Queen’s Speech

Baroness Royall of Blaisdon Excerpts

Wednesday 16th May 2012 Lords Chamber

Moved by

[Baroness Royall of Blaisdon]

As an amendment to the motion for a Humble Address, at the end of the Address to insert, “but regret the failure of Your Majesty’s Government properly to address economic recovery, especially promoting growth and jobs, and the issues of general living standards and the one million young people out of work, and deplore the incoherence and the lack of vision of the measures proposed by Your Majesty’s Government for the coming Session of Parliament”.

[Baroness Royall of Blaisdon]

My Lords, I move the Opposition’s amendment to the Motion on the gracious Speech. We on these Benches do not do so lightly, and we acknowledge that it is a serious step. To do so is not unprecedented, although we recognise that it is unusual. In fact, the last time it was done was back in 1999, in an amendment against the overall thrust of the policy of the then-Labour Government. The mover of that amendment was none other than the noble Lord, Lord Strathclyde, so we are completely confident that the government Benches will strongly support our right to argue for this amendment today.

Our reason for tabling the amendment is straightforward. We believe that the Government are putting the wrong priorities first because the Government are putting the wrong people first: tax cuts for the rich, but hard-working families being asked to pay more; nurses being laid off, but an expensive and wasteful NHS reorganisation; and police numbers being cut back—indeed, as the police themselves say, 20% cuts are criminal—but nothing being done to tackle crime. There is no legislation, as was promised, on ASBOs. Rather than concentrating on Lords reform, the Government should be concentrating on jobs, on growth, on living standards and on youth unemployment.

Let us consider the economic state of the nation. The economy is in a double-dip recession with no end in sight. Indeed, the latest dismal figures for the building industry suggest that the estimate of national GDP growth of minus 0.2% in the first quarter was overly optimistic, an underestimate of the true scale of economic decline. The UK, as a direct result of this Government’s policies, is set to endure a longer depression than the country suffered in the 1930s. Just today, the Bank of England has cut its growth forecast for this year from 1.2 per cent to 0.8 per cent, and warned that the UK would not be unscathed by the storm which is still convulsing the eurozone. That is precisely why we should be part of, and influencing, the debate rather than standing in isolation. But it is still this Government, not events beyond our shores, who are responsible for the double-dip recession in which we are mired.

What is there in the Queen’s Speech that will do anything to kick-start the economy back into growth? Of course there will be Bills on competition policy and on banking, and on a green investment bank, as the noble Baroness, Lady Wilcox, said, but I would be grateful if in her reply, the Minister would confirm that the banking Bill is not going to be a carryover Bill, as we had understood.

These may be worthwhile measures. We certainly hope that they will be, but any effect that they have on economic performance will be in the medium to long term. They will make no discernible impact over the next few, crucial, years. The noble Baroness mentioned a Bill to reduce burdens on business by repealing unnecessary legislation. Well, we are all against “unnecessary legislation”, though it seems to me that we have encountered a lot of seriously unnecessary legislation recently—for example, on the National Health Service, something that produced a plethora of quangos. But I leave the verdict on these proposals to none other than the leader writer of that organ of radical thought, the Daily Mail:

“The promised bonfire of the quangos and red tape has been pathetic, with last week’s Queen’s Speech paying only lip service to deregulation”.

I do not think that the Government really understand. They do not seem to understand that it is their policies that have mired the economy in recession and that, without a change of course, without active intervention now, the prospects for a return even to the levels of output seen in 2008 are bleak. The coalition appears to be in recession denial. There is no hope and the people of our country are desperate for vision, hope and opportunity. But the Government lack any vision of how Britain might return to prosperity.

[Lord Roberts of Conwy]

Would the noble Baroness give way? I am very surprised that she does not give a hearty welcome to the increase of 105,000 in employment and the decline of 45,000 in the unemployed that were announced today, facts that were welcomed by the Leader of the Opposition at Prime Minister’s Questions.

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[Baroness Royall of Blaisdon]

If the noble Lord will give me a few minutes, I will get to the part where I do indeed welcome what has happened today with the unemployment figures. However, I will of course qualify that.

The oft-stated primary objectives of government policy to maintain sterling as a safe-haven currency by protecting at all costs Britain’s triple-A rating with the ratings agencies, and keeping interest rates low to stimulate investment, is interesting and important. However, the strengthening of sterling poses a threat to the recovery of industrial exports from Britain and, in the absence of any prospect of growing demand, low interest rates have been accompanied by a collapse in investment.

Put simply, the Government’s economic policies are incoherent. Consider the fact that almost 90% of the planned cuts in government expenditure are still to come, creating a headwind loss of 6% of GDP before growth can get going again, and the overall damage that their policies are doing to our growth prospects are all too evident. Even the ratings agencies are now beginning to wonder whether the UK’s rating should be downgraded because of the lack of growth.

Moreover, the human consequences of the Government’s economic policies are all too evident. As I said, I welcome the fact that unemployment fell today, but I note too that the number of people unemployed for more than a year—that is, under the definitions used, the long-term unemployed—rose by 27,000 to 887,000, the worst total since 1996, when the Conservative Party was last in power. It is the Government’s policies that have led directly to higher unemployment so that people lose their dignity and purpose and may have to claim benefits rather than working and thus helping to create economic growth and deficit reduction.

