Jobs and Business

Debate between Liam Byrne and Lord Beamish

Friday 10th May 2013 Commons Chamber

[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.

Finance Bill

Debate between Liam Byrne and Lord Beamish

Tuesday 6th July 2010 Commons Chamber

[Mr Byrne]

I am happy to withdraw comments published in the Daily Mail.

The point that I was about to make was that the business community, having had a chance to reflect on the Budget, has come to some conclusions, and I was surprised not to hear about them in the Chief Secretary’s remarks. A fortnight ago, the Chancellor told us that the Budget was

“a balanced package that will send the signal that Britain is open for business.”—[Official Report, 22 June 2010; Vol. 512, c. 176.]

In the weeks since, it is fair to say that business has not been hanging out the bunting. The stock market has now recorded its worst quarterly fall for eight years, as it fell to its lowest point for 10 months. Goldman Sachs has warned that tighter fiscal policy now

“would make it hard to deliver improving growth for all, or possibly any”

country. The chief economist of the British Chambers of Commerce has said that the scale and severity of the Budget

“inevitably increases the danger of an economic setback”.

The Chartered Institute for Purchasing and Supply has said that its managers have

“voiced grave concerns that budget cuts and VAT will tip the scales and amplify the likelihood of the UK slipping back into recession”.

The confidence of Britain’s finance directors has fallen to a 12-month low—just one in four is optimistic, and two thirds say that tighter fiscal policy will hurt their business. Yesterday, the confidence of Britain’s supply chain had its largest monthly fall since 1997. It is for those reasons that a wise man once said that

“the next government has to recognise the fragility of the economy and not take action which would precipitate a double dip recession leading to more unemployment and even bigger budget deficits.”

That was, of course, the Business Secretary in April—once a prophet and now a lost cause.

[Mr Kevan Jones]

Does my right hon. Friend agree that one of the important sectors in the economy is the service sector? Has he seen the Markit/CIPS purchasing manager index this month, which has recorded its largest drop in confidence in the last 14 years?

[Mr Byrne]

That news was somehow absent from the Chief Secretary’s remarks. He and the Chancellor may now think that everything is fine. I know whose verdict I would rely on, and it is not the Chancellor’s.

I do not want to depress the House unduly and I have a little bit of good news—

--- Later in debate ---

[Mr Byrne]

In preparation for this debate, the hon. Gentleman will have compared those employment forecasts with those in the March Budget and will have noticed, like the rest of the world, that they are now 100,000 lower.

[Mr Kevan Jones]

Does my right hon. Friend agree that the Chartered Institute of Personnel and Development not only made predictions on unemployment, but also said that the Government’s targets for job creation were not achievable? Its chief economist, John Philpott said:

“There is not a hope in hell’s chance of this happening.”

[Mr Byrne]

My hon. Friend is absolutely right. Very few people in the country believe the Budget’s forecasts for employment growth, which is not surprising given how hard the Budget is hitting growth.

I want to move on from the economics of the Bill, and the possibility that it may work, to a wider question that I know we will want to debate this afternoon.