK Independence party. We have heard a lot of strong language about a crackdown on migrants, and in relation not only to migration but to access to health care and benefits. I understand that a ministerial group on immigration has been meeting, but it has not yet come up with a great deal because most of the plans that have been put forward have been blocked. The Health Secretary has been saying that we have a problem with health tourism, but he cannot tell us how much it costs.
The only real legislation put forward on immigration is secondary legislation that will enshrine the rules on deporting foreign prisoners and on getting private landlords somehow to check whether their tenants are entitled to be in the country. The first one is already law and so will affect nothing, and I do not see how the second can work without some type of registration scheme. Also, it will not apply to the bulk of immigration in this country, which it is threatened will come from Romania and Bulgaria, because that will be perfectly legal.
It is interesting that Nigel Farage says that he is now the heir to Thatcher. I remind Members that it was Margaret Thatcher who signed the Single European Act in 1986, which allowed the free transfer of labour across Europe. These proposals will have no effect. The Prime Minister is trying to act tough, but in practice he can do very little about the transfer of EU migrants. In many ways that transfer of labour has been good for British people, because many people in the north-east who were made redundant when the shipyards closed now work all over Europe, making a contribution not only to the economy of those countries but here.
My hon. Friend the Member for Poplar and Limehouse referred to the fact that we are at the fag-end of this Parliament. I have to say that the Business Secretary looked very unhappy this morning. He reminds me a little of the father of the bride at a shotgun wedding who is now going round saying, “I told you it wouldn’t last very long.” The Prime Minister obviously has a problem with his children on the Back Benches who are now in open revolt. It will be very interesting to see how it all ends. The lack in this Queen’s Speech of a positive economic stimulus over the next two years will add to the misery that is being faced day in, day out by many thousands of people in this country, many in my constituency.
Gordon Birtwistle (Burnley) (LD)
It is a pleasure to make a contribution to the debate on the Gracious Speech, which was delivered earlier in the week. I want to talk about the economy, particularly in relation to apprenticeships and trainees.
I intervened on the shadow Secretary of State about rebalancing the economy, and he accepted that we have to do that. He did not comment when I asked him why the previous Government reduced the 22% of GDP that came from manufacturing to 9%, and how they managed to do that. Rebalancing our economy is vital to get this country out of the financial mess we are in, because we cannot rely on the City and the service sector to pull us out. We came into government three years ago with the manufacturing sector representing, as I said, 9% of GDP. Thankfully, that proportion is now growing.
Unfortunately, we do not have enough people in this country to do the jobs that the manufacturing sector is going to need. It is anticipated that over the next 20 years the civil aerospace sector will be ordering $7 trillion to $9 trillion-worth of new aeroplanes. Many of the parts and engines for those aeroplanes are manufactured in the UK. That will almost double the aerospace industry in the UK, but as things stand we will not have the skills to deliver those products to the industry. That is a big problem.
Mark Hendrick (Preston) (Lab/Co-op)
The hon. Gentleman will know that Barnoldswick, which is not very far from his constituency, has a major manufacturer of aerospace blades for Rolls-Royce engines. Why do not Rolls-Royce and other similar companies working in the aerospace sector take on and train more apprentices to meet the demand he is talking about?
Gordon Birtwistle
I can tell the hon. Gentleman that I was pleased to visit the Rolls-Royce training facility in Derby only a couple of weeks ago, and I was delighted to see the millions of pounds of investment being put into it. Rolls-Royce has picked up the story and is getting on with it.
There has been a lack of apprenticeships and training, certainly in engineering, in which I have been involved all my life, for the past 20 years. We cannot have someone who is an apprentice today assembling aeroplane engines tomorrow. It is a long process. The Government have started that process with the apprenticeships scheme, and over the next few years we will be able to deliver on this. It is very difficult to train apprentices to become skilled people who can deliver what is needed for $9 trillion-worth of aeroplanes over the next 20 years, but we must get on with it. Thankfully, we have made a start, although we are not moving fast enough.
We quickly need to resolve the situation with the national aerospace supply chain centre, which has been agreed by the Government but for some reason is stuck in the Whitehall mandarins division. Having been here for three years, my view of what goes on behind the scenes with the mandarins is that it seems like “Yes, Prime Minister”. I watched that series on television and thought, “No, it can’t be like that”, but actually it is. We come here and listen to all the statements about what we are doing, and then it is still being done 12 months down the line. Setting up the national aerospace supply chain centre must be a priority, and I hope that it is located at the Samlesbury site of BAE Systems. I hope that the proposed national skills centre will be set up at the same site. That centre will train 600 apprentices a year for the aerospace industry, for United Utilities, and for the shale gas industry—another industry coming through in the north-west that will need skilled people.
Bob Stewart
Many people who learn trades in the armed forces have a problem translating their qualifications into civilian life. We could do more to equate armed forces qualifications from places such as Cosford with those that are required in the aerospace industry, because there are people who could easily move into that industry.
Gordon Birtwistle
My hon. Friend makes an excellent point. I was about to move on to the oil industry, to which former members of the armed forces make a substantial contribution. I was on an oil rig in the North sea about 12 months ago and quite a number of ex-military personnel were working there. The medical officer was an ex-Army officer and some of the cooks in the restaurants were ex-Army personnel. It is good to see that they are making such a contribution.
The oil industry, which is more or less a forgotten industry, contributes billions of pounds to economy. One national oil company is about to invest $11 billion in the North sea. The site is about 100 km off the coast of Scotland, but every bit of kit is being provided from overseas. That is an outrageous scandal. That kit should be produced in the UK. Unfortunately, we do not have the companies to do that any more because we have let them disappear over the past 20 years. The previous Government let them disappear without batting an eyelid because they thought that the financial sector could bail us out of anything.
Mr Kevan Jones
The hon. Gentleman is speaking complete and utter 100% rubbish. If he goes to the north-east of England or to Scotland, he will see first-rate British companies that are providing not only hardware for the oil industry, but vital support.
Gordon Birtwistle
Exactly; once the kit has been provided, the support comes from those companies. No company on the north coast of Scotland can build a 17,000-tonne jacket or a topside that weighs more than 45,000 tonnes for the North sea. Those pieces of kit are being built in Spain and South Korea.
Mr Jones
If the hon. Gentleman goes to the technology park at Walker in Newcastle, he will see that 80% of the world’s under-sea umbilical cable is built by two companies in the north-east. That is a success story not just for the north-east, but for UK plc. I am sorry, but his notion that there is no productivity in this country for the oil and gas sector is complete rubbish.
Gordon Birtwistle
I refer the hon. Gentleman to what I said earlier about major structures. I agree that sub-sea equipment is built here. I used to own an engineering company that still builds sub-sea equipment. However, we can no longer build major structures.
Gordon Birtwistle
I do not want to have that debate across the House, Mr Deputy Speaker.
I will move on to trainees and apprenticeships, and the national shortage of skilled people for the jobs of the future. I was told yesterday that of the £106 million budget for the National Careers Service—bear in mind that 1 million young people are out of work— £84.5 million is spent on people over 25, £15 million on prisoners and £5 million on offering careers advice to young people. I think that that is the wrong way round. We should be spending at least half the money on getting young people into the jobs of the future and a little less on people over 25 years old and prisoners. I was shocked to hear that we spend three times more money on careers advice for prisoners than on careers advice for young people who are leaving school. That is outrageous and I hope that the Government will look at it. We need to increase the number of apprenticeships and traineeships to provide people with the skills and the jobs that will be required for this country’s economy in the future.
Mark Hendrick (Preston) (Lab/Co-op)
I rise to speak about jobs and businesses, and in particular about those serious issues in our country that the Queen’s Speech has done—and will do—little to alleviate. Unemployment in Preston is currently about 7%, and a great deal of existing employment is low paid. With the measures that the Government are trying to introduce to make issues of health and safety less important and make things easier for employers, being in employment will clearly be a risky business. We recently commemorated the international recognition of workers who have lost their lives or fallen ill while in employment, yet we also have a Government who are making it more likely that employees will fall ill while in work.
At its lowest point, about 1,400 people in Preston were on jobseeker’s allowance. There are now about 4,000, which is very bad. Lots of young people are coming to my surgery complaining about being sanctioned, supposedly for not trying hard enough to find a job, but in fact very few vacancies are available in Preston. For those who are applying for jobs to be told that they are not trying hard enough is, in my view, adding insult to injury.
There are good industries—the hon. Member for Burnley (Gordon Birtwistle) mentioned aerospace, which is a good industry in north-west England, focused particularly on Lancashire. It is doing great things to train young people and get them into work. Westinghouse provides nuclear rods for the nuclear industry, but there are not enough such companies. Although I welcome the Government’s aerospace strategy and we are doing well in that area, we have unfortunately seen a gradual decline in many industries, particularly in consumer electronics and for a lot of consumer goods, and those industries and jobs have left this country to go to other shores.
The Business Secretary said that we cannot legislate our way to economic growth, but is not the Enterprise and Regulatory Reform Act 2013 a way of legislating to promote economic growth? We must be able to create the conditions to allow that growth, and the Business Secretary’s earlier response on the creation of more than 1 million private sector jobs was interesting. Why has that not resulted in any significant growth? He did not say—this was left to one of my colleagues—that it is because many of those jobs are low paid or part time, and that is why they are not contributing to the growth we would like to see in this country.
As we teeter, as we saw, on the brink of a triple-dip recession, let us cast our minds back to before the general election in 2010. The Labour party had a programme that would have got rid of the deficit over two terms, and halved it after the first. This Government promised to wipe out the deficit in one term. What we saw beforehand was a programme that would have benefited this country in a great way being pooh-poohed. When we said there would be a double-dip recession—[Interruption.] The Minister is chuntering from a sedentary position. If he would like to intervene, I invite him to do so.
The Minister of State, Home Department (Mr Jeremy Browne)
I am grateful for this unexpected opportunity. I was pointing out that the previous Prime Minister promised the House that he had abolished boom and bust. I therefore do not understand how the hon. Gentleman can be talking about a bust, given that the previous Government eradicated the possibility of Britain ever having a bust again, according to the previous Prime Minister.
Mark Hendrick
I thank the Minister for his intervention and he will, of course, note that the last recession in 2008—[Interruption.] Again, he is chuntering from a sedentary position, but I will try to answer his question. He will remember that the economic crisis and recession in 2008 was caused by external shocks, principally starting in the US housing market where financial products were wrapped up in very unsafe debts. That caused financial contagion around the world. The recession was an international one, not a home-grown one, such as the ones under previous Conservative Governments and the coalition Government. That is how the deficit came about. In the Labour Government’s wisdom, they thought it right to bail out the banks. Otherwise, people would have gone to cash tills and no money would have come out, and there would have been no finance to keep the economy moving. They now get the blame for an international problem—the problem was not home grown, unlike the recessions under the previous Conservative Government.
The Labour Government were accused—[Interruption.] The Minister chunters again from a sedentary position, but I will let him intervene.
Mr Browne
I am grateful for a second opportunity to intervene. The previous Prime Minister did not say, “I have abolished boom and bust,” adding in brackets, “Unless there are people who lend irresponsible mortgages in the United States of America.” He said, “Labour has abolished boom and bust.” I remember sitting in the House hearing him make that boast the whole time. We now hear that boom and bust is all about international factors. Why does the Labour party not take responsibility for building up the massive deficit when it promised it had abolished boom and bust, no caveats, full stop?
Mark Hendrick
We do not need caveats. The Labour Government will not take responsibility for the housing market in the US. The Minister says that we blamed international factors, but the current Government try to blame the eurozone for the current deficit, which is absolutely ludicrous. The policies they introduced when they came to power in 2010 were such that a second dip was likely. We told them a second dip was likely, and that is what happened. We have nearly had a third dip.
The 1 million jobs in the private sector that the Government keep bragging about are low-paid jobs, many are part time, and they are doing nothing to contribute to growth in this country. As we can see, growth is flatlining.
The Government talk about the growth of more than 100,000 apprenticeships. The hon. Member for Burnley was perfectly correct on the excellent apprenticeships offered by companies such as BAE Systems, Rolls-Royce and many other good companies up and down the country. When I was an apprentice—I am sure he was an apprentice in his day—apprenticeships generally took three or four years, and apprentices had to gather lots of skills and relevant qualifications. Some of the so-called apprenticeships that the Government label as such are weak and involve very little in the way of qualifications. Some apprenticeships are in things such as cake decoration or hairdressing. We need hard skills in high-tech, high added-value industries to get this country back in growth and back to being a power in the industrial world, but they are not the skills involved in what the Government label the 100,000-plus apprenticeships.
Gordon Birtwistle
Yes, I was an apprentice engineer, and apprentices then did three or four years, but I have friends who are apprentice hairdressers and a relation who was an apprentice baker. It is wrong to decry the skills available. It might not take three or four years to learn them because of technology, but people work hard for those skills and deliver a service with them afterwards.
Mark Hendrick
I would go along with that, but we are not comparing like with like. I am saying that an apprenticeship over four years that leads to a highly skilled job with well respected qualifications is very different from what is on offer. In the past, those positions have not traditionally been called apprenticeships.
Bob Stewart
I and I was born in Preston and I understand and agree that that area of Lancashire has huge potential for apprenticeships. I am sure the hon. Gentleman and the hon. Member for Burnley (Gordon Birtwistle) agree that we should put apprenticeships at the same level as the requirement for university education. We should have a huge drive on apprenticeships to get our young people into a qualification so that we can take advantage of the future economy of the world.
Mark Hendrick
I totally agree with the hon. Gentleman.
Taking people out of income tax is great, and we want to take people out of income tax, but how many people have lost tax credits? Many people who have been taken out of income tax will find, particularly if they have children, that they are not better off.
In the past few weeks, we have seen the Government prepared to dabble with the welfare and jobs of 3 million people by putting at risk our membership of the European Union. The Conservatives have promised to hold a referendum on renegotiating the terms of British membership. Let me be blunt: many Government Members do not want renegotiation, or the sort of renegotiation that the Prime Minister is likely to achieve—they want out. We will not know the terms of our trading relationship with the EU if we leave. We will have the same lack of benefits as Norway and Switzerland: they have no involvement or control over EU laws and directives, but are obliged to adopt them if they wish to continue to trade with the EU. We will have a referendum on the possibility of the UK leaving the EU without knowing precisely the trading or economic consequences of withdrawal. If we do leave, it will cost hundreds of thousands of jobs.
Dr Matthew Offord (Hendon) (Con)
The hon. Gentleman is making his position clear, but I would be grateful if he explained where he found that figure of hundreds of thousands of lost jobs.
Mark Hendrick
Hundreds of thousands is a small percentage of the 3 million jobs tied up in our business and trade with the EU. We will not know the exact consequences of leaving, and we cannot negotiate, while we are still a member, what our trading terms with the EU would be if we left. The German and French Governments—any Government worth their salt—would not be willing to negotiate before a referendum to tell us exactly what the terms would be if we voted no.
Mark Hendrick
The 3 million figure comes from the European Commission and many other respected and independent bodies. [Interruption.] The hon. Gentleman, from a sedentary position, wishes to challenge that figure. Can he give me a figure and substantiate it? Voting no in the referendum will have a serious impact. We can argue about whether it will affect hundreds of thousands of jobs or up to 1 million jobs, but it will have a serious impact on employment and our ability to trade.
