David Anderson
Main Page: David Anderson (Labour - Blaydon)
Mr Anderson
That was very good decision by my colleague. Is not the truth that investors see this country as having stable regulation, but that they see it as wide open? That was the way privatisation was set up in the 1980s, so that companies can rip off the public and put bills up on a whim and do not care how they do that as long as they can get away with it. Ofgem has failed continually and it needs to be reformed; my right hon. Friend is absolutely right in what she says.
Caroline Flint
I thank my hon. Friend for that intervention. The truth is that we do not have a competitive market: six large companies dominate 99% of it, so we have to open it up. We need to make it more dynamic and more transparent, so that the public feel they are paying a fair price for the energy they buy.
Jim Dowd
But I entirely understand that there may be those who would.
The argument needs to be heard. The other day I received a message from a constituent who was an avowed Tory voter at the last election—in the Bromley part of my constituency; there are not many Tory voters left in the Lewisham part—
Jim Dowd
A few.
My constituent resented the suggestions that were being made about the referendum, because no one had put the idea to the electorate at the last election. I expect the issue to be a key part of the next general election campaign, and I think that we should offer people a referendum on it.
Labour is the only party that has ever given people in this country a referendum. Back in 1975, under the Wilson Government, the referendum was on whether we accepted the revised terms under which we would remain in what was then the European Economic Community. Scottish and Welsh devolution, the forming of the Greater London Authority, the direct election of a Mayor of London and elected mayors in cities across the country have all spawned referendums, and all of them were instituted by a Labour Government. The closest that a Conservative Government have ever got was being forced into a referendum on electoral reform and the alternative vote by the terms of the coalition agreement.
Ian Paisley
My hon. Friend hits the nail on the head.
The people who most require fairness are the most vulnerable in our society, such as families in the low-income bracket. One of the ways we can help to address that is through the cost of fuel. Sixty per cent. of fuel costs are duty or VAT. The Government could do something to deal with that, and I look forward to them taking measures to do so over the course of the year. I welcome the increase in the personal allowance for income tax, because that is focused on the low paid.
Job creation is really where the Government’s attention should be directed. Over the past few days, many people have expressed concern about things not being in the Gracious Address, and one such thing is a change to corporation tax levels in Northern Ireland. I am disappointed about that, because such a change would have allowed us to create additional employment and stimulate the economy in the way it needs to be stimulated.
However, I pay tribute to the Government for listening to us on some of the welfare reform issues. They have allowed Northern Ireland to develop its own flexibilities, such as direct payment to landlords, twice-monthly payments to claimants, and the splitting of the single household universal credit payment between two people. That is very welcome because it helps families in Northern Ireland, especially those on low incomes, to manage their money better.
Mr Anderson
The hon. Gentleman is making a very detailed speech. I agree that those are good concessions for his part of the world, but is there any reason why they could not apply in the rest of the country, because people in the north of England have similar circumstances to those in the north of Ireland?
Ian Paisley
Like the hon. Gentleman, who is also a great Unionist committed to the Union, I believe that the same benefits should flow whether in the north of England or the northern part of Ulster. [Interruption.] That includes Donegal; we will get it back into the Union at some point soon.
Families with a person who suffers from cancer may face difficulties. Macmillan Cancer Support recently produced an interesting report showing the significant impact on the cost of living of cancer sufferers, which could amount to as much as a year’s mortgage payments. The Government should focus their attention on what additional support they can introduce to assist those people.
Mr David Anderson (Blaydon) (Lab)
Follow that!
Eleven hundred days into the fruitcake Parliament, we have the mid-term report. How did we get here? Everybody knows that the cost of living is going through the roof, while the standard of living is going backwards. The Government obviously have a narrative; they say it is all the Labour party’s fault. I agree with them to some extent. I agree that my party, when in power, was far too lax with the banks. Its light-touch regulation was far too light. The Conservative party then said that we were too severe, so how can they now say we got it wrong?
The truth is that it was working. In 2007, the net debt in the UK was only 38% of GDP—the second lowest in the G7 and almost the lowest in our history. Obviously the whirlwind that hit the world when Lehman’s collapsed affected everybody, but the Labour Government at the time did not become paralysed in the way that the current Government have. We went for growth. We cut VAT to 15%. We introduced the car scrappage scheme. We brought forward capital schemes, some of which were still going after the election only to be stopped by the Government, including £80 million-worth of new school building in my constituency which could have put people into work and given kids better schools.
We have gone from growth at 1.8% when we left power, to the Government breathing a huge sigh of relief over the past three years just because we have not gone into a triple-dip recession; they were even happier with only a double-dip recession. The best that we have had is stagnation. It is clear that the programme put forward by the Government has not helped this country and we need to see changes. Why do we need change? Who is paying? It is the same people who always pay: the poor, the weak and the vulnerable.
Let us look at what has happened in the past three years to affect the poor, the weak and the vulnerable. VAT has gone up. The child trust fund has been taken away. The education maintenance allowance has been taken away. Working tax credits have been frozen or cut. Pensions and benefits have been changed from RPI to CPI. Child tax credit has been cut and child benefit frozen. The sure start maternity grant has gone. The health in pregnancy grant has gone. Child benefit has been cut for better-off earners. We now have the bedroom tax and cuts in council tax benefit. There is lots and lots more. This is not about scroungers; it is about working people who are trying to get on in the world and who are struggling.
