Fairness at Work and Power in Communities

Barry Gardiner Excerpts

Thursday 12th May 2022 Commons Chamber

[Dr Liam Fox (North Somerset) (Con)]

It is always a pleasure to speak in this House, but it is a particular pleasure for me today, as it is 30 years to the day since I stood on almost the same spot to give my maiden speech in the House of Commons. It is a pleasure, too, to speak in a debate about the communities up and down our country.

Nothing undermines the stability of our economy, community and families more than inflation. It inevitably hits the poorest in society hardest, and it is therefore a moral as well as an economic hazard. As Milton Friedman said, inflation is taxation without legislation, except that no one wins, including the Treasury.

As a result of the covid-19 pandemic, the global economy suffered a negative supply shock, with an initial fall in output followed by an increase in prices. That has affected a wide range of global commodities, but nowhere has the effect been felt more than in the energy sector. The complication here is that the current surge in prices is the result not of a single shock of the pandemic, but of a number of supply and demand factors that have affected the market in recent times. Members who are interested in a detailed analysis of this subject should read the report by Carlos Fernandez Alvarez and Gergely Molnar, written and published by the International Energy Agency, because it answers the question that many of our constituents are asking us: why has energy suddenly become so expensive?

At the beginning of the pandemic, fossil fuel prices fell to their lowest in decades. That was followed by a strong rebound as the global economy recovered, and it was exacerbated by a cold winter in the northern hemisphere and lower than average wind generation in Europe. However, the main driver of price increases has come on the supply rather than the demand side. The commodity price collapses of 2014-15 and then 2020 resulted in diminished investments in oil and gas, which increased the vulnerability of the sector. Governments across the world have failed to sufficiently scale up clean energy sources, renewables and technologies to fill the inevitable gap.

Those problems were exacerbated by the recent lockdowns, which pushed essential maintenance work from 2020 into 2021. That led to restrictions on supply just as demand was quickly recovering. That was particularly true in the UK and the Norwegian sectors of the North sea. Similar problems affected the gas industry. The global economy has seen an unavoidable inflationary shock, but—and there is a big but—we can be sure that this is not the whole story when it comes to the price rises that British people face today, not only in energy but across a range of commodities. How can we be so sure? If we look across the global economy at the variability of inflation rates, we see a very large difference. In Japan, which imports all its fossil fuels, the latest inflation figure shows a rise to 1.2%. China is 1.5%. While inflation in the eurozone has surged to 7.5%, Switzerland, a European but non-eurozone country, has inflation of 2.5%. In the UK, we are above 7%, and the US is 8.5% and rising, so something other than energy prices has been behind our inflationary phenomenon.

In fact, we have two different inflationary surges—that of global commodity prices, as I mentioned, which affects everyone, and that of monetary inflation, which afflicts those countries where central banks have allowed persistent increases in the amount of money in circulation relative to existing output. The group-think mentality of central bankers in the United States, the eurozone and the UK has reinforced the idea that they have stumbled on some kind of monetary alchemy that makes it is possible to continually expand the money supply, unrelated to output, without creating inflation. Perhaps that is an uncharitable view, and they knew all along that they would create inflation but were simply responding to their political masters. However, that raises questions about the independence of the central bank in the first place. Either way, it is a wholly unacceptable position.

It is almost universally accepted that the first duty of Government is the protection of its citizens. As a former Defence Secretary, I am only too aware of the many external threats to the safety of our people and our country, but there are other threats that I believe we have a right to be protected from: the debasement of our currency, the erosion of our earnings and the devaluation of our savings. I believe it is fundamentally wrong for Governments to engage in structural profligacy, spending excessively across the economic cycle and passing ever-larger amounts of debt on to the next generation.

I also believe it is the duty of central banks to safeguard the value of our money and our savings. The Bank of England persisted beyond any rational interpretation of the data to tell us that inflation was transient, then that it would peak at 5%. It has consistently underestimated the threat.

There are three things I would like to see. First, the Treasury Committee should launch an investigation into why the Bank of England so comprehensively underestimated the inflationary threat; secondly, the monetary policy report should go back to being the inflation report and thirdly, the Government should think about what guidance might be given to the Bank of England on considering and reporting monetary stability.

I will say a word about the Government’s forthcoming Levelling Up and Regeneration Bill. We all understand the need for housing targets. We must have social mobility, ensuring that the next generation can participate in the benefits of home ownership. We need more affordable homes to allow young people to continue to live in the communities in which they grew up. However, targets for housing must be just that—targets for local authorities, not instructions to local authorities. I am delighted that the Government seem to have changed the direction of travel to move in a much more rational direction than previously.

We must also accept in planning that local authorities have competing priorities. To give one example, in my North Somerset constituency we accept that we need to have more housing and that the Government will set targets, but at the same time the Government say, understandably and correctly, “Don’t build on the green belt”, and, “Don’t build on floodplains.” That limits the space to build further housing. I would like to hear the Government make very clear that, where local plans are being constructed and conflicting priorities are being applied to them by Government, it is the local authority that will get the benefit of the doubt when it comes to the Planning Inspectorate.