Many people are saying that due to globalisation we are trading more with countries such as China and India. That is welcome, but is no substitute for the market we have on our doorstep—the EU. Any future trade with the EU, should we choose to leave, will be conducted on terms dictated by the remaining members of the EU, not a British Government. That will have a big impact on jobs and a bigger impact on the prosperity of this country.
Gordon Birtwistle
I am grateful to the hon. Gentleman for giving way; he is being very generous. Does he agree with the protestations of some Members that if we pull out of Europe Mercedes will still be delighted to deal with us? My concern is whether the people of Germany will still be delighted to deal with Jaguar Land Rover when we are no longer a member and tariff barriers are introduced.
Mark Hendrick
That is right. If we left the European Union, tariff barriers, possibly quotas and all sorts of other obstacles would be placed in front of Britain, which would restrict and inhibit our trade with Europe. That could have a serious or even disastrous effect on many of the industries we rely on to provide jobs and business in this country. When we have on our own doorstep a market as big as the European Union— 500 million people—it would be folly to ignore it and to pretend that the UK can do better by going it alone.
A great deal has been said on immigration—even Labour Front Benchers have said that to some extent we got it wrong with the accession of the 10 central and eastern European countries. I disagree. Many of those people came to the UK looking for work when our economy was doing very well and the work was available; in many cases, they took work that some people in this country were not willing to take. In my constituency, there are schools and even Catholic churches that would have closed but for the arrival of many Polish and other central and eastern European families. They came and turned them into thriving communities and schools, so we now have churches occupied that had been threatened with closure.
Half those people have now returned to their country of origin, partly because they have made money and started up their own business back in those countries and partly because the job situation here is now not so good. Quite naturally, if there is not work here, they will look for work that, in many cases, might be lower paid, but is in their own country. Free movement is a benefit: people move only to where there are jobs, and the idea that everyone is coming here to scrounge off the state is untrue and an absolute disgrace—it is opportunist politicking at the least.
Mark Hendrick
That is right. If we look at the history of immigration in this country, first we have the Irish, then the West Indian immigration—
Mark Hendrick
That is going back even further. We have had successive waves of immigration to this country, and every wave has benefited this country and made it greater. One of the greatest nations on earth, the United States, is a nation of immigrants. One of the emerging nations, which will be very powerful, Brazil, is a nation of immigrants. Immigrants bring far more to any community than people could possibly believe. Scapegoating them, as some political parties are in this country, is an absolute disgrace. It is opportunism that blames the European Union for our economic woes and foreigners for the state of our public services.
Finally, I want to say something about health tourism, which is also practised by some 1 million to 2 million British people working abroad or living in other parts of Europe, many of whom come back to the UK when they need the national health service, while paying taxes and working in other countries. I have no problem with paying taxes or living in other countries, but we should look at health tourism as a whole.
To leave the EU would be to cut off our nose to spite our face. The only losers would be the UK, and that would be bad for business and bad for Britain.
Dr Matthew Offord (Hendon) (Con)
I rather enjoyed the contribution of the hon. Member for Preston (Mark Hendrick). At one stage, I think I was the only person in the Chamber listening to him, as there was a gathering around the Chair. [Interruption.] At least one other Member was listening. I found the contribution interesting; I did not agree with everything he said, but I thank him for coming along today and giving us an insight into his ideas.
I want to speak about the Queen’s Speech. The Government have made good progress in the past three years. Yes, we still have problems with our economy, but no one expected it to turn around in the time we have had so far. Nevertheless, we are fixing things, such as our welfare system, to introduce greater fairness.
We are reintroducing different tax regimes, so that fewer people in this country pay tax. We are talking about taking 2 million people across the country out of tax. In my constituency, 49,360 people will be taken out of tax. That is all good, but when we talk about immigration—which I shall come to—we should recognise that there are two stages to it: the accession of people from Europe and the rest, from outside. We have decreased immigration from outside Europe by a third. We have also cut crime by 10%, which is no mean feat either. We should also remind ourselves that we have made significant progress in cutting the Labour party’s deficit, which we inherited.
Mark Hendrick
The hon. Gentleman mentions cutting non-EU immigration by 30%. Can he tell me how many of those affected are people who would have been students, contributing to this country’s economy in cities such as Preston, in my constituency, which is dependent on foreign students for the local economy?
Dr Offord
I cannot tell the hon. Gentleman about Preston, but I can tell him about Middlesex university in my area, which is also suffering from the kind of problems he describes. I also have the National Institute for Medical Research in my constituency. It, too, has problems getting PhD students. That is why I feel that our focus has been on the wrong kind of immigrants. The problems we have in this country—those that have been raised by political parties such as the UK Independence party—are to do with EU migration. For example, Kiplings, the Indian restaurant in my constituency, has a problem getting a curry chef. The local Chinese restaurant also has a problem, because it cannot get people from outside the EU. That is a problem the Government need to face.
Let me return to the Queen’s Speech. There are some things I am very pleased about. My hon. Friend the Member for South Basildon and East Thurrock (Stephen Metcalfe) spoke eloquently about tackling antisocial behaviour in his constituency. We have a Bill to address that. I look forward to seeing the detail; my concern is that we have had many Bills to deal with antisocial behaviour, since way back when Tony Blair was Prime Minister. My feeling is that we probably need a cultural change in our society rather than more legislation. There seems to be something fundamentally wrong with people’s beliefs about their responsibilities and activities in public and the way they impact on others, from simple things such as spitting in the street to putting their feet on bus seats. These are all problems that contribute to antisocial behaviour and a general sense of unease in society among those whom we live alongside.
I also look forward to the Department for Work and Pensions bringing forward its Bill to address pensions inequality. Pensioners have had a hard time in our country for many years. I look forward to seeing proposals that will make it easier for working people to contribute to their pensions, particularly as other significant changes have been made.
The final issue I am keen to address is immigration. This is a debate about jobs and business—the economy encompasses both jobs and business—and immigration, as we have heard, is a major part of that. One thing I like about the debate on the Queen’s Speech is listening to Members’ experiences in their own constituencies, which we have heard today from my hon. Friend the Member for Tamworth (Christopher Pincher), for example. We have also heard about the experiences of the hon. Member for North Durham (Mr Jones). It is useful—not only for Members such as myself, but for Ministers too—to hear about the problems faced by Back Benchers. We have already heard that the Chancellor is listening—no doubt he was listening to the shadow Business Secretary, and I hope he is listening to me now and can hear about the problems of my constituency.
However, while I was working in my office yesterday, I heard an histrionic speech by an Opposition Member. She was talking about immigration, saying that doctors, nurses and landlords should not be Border Agency guards. There has never been a proposal for that to happen. I believe that the proposal to require landlords to check the veracity and identity of those living in their properties is a good one. I cannot speak for others, but I have rented property to Middlesex university students who were not from the EU or this country. I always made sure that I knew where they came from and that they could pay their rent. That is a sensible thing to do, and most landlords probably do it already.
We have also heard about health tourists coming to this country. We do have people coming here to seek elective or semi-elective surgery—people who might decide that they want their child born here, for instance. It is unacceptable for people to come here in the knowledge that very soon they will have a child, because it has many repercussions for this country.
Ms Abbott
The hon. Gentleman will be aware that the Royal College of General Practitioners is quite clear that its members have a primary duty to heal the sick and they are simply not willing to be immigration officers. On the question of landlord checks, what will the hon. Gentleman do when his constituents come to tell him that their children, third generation British nationals, are being asked for their passport before they can rent a room?
Dr Offord
I am sure they will welcome the fact that there will be fairness, and everyone is treated the same. That is what they would like. As we have seen across the country—some Members appear to be ignoring what has happened in the country over the past week or two —people want their concerns about immigration to be taken seriously. The hon. Lady talks about doctors and nurses acting as border guards, but what happens when we open a bank account? We are required to show proof of identity in many different ways, including utility bills, to prove where we live. Why do we do that? Because of the Terrorism Act 2000. In some areas, that will have contributed to a decrease in terrorist funding. I have to say that when I go into banks, particularly one I already bank with, they already know that I am a British subject and that I receive an income from this country. Such a mechanism is already in place.
Dr Offord
I shall not give way yet, as the hon. Lady might like to hear what I have to say. Let us not forget that in 2001, the right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) introduced his asylum Bill, which ensured that carriers such as lorries received a fine if someone was found stowed in their lorry. It was nothing to do with the driver if someone had decided to stowaway on a lorry coming back from France, but they, not doctors and nurses, were required to be border guards.
Ms Abbott
I only hope that residents in Hendon are hearing the hon. Gentleman’s enthusiasm for a kind of pass law for themselves and their children. My specific point about so-called “health tourism” is that doctors take a Hippocratic oath, and all the Royal Colleges have made it clear that they are not willing to breach that oath in order to undertake immigration check duties. If somebody comes to them ill, they have sworn an oath to help them. Is the hon. Gentleman aware, furthermore, of the public health implications of trying to stop people from getting the health care that they may desperately need?
Dr Offord
As I said earlier—I think the hon. Lady has deliberately decided not to understand what I said—this involves elective and semi-elective surgery and other cases. Sometimes people come into the country when they are pregnant and decide to have their child here. If that is a possibility, they should be prevented from coming here. Secondly, and most importantly, they should be forced to have their own insurance policy. I cannot say whether the hon. Lady has been abroad, but I know that if I go to India or New York and find myself in an accident requiring medical attention, I will receive a wallet biopsy from the ambulance man, which will determine the type of treatment I get. [Interruption.] All we are seeking is the same for this country; it is about fairness. It is not about denying people medical treatment; it is about fairness. [Interruption.] I am going to move on. [Interruption.]
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. We need the debate to be conducted through the Chair rather than to have cross-channel discussions. I understand that the debate is getting a little tense, but I am sure we can get back to where we need to be on the Queen’s Speech.
Dr Offord
I bow to your superior knowledge, Mr Deputy Speaker.
I want to move on to discuss other aspects of immigration and what I would like to see in the Government’s legislative programme. We heard earlier about people entering this country from the EU and migrant countries and about the problems they have caused. I have a lot of problems with this in my constituency. In Edgware, for example, several people living in garages told me that they could not afford to go home. On a recent ward visit to Watford Way in Hendon, one of my constituents and I went to an old commercial garage in which scores of people were living rough. These were people who beg locally and they were visibly east European. I spoke to some of them who claimed that they did not have the money to get back home. Funds are available, however, and I should like them to make use of them, because their current lifestyle is unacceptable. That is the face of Labour’s immigration policy in the last decade: people sleeping in garages in my constituency.
As recently as this week, we saw members of the Metropolitan police on horseback going to areas around Marble Arch, rounding up people—particularly Bulgarians and Romanians—and checking their identification papers to establish what they are doing, who they are and why they are here. At present, as the House knows, they are not allowed to work, but those restrictions will soon end, and they will have three months in which to demonstrate that they can support themselves. If they cannot do that, the Border Agency will summon them for an interview and ask them what they are doing. If they refuse to turn up, there is nothing that the agency can do. It should be an arrestable offence not to turn up, but it is not, and they can be picked up again in future sweeps. Moreover, they can leave the country and come back again, in which event their three-months time frame will start all over again. The Immigration Bill should address some of those points, and I hope that the Government have heard my plea.
I now want to talk about what will not be in the Bill. The hon. Member for Poplar and Limehouse (Jim Fitzpatrick)—who is not in the Chamber at present, but who has been described as “the popular Member for Limehouse—referred to some of the issues that would not be included, but omitted to mention provision for a referendum on Britain’s membership of the European Union.
Lord Lawson made his position clear at the weekend. Within hours, the Deputy Prime Minister had decided that he knew better than Lord Lawson and, indeed, better than anyone else. He said:
“There are 3 million of our fellow countrymen and women in this country whose jobs rely directly on our participation and role and place in what is after all the largest borderless single market.”
The hon. Member for Preston also gave that figure. I asked him where he had got it, a question that I do not believe he was able to answer.
Dr Offord
That is not correct. I remember the figure being bandied about a decade or so ago, when I was working at the BBC. We used regularly to fact-check such things.
In 2000, research conducted by economists at London South Bank university suggested that about 2.5 million people owed their jobs directly to exports of goods and services to countries in the European Union, and that a further 900,000 jobs had been created indirectly by trade with the continent. If we left the single market, however, Britons would not be simply thrown on the dole, for the simple reason that Britain would still be able to trade with countries in Europe even if it were not a member of the EU. I understand that 20 countries continue to do so. Switzerland and Norway, for instance, have negotiated free trade agreements with the bloc without signing up.
Mark Hendrick
The hon. Gentleman will be aware that Switzerland and Norway have to abide by all the EU regulations and directives pertaining to the single market, but have no control over or say in them because they are not EU members. While enjoying some of the benefits of being in the single market, they have none of the decision-making powers that membership of the EU confers. If we leave the EU, we will have to start from scratch, and will probably have to do exactly what Norway, in particular, is doing: accept, wholesale—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. The hon. Member for Preston (Mark Hendrick) made a 19-minute speech, and has made, I think, five interventions since then. Interventions should not be a way of making another speech. They must be short, because others wish to speak.
Dr Offord
Let me respond briefly to the hon. Gentleman’s point by saying that I think there are certain products that parts of the EU cannot do without. For instance, I know that places such as Italy could not do without Lancashire cheese. I have tasted that very cheese in your room on occasion, Mr Deputy Speaker, during some of your receptions.
Was the Deputy Prime Minister claiming, in his “3 million” statement, that Britain would not negotiate a reciprocal deal to avoid tariffs? I should like to know the answer to that, particularly given that we import more from the EU as a whole than we export to it.
According to the National Institute of Economic and Social Research, there is
“no reason to suppose that unemployment would rise significantly if the UK were to withdraw from the EU. Withdrawal could cause disruption”
—I acknowledge that—
“but it is most unlikely that export sales to EU markets would cease completely”.
The hon. Member for Poplar and Limehouse quoted from The Daily Telegraph. One of the quotes cited the Institute of Directors, which in 2000 came to the opposite conclusion to that of South Bank university. It estimated that there was a net cost to the UK from staying out of the EU of about 1.75% of GDP, which was about £15 billion at the time, but all those figures are completely worthless now as so much has changed since then. We were promised no more boom and bust, but we now realise that that is not the case—it has not been the case for the past couple of years.
All the underlying calculations are simply wrong now, and we no longer know what the true situation would be. I therefore ask the Department for Business, Innovation and Skills to commission a cost-benefit analysis on Britain’s continued membership of the EU, to establish what the economic consequences of Britain’s withdrawal would be. I ask it to do that for no other reason than that the Business Secretary said in opening today’s debate that he was interested in dealing with “factoids”, and I would like to see the relevant factoids. I would also like the Deputy Prime Minister to use the correct factoids, instead of scaremongering people into thinking that Britain cannot leave the EU.
There has been some talk about the UK Independence party today, and I, too, will mention it briefly. I believe that in the past couple of weeks UKIP has come to be seen by some as offering a panacea for all the problems of the UK, but I do not believe that is true. I do not think its members and supporters are all fruitcakes, nuts and loops either, and I believe we need to take them on on policy—or, rather, on their lack of policies. I agree with them in some areas, however, and many people voted for UKIP last week not because they want UKIP to be elected, but because they want some of the policies that it raises to be addressed, and they are looking to us to do that. It is wrong for Members on either side of this House to reject UKIP supporters, and it sends out a message that the political class is not listening. Gillian Duffy stated the case well in the 2010 general election, and we ignore it at our peril. I therefore respectfully ask you, Mr Deputy Speaker, to ask Mr Speaker to select the amendment in the name of my hon. Friend the Member for Basildon and Billericay (Mr Baron), to which I have added my name, so that we can have an opportunity to vote on it next week.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
The hon. Member for Hendon (Dr Offord) has sat down a little earlier than I thought he would—and I was enjoying his speech so much!
