King’s Speech (4th Day)

Baroness O'Grady of Upper Holloway Excerpts

Monday 22nd July 2024 Lords Chamber

[Baroness O'Grady of Upper Holloway (Lab)]

My Lords, I declare my interest as a former leader of the TUC. I congratulate the noble Lord, Lord Petitgas, on his maiden speech, and my noble friend Lord Vallance on an excellent speech setting out the Government’s programme.

I want to remind the House what is at stake. Around the world, one of the biggest threats to democracy is the rise of populism, or, more precisely, hard-right nationalism, which history teaches us can be a gateway drug to something even worse. While debate on populism is often dominated by immigration policy, tackling the economic conditions that give rise to it warrants urgent attention. The common patterns are clear and have been documented by researchers at the London School of Economics and others: high inequality, austerity and insecurity is the toxic combination that fuels the rise of a toxic politics.

According to a recent Joseph Rowntree Foundation report, wealth inequality is rocketing and outstrips income inequality. In the UK, the top 10% now owns a staggering 57% of total wealth. The impact of austerity on the public realm has been devastating. Public services matter, not just to keep the workforce healthy, educated and on the move, but for everyone’s security through life’s ups and downs, for our sense of a shared identity, and for our capacity to build safe and welcoming communities.

Another key indicator of countries at risk of populism is sustained pressure on living standards and the deregulation of labour markets. In the UK, that has led to mass insecurity at work. People look for scapegoats when they feel aggrieved and humiliated, and too many have lost faith in the ability of the political class to make their lives better. Labour has set out an economic programme to get the country back on its feet that should help to stem that tide. My hope is that, just as after the Second World War, we can build a broad consensus for the change that Labour is committed to delivering, with investment and strategic public ownership through Great British Energy, British Rail and a national wealth fund that will smooth the tough but necessary transition to a greener economy.

An active industrial strategy, boosting skills, housing and infrastructure, is vital to bring good jobs and new hope to the parts of the country that need it most. Whether growth will come fast enough to meet the scale of the challenge is a fair question. My own view is that we should choose to raise additional resources by shifting the burden of taxation from work to wealth. Tax experts calculate that taxing capital gains at the same rate as income would net the Treasury £12 billion a year, while restricting tax relief on pensions to the basic rate of income tax would raise a further £14.5 billion.

Labour market reform is necessary too. The P&O scandal and recent union-busting at Amazon are emblematic of working lives that leave too many people feeling frustrated, angry and powerless. Given the chance, this is the emotion that hard-right nationalist parties will seek to exploit. TUC-commissioned polls show that there is strong public support for the measures in Labour’s new deal, including from a majority of Conservative and Reform party voters. All the evidence shows that fair treatment, a stronger workers’ voice and good industrial relations can boost productivity and build a stronger society.

I am proud that this Labour Government understand, head and heart, the importance of the new deal to make work pay and restore dignity at work, and how in turn that can help to keep hard-right nationalism at bay. I hope that noble Lords across the House will recognise just what is at stake—not just fair growth and common decency but the democratic values that we hold dear.