Economic Growth

Clive Betts Excerpts

Tuesday 14th November 2023 Commons Chamber

[Rachel Reeves]

I thank my hon. Friend for that intervention. The truth is that the combination of austerity, which was five Prime Ministers ago, Brexit without a plan—which relates to most of them—and the kamikaze Budget has contributed to the parlous state of our economy and the cost of living crisis that we are enduring today.

This is a party led—and I say “led” in the loosest sense of the word—by a Prime Minister with no mandate whatsoever and with no authority or vision for the future. This Prime Minister appears to be spending more time polishing his CV in conversation with Elon Musk than fighting for the livelihoods of manufacturing workers in Scunthorpe, Port Talbot and Derby.

And it is the previous Prime Minister, the right hon. Member for South West Norfolk (Elizabeth Truss), who still sets the tune for so many in the Conservative party. She wanted to scrap the bankers’ bonus cap in the kamikaze Budget last year, and that has now been dutifully delivered by this Prime Minister and this Chancellor. When the previous Prime Minister called this year for delaying the timetable for new electric cars by five years, undermining both the net zero consensus and the British automotive industry, this Prime Minister and this Chancellor delivered. Today, the former Prime Minister’s so-called growth commission is setting out its demands for next week’s autumn statement, oblivious to the damage already done. Will the Chancellor tell the House whether he agrees with the person who appointed him to do the job he is now doing and her proposals to slash corporation tax, abolish inheritance tax, abolish stamp duty and other unfunded commitments that make last year’s mini-Budget look like small fry, with tax cuts announced totalling £80 billion?

Labour will never gamble with the livelihoods of working people, as the Conservatives have. Labour’s economic approach is built on a rock of fiscal responsibility, with respect for taxpayers’ money. We will work in partnership with industry to bring about the change that our country so desperately needs. We know what the Tories did last autumn. They blew up our economy with their reckless, unfunded promises and a trashing of our economic institutions. It was a collective failure from the Tories. It was not just one bad apple, but a whole orchard of irresponsibility. The Conservative leadership contest of summer 2022 produced a sum total of £200 billion of unfunded promises. The Chancellor did not want to be left out. His leadership candidacy might not have been as successful or lasted as long as he may have wished, but there was still time for him to make almost £80 billion of unfunded commitments himself on corporation tax, business rates and defence, with no idea how those commitments would be funded.

Following the leadership election last year, Conservative Cabinet Ministers tried to blindfold the nation and global financial markets by preventing the Office for Budget Responsibility from publishing its assessments. The Conservatives knew that the truth would hurt, but they continued to gamble with the livelihoods of our country. The pound crashed, pensions were put in peril and interest rates soared. Working people were made to pay the price for the Conservatives’ kamikaze Budget and reckless eagerness to cut the taxes of the wealthiest few. It was reckless, it was irresponsible, and with Labour it will never happen.

The result is an average Conservative mortgage penalty of £220 each and every month for hard-working homeowners. This out-of-touch Government do not have a clue about what that really means for people. That is a lot of money to try to find from nowhere each and every month. It means holidays cancelled, spending cut back and life made harder. Some families are having to downsize, and others who have been trying to get on the housing ladder for years have had their dreams snuffed out. Meanwhile, rents rise as landlords see their mortgages go up and want to pass the costs on.

[Mr Clive Betts (Sheffield South East) (Lab)]

My right hon. Friend is making a good point about housing costs and the shortage of housing in this country. Is it not therefore astounding that, given the climate we are in, there is not one single word about housing in the whole King’s Speech? There is not a single word about the shortage of housing or the rising costs of housing, no long-term proposals to build on this vague commitment of 300,000 homes, and no idea how to build them.

[Rachel Reeves]

My hon. Friend speaks powerfully on what he knows well. On top of the big challenges with house building and the Government getting rid of their housing targets, the number of homeowners in arrears on their mortgage is also up a staggering 18% compared with a year ago. The Conservatives are no longer the party of home ownership. Higher housing costs are the last thing people need in a painful cost of living crisis. It should never have happened in the first place, and it must never happen again.