My constituents were looking forward to Her Majesty’s Gracious Speech, as they have looked forward to every Budget and autumn statement since this coalition assumed office. They have been looking for a sign that Ministers had abandoned government by dogma and were prepared to prioritise targeted programmes to tackle the problems of unemployment and under-employment, particularly among young people, but there has been no such sign.
Youth unemployment in my constituency is currently 14.3% as against a national average of 7.2%. That is totally unacceptable. It is double the national average and will be blighting the lives of those young people, possible irrevocably. Why is it always the north-east that suffers when there is a Tory in the Prime Minister’s office? Do not our kids deserve as fair a chance as the kids in the shire counties? Are they always going to be at the bottom of the list of priorities for Tory and for Lib Dem Ministers, perhaps because their parents vote for Labour in droves? One nation Labour will not behave in such a way when we are in office. We will govern for the whole of the country and all young people regardless of how their parents vote.
My constituents have been looking for signs that this Government are on their side, rather than on the side of the super-rich, and for signs that they are going to tackle the big issues which have such a big impact on the quality of life of so many people—lack of affordable housing, rising fuel bills, poor economic performance, zero growth and a weak jobs market. They will have been sorely disappointed as there were no measures to tackle any of them, and there was nothing to arrest the increase in child poverty. Earlier this week, the Institute for Fiscal Studies projected that there would be more than 1 million extra children in poverty, wiping out the progress made by the last Labour Government, and surely saddling the country with huge costs over the lifetime of those children in lost opportunities and increased health and earnings inequality.
There were some important items of legislation in the Queen’s Speech, of course, but in the main my constituents got a list of vague ideas designed by Lynton Crosby to try to woo right-wing voters back into the Conservative fold—I include some Government Back Benchers in that group. There was very little positivity for the future, very little vision for a fairer and more modern Britain and very little to put food on the tables in Washington and Sunderland West.
Having said all that, I am hopeful about one Bill. The consumer rights Bill announced in Her Majesty’s Gracious Speech has, of course, been long anticipated; indeed, time is running out for it to be introduced. As Members will be aware, the European directive on which it is based needs to be implemented by December, so the Government will no doubt be in a rush to make significant progress on the Bill before the House rises for the summer.
During that rush, I hope to make my case for the Bill to include measures to reform the secondary ticketing market to ensure that fans get a fair deal. I was very encouraged to hear the shadow Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for Streatham (Mr Umunna), confirm in response to my intervention during his opening remarks that, if the Bill introduced by the Government contains no such measures, he will seek to make amendments to ensure that the wild west that the secondary ticketing market has become is reined in and regulated.
Members, and certainly Ministers from the Department for Culture, Media and Sport, will remember that I introduced a private Member’s Bill in the first Session of this Parliament that attempted to start this process. It would have established a scheme whereby those who are putting on a ticketed event—whether that is a gig, a west end show or even an art exhibition—could, if they wanted, protect those tickets from being resold by unauthorised individuals or companies for a mark-up of more than 10%. People would still be able to resell their tickets if they could no longer attend an event, but not for a huge profit.
Members might have noticed that I said, “even an art exhibition”. There is actually a roaring trade for such tickets. The Da Vinci exhibition at the National Gallery hit the headlines last summer because tickets were being snapped up by touts, much to the annoyance of the National Gallery, which felt absolutely powerless to do anything to prevent it. Anyone who wants to see the exhibition on David Bowie that is on at the Victoria and Albert museum will find themselves having to fork out at least £60 for a weekend ticket, which is more than four times the face value.
Back in 2010, I thought that my Bill was a sensible way to empower artists and event-holders to protect their fans from the rampant profiteering that we see on a regular basis. I believe that even more now. However, I also believe that the market needs to be much more transparent, as consumers should know who they are buying from and the provenance of the ticket. That is how any market should work.
There are a number of reasons why I am more convinced than ever that we need action. Since my Bill was talked out by the usual suspects on the Government Benches, we have had an excellent exposé by the “Dispatches” programme of how websites such as viagogo and Seatwave, through which the vast majority of secondary tickets are now sold, operate. Surprisingly enough, that differed greatly from the image that they used to portray of themselves as being fan-to-fan exchanges. They used to have that description on their websites, but since they have been exposed they have taken that down. We saw tickets being sold as if by fans when those companies were receiving allocations of tickets directly from promoters, or using banks of phones and batteries of credit cards registered to multiple addresses. We also saw how those companies court what we call “power sellers”—professional touts who manage to secure huge inventories of tickets to events by highly dubious means such as botnets, which Chris Stewart of Ticket Hut was recently found by the Daily Mirror to be using to secure vast swathes of One Direction tickets. I am sure that there are a number of One Direction fans in the Chamber today.
What makes me more concerned about the murkiness of this industry is that football tickets are now being sold through those websites, with clubs exploiting their right to authorise resale by saying that the likes of viagogo and StubHub can do that, even though it is actually random season ticket holders who are doing so. The resale of football tickets through other channels is understandably banned, due to safety concerns, and many people might think that the resale of football tickets is illegal, because there is supposed to be legislation. The purpose of the ban is to ensure that hooligans cannot get their hands on any tickets, and that fans of each team are segregated.
Stephen Pound
Every word I hear from my hon. Friend makes me all the more furious that her excellent Bill was talked out. Is she aware, as many of us are in the House, that Sir Alex Ferguson’s last match in charge of a certain team from up north is already attracting ticket prices of £3,000? Surely, under those circumstances, action must be taken.
Mrs Hodgson
I agree. There is obviously the unfairness, but there is also the fact that there was supposed to be legislation to protect football audiences from unscrupulous fans. Nothing stops any of those fans who might be able to get hold of that amount of money going along and ruining an amazing occasion such as the last match that Sir Alex will be in charge of. I certainly do not have any confidence in the websites that are now authorised by the clubs to sell tickets, because their ultimate aim is to make profits and I do not think that they are best placed to uphold the principles with regard to hooligans and segregation.
Lyn Brown (West Ham) (Lab)
What did my hon. Friend think of the Olympic ticketing system? That seemed to work quite well.
Mrs Hodgson
As my hon. Friend knows, we introduced legislation to protect the Olympic tickets. It was a proviso of the International Olympic Committee that the country that hosted the Olympics must protect the tickets, and it worked very well. Although the tickets were really hard to get hold of, the allocation was made fairly and they did not go to the highest bidder. Later I shall mention Operation Podium, the Met unit set up to police that legislation.
Despite the clear evidence in the “Dispatches” programme, and in a number of Penman and Sommerlad columns in the Daily Mirror since then, the sports Minister, the Minister of State, Department for Culture, Media and Sport, the right hon. Member for Faversham and Mid Kent (Hugh Robertson), has remained steadfast in his opposition to such a move. So I am now looking to the Secretary of State for Business, Innovation and Skills to look more favourably upon such measures in his forthcoming consumer rights Bill. The sports Minister has, however, always been at pains when we have debated this issue to say that his mind could be changed. Indeed, in a Westminster Hall debate on secondary ticketing secured by the hon. Member for Hove (Mike Weatherley), who also campaigns on the issue and who supported my private Member’s Bill—he was the only Conservative Member who did—the Minister said:
“Purely in my own opinion, the moment that the security services or the police say the activity is becoming a proxy for large-scale criminal activity, and that large amounts of money are being laundered through the system, the case for legislation will become much easier to make.”—[Official Report, 13 March 2012; Vol. 542, c. 65WH.]
Well, now the police have that evidence. Operation Podium, which Members may be aware was the Metropolitan police’s dedicated response to the serious and organised crime affecting the economy of the London Olympic and Paralympic Games in 2012, in a report entitled, “Ticket Crime: Problem Profile”, published in February to coincide with the unit’s abolition, set out the extent to which fans are being “ripped off” through dodgy practices. It also laid bare the involvement of organised criminal networks, which will always be involved where there are large sums of money to be made in a semi-legitimate way. As for large sums, the Met estimates that the “industry”, if we may call it that, is worth £1 billion a year—a not insubstantial sum of money.
Mrs Hodgson
That is exactly the point, and it is well made.
For the benefit of the House, I shall quote some highlights from Operation Podium’s report. It makes very interesting reading. It found that
“due to the surreptitious way that large numbers of ‘primary’ tickets are diverted straight onto the secondary ticket websites, members of the public have little choice but to try to source tickets on the secondary ticket market.”
It concluded that
“the lack of legislation outlawing the unauthorised resale of tickets and the absence of regulation of the primary and secondary ticketing market encourages unscrupulous practices, a lack of transparency and fraud.”
This is the Metropolitan police recommendation:
“Consideration must be given to introducing legislation to govern the unauthorised sale of event tickets. The lack of legislation in this area enables fraud and places the public at risk of economic crime.”
They went further still by saying:
“The primary and secondary ticket market require regulation to ensure transparency, allowing consumers to understand who they are buying from and affording them better protection from ticket crime.”
In short, the report sets out how this market is failing, and how it works in the interests of a handful of professional touts, middlemen and the criminal underworld, with dubious practices and tax arrangements. As an example, in the wake of the “Dispatches” documentary, it emerged that viagogo had transferred its formal head office for legal and tax purposes from the UK to Switzerland, despite the fact that all its staff are still working right here in London. One must ask why.
The Government could take action in the Bill to make the secondary market work in the interests of the consumer, which is to say the genuine fans and event-goers who want to enjoy and patronise the arts. In doing so they would also make the market work in the interests of those who are investing time, energy and resources, as well as talent, of course, who at present have to make the invidious choice between being leeched off by touts or getting into bed with them to get a little piece of the poacher’s pie.
This pie, as I said, is estimated by the Met to be worth in excess of £1 billion a year. No wonder there is such interest from the criminal world. We are talking about huge amounts of money to be made from doing very little. But this is not a victimless abuse. I get e-mails from dozens of victims every week. They are law-abiding regular citizens, adults and children, who have found themselves drawn into this murky world because they just want to see their idol play a gig or go to the theatre or an art exhibition. They end up feeling that they have no choice but to buy their tickets from the secondary market because that is the only place where the tickets are. Some realise that they are being fleeced and some do not, but all feel they have no choice.
These tickets end up changing hands for four, five or even more times their face value, as we heard—sometimes thousands of pounds. Who gets all that profit? The tout does, mainly, but as I mentioned, the situation is now much more complicated, as the Met made very clear in its excellent Operation Podium report.
Leaving aside the criminality, murkiness and lack of transparency, I am doing this for the fans—for the millions of music, sport, art, comedy and theatre fans out there who are routinely priced out of this wild west of a marketplace. It is not fair. I read all the e-mails I get. Some are heartbreaking, especially those from children. These are tickets to an experience, sometimes a once-in-a-lifetime experience. This cannot and should not be compared to the usual rules regarding supply and demand. As someone once said about football, “It’s not a matter of life and death; it’s more important than that.” I really believe it is. Other countries have chosen to regulate the market, most recently France under Sarkozy, who is hardly a left-winger. It did so because that is the right thing to do and we should do it as soon as possible.
The Bill is fundamentally a consumer protection Bill, so let us take the opportunity to protect live event consumers. Let us bring some transparency to a very murky market. Let us give those whose talent and investment create this demand in the first place greater control over the supply of their tickets. But most importantly, let us put fans first and let us take action on ticket touts now.
Julie Hilling (Bolton West) (Lab)
A few weeks ago I sat in the Chamber listening to the Budget debate. My overwhelming memory is of the Chancellor sitting on the Front Bench looking like a little boy lost, with no idea what to do about a flatlining economy, the loss of our triple A status or the level of borrowing, and no idea how to balance the books. So he delivered a Budget that did none of that, sitting on his hands, hoping that things would just happen.
After that disappointment, one might think that I would learn, but sadly not. I listened to the Queen deliver the Gracious Speech, hoping that she would tell us about the action Her Government would take to improve life for my constituents. It seemed to start pretty well:
“My Government’s legislative programme will continue to focus on building a stronger economy”.
I frowned a little at the word “continue”, because after three years they seem to have failed to build anything, but still I sat in hope. She continued:
“It will also work to promote a fairer society that rewards people who work hard.”
Well, we all agree with that. She went on:
“My Government is committed to building an economy where people who work hard are properly rewarded. It will therefore continue to reform the benefits system, helping people move from welfare to work.”
I frowned a little at that, too. As I see it, their reforms of the benefits system are not helping people to move from welfare to work; they are making them move to food banks and to skip meals so that family members can eat. If they are even more unfortunate, they might be one of the families who have been made homeless.
Even so, I waited to hear what the Government would actually do to build our economy. I waited and waited—I did not have to wait long, because in less than 10 minutes the speech was over—but there were no answers and no relief for my constituents. There was a little tinkering, but it was yet another wasted opportunity from this failing Government. They are out of touch and out of ideas.
How much evidence do the Government need that their policies are failing? The International Monetary Fund says that growth in the UK is slower than in 23 of the 33 advanced economies it monitors. Olivier Blanchard, its chief economist, warned the Chancellor that he is “playing with fire” by refusing to change course. However, there was nothing in the speech to address the IMF’s call to boost growth and rethink the speed of the deficit reduction. Starting to build HS2 in a few years, welcome though that is in Bolton West, will do nothing to build the economy now.
On the same day that the Queen delivered that terribly thin speech, the Institute for Fiscal Studies said that 1 million more children will descend into poverty as a direct result of benefit policies. Simply saying that people should work hard and blaming the poor for the situation they find themselves in is an insult. The Joseph Rowntree Foundation says that 6.1 million people living in poverty are in working households, 6.4 million people lack the paid work they want and 1.4 million part-time workers want full-time work, the highest figure in 20 years.
The Government like to boast that they have created over 1 million new jobs, but they do not tell us how many of those jobs are a direct transfer from the public sector or how many are unpaid. Unbelievably, workfare jobs, where people work for their dole, are counted as jobs created. Despite the Secretary of State’s denial, according to the Office for Budget Responsibility unpaid work experience and work placements make up 14% of those so-called new jobs. The Government do not tell us how many of those jobs are on are zero-hour contracts or how many are part time, and they do not tell us how many of them no longer exist because the business has failed or downsized.
The Government like to peddle the myth that the 2.5 million people who are out of work and the 1 million young people who do not have jobs are skivers and shirkers. The reality is that millions of people are desperate for work and there is a substantial churn of people in poverty or out of work. Although 18% of people are on a low income at any one time, one in three of us experience at least one period on a low income in a four-year period, and 11% of people are on a low income for more than half of those four years. More people are out of work under this Government than were when they took office, and the flagship Work programme gets only two in every 100 people into work—fewer than if the Government had done nothing at all.
Tax credits have been cut so hard that a previous Work and Pensions Minister revealed that some families with children could be £728 a year better off if they were out of work. The Department for Work and Pensions impact assessment reveals that universal credit will fail to make work pay for 2.1 million workers and that real wages are down by £1,700 since the election. The welfare bill has continued to go up since the financial crash and is increasing in real terms by 2% each year. Borrowing is going up and unemployment is set to rise even higher.
