The Economy and Living Standards

Andrew Selous Excerpts

Thursday 12th June 2014 Commons Chamber

[Ed Balls]

I will give way in a moment, when I have established my argument. [Interruption.] Hon. Members should not be complacent; they should listen to this.

People have good reason to be sceptical. This stagnation in real wage growth is not just a problem of the past few years. It started in Britain over a decade ago as rapid technological change and global trade pressures put the squeeze on middle and low income households. The UK is not alone. That pattern is reflected across the developed world. Low wage and unskilled employment has grown, but research shows that traditionally middle-income, middle-class jobs in manufacturing and services have fallen as a share of total employment in all OECD countries. As the recent publicity around Google’s driverless car shows, labour-substituting technology is likely, if anything, to accelerate.

So the challenge for this Queen’s Speech and for this political generation is to show that, in the face of globalisation and technological change, we can secure rising prosperity that working people believe they can share in. Of course we have to respond to their concerns about immigration and reform in Europe, but the challenge is to get more better paid jobs for people who feel they have been left behind, and to bring in new investment, new industries and new jobs which could replace those in traditional areas where jobs have gone.

Those of us on the Opposition Benches will, with an open but critical mind, study the proposals in the Queen’s Speech on fracking, annuities, and pensions savings vehicles, but the real test against which this Queen’s Speech and the manifestos of all political parties will be judged over the next year is whether on jobs, skills, innovation and reform this generation can rise to the challenge and build an economy that works for all and not just a few.

[Andrew Selous (South West Bedfordshire) (Con)]

In his quest to re-engage the electorate who have become disenchanted, I am sure the right hon. Gentleman will believe that transparency and plain speaking are important. In that spirit, will he let us know clearly what Labour’s views are on increases in national insurance for employers?

[Ed Balls]

I am happy to do so. I know that my right hon. Friend the Member for Birkenhead (Mr Field), whom I respect a great deal, has a proposal, but that is not my proposal and it is not Labour’s proposal at all. We know that there are pressures in the national health service and that £3 billion has been wasted on an NHS reorganisation, but we also know that there is a cost of living crisis. People are paying hundreds of pounds more a year because of the Government’s VAT rise, and what we want to do is cut taxes for working people.

--- Later in debate ---

[Andrew Selous (South West Bedfordshire) (Con)]

There seems to be a degree of amnesia among Opposition Members about the scale of the great recession presided over by the last Government and which this Government are having to deal with. That recession cost the British economy £112 billion, and it cost 750,000 people their job. On Labour’s watch, youth unemployment increased by nearly half, long-term unemployment almost doubled in just two years, 5 million people were left on out-of-work benefits, and in one in five households no one was working. We have made improvements, although of course we want to go further, but it is worth remembering the scale of the difficulties this Government have had to deal with in the past four years.

Government Members believe in high-skill, high-value jobs. That is why we are so passionate about our apprenticeship programme and about the university technical colleges we are introducing. It is why we are so passionate about our young people gaining the best skills and about improving school standards. That is the way to get pay increases, to defeat poverty and to deal with the cost of living issues facing our constituents.

In my constituency, I see employers rising to the challenge. I see B/E Aerospace in Leighton Buzzard now employing some 540 people, Honeytop Speciality Foods developing a new factory, and Care Group, a company from India, setting up a new factory on the Woodside estate in Dunstable. In India, that business has taken on a significant number of disabled people, and its delightful chief executive plans to do the same in this country—let no one say that capitalism cannot have a human face and a heart.

The jobs figures in my constituency show that there has been a 40% fall in the overall claimant count for jobseeker’s allowance in the past year and a fall in unemployment of 54% for 18 to 24-year-olds, 35% for those over 50, and 39% for those who have been out of work for more than 12 months. Of course, we have further to go—we want everyone to have a job—but that is not bad progress, given the scale of the challenges with which we were left.

We have a Prime Minister who has said at the Dispatch Box that he would like to see a minimum wage of £7 an hour. More companies are paying the living wage. I remind Opposition Members that it took a Conservative Mayor of London to introduce a living wage in London, and a Conservative Secretary of State for Work and Pensions to make sure the cleaners in the Department got the living wage. That did not happen under the previous Government.

What would a socialist Government look like? We do not have to imagine it, because we can just look across the channel, where we will see higher rates of unemployment, much lower rates of business start-up and a whole host of French entrepreneurs, such as Mr Guillaume Santacruz, crossing the channel to set up business here. He has said:

“Where will I have the bigger opportunity in Europe?”

Of the UK, he has said:

“It’s more dynamic and international, business funding is easier to get, and it’s a better base if you want to expand.”

He has left socialist France to come to a majority-Conservative-led Britain to expand his business.

[Oliver Colvile]

Does my hon. Friend agree that cutting corporation tax makes it much more attractive for business and industry to come here, and that that is a key thing we should be looking to do, to make sure we have lower taxes?

[Andrew Selous]

My hon. Friend is absolutely right. We sometimes miss the point that what we should concentrate on is not the tax rate, but the amount of tax the Exchequer gains. Economic history has shown over a long period that lower rates of tax tend to generate more tax revenue, as they inspire entrepreneurs to create more businesses and expand them.

I am proud that we have a Government who are rising to the infrastructure challenge facing this country. We have heard a lot about infrastructure. My area has waited for a crucial bypass for 60, 70 or even 80 years. I have watched the town in which my constituency office is located, Dunstable, and the neighbouring town of Houghton Regis being throttled by excessive traffic congestion for many years. It has had a dreadful impact on businesses there. Even though permission was given for the road in 2003, not a shovel hit the ground during the whole 13 years under the previous Labour Government. I can tell hon. Members that diggers are now on the ground in my constituency and the road is going to get built. There will be relief for the people of Dunstable and Houghton Regis, who waited a long 13 years under the previous Government for nothing at all to happen.

We have the courage to make sure that people can get on trains in the morning and do not arrive at platforms that are already full. We have not built a new railway line since the Victorian era, but it is this Government who have the courage to rise to the infrastructure challenge.

We have also shown courage on pensions. Have not Opposition Members received letters from their constituents telling them how appalling the annuity market has been and how the projections of their future pensions were on the floor, cut by more than half? Were they not concerned by that? We on the Government Benches were, and, as the Chancellor said earlier, many of us came in Friday after Friday to try to get private Members’ Bills through to do something about it. Of course, Labour Members did not trust our constituents to spend their own money wisely. Oh no, they did not want to do that—they wanted to control it. I am proud to be serving in a Government who trust people with their own money. As the Chancellor has said, they have earned it, they have saved it and they have the right to have control over it. That is exactly what we should be doing.

Those are all very good things. Of course, there is further to go. The way to deal with the cost of living and help people pay their bills is more jobs, more better paid and highly skilled jobs and a high value-added economy. We are going in the right direction. We are creating more jobs, and Government Members want them to be well paid and highly skilled, and that is what we will continue to try to achieve.