The Economy and Living Standards

Barry Sheerman Excerpts

Thursday 12th June 2014 Commons Chamber

[Mr Osborne]

I will make a little progress and then give way.

That speaks to a broader point. The shadow Chancellor is not a naturally retiring type. He likes to get out there and meet people. He likes to go to supermarkets and shake people’s hands. The truth, however, is that he has gone quiet in recent months and we do not see him so much on the television or hear him on the radio. I think that is because he knows—or rather his party leadership knows—that they have lost the macro-economic argument. He is now losing the micro-economic argument within his own party. The Leader of the Opposition does not want to talk anymore about Labour’s spending and borrowing plans, because he knows they are very unpopular. Instead, there is a whole series of populist initiatives on price controls, incomes policies, bans on foreign investment, renationalisation, and wars on business and enterprise. The truth is that the shadow Chancellor actually spent a considerable period of time, in Opposition in the 1990s and then in office, trying to get his party to reject these kinds of things. He knows that they will lead to higher prices, lower incomes, less investment and fewer businesses.

In fact, the shadow Chancellor makes no secret, if we read between the lines of his speech today and his article in the New Statesman, of the fact that he is not in favour of trying to restrict the open economy, and that he values foreign investment coming into the country. The problem is that the message being given out by the leader of the Labour party is the complete opposite of that—it is in a completely different direction. He jumps on every single issue to make the argument, essentially, that we need a more closed economy and that there is a dangerous race to the bottom. The truth is that I think the shadow Chancellor and I agree that it would be a disaster for Britain to head down that route.

The shadow Chancellor has a macro-economic argument, which is that Britain should be borrowing and spending more, and, if necessary, increasing taxes to pay for it, but the Labour leader will not allow him to make that argument anymore, so he has gone completely silent. Normally, he is there right behind the leader of the Labour party, right behind his shoulder blades waiting to support him. Instead, he has learned a trick from his old friend the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown): when the Labour party is doing badly, losing by-elections and the like, stay quiet and disappear. That is what he has attempted to do in the past couple of months. The truth is that the threat that his economic approach represents—higher taxes, and borrowing that would destroy our public finances and push interest rates up—does not go away just because he goes away. That is the plan he would put into practice were he ever to walk through the doors of the Treasury again.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Before the Chancellor moves on, he was giving us a history lesson earlier but could we have some proper history? He was criticising the shadow Chancellor for the period when the Chancellor alleges things went wrong with the banks and lending. He himself, the present Chancellor, was urging less control and less regulation. Let us get that history right. Will the Chancellor address one issue: why is productivity failing to improve?

[Mr Osborne]

I agree with the hon. Gentleman that productivity is one of the challenges for the British economy. I have to say that if offered the choice in the early stages of a recovery between productivity improvements and increased job numbers, I would take increased job numbers because of the considerable human damage and the potential serious long-term economic damage that high unemployment can cause. I am enormously proud of the record of the British business community in creating those jobs, and of the people who have got those jobs and are holding them. I agree that we want to make our economy more productive. We do that by having an open economy where we welcome investment, support enterprise and support business. The Labour party’s policy proposals on prices, incomes, new restrictions on foreign investment, higher taxes on business and a higher corporation tax are all the wrong approach and would make our economy less productive.

--- Later in debate ---

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

One of the things that my constituents do not like is the sort of debate that we have had today. They watch it on television and think, “What on earth is going on?” We live in one of the wealthiest countries in the world; we have the sixth largest economy; and we are highly successful in so many ways, under both the present Government and the previous one. My constituents look at the Queen’s Speech, but do not see how it relates to the reality of their existence.

As a social and economic entity, we have changed vastly over the years. This year, we remember the wasted lives of the 1914-18 war, when 16 million young men died. Since that time, and since the second world war, this country has changed dramatically. Nationally and in my constituency—we in Huddersfield are the average—about 8% of people now make anything in manufacturing. The manufacturing sector is very small but highly efficient. It is growing, but as it does so, it increasingly uses sophisticated machinery and fewer skilled workers.

We have an hourglass economy, with a large number of very skilled people who are doing very well, but many people with traditional jobs and a fair number of skills who have been squeezed out of such occupations, while people with few skills are having a bleak time and will have a bleaker time in future.

So much of this Queen’s Speech fails to address the fact that so many Members of Parliament, especially Opposition Members, but—let me be generous—Government Members as well, came into the House to get a good life for people. Many people in our country are not getting a chance to have a good life; they are certainly not doing so in Huddersfield. What we need to have and what should have been in the Queen’s Speech is an emphasis on the difficult things, such as homes and housing. A whole bunch of cowards on these Benches—I say this nicely, because I do not want to be brought up before the Speaker—will not face the fact that nimbyism and the green belt are preventing houses from being built so that people can have a decent place in which to live. When are we going to recognise that?

When will we invest more in skills, putting real investment in our further education sector and in genuine apprenticeships that last longer than a year and fit people for future jobs, not present ones? The fact is that we have a good skill base, but it is not big enough. If we are not careful and if we are not brave and courageous, we will not have the skills relevant to keep our companies in the premier league.

Our constituents do not like the argy-bargy that we have all the time. We would be much better agreeing on lots of the stuff that comes before the House for us to discuss. Universities are an example. We must settle on the fact that the present way of funding our universities is putting them all in danger. They are absolutely the jewels in the crown of our skill base and our educational system, but they are under threat.

In this Queen’s Speech debate and during the last year up to the election, we must prioritise skills, education and homes. I could write the Labour manifesto. That is what we need to do. It is what this Queen’s Speech is missing, and what we will replace in a year’s time.