Of course, the Government like to blame Labour for everything. According to them, the Labour Government caused the global economic crash—a crash that started in America and spread to the rest of the world. They like to say that we did not fix the roof while the sun was shining, but they forget that the Labour Government paid off the second world war debt, built hundreds of new schools and hospitals, and invested more in the railways than the so-called record spending that this Government currently claim. At the time of the general election we had growth of 0.7%, unemployment was falling, and the deficit was coming down.
The Government need to start to take responsibility for a double-dip recession, for soaring borrowing, and for failing to meet every one of their predictions on growth, borrowing and deficit reduction, yet they carry on with their failed policies. Have they never heard the old adage, “You can’t cut your way out of a recession”? They need to take action to grow the economy. Building homes would be a good place to start, as would ensuring that businesses get the finance they need with a British investment bank.
The Minister of State, Department for Work and Pensions (Steve Webb)
I do not know whether the hon. Lady is aware that when she stood for election in 2010 her party set out spending plans for this Parliament that involved substantial spending cuts.
Julie Hilling
Absolutely; I am well aware of that. In fact, we said that we would halve the deficit over this four-year period. The Government said that they were going to cut it completely in one term, but they are not even three quarters of the way there yet. They told my local council that it would have to find £20 million-worth of cuts over the course of the Parliament. It has already had to find £100 million-worth of cuts. That is the difference between a planned deficit reduction and planned action for growth and a Government who sit there saying, “If we cut, something miraculous will happen to grow our economy.”
Julie Hilling
That is the million dollar question. I have no idea why the Government will not take responsibility. They like to trot out the same old line that it is all the Labour party’s fault, but they must start to take responsibility.
We can all see the cost of the Government’s policies for the poorest in our communities, who are being hit not only in their pockets but by cuts in the services they depend on. We can see the consequences of cuts to in-work benefits, no pay rises, and rising inflation for those who used to feel comfortably off. We all know that there are only two ways to balance a budget: cut expenditure or increase income.
The Government’s cuts are harming not only individuals and their communities but the economy. A recent Financial Times study showed that cuts in social security payments would take £19 billion out of the economy. However, it is not just about social security spending. The low-paid spend more of their income, so less money in the community means more jobs lost, which means more people on benefits, and more jobs lost again—a downward spiral. The only way to reverse that spiral is to grow the economy by investing in properly paid jobs so that people are not dependent on social security but are instead paying into the coffers.
The Government do not have any real answers to the problems that we face. Unemployment in my constituency is up. One in 10 people in Greater Manchester skips meals so that family members can eat. Nationally, homelessness and rough sleeping are up by a third, and Shelter says that every 15 minutes another family is made homeless. The economy may be flatlining, but people’s incomes and spending are not. The Office for Budget Responsibility has said that in 2015 people will be worse off than they were in 2010. Wages are £1,700 lower than in May 2010.
Behind those figures are real people having a desperately hard time—people who are losing their homes, having to choose between heating and eating, and relying on food banks to feed themselves and their children. The people of Bolton West are struggling, and many are more than struggling—they are finding it hard to survive day to day. The Government blame them and are hell-bent on making the situation worse. They say that they have to cut the welfare budget but neglect to say that the majority of that budget is made up of pensions and in-work benefits. That does not fit the picture they are trying to portray of the skivers who are ruining the economy. They forget to say that jobseeker’s allowance accounts for less than 5% of the budget and that cutting benefit not only forces people to food banks but harms the economy. They forget to tell us that the private rented sector is far more costly than social housing. They will do nothing to introduce fair rents and nothing to curb the cost of private rented accommodation; they simply cap benefits in the hope that that might just bring down the rents. They introduce a bedroom tax that drives people to desperation.
The Government refuse to acknowledge that the work capability assessments that are conducted on ill and disabled people are fundamentally flawed. Even people who are too ill to leave their homes are being found fit for work. People who have lost their jobs through illness or disability are being told that they should get a job, but jobcentres will not sign them on for jobseeker’s allowance because they are too ill to work. Even though our staff are dealing with suicidal constituents on a daily basis, the Government accuse us of blowing the situation out of proportion.
Mrs Hodgson
My hon. Friend is making a fantastic, powerful and moving speech. Is she aware of other cases like my constituent Michael Moore, who was classed as fit for work and died less than 18 months later, or was that an isolated case?
Julie Hilling
If only that tragic case was an isolated one. There are many more people who have committed suicide after being told that they are fit for work or who have died between being told that they are fit for work and their appeal. That is a tragedy. The system is cruel and heartless, but the Government will not listen or say that they have to do something about it.
The Government blame migrants for unemployment but do nothing to enforce the national minimum wage, tackle the agencies that recruit only from abroad, or deal with the abuse of inflated accommodation charges for vastly overcrowded houses being taken out of people’s wages.
The Government have proposed a deregulation Bill. I shudder every time I hear those words. Of course we should get rid of unnecessary burdens on business, make compliance with legislation as simple as possible and listen to the concerns and proposals of businesses, but every time this Government have proposed changes, they have eroded the hard-fought-for rights of workers.
Julie Hilling
My hon. Friend makes a very good point. That fits with the Government’s pattern of not looking at the reality and not talking to people who work at the coal face or the chalkboard—the people who actually do the job and know what is needed.
The proposal to exempt self-employed people from health and safety law may sound reasonable, but it will not be if it means that corners are cut, lives are lost and the cost to the taxpayer for hospital treatment and disability benefit increases. Perhaps I will be pleasantly shocked and the proposals will be fair to both employer and employee—we live in hope.
There are many things that the Government could have done to bring growth to the economy, to give 2.5 million people the dignity of work and to give a decent standard of living to those who are too ill or disabled to work. It is a pity that they have wasted yet another opportunity.
Before I sit down, I must bring up one more issue. The Government have failed to take the opportunity to introduce holistic legislation to tackle dangerous dogs. Although the proposal to extend the legislation to cover dog attacks on private property is welcome, the lack of proposals to promote responsible ownership and prevent dog attacks is more than disappointing.
Each year, there are 210,000 dog attacks and more than 6,000 people are admitted to hospital, often suffering life-changing injuries. On average, 12 postal workers are attacked each day. The NHS spends £3 million on treating the victims of dog attacks and local authorities spend £57 million on kennelling costs. There have been nine deaths since 2006, the last of which was that of my constituent, 14-year-old Jade Lomas-Anderson.
The last Government started a consultation on dangerous dogs that closed in June 2010. There was a consensus among organisations including the Kennel Club, the Dogs Trust, the RSPCA, the Royal College of Nursing, the British Veterinary Association and the Communication Workers Union that dog control notices should be introduced. Those would give the responsible officer the ability to instruct an owner to keep their dog muzzled, on a lead or away from children; to order the owner and dog to undertake training; and potentially to reduce the number of dogs in a particular household. That would be good for the community and for the welfare of the animals. There was also a call to extend the legislation to cover attacks on other animals and to restrict the number of puppies that are bred by unlicensed breeders.
The Government said no to all of that. They are missing an opportunity to introduce holistic legislation that would protect not only the community, but dogs themselves. None of this will help Jade, but one thing is certain: inaction will mean that there will be more attacks and that more families will suffer the terrible tragedy of the death or injury of a loved one. I ask the Government to reconsider their position. I will certainly be campaigning for vast improvements to their very limited proposals.
Mr Steve Reed (Croydon North) (Lab)
I am delighted to follow that passionate and insightful speech from my hon. Friend the Member for Burnley—for Bolton West (Julie Hilling). [Interruption.] I am still learning the constituencies!
As a relatively new MP, I found it a privilege to be present at the Queen’s Speech for the first time. There was a sense of occasion and history; the sight of Her Majesty on the throne; Black Rod hammering on the door of the Chamber—so much to see everywhere except, unfortunately, in the Queen’s Speech itself, which was remarkably light on content. Outside in the real world there is a financial crisis. People cannot find work, living standards and incomes are being squeezed, and vital public services are being cut to the bone. Long-term youth unemployment in Croydon North, which I represent, is at a record level and continues to rise. That destroys people’s futures and crushes their life chances. How disappointing to hear a Queen’s Speech that fails to meet the challenge for jobs and growth or find new ways to provide the services and support that people need.
As a Labour and Co-operative Member of Parliament I want to focus my contribution on co-operatives. There was little support in the Queen’s Speech for the co-operative economy, but that sector is a significant and growing part of the overall UK economy, and is worth more than £35 billion. It is owned by nearly 13 million adults in the UK and has grown by nearly 20% since the start of the credit crunch, while the rest of the economy has shrunk. Start-up co-operative businesses have a 50% greater chance of surviving past three years than other businesses. That means jobs and growth, which is what we are looking for.
In the words of the managing director of the International Monetary Fund, growth versus austerity is a
“false debate…Countries can choose a strategy that is good for today and good for tomorrow.”
Countries can make that choice, and co-operatives are part of it. Unfortunately, however, our Government have chosen not to do that, despite all the evidence that their current economic policy is not working.
Co-operatives and the principles of co-operation have more to offer than just economic resilience. Co-operation offers an approach that we can use to transform public services so that we can do better for less. Co-operative housing offers a means for first-time buyers to get a foot on the housing ladder, as well as a safe way for people on lower or fixed incomes to build up a share of equity in their home. Energy co-ops offer a way to generate energy more sustainably, while lowering prices for hard-pressed households and helping to break the stranglehold of big energy corporations.
Labour-led co-operative councils, such as Oldham, show how more co-operative approaches to tackling unemployment can get people back to work. Instead of forcing unemployed people on to prescriptive DWP programmes that rarely lead to jobs, such councils are sitting down with unemployed people and asking what support they need within the financial envelope available. Instead of endless courses on how to write a CV, people can choose training in a profession such as plumbing, be given a bag of tools, and go out and find work. That gets them off benefits and allows them to make a positive contribution to the community of which they are part.
In Lambeth—another co-operative council—the local authority is tackling violent youth gang crime by sharing its power with the community through a new youth services trust—the Young Lambeth co-operative. Instead of putting vulnerable young people on courses and programmes that do not cut offending by anywhere near enough, it is helping communities choose the support their young people need. That is proving far more effective at getting young people out of gangs and away from crime, and steering their lives back on track.
Mr Reed
I know how passionately my hon. Friend supports empowering communities to tackle the problems they face, such as violent youth crime. Like him, I have noticed the absence of such a Bill, which is a huge disappointment, because that agenda offers huge opportunities for the Government and people to reconnect to start to deal with the problems that disfigure some of our communities. The problem is not just violent youth crime. I hope he agrees that the examples I have outlined deliver better outcomes for citizens, and that those measures will save money, which we are desperate to do when resources are so constrained.
Co-operation means handing power to the people who use public services so that their insights help to make those services more efficient and effective. It hands back to people control of their lives, so that they can break free from dependency on others’ decisions. The Queen’s Speech does nothing to promote such models more widely. Co-operation offers a vision for greater economic security, more resilient communities and more effective public services, but, instead of a vision that meets the challenge of our times, the Queen’s Speech is one that my nan would have described as all mouth and no trousers. There is plenty of glitz and glamour, but no answers to the questions our country faces.
Rushanara Ali (Bethnal Green and Bow) (Lab)
The Government have had three years in office, and the Queen’s Speech offers us a timely opportunity to assess their record. As we have heard, what the Government have achieved and not achieved is striking. They have delivered rising unemployment, 1 million young people out of work, prices that are rising faster than wages, and a chronic drop in living standards for British families.
The Institute for Fiscal Studies this week forecast that the Government’s reforms since 2010 will lead to one in four children living in poverty by 2020. That is scandalous in the 21st century. The Child Poverty Act 2010 set a goal to set a target to reduce child poverty to one in 10, which is still not acceptable. It is therefore an absolute scandal that the Government are doing nothing to address that important problem.
Kerry McCarthy (Bristol East) (Lab)
My hon. Friend was not in Parliament before 2010, but I am sure she kept a close eye on child poverty in her work at the time. Does she share my frustration? Many of those now on the Government Benches signed up to the child poverty pledge and said that the abolition of child poverty was their No. 1 priority. I was sceptical of that at the time. The moment the Conservatives got into government, they spoke of revising the targets and said they did not want to assess child poverty in this way or that and so on. I am not allowed to say that people were misled, Madam Deputy Speaker, but does my hon. Friend believe that people will feel let down by the fact that Conservatives were vociferous in their support for the pledge and then reneged on it?
Rushanara Ali
I could not agree more with my hon. Friend. That episode highlights the fact that the Conservative party was desperate to decontaminate its brand as the nasty party. As soon as it returned to power, all the bad old Tory habits crept in—and they are now flooding in. There is no pretence and no attempt to rebrand the party. The Conservative party stands up for millionaires and not for ordinary people or for children who live in poverty in constituencies such as mine—more than 50% of children in my constituency live in poverty, and that will get worse by 2020.
Mark Hendrick
My hon. Friend mentions those living in poverty. Given her role on the shadow Front Bench, she will be aware of the failure to include in the Queen’s Speech the Government’s promise of a law on the 0.7% commitment of gross national income. All three parties agreed to that before the general election, but the Government have failed to deliver it.
Rushanara Ali
The Government’s record in tackling poverty domestically is risible, and their inability to stick to the commitment to enshrine in law the commitment of 0.7% of GNI is deeply disappointing. I hope they will act on that. It is disappointing that the commitment was not in the Queen’s Speech, and that it was not in previous Queen’s Speeches.
I want to return to the Government’s failure to take child poverty seriously. In my constituency we also have some of the highest rates of youth and graduate unemployment. If the Government were serious about lifting families out of poverty, they would increase the number of training opportunities to help graduates into work and increase the number of apprenticeships. We have 10 young people chasing every single apprenticeship opportunity—that is completely unacceptable. The money spent on the millionaires’ tax break could have been used to create more apprenticeship opportunities. We cannot go on like this, with 1 million young people out of work.
Steve Webb
The hon. Lady said that half the children in her constituency are living in poverty. She will know that the official published figures on child poverty show a fall since the general election. Presumably, after 13 years of a Labour Government, half the children in her constituency were in poverty. Will she apologise for that record?
Rushanara Ali
The hon. Gentleman’s Government should apologise for their failure to reverse the increase. Child poverty in my constituency has gone up consecutively in the past three years. He ought to apologise for that and he ought to act. He should have lobbied his Government to propose measures in this Queen’s Speech to tackle child poverty. He ought to apologise and I give him the opportunity to do so today.
Clive Efford
I am reading the conclusion of the Institute for Fiscal Studies report into child poverty, and it states that relative child poverty is projected to be 6% higher, reversing the fall in relative poverty between 2000 and 2010-11.
Rushanara Ali
What can I say to my hon. Friend but, “Well said”? I wish the Minister would take these issues more seriously. Instead of tackling the substantive problem of child poverty, his colleagues in the Treasury have decided to redefine it. As with many things the Government are doing, they find it is easier to meddle with the figures and interfere with the statistics—rewrite them, even. The Secretary of State for Work and Pensions is not in his place. He has just had his wrists slapped once again by the Office for National Statistics for meddling with the statistics.
The Government should rebuild trust with the British people by coming clean on these issues. They should not try to rewrite the figures, but actually do something about child poverty, an issue that is of great concern to families and to all people. Doing so would address the point, made by my hon. Friend the Member for Croydon North (Mr Reed), that the Conservative party is not just in the business of pretending to change on these substantial issues. We live in hope, although there is not much of that left.