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[The Chancellor of the Exchequer (Jeremy Hunt)]

It is an honour to speak in the first King’s Speech debate for more than 70 years. Her late Majesty was a figure of grace and continuity, and we now look forward to His Majesty the King leading us, as she did, through troubled times.

It is always a pleasure to debate with the shadow Chancellor, although in a whole year of my being Chancellor, this is the first time we have had an economy debate, and now we know why: she has been busy writing a book, or, rather, Wikipedia has been busy writing her book. Today, I see she has been busy copying and pasting Conservative language about tax. May I tell her gently that that will take her only so far? Conservative Members will never forget what happened under Gordon Brown, who she campaigned for: income tax up, national insurance up, stamp duty up, fuel duty up, pensions up and multiple other taxes up.

Let us turn to some of the shadow Chancellor’s assertions. She said that the economy was flatlining. What she did not tell the House was that since Labour left the economy in the deepest recession since the second world war, we in this country have grown faster than Spain, Portugal, Italy, France, the Netherlands, Austria, Germany or Japan. She did not mention that after a global pandemic and energy shock, our economy is nearly 2% bigger than it was pre-pandemic. That is higher, for example, than countries such as Germany, whose economy is only 0.3% larger, not least thanks to the furlough scheme introduced by my right hon. Friend the Prime Minister.

The shadow Chancellor also did not mention that when it comes to the fastest-growing industries, we are doing even better. In the last 13 years under Conservative Governments, we have built Europe’s largest tech sector—double the size of Germany’s and three times that of France; it is the third-largest in the world. We also have Europe’s largest life science sector, saving more lives than any other country globally with vaccines and treatments discovered in Britain. We have more offshore wind than anywhere in Europe bar Germany and Norway—it is the third-largest sector in the continent. We also have a world-leading creative industries sector, including Europe’s largest film and TV industry and a thriving publishing industry that has even produced a book written by the shadow Chancellor, which helpfully collates some fascinating information from the world wide web.

[Mr Betts]

The Chancellor talks about what he sees as some successes. Why does he not address the problems of small modular reactors? Sheffield Forgemasters in my constituency could be building SMRs, but it has been waiting for months for the Government to make a decision on a go-ahead for the right techniques. ITM Power, which is a leader in green hydrogen, is building plant in Germany, which is spending £7 billion on it in the next few years, while in this country we are spending £1 billion, so we are losing the international race on that.

[Jeremy Hunt]

The first big infrastructure decision that I took was on nuclear, when I assigned £700 million to Sizewell C. I completely agree with the hon. Member about the potential of SMR. That is why we set up a competition, and with the previous Energy Secretary I stipulated that it should finish by the end of this calendar year so that we can proceed as quickly as possible on SMR, because it could be an important part of our net zero future.

The shadow Chancellor’s central argument is that we can get growth only by borrowing £28 billion a year more. [Interruption.] Well, I was listening to her words. She may not have mentioned this in her speech, but on 9 October she said on the “Today” programme that she wanted to take borrowing “up”—her word. We delivered all those achievements in technology, life science, creative industries and advanced manufacturing industries during a time when we were cutting borrowing, which went down by 80% between 2010 and the start of the pandemic. That is the difference. Unlike Labour, the Conservatives know that we cannot borrow our way to growth. We have to do the hard work to support entrepreneurs and innovators, including by keeping their taxes down, which Labour has never wanted to do. Because we have done just that, the International Monetary Fund says that after inflation has been brought to target from the end of 2025, this country will have faster growth than France, Germany or Italy. No shortcuts; just hard work to get one of the fastest growth rates in Europe.

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[Mr Clive Betts (Sheffield South East) (Lab)]

I pay tribute to the outstanding speech by my hon. Friend the Member for Mid Bedfordshire (Alistair Strathern). It was one of the very best maiden speeches I have heard in this House. It had humour and seriousness. He succinctly described his predecessor in a couple of sentences, and in one sentence he demonstrated his superior knowledge of football compared with the Foreign Secretary. Many people watching across the country will now be reflecting, “If that is the quality of representative we could get by voting for change, perhaps we will give it a go at the next general election, too.”