That brings me to the issue of the green belt itself. According to the Government’s national planning policy framework, the green belt serves five purposes:

“to check the unrestricted sprawl of large built-up areas; to prevent neighbouring towns merging into one another; to assist in safeguarding the countryside from encroachment; to preserve the setting and special character of historic towns; and to assist in urban regeneration, by encouraging the recycling of derelict and other urban land.”

[Barry Gardiner (Brent North) (Lab)]

In order to secure that supply of land for building houses that the right hon. Gentleman spoke of, does he agree that it would make sense to reform the Land Compensation Act 1961 so that local authorities can purchase land closer to its existing value, rather than its hoped value?

[Dr Fox]

That is certainly something that we should look at. The passage and the Committee stage of the Levelling-up and Regeneration Bill are opportunities for Parliament to genuinely reform our planning laws to make them sensible for a 21st-century country. We must ensure that in that Bill, not only is our green belt protected, but the Government increase those protections. Once our green belt is gone, it is gone forever. I believe it is our duty to steward the green spaces in our land for future generations.

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[Barry Gardiner (Brent North) (Lab)]

I pay tribute first of all to Her Majesty the Queen. It was a great sorrow to me that she was not able to give the Gracious Speech in person earlier this week. We have been privileged to live in the Elizabethan age. Most Members of Parliament serve many sovereigns; we have had the privilege of only serving one.

The Elizabethan age began as one of upheaval after the second world war. It became an age of opportunity and equality with the Labour Government and the equalities Acts from the 1960s. Now, however, it is becoming an age of insecurity—insecurity of income, insecurity of housing and insecurity in health, food and work.

Since the Prime Minister boasted last year that the UK was the fastest-growing economy in the G7, it has become the slowest-growing economy in the first quarter of this year. Indeed, we now find that we are the fastest-shrinking economy. We have gone from 0.8% growth at the beginning of this year to -0.1%. That is a shrinking economy.

The Bank of England projects 10% inflation by the end of the year. Meanwhile, real wages have been falling and 2 million people are going without food for more than a day, sometimes because they do not have the money to buy it, sometimes because they do not have the money to cook it and sometimes because they do not have the will to take it out of the mouths of their children. [Interruption.] It is shameful, as my hon. Friends say. We are the fifth-richest economy in the world, and it is shameful.

Let us examine these insecurities. This year’s Queen’s Speech, coming from any Government with any compassion, would have put at its core a right to food, as my hon. Friend the Member for Liverpool, West Derby (Ian Byrne) has been calling for for months. That should have been at the very centre of the Gracious Speech, because we cannot feel that we are doing our job as politicians, and I hope that Government Ministers feel that they cannot be doing their job as a Government, when there are people facing hunger on that scale in our country and when so many of our fellow citizens—millions—are reliant on food banks. This is not the Britain that we should aspire to be part of, and it is certainly not the Britain that any Government Minister should aspire to be a Minister in charge of. The insecurity in income is extreme, and it has been exacerbated by the fact that, even on the Government’s own figures, 900,000 individuals, many of whom have disabilities, will become worse off as a result of the transition from legacy benefits to universal credit. That is why the Government should have had at the heart of the Gracious Speech the need to restore the £20 cut to universal credit to protect the income of those adversely affected and to make sure that any recovery was not on the backs of the poor.

There is insecurity in work. This debate is entitled “Fairness at Work and Power in Communities”. Well, as so many of my colleagues have said, the gaping hole at the centre of the Queen’s Speech is the fact that there is no employment Bill, promised 20 times by Government Ministers—no legislative solution. I almost felt sorry for the Minister who opened the debate, because, as must have been obvious to so many of us, he was embarrassed because he knew that what had been committed to—what had been promised—had just slipped away, and he knew that he had no power to do anything about it. But there are people in the Government, in the Cabinet, who did have the power to do something about it, and they failed. These choices should have been made in the Queen’s Speech to protect people in work.

This week, 127 people at Richmond upon Thames College—the entire teaching staff—were told, “You’re fired unless you sign a new contract taking 10 days off your entitlement. Go away and think about it.” Of course, because of the trade union legislation it was not possible for the union to fight back immediately—it had to consult, ballot and notify. But it has balloted, and, on an 88% turnout, 97% voted in favour of strike action, because the situation is disgraceful. Yet the management of the college are now calling in those workers one by one, putting pressure on them by saying, “What are you going to do if you don’t have a job because you’re failing to sign this new contract? What are you going to do at the end of the week if you can’t pay your rent or feed your kids—if you’re one of those people who need to use food banks?” That is the pressure that is being put on people by insecurity in employment. That is why all the things that my hon. Friend the Member for Middlesbrough (Andy McDonald) talked about—all the things that he put together in the employment rights green paper—are so vital if we want to have equality and fairness at work, as the title of this debate says we should. We do not have it; we need to.