The Government’s approach to child poverty and the response of the Minister highlight how out of touch they are. If he and his colleagues cannot understand the seriousness of falling living standards and rising levels of child poverty—to name but two issues—and what they mean for ordinary people’s lives, I cannot understand how we are to trust them to get us out of the economic mess that they have put us in over the past three years. It is their mess: they need to clean it up and they have categorically failed to do so.
Julie Hilling
Does my hon. Friend agree that many Government Members do not have an understanding of what the cuts to living standards mean? It is not that people cannot just go to the pub one night a week. The cuts mean that people cannot feed their children, that there is no food in the cupboard and that they go to bed hungry. Does she agree that it does not feel like Government Members understand that that is what it is like?
Rushanara Ali
With a Cabinet full of millionaires, I think the empathy will be limited, but I hope that those Cabinet millionaires speak to Government Members who come from the kind of background that means they might have some understanding. If they even talked to some of their own colleagues—such as the former shadow Home Secretary, the right hon. Member for Haltemprice and Howden (Mr Davis), who, I understand, grew up on a council estate, and raised the issue of the Government and the Prime Minister being out of touch—they might learn a thing or two about how people have to live their lives. If they paid attention to ordinary, poorer constituents, they might learn a thing or two about what it is like to live below the poverty line or to struggle on a modest income. The changes the Government have made in people’s incomes—a reduction of £1,700 a year—have had a devastating effect on families and children. [Interruption.] The Minister is heckling, but I cannot hear what he is saying. He is welcome to make an intervention. Does he wish to make an intervention? No. He does not have much to say.
Madam Deputy Speaker (Dawn Primarolo)
Order. Minister, either intervene or stop heckling. It does not help the recording of the debate to throw comments across the Chamber that not everyone can hear—the Hansard Reporters in particular.
Rushanara Ali
I am interested in hearing the Minister, if he would like to say anything.
Mark Hendrick
On a point of order, Madam Deputy Speaker. Given that we are debating the coalition Government’s Queen’s Speech, is it in order that only a Minister, a Parliamentary Private Secretary and a Whip are present? Not one Government Back Bencher is present for this very important debate.
Madam Deputy Speaker
Mr Hendrick, that is not a matter for the Chair. Who is in the Chamber or who answers for the Government is a matter for the Government and Government Members. You have got your point on the record, but perhaps we can now return to the debate on the Gracious Speech.
Rushanara Ali
I was about to come on to that. Clearly the legislative programme in the Queen’s Speech is riveting, given the extraordinary presence on the Government Benches—just four Government Members, including Front Benchers. That says it all. The Government cannot even pull together more than a handful of Members to defend their legislative programme. [Interruption.] There are five of them now. The Secretary of State for Work and Pensions is here. Perhaps he can defend it singlehandedly on behalf of the two parties in government. It says it all that so few people are in the Chamber to speak up for the Government’s legislative programme—or, rather, the lack of it.
I want to focus on unemployment, which, yet again, the Government’s programme—or lack of it—fails to address. In constituencies such as mine, long-term and youth unemployment continue to soar. The lack of opportunities remains significant; the lack of sufficient numbers of apprenticeship programmes to meet the demand is a real problem and a real challenge. If young and other unemployed people were given the opportunity to get a foot on the employment ladder, we could reduce not only the level of deprivation in constituencies such as mine, but the burden on the taxpayer of welfare costs. The way to reduce the deficit is to ensure that we get people back into work and economic activity.
The Government’s Work programme has managed to find work for only 2% of participants in my constituency. It is a scandalous waste of public money that only 2% of people are in jobs through that programme. Will the Business Secretary and the Work and Pensions Secretary look again at why their programme has had such little impact? Why not consider improving the system for getting people into work so that we can give people, in particular young people, hope and a chance to make a contribution to our economy? That kind of wasted talent cannot be good for our society or communities, and is certainly not how to recover from the economic troubles that we continue to face.
One suggestion that my party has made, but which the Government have failed to take on board, is the compulsory jobs guarantee. We know that having training programmes with a genuine guarantee of a job works. We demonstrated that it worked when we were in power, through the future jobs fund and apprenticeship programmes. I believe that the Business Secretary and the Work and Pensions Secretary want to get people into work. What I do not understand is why, if a programme does not work properly and manages to get only 2% of people into jobs, the Government will not reform it. When the Secretary of State for Work and Pensions went on his journey in opposition to discover poverty in constituencies such as mine, I thought he might have learned a thing or two about how to get people out of poverty and into work, but he clearly has not. He is too busy focusing on punishing people, rather than giving them hope and the opportunity to get a job.
Mr Duncan Smith
The hon. Lady is wrong about the Work programme. In fact, I will show her later that the UK Statistics Authority has taken her party and others to task for their use of the statistics, which it says is incorrect. The reality, as she will see when we come forward in June, is that the programme is a success, and it is cheaper than anything that Labour produced.
Rushanara Ali
Perhaps the Secretary of State can also explain why he got a slap on the wrist today—and previously—for meddling with the statistics, because people—
Rushanara Ali
No, I will not give way until I have finished my sentence. I will give way when I am done; then I will listen to the Secretary of State’s response.
The Secretary of State is damaging public trust in statistics—there is that old phrase about “damned lies and statistics”. That will lead to further distrust, not just of politicians such as him, but of important institutions that are there to provide independent, credible statistics. He should not be meddling with his figures. The fact that only 2% of participants in my constituency managed to get jobs through his Work programme is an absolutely appalling indictment of his performance in his role and shows his failure to get people into work. I find it deeply disappointing, because I happen to have admired his work with the Centre for Social Justice, which he set up before he got into government. Although I was a sceptic about his conversion to understanding poverty and deprivation and wanting to reform and improve society, I was willing to give him the benefit of the doubt, but no longer, because he has returned to the approach that the Conservatives have always taken and failed to do anything to give people genuine opportunities. That is summed up by his Department’s failure to get people into work in constituencies such as mine. The facts speak for themselves. I am afraid that he does not have much to offer, other than trying to rewrite statistics.
Unless the Secretary of State has something else to add, I will move on.
Rushanara Ali
The Secretary of State has forgotten, but I am happy to give way.
Mr Duncan Smith
I hope that the hon. Lady will withdraw the idea that I am rewriting statistics. She will see from the letter written to me today by the UK Statistics Authority that no mention is made of that. I continue to believe, absolutely correctly, that the work of the cap will help and will lead to people getting jobs. That was the whole purpose, which is why we left those on tax credits off the cap. I believe that people are moving into work, and will continue to do so, as a result of the cap, and I will be able to demonstrate that.
Rushanara Ali
Perhaps the Secretary of State could start by demonstrating now and explaining why only 2% of participants have got jobs in my constituency. What is the reason for such a ridiculously small number, when there are so many people chasing apprenticeships and job opportunities? How can that be acceptable? Why is he so complacent? I thought he was interested in getting people off welfare and into work. It seems that he is interested only in attacking people, rather than helping them to get back into work. That is deeply disappointing. I had more hope that he would do something constructive to get people into work, given his track record in opposition and his efforts to get to know communities in our country and understand where the barriers were, but perhaps I should not have given him the benefit of the doubt.
Julie Hilling
Does my hon. Friend agree that the Secretary of State’s comment absolutely reinforces what seems to be his view that people are choosing to live a life on benefit rather than the fact that 2.5 million people are unemployed, the vast majority of whom would love to be in work? The benefit cap does not drive people into work; what gets people into work is the creation of jobs for which they can apply and then go and do.
Rushanara Ali
I could not agree more with my hon. Friend. The crux of the matter is that the economy is flatlining and there is no prospect of people having a chance to get a foot on the employment ladder. Such opportunities as are available are too few. We need an economy that can grow and a Government who can act as quickly as possible to boost demand and reverse the trend we have seen. We need more genuine training and employment opportunities, particularly for young people.
I raised with the Business Secretary the issue of graduate unemployment, as this is another pool of talent that is being wasted in our country. I was the first in my family to go to university and many in my constituency are in the same position. They have worked hard, played by the rules and just want to make a contribution.
Mr Steve Reed
Has my hon. Friend noticed that the Secretary of State for Work and Pensions likes to claim that his benefits cap is responsible for the number of people moving off benefits into work, yet he does not comment on the fact that roughly the same number of people are moving out of work and on to benefits, with both those aspects being part of the usual cyclical change? His interventions have made not a blind bit of difference to any of that.
Rushanara Ali
What can I say? The Secretary of State made some interventions earlier, but they provided very little room for optimism. We need to look at how people’s everyday lives are affected by these issues. As I was saying, in my constituency, graduates, school leavers and those who have left further education just want an opportunity. They want this Government to answer their needs, but that is what is failing. Whatever our political leanings and whichever parties we happen to be in, the critical thing is to get people into work so that they can make their contributions. The fact that that is not happening is the Government’s failure, and they need to take responsibility for it and think again about their policies, which are not working adequately.
Let me deal in more detail with graduate unemployment. In a constituency such as mine, numerous family members are coming out of university, often having been the first in their families to have gained degrees, but they are often struggling to get into work. Despite some major economic opportunities around the City and Canary Wharf, there is a mismatch between people’s potential and their skills and the opportunities to get into those institutions. I believe the Government could do more to support graduates and those leaving further education by making it easier for them to make the transition into those institutions that are traditionally not easy to enter—financial organisations, the creative industries and many other sectors in our city. The cost of graduates being out of work and claiming benefits when they could be making a contribution and lifting their families out of poverty is an example of the missed opportunities. Taking action to deal with that could provide an easy win.
I therefore hope that the Business Secretary will think again about how to get a large number of graduates back into work, as they get very little help when they leave university to make that transition. Graduate unemployment among those from working-class or ethnic minority backgrounds is disproportionately higher than it is for other groups, but it is a real struggle for all graduates. I ask the Secretary of State for Work and Pensions to think about this issue and to highlight in his response whether he has any proposals to deal with it.
I should like the Government to think again about whether they have set the right priorities in giving tax breaks to millionaires at a time when working families are losing so much as a result of the changes that they are making. It is proving incredibly difficult for those families to make ends meet, and to pay for such things as child care and heating. The increasing number of people who are going to food banks in constituencies all over the country shows just how much they are struggling.
It is strange that the Government have stuck to their commitment to give tax breaks to millionaires rather than, for instance, introducing the mansion tax on which the Business Secretary was so keen before the election. I hope that he can persuade his colleagues in the Conservative party to take on board an excellent policy idea, which is supported by both my party and his. It would raise additional revenue and help us to meet some of the vital challenges that we face, especially in relation to getting people back to work.
As some of my hon. Friends have already pointed out, a temporary cut in VAT could help to stimulate the economy. When we were in power, there was evidence that a VAT cut could make a significant difference by boosting consumer demand. We desperately need to establish ways to stimulate demand in the economy. The Government should think again about how to generate growth and create jobs. That is not happening, and it has been not happening for too long, despite the promises that were made in 2010 and despite all the forecasts—which, thanks to the Government’s policies, have turned out to be wrong.
I want to make two points about the impact of unemployment on women in particular. The unemployment figures highlight its disproportionate impact on women, and the position is worsening. The Government’s attempt to water down the powers provided by the Equality Act 2006 is very worrying, given that in the current downturn the impact on ethnic minorities and women is greater than ever before. We need organisations that can ensure that those unequal impacts do not become even worse, and I hope that the Government will think again about their strange decision to water down the powers of the Equality and Human Rights Commission.
The pay gap between men and women—as well as the fact that women are more likely to lose their jobs and remain out of work—is deeply worrying. I hope that the Secretary of State for Work and Pensions will tell us what his Department is doing to address the real concern that is felt about the effects of that on women.
The content of Queen’s Speeches is ever-diminishing, and this year’s is particularly disappointing. It is clear that the Government have run out of ideas and energy in just a few years. My constituents, and constituents throughout the country, desperately need a plan for jobs, a plan for growth and a plan for economic recovery, none of which the Government are providing. If they cannot be bothered even to come up with a decent legislative programme in the Queen’s Speech, we have to wonder why the public should trust them to restore our economic future and create jobs and growth. I hope very much that the public will see through the Government and their failure, in these very difficult times, to understand and respond to their needs and to the fact that they are struggling.
Kerry McCarthy (Bristol East) (Lab)
As many Opposition Members have said over the last few days, in this Queen’s Speech the Government have comprehensively failed to address the real issues and the scale of the challenge facing this country. They have missed a good opportunity to set out an economic programme that can rebuild our failing economy and address the rocketing cost of living.
That is not talked about enough, because the problem is not just the fact that people cannot get jobs and are struggling to find work; it is also that even for those in work, the cost of living, with rising fuel bills, food prices and rail and bus fares, alongside what is happening in the private rented sector—I could give many more examples—is having a major impact on people’s lives, yet the Government do not seem able to act.
There is a paucity of imagination and a dearth of ideas in the Queen’s Speech. As many have said, there is a very thin legislative programme. The Queen’s Speech could have contained several measures that were floated in advance of it, such as minimum alcohol pricing, plain cigarette packaging and the lobbyist register. I am sure the reasons why they have been dropped will be revealed in time, but there does not seem to me to be any good reason.
It was also disappointing that the Queen’s Speech did not include the legislation to enshrine in law the promise made in the coalition agreement to spend 0.7% of gross national income on the aid budget. As the head of advocacy at ActionAid said:
“The aid budget is a tiny proportion of Britain’s national income. Having it enshrined in law would provide poor countries with the certainty they need to plan their development and deliver the best value for money from UK aid. A constant debate about volumes of aid is not in the interests of either donor or recipient nations and the Government should have recognised this.”
Mark Hendrick
My hon. Friend will recall that I introduced a private Member’s Bill that would have put that 0.7% of GNI commitment into statute. It was scuppered by the Government twice, which was an absolute disgrace.
Kerry McCarthy
I share my hon. Friend’s disappointment that that Bill was not supported, and I was present in the Chamber during some of the debates on it. Although the Prime Minister has said publicly that he is determined to stick to the 0.7% target, the fact that he promised legislation and has now reneged on that sends out a signal that he is not absolutely committed to it. I have heard many calls from his Back Benchers saying it is wrong to have that 0.7% target and that the money should, for example, be moved over to the Ministry of Defence and be spent on defence instead. Given those ripples of discontent emanating from the Conservative Back Benches, the Prime Minister should have nailed his colours to the mast and made it very clear that the Government were not for turning on that target.
Just before Prorogation, the Government published a draft Bill on wild animals in circuses, but that, too, was not specifically mentioned in the Queen’s Speech. Animals in circuses might sound like a trivial issue compared with big topics such as jobs and employment and getting economic growth going again. However, this omission sends out a signal about the Government’s lack of will or nerve to introduce legislation. My view is that we could deal in just a day or two with legislation to outlaw wild animals in circuses. Almost 95% of the public back a ban, and when the House debated a motion on this on 23 June 2011, the Government made concessions to a Conservative Back Bencher who was pushing the issue, and said, “Yes, we’ll bring legislation forward.” That was almost two years ago, and now we have a half-hearted measure saying, in effect, “We’re going to bring forward draft legislation because this is such a complicated issue.” There are only 20 animals left in circuses in this country, but apparently this is so complex it has to be put out in the form of draft legislation and then examined by Committee, and the Government will not be able to bring in a ban until the end of 2015. That seems absolutely laughable given that there has already been a two-year delay. Basically, we should just get on with it.