The number of people working part-time who say that they want a full-time job is at a record high, but of course the Government do not seem to care. A Downing Street source was quoted yesterday as asking why people only work part-time—more evidence of this Government being out of touch. They briefed the newspapers ahead of the Queen’s Speech about the family-friendly policies within it, yet do not understand that people may need to work part-time because they have childcare or other caring responsibilities, let alone that sometimes part-time jobs are the only jobs available.

The effect of the Government’s policies has been especially wounding for young people. Even after today’s figures, more than one in five young people are unemployed—over 1 million in all. Just when they should be starting out on their careers, perhaps thinking of settling down and building a family, they are left idle, untrained, demotivated, and devastated. As my noble friend Lady Hughes of Stretford spelt out so well yesterday, this coalition’s policies are creating a wasted generation that should weigh on the conscience of every single member of this Government. The Queen’s Speech contains nothing that addresses the problem of the unemployed young. The country as a whole will suffer from this neglect for years to come.

Of course, the assault on the poor continues. The Institute for Fiscal Studies has shown that government measures introduced this April will have a disproportionate effect on the lower half of income distribution, with the biggest hits being suffered by households with children, and there is more to come. Only 12% of the proposed cuts have so far been implemented and we are told that, on the advice of his strategy adviser before he leaves the sinking ship and heads off to California today, the Prime Minister is considering a further £25 billion in welfare cuts. The much vaunted Budget increase in the personal allowance, which the coalition partners pretend help the worse off, is also systematically biased against the poor: 70% of the benefit will go to those in the top half of income distribution.

All this, and yet there is nothing concrete in the Queen’s Speech to address the pressing needs of so many people in our country—and there is worse to come. In its report to accompany the Budget Statement, the Office for Budget Responsibility tells us that the coalition recession is not just resulting in lost income, lost jobs and blighted lives today, but is blighting Britain’s future, too.

The OBR could not be clearer,

“our estimates of potential growth do imply a significant and persistent loss of potential output relative to the pre-crisis trend … Our … estimates for 2011 imply a potential output loss of around 8 per cent … This shortfall widens to around 11 per cent by 2016”.

That is terrifying. It is because the sharp fall in investment since the coalition took power bequeaths the country crumbling infrastructure and underskilled workers. Yet there is nothing in the gracious Speech that would stimulate infrastructure investment or enhance the skills base.

However, I must admit that since the Queen’s Speech the Government have launched a new economic policy to tackle Britain’s economic problems. The noble Baroness mentioned her right honourable friend Mr William Hague, the Foreign Secretary. A few days ago, he declared:

“There’s only one growth strategy: work hard”.

Then Mr Eric Pickles, the Secretary of State for Communities, chimed in, saying:

“I think we all should work harder”.

So the youngster desperately searching for a job, who has sent of dozens of applications without success, sometimes without an answer or an acknowledgement, is told to work harder. To the thousands put on short time, the message is work harder. To the family struggling in the face of cuts in working tax credits, the message is clear: work harder. To the small business owner, unable to renew his or her bank funding, and seeing the prospect of securing future orders vanish, the message is work harder. To the building contractors facing 5% falls in demand, and retailers facing a shrinking high street, the message is stop whingeing and work harder. As Mr Hague put it so precisely,

“do more with less—that’s the 21st century”.

Well, the coalition is certainly guaranteeing that we will have less. It is not as if the Government are even willing to debate how new measures might boost demand in the economy. What is the Government’s response to UK manufacturers who want more support, including the creation of an industrial bank? Why was there nothing in the Queen’s Speech about infrastructure? Why no HS2 Bill? Why, for example, is there no debate over creating a national infrastructure bank? If Britain can afford to lend £10 billion to the IMF, then it can afford to lend £10 billion to a national infrastructure bank to attack directly the decline in productive potential that the austerity policies have produced. The Chancellor of the Exchequer said the IMF loan would come from the UK’s reserves, that it was not money that would otherwise have been available for public spending and that it would not add to the national debt. So let us perform that trick again, but this time at home. Why is there no debate over the American idea that austerity policies—cuts in spending or increases in taxes—should be contingent on the economy reaching predefined goals in terms of growth and/or employment? Legislation would commit the Government to cutting the deficit when the growth target had been hit, but the Government will not even consider the possibility.

The Government make the claim that they inherited a difficult economic situation. Well, they entered office two years ago in the face of a major world financial crisis, a crisis that had a particularly damaging effect on the UK because of the disproportionate importance of the financial services industry in our economy, as the noble Baroness said. However, she did not add that they inherited an economy on the path to recovery, growing at 2% a year, with a deficit plan in place that would have halved the deficit in four years, the target agreed by the G20 nations. It is their policies that have forced the economy back into recession. Two years on, they have no excuses. Their austerity policies have failed and should be abandoned, and they must also abandon the assault on the poor, the NHS and legal aid which they disguise as necessary pain.