On top of that, almost 750,000 public sector workers have been sacked. They have been taken out of income tax all right: they have been sacked and are not paying it. They have been taken out of good, strong and stable jobs. People have been put into 1.25 million poor-quality jobs where they are underemployed and underpaid. Pensions have been cut, wages frozen and increments stopped. Why is it right to incentivise the rich but not the workers?
The worst thing is that the strategy has failed; it has flatlined. Even worse, the Government knew that it would fail, because it has always failed. It has been tried before and has always failed. Martin Wolf said last year:
“What is clear from UK history is that growth is a necessary condition for successful management of public debt. The...cuts of the early 1920s failed to lower the debt…the economy then collapsed.”
Nobel prize winner Paul Krugman said that the infuriating thing was that, half a century ago, any economist could have told policy makers
“that austerity in the face of depression was a very bad idea”,
and millions of workers are paying the price for that mistake.
Barack Obama, the absentee Prime Minister’s new friend, said that some people would say that
“The market will take care of everything…if we just cut more regulations and cut more taxes…our economy will grow stronger…And that theory fits well on a bumper sticker. But here’s the problem: it doesn’t work. It has never worked.”
Another Nobel prize winner, Joseph Stiglitz, said that
“austerity as the solution is just wrong. There won’t be a return to confidence—quite the contrary. So the direction Europe is going is…I think the wrong direction.”
There we have it: three Nobel prize winners—but they are wrong, aren’t they, because our Chancellor thinks that he is right? He ignores what happened in this country the last time we had a major recession. Keynes proved that you could not win with austerity and Roosevelt proved it in the United States. But we have a Government whose arrogance is matched only by their ignorance and now, as a result of his posturing, the Chancellor—even if he thought he was wrong—cannot back off. He has painted himself into a corner and he knows that if he puts in place plan B, he will be skewered by the shadow Chancellor. Pig-headed obstinacy, pride and ideology have combined to the detriment of this country. The job is far too big for the Chancellor. Now the Government are paralysed not only by their ideology and obstinacy, but by their internal fighting yet again about Europe.
We are seeing the people of this country struggling to get by, with tax cuts for the wealthy and tax hits for the poor. The poor are getting poorer and the rich are getting richer. It is, sadly, the same old Tories.
Catherine McKinnell
I anticipated Members raising the issue of personal allowances, but the fact is that the Institute for Fiscal Studies has clearly shown that the overall impact of the Government’s changes to tax, credits and benefits has left the very people for whom the change to personal allowances was supposed to help worse off. People will be worse off under this Government in 2015, too.
Then comes the ultimate betrayer of the Government’s true intentions. First, someone claims Britons have never had it so good, completely downplaying the impact of the recession on those hard hit. Then, after resigning on the back of it, this person is reinstated and can now be heard extolling the virtues of starting a business in a recession on the basis that
“labour can be cheaper and higher quality, meaning that return on investment can be greater”.
I was both alarmed and enlightened to read the report in The Daily Telegraph of a leaked discussion between pollsters and the Government’s key advisers. When asked what kept them awake at night, those advisers replied “Nothing” at first, and then admitted that it was their kids’ school fees that bothered them most. If that is the main issue affecting the lives of the Government’s key advisers, that is quite indicative. Lord Young’s comments, cited above, are quite startling, showing him to be revelling in the strain that the jobs and wages squeeze is putting on people’s finances. There are 2.5 million people out of work at the moment, and nearly 1 million young people out of work, with 500,000 out of work for two years or more. That is the highest number since the end of the last Tory Government in May 1997. Since 2010, the number of unemployed people has risen. Lord Young should reflect more on that.
Catherine McKinnell
I am afraid that I cannot. If I do, I will run out of time.
Living standards have come under increasing pressure. Average earnings are rising at the lowest rate since the end of 2009. More worryingly, according to recent analysis of figures from the Office for Budget Responsibility by the Resolution Foundation, that squeeze on average incomes is set to continue for many years. The foundation estimates that, given the OBR’s projections, the gap between what people earn and what they would have been earning had their wages risen in line with inflation will have risen to £3,200 by 2017.
The squeeze on living standards has had a disproportionate impact in my region in the north-east. Analysis carried out recently by the northern branch of the TUC drew attention to the pay gap in the north-east in particular. It showed that since 2010, real wages had fallen by £23 per week and £1,196 per year in 10 out of 12 north-east local authority areas, and that the north-east is the poorest region in the United Kingdom. Some households have been squeezed by £4,000 more than was the case a year ago, given wage freezes, below-inflation pay rises and public sector job losses throughout the region.
What hope did the Queen’s Speech offer to the millions of people across the country who have been affected by the Government’s policies? We needed a Queen’s Speech that would create jobs and growth and give people enough confidence in the economy to invest, but the Government offered nothing. The British people deserve more.