One of the Bills that I was pleased to see in the Queen’s Speech was the Mesothelioma Bill, although I share the concerns of my hon. Friend the Member for North Durham (Mr Jones) that it is not comprehensive enough and does not deal with all the details. When I was a junior lawyer—I think that it was 25 years ago, which is quite a scary thought—I acted on one of the very first mesothelioma cases. It took us six years to get resolution. One problem was that the deceased man in question—we were acting on behalf of his widow—had worked for some very small companies. He was a central heating engineer and it was absolutely impossible to trace those companies, because they were almost one-man bands and were no longer in business. However, for a period he worked for Vauxhall Motors. The breakthrough moment came. We could not find any living witnesses who could prove that the deceased man in question had worked with asbestos at that time. Then I happened to talk to my grandfather and it turned out that my grandfather had worked with him and knew him quite well, so we came up with a witness almost by chance.
Nevertheless, it was a struggle to get that case through. At the end of the process, the man’s widow received a settlement of about £80,000, which in the late 1980s was a considerable sum. However, she said, “If I had known the pain and hassle that I’d have to go through, and the endless meetings with solicitors, I really would not have done it.” We want to ensure that other widows and other people who are suffering from mesothelioma do not have to go through that process.
The consumer rights Bill has the potential to be a very interesting and useful piece of legislation. However, it will be quite difficult to pull together all the measures needed to tackle the problems. I am very supportive of the proposals of my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson) on secondary ticketing. I hope that the Government will listen to them and take them forward. I have talked to my hon. Friend in some detail about the research that she has done on the problem, which affects many fans and musicians alike.
We have not seen the text of the consumer rights Bill yet, but I was interested that the commentary on it says that it will help people who want to switch suppliers or make purchases via the internet or the phone. In my surgeries, many people come to me who are just banging their heads on the desk because they cannot get a company to respond. I think I spent the best part of yesterday and the day before on the phone to a particular mobile phone supplier. I am very tempted to name and shame it, given the number of times that I was told I would be called back and was not. I was then sent a text message saying, “What’s your experience of the service we’ve provided?” I could give a 10 for “excellent” and a zero for “dismal”. Every time I tried to text zero, the message would not go through. Perhaps if I had tried to text 10, the message would have gone through and the company would have said, “Thank you very much, we are happy to have been of service.”
It is so frustrating for people when they have to go through such minefields, and a lot of people end up stuck with services they do not want. There is another company I could mention on whose website it is almost impossible to find out how to go about cancelling a contract. When a caller phones up, the options are, “Press this if you want to pay your bill, press number two if you want to spend lots more money with us and number three if you want to change your address.” There is never a button with a message saying, “If you want to tell us to get lost, press this” or whatever. I am not saying that it should be compulsory for companies to have a “We want nothing more to do with you” button on their automated phone systems, but it should be made much more apparent to consumers how they can get out of such contracts. Otherwise, they are tied in for a very long time at considerable expense.
On the question of carry-over Bills, the Government have confirmed that they will carry over the Energy Bill. However, that Bill needs extensive changes to address not only the reality of rocketing fuel bills, which I have mentioned, but the issue of climate change. Again, anything on that issue is lacking in the Queen’s Speech. There is nothing to suggest that the Government want to be the greenest Government ever. There is little that will do anything to promote green investment and green jobs. That is a real missed opportunity.
I have real concerns about where the Government are going on green jobs. There was a complete shambles over feed-in tariffs, and I know from speaking to people in Bristol, where there are many companies that are involved in green technology, including research, that they do not believe that the Government are supportive enough of their efforts to make the UK, and Bristol, a real hub for that sort of work.
I have real concern about the policy on fracking. There are again suggestions in the paper today that the Government may be too close to people who have a very personal vested interest in making money out of it. In the forthcoming parliamentary Session, we need to have real scrutiny of whether fracking is the right way forward for our energy policy, taking into consideration environmental consequences such as disruption to local water supplies. There are a lot of unanswered questions about fracking, which the Government should answer before they pursue that path.
Energy bills are one of the biggest costs that families now face. A typical dual-fuel bill is now £1,420—up more than £300 since the Government came to power. The number of households living in fuel poverty is predicted to rise to 8.5 million in 2016—up from 4.75 million in 2010. The big six energy companies have rightly been accused of “cold-blooded profiteering” after figures emerged showing that they have more than doubled their retail margins over the past 18 months and are now earning a staggering average of £95 profit per household on dual-fuel bills.
In a recent debate, my hon. Friend the Member for Llanelli (Nia Griffith) highlighted the case of a large supplier in south Wales, which has now increased its standing charge to £200 for both gas and electricity. That is hitting the poorest households hardest. They have to pay £200 before they use even 1 W of electricity. I hope that problem will be addressed, if not in the Energy Bill, then in the consumer rights Bill.
The thing most notably missing from the Energy Bill is a target for decarbonising electricity by 2030. By putting off the decision about decarbonisation until 2016, after the next general election, the Government are locking our economy into increasingly expensive gas, which is bad for carbon emissions and for energy bills. The Committee on Climate Change has said that the gas strategy set out by the Chancellor in December is “completely incompatible” with the UK’s legally binding carbon emissions targets, and should be “plan Z”. I wonder whether the Government have any intention of decarbonising our power sector by 2030. I also increasingly doubt their commitment to meet our legally binding carbon target of reducing our carbon emissions by 80% by 2050. Again, there was nothing in the Queen’s Speech to help us move towards that.
As I mentioned, the one thing that the renewable energy sector needs to enable it to create more jobs and encourage investment is confidence that the Government are committed to renewable energy and will support it over the long term. The lack of a target also puts the sector in a difficult position in that regard. It is deeply disappointing that the Government do not capitalise on a golden opportunity to drive economic growth and create jobs. A CBI report published in July showed that the UK could become a global front-runner in low carbon, adding £20 billion to annual GDP by 2015, and that a third of the UK’s economic growth from 2012 to 2013 came from green businesses. As the former Energy Minister, the hon. Member for Wealden (Charles Hendry), has said, extending uncertainty about that until 2016 will lead to higher capital costs and higher energy bills. That is backed by the Committee on Climate Change, which has said that
“continued reliance on unabated gas-fired generation carries the risk of electricity bills for the typical household being up to £600 higher than under a low-carbon power system over the next decades”.
In the remaining two minutes, I want to flag up what has become a topic of particular interest to me during the past year—food waste. There was an opportunity for the Government to bring forward in this Queen’ Speech measures that would tackle the issue. I was very disappointed yesterday when phase 3 of the Courtauld agreement, a Government-led commitment to reducing food and packaging waste, was announced. There is a target for retailers and manufacturers to work to reduce household food waste by just 5% by 2015, and to reduce their own waste—the waste that they create in the supply chain—by just 3%. Given rising food prices, and as people become better educated about the things that they buy, it is estimated that we will meet such targets anyway. So the target is meaningless. The Government had a real chance to push forward with measures to prevent food waste. Between 30% and 50% of edible and healthy food is wasted in this country, and half that waste is generated by the food industry. In Westminster Hall recently we heard the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Newbury (Richard Benyon), telling people how they could reduce food waste and stop throwing away food that was in their fridges. He told them not to keep bread in the fridge and offered other helpful little tips, but we need to tackle what the food industry is doing. It is the industry that should drive the level of change that is needed. If the industry will not do so and if the Courtauld commitment does not contain the targets that will make the industry act, there should be a mandatory obligation on large retailers and manufacturers to take steps to reduce their food and packaging waste. The Government could have introduced that in the Queen’s Speech but they did not.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
It is a great pleasure to wind up this debate on the Gracious Speech, but on a topic as serious as this, I cannot help but express a little disappointment at the fact that there have been twice as many speakers from the Opposition Benches as we have heard from the Government Benches. Often, as we have looked at the Government Benches in the course of the debate, we have found them as empty as the Queen’s Speech. There appear to be very few people on the Government Benches who are prepared to defend this Queen’s Speech, just as there were very few people to defend the Budget earlier this year.
Mr Kevan Jones
I agree with my right hon. Friend’s observation. It obviously reflects the amount of support that the Prime Minister has from his Back Benchers. He was so desperate in the earlier stages that he had to have his Parliamentary Private Secretary intervening in the debate.
Mr Byrne
My hon. Friend makes a good point. Looking at the Queen’s Speech, perhaps it is not a surprise that so few people in the Government party are prepared to defend it.
I shall start where my hon. Friend the Member for Streatham (Mr Umunna), the shadow Business Secretary, concluded. After three wasted years, we have this year had a wasted Queen’s Speech. The task on Wednesday was simple—to give us a legislative programme as big as the challenges that face our country. What we got instead was practically nothing. It seems that this Government are incapable of proposing any ideas that they can agree on. They are a weak Government who are out of ideas, and that is why the public want them out of office. They have chosen to fight the biggest economic battle confronting this country for decades by arming themselves only with pea-shooters.
We should be clear about the task that we confront. It was set out brilliantly by my hon. Friend the Member for Streatham. We have an economy that is flatlining. We have growth of just 1.8%. That is a third of the level of growth seen in the United States. Living standards are falling. The wages of our constituents have fallen by £1,700 a year since the election. Our constituents are getting poorer. GDP per capita has fallen by £1,500 since the election. Unemployment is rising and is 90,000 higher than at the election. The consequence of all this is a catastrophe for the public finances. Borrowing is now £245 billion more than forecast. Worst of all, perhaps, is what is happening to the fundamentals of our economy.
The hon. Member for Tamworth (Christopher Pincher) expressed some confidence that the economy is beginning to rebalance. If only. Consumer demand is flat. Business investment is stalled. We had great hopes that economic growth would come from some kind of rebalancing towards exports. As the Business Secretary said in his lengthy but rather good essay in the New Statesman not long ago, there is not necessarily a problem with global demand. The problem is that we in these islands are not tapping into that demand.
Our exchange rate has fallen by roughly 20% since 2007, but exports have grown by 1% or 2%. Once upon a time the OBR forecast that net trade would add 1.2% to GDP. Now it admits that net trade is a drag on growth, not a boost. That is a huge contrast to what we saw in the 1990s, when sterling depreciated by about 20% and exports grew by a third. If our economy is to grow at the level that the OBR forecasts it should between now and 2016-17, we need to grow exports by 45% over and above the level we saw in 2009, but we are simply not on track to deliver that change.
Mark Hendrick
I am listening with interest to my right hon. Friend’s comments on growth. Does he think, as some Government Members do, that withdrawing from the European Union is likely to increase jobs and growth in this country?
Mr Byrne
My hon. Friend is absolutely right, and that was outlined very well in today’s newspapers by the former Chancellor of the Exchequer. At a time when we are struggling to grow our export base, why on earth would we choose voluntarily to put in jeopardy our membership of the world’s largest free trade zone?
The challenge is not simply that global demand conditions are weak—the Business Secretary said as much in his New Statesman essay—but that our exporters are losing market share. The Prime Minister is fond of telling us that we are in a global race, but the problem is that we have stalled on the starting grid. He is instead locking us into a race to the bottom, with a policy that will deliver nothing better than low growth, low skills and a low-wage future.
Those are the challenges that the Queen’s Speech should have addressed—the investment crisis on the one hand and the jobs crisis on the other—but there were big holes where the Bills on promoting investment and growing jobs should have been. Let us start with the investment crisis. The Breedon review showed some time ago that SMEs in our country confront banks that are deleveraging on a scale unseen anywhere else in Europe. The country’s investment rate is now under 15%. It is flatlining and well below the levels seen elsewhere in Europe. Business investment is £11 billion lower than it was during the peak before the crash, and there is falling investment in the venture capital industry, which is £80 million down on the latest set of figures.
Meanwhile, in corporate bank accounts cash is piling up. It is what the incoming Governor of the Bank of England, Mark Carney, has criticised in Canada as the phenomenon of “dead money”. Dead money is piling up in bank accounts in this country because the business community does not have confidence in the Government’s economic plans, yet all we got in the Queen’s Speech was a carry-over Bill on bank reform. As the hon. Member for South Basildon and East Thurrock (Stephen Metcalfe) said, that will probably not unlock the kind of business and banking investment we need. The Chair of the Treasury Committee has criticised the Bill because he found the Government’s arguments insubstantial. We did not get answers to Britain’s investment crisis in the Queen’s Speech, which is why it is such a wasted opportunity.
The wasted opportunity on jobs is perhaps more serious. Unemployment today is 90,000 higher than it was at the general election. There is simply not enough work to go around. Once upon a time we were promised a welfare revolution, and no doubt it was well intentioned, but the Work programme is not delivering for those who need jobs or those on employment and support allowance. I look forward to some reassurance from the Secretary of State when he responds. Universal credit, again, was a good idea, but if its virtues are confined to 300 citizens in Tameside, I am afraid that it will not revolutionise the back-to-work business here in Britain.
Perhaps worst of all, the Secretary of State stands before us today as a man who has failed the test he set himself in Easterhouse. Unemployment on three quarters of our worst estates is going up, not coming down, and long-term unemployment is going up on two thirds of those estates. Three years into this Parliament, that is simply not good enough, and it is not good enough that there was nothing in the Queen’s Speech to fix it.
Stephen Metcalfe
The right hon. Gentleman makes an interesting point about rising unemployment on some of our estates. Does he not accept any responsibility for failing to give those people the skills they need to access the opportunities that do exist across our economy? I think that is why some people on our estates are, unfortunately, finding it so hard to get the employment opportunities that do exist.
Mr Byrne
Apprenticeships quadrupled during our time in office. In the decade before the crash, we achieved rising productivity and rising wage growth. That is why wages were so much higher when we left office than when we began. Because we invested in skills, our record on rising wages was beaten only by Ireland and Australia. The Government should be building on that record, not watering it down.
Mr Byrne
I am going to move on quickly because I need to refer to some contributions to the debate.
The price that is being paid by our constituents, including our young people, has been well set out. My hon. Friend the Member for North Durham (Mr Jones) spoke eloquently, with force and power, about the price being paid by young people and the long-term damage that is being confronted. Some of my colleagues, such as my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson), face very high levels of youth unemployment in their constituencies. To echo the substance of the argument made by my hon. Friend the Member for Preston (Mark Hendrick), we need more apprenticeships, not least because in many parts of our country right now—in Yorkshire, the north-east and the north-west—employers are saying that they cannot get skilled workers at a time when unemployment is higher than it was at the last election. That shows that the system put in place by this Government is not working.
We need to do more for the long-term unemployed. We also need to do more to support women back into work. In a brilliant speech, my hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali) argued powerfully that women are not being supported into work at the rate we would like. The shambles that we saw in the House yesterday on child care policy did not give us much confidence that things are going to change. The price of failure is being paid by families and the 2.5 million people denied the chance to work. That point was made by my hon. Friend the Member for Bolton West (Julie Hilling). As we heard in the powerful speech by my hon. Friend the Member for Bristol East (Kerry McCarthy), very many families are contending with falling wages and rising living costs because there is simply not enough work to go round.
Perhaps worst of all for the long term is the price being paid through rising levels of child poverty, about which my hon. Friend the Member for Bethnal Green and Bow spoke eloquently. We lifted 1 million children out of poverty during our time in office, and now most commentators agree that all that progress will be wiped out by the decisions of this Government. It is record of shame that we will hang around their neck at the next election. That is why it is such a tragedy that at a time when so many people are paying so much, the Government singled out as their chief priority giving a £2,000-a-week tax cut to millionaires.