It is not just us on these Benches or my party generally that makes this criticism. Even the most measured and careful of professions, the accountants, are making the same points. The Institute of Chartered Accountants for England and Wales was quoted yesterday as saying that the Government’s child benefit tax is seriously badly engineered. Another accountant said that nuking large-scale philanthropy at a time when the demands of charities are rising steeply does not make sense. That is no doubt why the Queen’s Speech includes a panic provision to reverse the Budget’s impact on charities.

The day after Her Majesty delivered the gracious Speech, the Daily Telegraph headline read:

“Queen’s Speech: why was there no plan for growth?”.

Around the world we see policy makers struggling to develop new ideas to escape austerity and resuscitate growth, the growth that everyone other than the recession deniers in this country knows is the only way to restore the public finances. The only Government not participating in this debate is this one. Their policies lack vision, they lack coherence, and they fail to address the pressing problems of the creating growth and jobs in this country.

The Queen’s Speech illustrates that in just two years their policies are not working and they have no idea what to do next. That is why we have tabled this amendment, to focus attention on what the Government are doing—pursuing policies that are not working and making cuts that go too far, too fast. We wish to focus attention on what the Government should be doing—that is, pursuing policies to promote jobs and growth, improve living standards and cut youth unemployment.

This Government are out of touch. Even elected Conservatives are coming to this conclusion. In Stroud, in my glorious county of Gloucestershire, the Conservative chairman of Stroud District Council, Councillor John Hudson, has recently resigned from the Conservative group, and indeed the Conservative Party, over the effect of the Government’s policies. He said:

“I’m a family man with three very young children, just trying to keep a roof over their heads, food on the table. To be brutally honest, and it sounds a bit socialist and I’m no socialist, the people who run the Government have no idea how the ordinary working man is coping”.

He is right. The Government are out of touch, incompetent and unfair. The elections show that, the polls show that and I look forward to this House showing that today. I also look forward to the maiden speeches of the right reverend Prelate the Bishop of Durham and the noble Lord, Lord Ashton of Hyde. I beg to move.

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[Baroness Royall of Blaisdon]

My Lords, we have had an excellent and full debate this evening on a wide range of issues. I am very glad that my Benches tabled the amendment that we did so that we could focus the attention of the debate on what we believe should have been in the Queen’s Speech.

I am very disappointed in the Minister’s reply, as, when he dealt with economic policy, he merely repeated the mantra that he has repeated so many times from that Dispatch Box: that the crisis is all the fault of the Labour Government. However, it is not all the fault of the Labour Government. Yes, when the noble Lord and his colleagues entered government, it was a very difficult time and we were in the middle of a deep financial crisis. However, it was a global financial crisis. In fact, the coalition inherited an economy that was on the path to recovery. It was growing at 2 per cent a year with a deficit plan in place that would have halved the deficit in four years. Instead of that we have unemployment, so the unemployed are not paying their taxes, there is no growth in the economy and the deficit is getting bigger. We now have a double-dip recession and the Minister and his colleagues blame it all on the eurozone. It is strange that they blame the current crisis on the eurozone. However, when they came into government, they said that the problem did not result from the global financial crisis but was our fault. That is all very strange.

I have to take issue with the Minister when he says that high-quality public services are among the big successes of this Government. The postcode lottery in social care is getting worse. Youth services up and down the country have been decimated. Libraries have been closed. School buildings are falling into disrepair and waiting lists are growing. The responsibilities of the state are being rolled back and the burdens are being placed on charities, which want to cope but are finding it more and more difficult to do so because they have so much on their shoulders. Therefore, I think it is a bit rich for the Minister to say that that is a priority.

The Minister also says that this Government will not cut the UK adrift. I am glad if the level of exports is getting better in some areas, and, as the noble Baroness, Lady O’Cathain, asked me to do, I celebrate the success of the motor industry. Clearly, it is very good for the people of the north-east and I hope that it will secure the future of the people in employment in Ellesmere Port. However, while we may not be cut adrift in our exports to India, I would say that we are cut adrift in our isolation in the European Union, and that saddens these Benches. The differences of opinion are clear. We believe that it is the young, the poorest and the most vulnerable in our society who are suffering, and most of the cuts have still not started to bite, as the noble Lord, Lord Razzall, pointed out.

There have been some very important speeches today, including of course that of the noble Lord, Lord Skidelsky, with whom I agree. In his wise contribution he said that it is better to put people and plant to work rather than to destroy them. I certainly agree with that. I also certainly agreed with the right reverend Prelate the Bishop of Durham, who said that confidence in the economy comes from action, not exhortation, and that it comes from cranes and scaffolding. Where are the cranes, where is the scaffolding, where is the infrastructure investment and where are the jobs?

I am very conscious of the late hour. I am very glad to have tabled the amendment because it focuses on the priorities that we believe should have been in the Government’s legislative programme. Looking at the result of the local elections and the polls, it is clear that they are also the priorities of the British people. Like us, they want this Government to change course. As I said, I am conscious of the lateness of the hour, so I shall not press my amendment to a vote. With that, I beg leave to withdraw the amendment.

Amendment withdrawn.