There is insecurity in health. I tabled an amendment to the Queen’s Speech in which I talked of the 6.1 million people who have been referred to a consultant and are waiting for treatment. Today that figure was uprated by 300,000, with now 6.4 million people who have been referred to a consultant still waiting for treatment, over 2 million of them waiting more than the 18-week maximum period and 300,000 waiting for more than a year. When the Minister winds up, let them not say that this is because of the pandemic, because we already knew that it was building up. The figure was 4.43 million before the pandemic even started—and that was because of a decade of underfunding of our health service.

We have insecurity of income, we have insecurity at work, we have insecurity in health, and we have insecurity in housing. How many times have we had to stand in this Chamber and talk about the plight of those trapped in accommodation where there are known fire safety defects? They are unable to move on with their lives, unable to sell— partly because the EWS1 forms but not only that—unable even to get insurance on their properties, and being charged through the nose by unscrupulous managing agents for scaffolding or waking watches. They wait just to get on with their lives. They cannot have a new child because they do not have the bedroom space. They cannot separate if they want to get divorced. They cannot move to go to a new job. Their lives are frozen because of the failure of the Government to act.

The insecurity that climate change puts over all our lives needs to be tackled in a comprehensive housing policy. For all the talk about a windfall tax—and we should talk about it—the cheapest energy is the energy that we do not use, so we should insulate the 19 million homes that need insulation. The Government have known this for years. Every Select Committee of this House has told them what to do and there has been complete inaction. Where in the Gracious Address is the real sense of commitment to tackling this as part of the housing crisis? There has been a 38% rise in street homelessness and a net loss of 22,000 social homes across England. We need the Government to tackle the housing crisis.

Looking to the second part of the debate’s title—“Power in Communities”—how do we give power to communities? By making their lives secure and by enabling them to stand up for themselves. That means having security of income and security of health, and it means someone having the security of having a home they are confident in, where they do not feel trapped and in danger.

Power is something that resides in land. It is extraordinary that 1,000 years on from the Domesday Book in 1086, half of the land of the United Kingdom is still owned by fewer than 6,000 individuals. That is why we urgently need land reform. I was delighted when the right hon. Member for North Somerset (Dr Fox) this morning agreed with me that we need reform of the Land Compensation Act 1961 so that councils can buy land at a price closer to its existing value, rather than its hoped-for value. That would free up land in this country for housing, but we need to go much further.

We need to look at what Milton Friedman—quoted by the right hon. Member this morning—described as the “least bad tax”. He was referring to the land value tax. Unless we challenge the 1,000-year land ownership that has given so few people in this country the power over their communities—I note that one such magnate spoke earlier in the debate—and give that power back to the people through a genuine programme of land reform, we will not have the right to talk about power in communities and fairness in our society.

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[Kemi Badenoch]

The fact remains that we have already made progress on legislating to strengthen workers’ rights. We have closed the loophole that saw agency workers employed on cheaper rates than permanent workers and we have quadruped the maximum fine for employers who treat their workers badly. The fact is, we on the Government side measure how well we are doing not by the title of legislation but by the fact that we have delivered record high levels of employment.

Moving on to the points made by the hon. Member for Wigan (Lisa Nandy), she criticises us for not doing enough on the cost of living. I remind the House that at the autumn Budget, when she and all her colleagues had an opportunity to reduce the cost of living, like the rest of them she voted against measures in the autumn Budget to reduce the universal credit taper rate, which effectively gave low-income families a £1,000 tax cut. So they failed to support those on the lowest incomes. We do not buy their argument that they are interested in the cost of living, because when the legislation comes forward they vote against it.

The hon. Lady also criticised the Levelling-up and Regeneration Bill, just as she did the levelling up White Paper. I remember her comments during the debate on that. They were all sneering and no substance from someone who, again, clearly had not taken the time, like the hon. Member for Enfield North, to read it. She is constantly playing catch-up, because her immediate priority is to criticise instead of engaging with the policy detail. That is why the five-point plan she wrote in January consisted of five recycled policies we are already carrying out and some sour finger-pointing. That is not an action plan.

The fact is that we have done quite a bit on the cost of living. We are supporting families with the cost of living through £22 billion of support in 2022-23 and delivering the biggest net cut to personal taxes in over a quarter of a century. Our plan for jobs, as I mentioned earlier, is bringing unemployment back below pre-pandemic levels. We are delivering a £9.1 billion energy rebate with the £150 council tax rebate. We are increasing the value of the warm home discount to £150 and expanding eligibility to cover nearly 3 million households.

[Barry Gardiner]

Will the Minister give way?

[Kemi Badenoch]

I am not giving way, because Opposition Members do not want me to list these things. We are protecting the vulnerable, including pensioners, with winter fuel payments of up to £300 and cold weather payments of £25 a week. We delivered a record cash increase in the national living wage, meaning a £1,000 salary boost for full-time workers. We raised the national insurance threshold from July, saving an average worker £330 a year. We cut fuel duty by 5p for 12 months. As I mentioned, we cut the universal credit taper rate.