Cost of Living

Debate between Albert Owen and Dan Poulter

Wednesday 16th May 2012 Commons Chamber

[Albert Owen]

I had many debates with my right hon. Friend when he was in office. I did not shirk that responsibility. He felt that increasing VAT was the best thing to do but was outvoted in Cabinet. It was not a Government decision. He wanted to increase VAT, but he was wrong. He also wanted to increase vehicle excise duty, but I argued and voted against that measure because it, too, was wrong. On those issues, he was wrong. He did many brave things. For instance, he introduced the 50p rate at the end of our time in office. [Laughter.] Government Members laugh. He did it at the end, but he did it because we were in a crisis and needed extra revenue. That was supported by a lot of people at that time, yet this Government have managed to reduce the taxation for the richest while putting VAT on businesses and as a result a tax on jobs.

[Dr Poulter]

Does the hon. Gentleman accept that the biggest tax on jobs would be if this country tried to spend its way out of debt, which is exactly what Labour would have us try to do?

[Albert Owen]

I understand what has come from the Government Whips—I have seen copies of it, and it says that all the time; indeed, it has probably got into the psyche. However, let us look at proper economics. When we have low interest rates—and we have had historically low interest rates—it is during a recession. That is what happens; it is a natural phenomenon. Since January 2009, interest rates have been at an historic low. That did not start when this Government came in; it started in January 2009. Gilts and bonds are low as well, which gives us a golden opportunity to borrow at lower rates. That is how we got out of recessions in the past across the world. Pure austerity measures have never worked. People should look at economic history. Austerity is part of the package, but unless we get growth and jobs, we will not get out of the double-dip recession we are in.

We sometimes get accused of being deficit deniers. I am neither a deficit denier nor a deficit extremist. It is extremism that gets us into trouble, and I have to say that there are many people in this House who are recession deniers—they are denying the fact that we are going down. Many people are paying the price, and that is why the cost of living is so important.

Let me move on to energy and electricity market reform. I support reform in principle, although we do not know the details, so it would be a little naive to support it fully until it is implemented. I am a member of the Select Committee on Energy and Climate Change, and we have looked at the principle of electricity market reform. We produced a report highlighting some of our concerns. There has been a White Paper for a long time, but we are only going to get pre-legislative scrutiny. We need to know what is in the Bill in order to deal with the issue properly and provide the certainty needed to invest in our infrastructure.

The Government have missed an opportunity in this Queen’s Speech. On one side, yes, there should be incentives for investment—that is very important—but there is very little protection for consumers. I have long argued in this House that Ofgem, the energy regulator, should have more teeth. It should be standing up. It is a damned cheek for the new Energy Secretary—whom I welcome to his place today—to try to claim some credit for the fact that energy companies are providing greater transparency in their bills. It is campaigns by the likes of Which? and Consumer Focus and so on that have highlighted the problems and embarrassed the energy companies, while the Government stood by and watched. Ofgem should have greater teeth. I make a plea to the Government to take that on board, because energy costs are hurting people, in peripheral areas in particular. Many are off the gas mains and off the grid. I want Ofgem, the regulator, to have the same powers to protect customers who are not on the gas mains as it enjoys in protecting those who are on the gas mains.

Finally, let me move on to the subject of transport. I welcome the concept of High Speed 2, but I want to see it up and running. The Transport Secretary is quoted as saying, “Well, we’re preparing for legislation.” The legislation is vital, so can she give some indication of when it is likely to be introduced? We have done the consultation and the matter has been agreed by this House, although it is not popular with certain sections.