We will look carefully at some of the Bills in the Queen’s Speech. We will study with close attention the proposals on mesothelioma. I will heed the words and sentiments expressed by my hon. Friend the Member for North Durham. The consultation that we undertook in February 2010 is the benchmark against which we will judge the Bill, and if we find it wanting we will oppose it.
We will look closely at the plans for flat-rate pensions. We support the principle of a flat-rate pension, which locks in the changes we made in office that lifted so many pensioners out of poverty. We hope, however, that the Government will acknowledge that many people’s income replacement rate will fall very low under these proposals. Unless there is reform of the private pensions industry that frees the fetters on the National Employment Savings Trust, caps charges and ensures that there is real transparency, we do not believe that plans are yet in place for a low-cost, low-risk private alternative to help people to save for the long term. That will be the thrust of our opposition to and constructive engagement with the Bill when it comes to this place.
As many colleagues have said, the tragedy of this Queen’s Speech debate is that there was an alternative. We proposed a jobs Bill that would have given the chance of work to young people unemployed for more than a year and to the long-term unemployed out of work for more than two years. We would have used an injection of capital into the construction industry to get our country back to work.
Mr Byrne
I am going to spare my time for the Secretary of State, I am afraid.
Those were the kinds of measures that we should have seen in this Queen’s Speech. They are simple, costable and easily affordable, and they would have helped to get our country back to work. To conclude, the struggle for jobs has always been at the heart of the struggle of our movement. When Keir Hardie rose on the Benches behind me to make the first speech of a Labour MP in this House, he insisted on the principle of work or maintenance. In our first election address, “Useful Work for the Unemployed” was our rallying cry. Next year marks an important anniversary in that long struggle for jobs. It is the 70th anniversary of the White Paper on employment policy, which accepted for the first time that the Government had a responsibility to ensure that everybody who wanted to work and could work had a job.
Once upon a time, the Conservative party agreed with that principle. When Rab Butler spoke to the 1953 Conservative party conference he said that anyone who believes in
“creating pools of unemployment should be thrown into them and made to swim”.
It is 40 years since the Conservative party backed away from those principles, starting with Sir Keith Joseph’s speech in Preston.
We could pay down our national debt faster if we got our country back to work. That is why the one idea that should have been at the heart of this Queen’s Speech was a plan for jobs and full employment. That is how we rebuilt our country after the second world war and how we rebuilt public services in 1997. Those are the ideas that we needed in the Queen’s Speech. Instead, we have a Government who are out of ideas. The day is fast approaching when we will run them out of office.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
It is a great pleasure to conclude this debate on the Gracious Speech. I congratulate hon. Members on both sides of the House and will deal quickly with some of the points they made.
My hon. Friend the Member for Tamworth (Christopher Pincher) made a good speech in which he supported the changes in the Deregulation Bill. I agree with him that it will be excellent for small businesses. As my right hon. Friend the Secretary of State for Business, Innovation and Skills stressed in his opening remarks, our record on small business creation is very good.
I have known the hon. Member for Poplar and Limehouse (Jim Fitzpatrick) for some time and am glad to see him back in his place. He was a very good Minister and talks a lot of common sense. His comments about the overseas aid budget were well made and are well taken. I know that there is some disappointment that we have not legislated on that, but the Government’s record of reaching the 0.7% obligation and sticking to it is second to none. It has been said at the United Nations that we have given a lead to the rest of the world. I am pleased that he supported that. I recognise his concerns about youth unemployment and will return to them in a second.
My hon. Friend the Member for South Basildon and East Thurrock (Stephen Metcalfe) reminded us of the record deficit that Labour left us with and made the strong point that everything stems from that. Labour’s spending, borrowing and taxing left us with a bust economy. As a man who has set up and run his own small business—it is not so small now, but it is certainly a good business—he knows everything about small businesses.
I congratulate my hon. Friend the Member for Burnley (Gordon Birtwistle) on his comments about manufacturing industry. He has been very good at supporting manufacturing in Parliament and beyond. He made the very good point that the last Government ran manufacturing down. Under the tenure of my right hon. Friend the Secretary of State for Business, Innovation and Skills, we are doing our level best to rebalance the economy after manufacturing was destroyed by the Labour party.
The hon. Member for Preston (Mark Hendrick) said that international factors caused the 2008 slump and that he was pro our membership of the EU. I had assumed that everybody was pro that. It is all well and good for him to say that everything was somebody else’s problem before 2010 and that now everything is our problem, but that means that Labour, somehow, bears no responsibility for anything.
When I asked the shadow Secretary of State for Business, Innovation and Skills whether he would like to apologise for the economic shambles that Labour left, he did a delicate dance around the words, “I am sorry.” He can say that now if he wants to intervene. I know that sorry is a hard word, but perhaps he would like to lead for once for the Government and say—[Interruption.] They were in government. He should lead for them and say that he is sorry for the shambles and the mess that they left. I am ready to give way if he would like to say sorry for the mess that the Labour Government left.
Mr Umunna
I am happy to remind the Secretary of State that we bequeathed a situation in which unemployment was falling, growth was rising, and stability had set in. As I said earlier, we expressed regret for not better regulating the banking system, and I look forward to hearing his apology in that respect as well.
Mr Duncan Smith
I think it is shameful that an individual who represents a party that when in government ran up the biggest deficit and, as my right hon. Friend the Business Secretary said, created the biggest bust since the first world war, cannot genuinely say to the British people, “I am sorry. We got it wrong.” They did get it wrong and will bear the consequences of that all the way to, and including, the next election.
Mr Duncan Smith
I will finish a couple of quick points and then I will happily take more interventions.
The hon. Member for Washington and Sunderland West (Mrs Hodgson) made a point about unemployment in her area and the north-east in general. Employment and unemployment are big issues for us all, but I say to the hon. Lady, and to others, that since the election employment in every single area and region of the UK is up from where we found it. Employment is up—I will return to that point in a moment—and what the Government have done has helped that.
The hon. Member for Bristol East (Kerry McCarthy) complained about the absence of legislation on overseas aid, but I thought she might have been a little more generous about the fact that this Government are the first to make such a commitment— stay static, get to 0.7% of GDP, and implement it. It would be more helpful to say, “Yes, this is the right thing to do.” We can by all means debate whether we need to lock that commitment into legislation, but the reality is that we have locked it in because the Government have made it clear that we will not depart from it. We can debate the realities of the legislation, but we are spending more as a proportion of our gross domestic product than any other Government have previously done, and that has shown a lead to the rest of the world.
Let me turn to the Gracious Speech, which I feel has set the tone for a real change to society. I am proud that my Department will be initiating and taking through the Pensions Bill, which is the most important reform and change. It follows a series of reforms and changes that my hon. Friend the Minister of State, Department for Work and Pensions (Steve Webb) has taken through with me: automatic enrolment and ensuring that consultants will not be able to overcharge people for that; making the necessary changes; and, finally, the single tier pension, which I know is close to his heart. I take this opportunity publicly to congratulate my hon. Friend on the hard work he has put in. Without it, the Bill would not exist and it is a very good thing.
With the Immigration Bill we are picking up the pieces of Labour’s immigration strategy that saw net immigration of more than 2 million people between 1997 and 2010. New legislation will ensure we have the power to limit access to public services and housing, attracting people who will contribute, and deterring those who will not. As contributions from Government Members have made clear, we are already making progress towards that business-led recovery, and out of the mess left by the previous Government we are creating jobs and helping people get into work.
That brings me to a series of points about labour market stats. Let me run through a few of the realities, even though sometimes it does not help the Opposition. Since the last election, the number of people with a job is up by well over 750,000. There are 1.25 million more private sector jobs since the election, meaning that over the past year, six private sector jobs have been created for every job lost in the public sector. The number of people of working-age—
Mr Duncan Smith
I want to get through this point because I think it is important. The number of working-age people without a job is down—I stress that—by 350,000 since the 2010 election, driven by falling inactivity. Inactivity is now at its lowest level for two decades; the Labour party left us with a high rate of inactivity, and we have lowered it. There are now fewer people and fewer young people on jobseeker’s allowance than when Labour was in office. The number of claimants aged 18 has fallen for the 10th consecutive month. In April, we had the lowest number of new jobseeker’s claims for four years, alongside falling redundancies. Let me deal with Opposition Members’ suggestion that those people are moving not into real work, but into part-time work. That is not true. In fact, full-time employment is up more than 500,000 since 2010—it is up 64,000 on the last quarter alone.
My final point on that is that Opposition Members need to lift their heads up occasionally and look elsewhere. My right hon. Friend the Secretary of State for Business, Innovation and Skills compared our situation with that of France, which has 11% unemployment. That comparison bears out very well what the Government are doing. The UK’s overall employment rate is growing at almost double that of the US, and faster than the rate in any other G7 country. That is because the Government have taken the tough decisions to ensure that we have the flexibilities and that people can get back to work. The private sector is now creating jobs, whereas under the previous Government, it was shedding jobs.
Let me remind Labour Members that, for all their crocodile tears, long-term unemployment nearly doubled in two years under the previous Government—from 400,000 in 2008 to 800,000 in 2010. That was a failure on their part. They gerrymandered the figures on youth unemployment, but when we take the gerrymandering out, we find that youth unemployment is now lower than when the Labour Government left office.
The Work programme is a success. In fact, the Office for National Statistics wrote the other day to a number people correcting how they interpreted the figures. It made it very clear that what the right hon. Member for Birmingham, Hodge Hill and others have said about the statistics was completely wrong. The ONS has said that the reality is that the figure of 2% or 3% that he has been using, which is below the minimum performance level, is incorrect. It went on to say that the realistic and more relevant figure is that 8.6% of those referred to the Work programme are in sustained employment in the first six months. That was ahead of the previous position. By the way, I remind him that, unlike all his other programmes, people do not get paid unless they get people into sustained work. That is unlike what happened under the future jobs fund and the flexible new deal, when the Labour Government paid up ahead and wasted the money.
Mr Duncan Smith
The figure was there and we told the right hon. Gentleman, but he refused to listen—[Interruption.] Yes, it was. The ONS has pointed that out. The point I am making to him is that, when we produce the next figures, the Work programme will show that it is dramatically improving and getting more people back into work. [Interruption.] I will deal with that point, because the right hon. Gentleman believes he has an alternative. He spoke of introducing a new programme. His new programme is a real mess—it has changed on a number of points. When he first referred to it at, I believe, the last Labour party conference, he was offering those who had been unemployed for one year or more a guaranteed job for 12 months.
Mr Duncan Smith
Hang on a second. As I pointed out to the right hon. Gentleman at the time, that programme sounded rather familiar, so I looked up the programme the previous Government were considering—it was called “step up”. That programme, which was piloted in 20 areas and which bore an uncanny resemblance to his latest programme, gave paid employment to new deal failures who had been out of work for two years. It was never rolled out nationally because it was discredited, even within the Labour party, as not giving value for money. For those nearest to the labour market and those under 25, “step up” had a negative impact on work prospects and came in at a massive cost of £10,000.
After the programme he announced at the party conference was discredited, the right hon. Gentleman went away, fiddled with his plans and came back with a new plan. He will now mandate people to a job for six months, which is half the length of time he previously advertised. Even as recently as April, the Opposition seemed to be in a mess. There is complete confusion. The shadow Chancellor spoke of a guarantee of one year for young people and two years for adults.
Mr Duncan Smith
I will give way in one moment. The shadow Chancellor gets in a real mess, so I say simply to the right hon. Member for Birmingham, Hodge Hill that the Labour programme will cost huge sums of money. Like the future jobs fund, it will be good only for the public sector, and there will be a net cost to the Exchequer. He will compound all the failures they ever made. They left us with the biggest deficit. We are cutting the deficit by a third and borrowing is down by £38 billion. We have the fastest growing employment rate in the G7. This Queen’s Speech builds on our success, not on Labour’s failure.
Ordered, That the debate be now adjourned.—(Greg Hands.)
Debate to be resumed Monday 13 May.
Business Without Debate
Workers’ Rights
Robert Halfon (Harlow) (Con)
I am particularly grateful to Mr Speaker for granting me this debate, which relates to the closure of the Tesco distribution centre in Harlow. I appreciate the help I have received from Councillor Jackie Cross, Councillor Phil Weight, David Foreman from Harlow trades council and, in particular, Simon Vincent, the Union of Shop, Distributive and Allied Workers representative, who has been working day and night to champion Harlow depot workers’ rights. I will concentrate on three issues: equal pay, the treatment of disabled workers, and what the Government can do.
In 1919, war veteran Jack Cohen began to sell groceries on a small market stall in the east end. By 1929, he opened his first store in north London, and by 1979 his chain of stores had expanded so much that sales topped more than £1 billion. That success has continued. It now has more than 3,100 stores in the UK, with successful operations across Europe and Asia. It made a pre-tax profit last year of £3.5 billion. Mr Cohen’s market stall has gone on to spawn the global supermarket chain we all know as Tesco. Despite its size, however, Tesco always argues that it is a responsible employer. Its mission statement says:
“We treat people how we like to be treated.”
I have seen that demonstrated in my own constituency of Harlow, where Tesco employs 750 staff in its stores alone, and often makes valuable contributions to the local community. Only recently, it generously donated equipment to four schools in Harlow. Indeed, I regularly shop at Tesco myself, and I have to say that the staff are second to none. I have absolutely no grievance with Tesco workers; this is about decisions made by senior people in relation to the workers in Harlow and the distribution centre.
It came as a shock to the whole of Harlow when Tesco announced that it would be closing its depot, affecting approximately 800 workers. This has been exacerbated by how Tesco has treated its staff, in particularly in three areas: the notice staff were given, the reduced pay and conditions offered to those able to transfer to an alternative site, and its treatment of disabled workers.
When the new Dagenham site was announced, staff in Harlow were assured that the extra distribution site was in addition to the depot in Harlow, to allow further expansion into London, rather than a replacement. The hon. Member for Dagenham and Rainham (Jon Cruddas) also thought that that was the case. Representatives from USDAW were continually reassured, at director level, by Tesco that the Harlow depot would stay open, and those assurances were passed on to workers. That continued to be the case just a week before they announced that the Harlow site would be closed. Naturally, workers feel aggrieved that Tesco was not upfront about its intentions, and they feel that it was making plans to close the site behind the scenes. Harlow workers are particularly upset that their hard work has made the Harlow depot one of the best performing sites in the country. Tesco has chosen to reward that hard work by closing the site and making them redundant.
I have raised the issue in letters to the chief executive and UK distribution director of Tesco, but I am disappointed that their response does not appear to address it. Tesco’s “Values & Promises” state that it has created a “great place to work” that is “based on trust”, and that customers receive great service by “motivated staff”. Tesco’s treatment of its workers in Harlow does not do justice to that statement.
The dedicated Tesco staff in Harlow, including roughly 100 who have worked there for the whole 24 years that the distribution centre has been open, now feel betrayed, no longer trust the Tesco directors and feel demotivated by their treatment. I recognise the provision Tesco has made to offer alternative employment to some of the workers from the Harlow site. In a letter to me on the 19 April, Tesco restated that, saying that it remains
“committed to keeping as many of our colleagues in Harlow in work as possible”.
That is the right thing to do, but there remains a serious number of problems. The offer only applies to workers who are employed permanently by Tesco—504 are affected. Tesco’s commitment to allow colleagues to transfer to Dagenham and to help them to find other opportunities within the company does not apply to agency workers or support workers such as catering teams. In an e-mail sent to me by Tesco on 21 March this year, I was told that
“it is not possible for the”
agency workers
“to apply as internal candidates for roles. However, the personnel manager on site is offering them support and they will be able to access the training offered by Seetec and Job Centre Plus”.