Housing was not mentioned in the King’s Speech. We have a housing crisis in this country, and both sides of the House share an aspiration to build 300,000 homes a year. I agree with the right hon. Member for Middlesbrough South and East Cleveland (Sir Simon Clarke) that we are not building enough homes—that is true—but who has just changed the planning system to take away housing targets from local areas? We will never get to 300,000 unless each area has its own housing targets that add up to that number.

A further problem is that we will never hit 300,000 through the private sector alone. The Housing, Communities and Local Government Committee produced a report four years ago saying that we need to provide at least 90,000 units of social housing through housing associations and councils. The Levelling Up, Housing and Communities Committee is holding an inquiry now, and all the evidence shows that we simply do not have the resources.

There is a challenge for both Front Benches. We will have to find more money at some point to build more social housing in this country, both to get the numbers we need and to get the numbers that people can afford, as people cannot afford to go into the market to buy in the current circumstances. So many people have to save for years, even beyond retirement, for a deposit on a home. Rising mortgage costs are certainly not helping.

There was a promise to abolish section 21 notices in the private rented sector, but we are now told the Bill will wait until some future time—we do not know when—when the court system has been reformed. Yes, the court system needs to be reformed, and we ought to have a dedicated housing court, but the cost to local authorities of dealing with homelessness and temporary accommodation has risen by 50% in the last two years alone. That is due to section 21 notices, the local housing allowance freeze—many people cannot afford even to rent a home in the private sector—and the Government’s asylum policy, which is all over the place and is putting great pressure on local authorities in some parts of the country to house people while they are having their asylum position confirmed. We have a massive challenge, and there is nothing in the King’s Speech to deal with it.

We ought to address how we build homes for the future. Four years ago, the Government had a working party on modern construction methods, but they have forgotten about it. They have given up. I went to visit Lighthouse, a firm in my constituency that has just taken on 100 workers. The firm has doubled in size and is venturing into modern methods of construction for social housing. The Government should be encouraging that at national level, but there is nothing at all. There is no policy, no strategy and no plan for the future.

Levelling up was not mentioned in the King’s Speech either. Germany saw the inequality across the country after reunification, so it had a 30-year programme. The inequality in this country is now as great as it was in Germany on reunification, yet all we have had is £4 billion in scattered pots of money for local authorities to bid for. There is no strategy and no long-term solutions.

Levelling up, again, appears to have been forgotten but, if we are to get our economy growing as a whole, we have to address the disparities in gross value added, productivity and income levels between different parts of the country. Productivity in the north of England is now lower than in the Czech Republic. GVA in our major cities is lower than the national average, which is completely different from what happens in Germany and France. We need to get the whole country and the whole economy growing but, again, there is no plan, no strategy and no long-term future for this country.

There are one or two good things in the King’s Speech, and I welcome them. We have not yet seen the details of the leasehold reforms, but certainly stopping the building of new leasehold houses and allowing people more easily to purchase their freehold are good measures that we need to implement as soon as possible. Addressing the problems of service charges and outrageous permission fees also needs to be in the Bill. I also welcome the proposals on football regulation. It is about getting a fairer distribution of funding and giving fans the legal right to be consulted on important things that affect their club; again, we will have to see the details.

Finally, I completely condemn Hamas’s attack on innocent Israeli citizens, but I condemn just as strongly what Israel is now doing. The killing of innocent women, children and other civilians in Gaza is not acceptable and cannot continue as it is. I want to see a humanitarian pause and an end to the blockade to get aid into Gaza, and I want to see that as the basis for a ceasefire. A ceasefire cannot just be announced; both parties need to sit down and agree to one. That has to be done, and it has to be a stepping-stone to moving forward to a two-state solution: safety for Israel and a free Palestine, free of Israeli occupation. That is what we should be moving towards.