This brings the total number of people affected by the closure of the Harlow site to more than 800.
Tesco’s offer to employees regarding payment if they transfer to the Dagenham site is unjust and, I would argue, unethical, and unacceptable. This is an issue about which I have been in constant contact with USDAW, Tesco management and workers. Despite having to commute to Dagenham each day, and workers having spent years loyally working for Tesco, their pay will be slashed. Tesco disputes that, stating that it has a pay protection policy, which means that colleagues transferring from Harlow to Dagenham will have their pay protected for the first year that they are in their new role. Workers will then be paid 25% less each year over the next four years until they reach the base rate of pay for Dagenham. In a letter to me on 30 April, Tesco tells me that this corporate pay protection policy has been
“in place, agreed and developed with USDAW, for 15 years”.
Harlow USDAW reps disagree. They point out that that will leave Tesco workers significantly out of pocket, especially as contractual overtime is not included.
For example, one worker will lose nearly £10,000. His current salary is £29,500 a year. That will be protected in year one but, because Tesco does not include contractual overtime, he will actually lose £3,500. His pay will then be cut by 25% in year two and continue to decrease over the next two years until it reaches the base rate in Dagenham of £20,844. A drop in pay of such a scale for doing the same work is completely immoral, and we must not forget the extra travel costs. How is it right that local Harlow residents are offered the same jobs with the same hours and are forced to take a substantial wage cut that may leave many with difficulties paying their mortgage, or putting food on the table for their families?
The Tesco depot workers feel aggrieved that managers from Harlow will be transferred and allowed to take their pay and conditions with them. Of course, I have no problem with managers transferring with existing pay and conditions. That is the right thing to do. But if it is right for the managers, it should be right for the workers too. Is it fair that Tesco is following a divisive policy of ignoring the hard work and years of service of their workers? Tesco says that its staff work as a team. Its actions suggest otherwise.
Tesco claims that
“pay rates at each distribution centre are benchmarked against the local market”.
Although I understand that, USDAW states that the Tesco Thurrock distribution site, three miles from Dagenham, pays more than £10 an hour for warehouse staff, while the Dagenham rate of pay is £8.72, which is kept low due to the use of agency workers. That is unfair for both agency staff and permanent Tesco workers. Employees have told me that when Livingston staff transferred to a new depot, Tesco allowed them to retain their pay. I simply ask Tesco to allow its Harlow staff to do the same.
I have been shocked at Tesco’s treatment of its disabled workers. Let us take John Waters, for example. John is 60 years old and suffers from epilepsy and arthritis. He has worked hard for Tesco over the last 24 years. Tesco has rightly made adjustments at the Harlow depot to allow him to complete a day’s work. However, if John is to transfer to Dagenham, he will not be allowed to take those adjustments with him. Or let us take Richard Waite, who has 17 years’ service with Tesco. He unfortunately suffers from tuberous sclerosis. In Harlow, Tesco has recognised the difficulties he faces by lowering his performance target on its performance indicator.
Worryingly, one disabled employee I have spoken to—he does not want to give his name—who has a degenerative back condition has allegedly been threatened by Tesco and told not to continue his grievance with me about taking his adjustments with him to Dagenham. In a recent meeting, he was told by a Tesco manager that if he continued talking to his MP about his case, he would be made redundant, instead of being allowed to transfer to Dagenham. That is unacceptable. It is absolutely outrageous that my constituent should come to talk to me about the problems that staff face and then be threatened by Tesco managers that if he talks to his MP, he might be made redundant. That is not the way that a company such as Tesco, with its rich history, should be behaving.
It appears that Tesco is not allowing disabled workers who have received adjustments in Harlow to have them transferred to Dagenham. These are often people who have given years of service to Tesco. They will be expected to hit new performance targets—on a performance indicator of 100—that are often significantly higher than those they have to meet in Harlow, which has a performance indicator of 85, with many disabled people having reduced requirements. The system will be tested during a compulsory eight-week trial period that is compulsory only for workers who are disabled. It is absolutely unbelievable that this is going on. USDAW estimates that around 30 members of staff from Harlow will be affected. By not being allowed to take their adjustments with them, these workers—people who have worked hard for Tesco for a number of years—will be unable to fulfil a new role in Dagenham and will be left unemployed.
Clearly this is a concerning time for those affected. Although I have raised these concerns with Tesco on a number of occasions, I have received nothing that reassures me. It is only right that Tesco acknowledges the anxieties that those workers are feeling—they are deeply worried that they are being forced out of a job—and takes steps to reassure them. I ask Tesco to honour its role as a responsible employer and allow workers to transfer to Dagenham with their current adjustments.
There is also a problem with agency workers. In the Harlow depot there are two types of agency workers. Some are contractors who deal with things such as catering. The other agency workers are based in the warehouse in Tesco, doing the same jobs as permanent workers. Tesco says it cannot allow either type of agency worker to transfer to another Tesco site. However, there is an issue about the agency workers who work in the warehouse doing the same work as permanent Tesco employees. There are around 140 such workers, many from eastern Europe, who also work extremely long hours, despite being paid less for doing exactly the same work as permanent Tesco colleagues, many of whom are long-standing Harlow residents. Tesco manages to do that by employing the Swedish derogation of the agency workers regulations. This allows an agency to employ staff on a minimum contract, which means that they continue to be paid between assignments, but also that they waive their rights to equal pay. It is also worth noting the impact that this has on the local economy. In today’s difficult economic climate, is it right that an employer such as Tesco should replace its full-time staff, often with workers from overseas, and use the Swedish derogation to get around offering them equal pay? I believe that Tesco is wrong to do that, as it leads to discrimination against giving jobs to local people.
I call on the Government today to look into the Swedish derogation and its effect on employment in Britain as well as its effect on the particular workers concerned. This has to be an issue of fairness. It cannot be right that companies get away with paying agency workers much less for doing exactly the same job, as well as discouraging firms from employing full-time local staff on permanent contracts.
It is wrong that Tesco depot employees should be facing such anxiety. I believe that the Government should send a strong message to Tesco that its treatment of Harlow workers is unacceptable and not in the tradition of the company’s values. In some areas, Tesco receives grants from the British Government—for example, in Bolsover, where Tesco received money to set up its distribution factory, which it is now closing, too. Any type of supportive grant should be stopped unless Tesco can guarantee fair treatment for its workers.
I mentioned that Tesco’s philosophy states on its values statement that it will
“treat people how we like to be treated”.
Let me repeat that—to
“treat people how we like to be treated”.
As MP for Harlow, I, alongside many local residents, feel that Tesco is not living up to those values. We all understand the need for economic efficiency, particularly in the light of Tesco’s commercial failure in the American market, but it is wrong that hard-working Harlow workers who have given years of their lives in service to a multi-billion pound company are paying for Tesco’s corporate mistakes. These are the people who made the Harlow depot one of the most productive distribution centres in England, yet they are being rewarded by either losing their jobs or having their wages slashed.
Some people tell me that I am a Conservative so I should support Tesco’s corporate position, but it is precisely because I am a Conservative that I am opposed to how Tesco is treating its workers. Conservatism is never meant to be about big corporations running roughshod over ordinary people. I should say that I am also a proud trade unionist, and I thank God for the work of the Union of Shop, Distributive and Allied Workers. Without USDAW, the Tesco workers would have suffered even more.
Although Tesco founder Jack Cohen famously said:
“Pile it high, sell it cheap”,
I doubt whether he would ever have meant to sell the workers cheap. I ask Tesco to live by its philosophy of treating people how we like to be treated by minimising the number of staff it makes redundant, by allowing workers to transfer on the same pay and conditions as they receive in Harlow, and by allowing disabled workers to take with them any pre-existing adjustments they already receive. That would be a good decision for Tesco, allowing the company to keep motivated and dedicated staff, and good news for their staff and their families who are currently under immense pressure. The people of Harlow have respected Tesco; all I am asking is that Tesco treat the people of Harlow with the same respect. It has deeply damaged our community and needs to repair it as soon as possible.
The Secretary of State for Business, Innovation and Skills (Vince Cable)
I congratulate the hon. Member for Harlow (Robert Halfon) on securing this Adjournment debate and on the very passionate and lucid way in which he set out his case. He has been an assiduous constituency MP when faced with a major closure and a lot of personal hurt. I very much admired how he presented his case and how he brought together the local community—the trade unions and the council as well as the business. He raises an important issue about a big international corporate, which in my role as Business Secretary I support in many of its overseas operations. Tesco is a big operation, making £300 million in profit, as the hon. Gentleman described. He has pointed to a big gulf between the nationally declared set of objectives and principles, which I am sure are sincerely intended, and the way in which the local management have applied them in an insensitive way and with poor communication.
What I found most appalling in what the hon. Gentleman said were the threats to individual employees. I sincerely hope that the transcript of this debate will be read by people higher up the company, who will then better understand what has been happening in Harlow. I hope that he will understand that, for the most part, this is an individual commercial decision, in which I cannot interfere as a legal process is involved, but he has left me with some basic issues of principle about the interpretation of the agency workers legislation. I will ask my officials to go away and reflect on whether any wider lessons are to be learned.
Let me take the hon. Gentleman’s points in turn. The loss of 800 jobs has, of course, been a big shock to his community. That is a lot of jobs, and difficult issues related to redundancy are involved. Those issues are not unique to this case, but it is a big closure, and I understand why he is concerned about it.
UK retail is a very competitive business. All retailers are constantly innovating, which, ultimately, is good for consumers. The current climate has required UK retailers to think again about the services that they offer, which frequently leads them to re-engineer their businesses and combine all the various retail channels so that they offer the consumer a seamless, integrated, flexible experience. As we have seen in the case of several of the leading retailers, that may involve the upgrading and relocation of distribution centres. I think that the hon. Gentleman indicated that there were other examples as well.
It does not always follow that there are staff redundancies. In many instances, employers are able to offer workers alternative jobs or the opportunity to relocate. The hon. Gentleman mentioned correspondence from which it appears that Tesco tried to relocate some jobs, although not in a way that he found very satisfactory. For some, however, redundancies may end up being the only option. Employers will have, or should have, made reasonable efforts to find and offer suitable alternative employment. In such cases, employees have a wide range of rights, including the right to be consulted about redundancies and the right to a minimum notice period, and ultimately they are protected under law against unfair dismissal.
While it is clearly desirable for employers to give their workers as much notice as possible of changes that might affect their employment, that cannot always be done. However—I am sure that the hon. Gentleman is aware of this, as he is clearly in close contact with USDAW—employers are under a statutory obligation to provide minimum periods of notice and to consult employees before they can be made redundant. I understand that a formal consultation is taking place in line with the statutory obligations, following which Tesco intends to serve notice on affected staff.
That brings me to the issue of the terms on which the contracts could be renegotiated, and the issue of pay. It is always open to either party to seek renegotiation of the terms of an employment contract, and there will be a variety of reasons for that to be done. I think it was acknowledged in the Queen’s Speech debate that has just taken place that in many cases workers have accepted lower pay as the price of keeping jobs. That is often what we mean by the rather bland word “flexibility”. The hon. Gentleman clearly feels that it has been unfair in this case, but it has frequently been a necessary part of adjustment to local labour market conditions.
We have been in touch with Tesco about this case. It has told my officials that its pay rates vary between distribution sites, and that—it says that this action was exceptional—it has offered to protect the pay of staff transferring to Dagenham at 100% for a year before implementing its existing company pay protection policy. I understand from what the hon. Gentleman said earlier that that does not cover future years or overtime, and that there are other exclusions.
An employer may not change the terms of any employment without the employee’s agreement. In most cases, responsible employers are already implementing good practice and complying with the law, but as the hon. Gentleman will know, the Government have developed a range of measures to resolve workplace issues as soon as possible, and to enable early conciliation and mediation to be sought. As a last resort, an employee can seek legal redress through the courts or by presenting a claim to an employment tribunal.
The hon. Gentleman raised a series of issues relating to inequalities of treatment. I noted what he said about the apparent favouritism given to management as opposed to less senior staff, and in particular, his point about agency workers who use the “pay between assignments” model which is often described as the Swedish derogation. The issues are complex because different categories are involved, but I shall try to deal with them in broad terms.
As the hon. Gentleman mentioned, workers in this category do not qualify for equal pay under the agency workers regulations. Instead they become permanent employees of a temping agency. Importantly, they are entitled to be paid between assignments at the rate of at least 50% of the pay they have received, usually in the prior 12 weeks of work. Pay between assignment contracts gives agency workers more certainty about their pay when an assignment ends. Just like other types of contract, such as part-time or fixed-term, they will not be suitable for all people. What is important is that individuals and businesses have a choice about the type of contracts available to them so we maximise the opportunities for individuals to find work suitable for their particular situation. He has, however, raised in trenchant terms the failure of this particular model, and we will look at the implications of that.
Turning to the issue of the disabled, the hon. Gentleman gave some moving and worrying accounts of the way in which individuals had been dealt with at the Harlow plant, and the reference to the threats was particularly troubling. Let me address the broad issue of disabled workers, however. Provisions to address disability discrimination are set out in the Equality Act 2010. Among other things, the Act aims to prevent discrimination against disabled people in employment, and in this particular case certain legal aspects will need to be pursued. One of the ways the Act aims to prevent discrimination is by requiring employers to make reasonable adjustments where a disabled person is put at a substantial disadvantage in comparison with non-disabled persons. The Act seeks to achieve a balance between the rights of disabled people and the interests of employers, and employers are therefore only required to make adjustments that are reasonable. Factors such as the cost and practicability of making an adjustment have to be taken into account. I trust that Tesco has taken the necessary steps to assist disabled employees to progress and remain within its organisation. Ultimately, it would be for an employment tribunal to decide whether an adjustment would be reasonable.
The Act also requires employers to ensure that any redundancy criteria and procedures do not indirectly discriminate against disabled employees. They must consider whether any procedures they adopt which apply to all employees might have a particularly adverse effect on disabled employees in general, and would place a disabled employee at a particular disadvantage. Again, I am sure Tesco has taken the necessary precautions, but an individual can, of course, seek the support of ACAS in resolving a matter or seek redress through a tribunal.
My officials have been in contact with Tesco over the closure of the Harlow site. The Minister of State for business and enterprise, my right hon. Friend the Member for Sevenoaks (Michael Fallon), wrote to the hon. Gentleman in March and told him that Tesco had accepted an offer of support through the rapid response service. This service is available to employers and employees facing redundancy, and draws together the various partner agencies. Since then, working with the local partner organisation and Harlow council, the response service has begun delivering presentations to all staff facing redundancy. Presentations took place this week, and a further session is scheduled for next week. Follow-up support in the form of a jobs fair will also be arranged at the end of May.
As I have said, a formal employee consultation is currently under way which is due to finish at the end of this month. It is, of course, important that this consultation is allowed to run its course without interference from the Government, and I am sure the hon. Gentleman will understand that I cannot interfere with that process. He has left me with some homework to do, however, in pursuing the particular issues around these laws as applied to agency workers, and I am sure he will acquaint the senior management of Tesco with what has been said in this debate, which reflects very badly on its national reputation. I am also sure that by achieving this Adjournment debate he will have taken a big step forward in helping these workers.
Question put and agreed to.