The Economy and Living Standards

Debate between Ed Balls and Sharon Hodgson

Thursday 12th June 2014 Commons Chamber

[Ed Balls]

I respect the hon. Gentleman and his views, but the main message of my speech so far has been a warning against complacency, and I suggest that he heeds that warning. [Interruption.] As should the right hon. Member for Chelsea and Fulham).

As I said, the challenge that this Queen’s Speech should have risen to, but did not, is how we can ensure that we generate a secure recovery that delivers more good jobs for our country. The huge disappointment was that that was not the subject of this Queen’s Speech. We know that there is no quick fix and that we have to earn our way to rising prosperity. We cannot turn our face against change, Europe and the world, but nor can we succeed with a race to the bottom whereby British companies simply try to compete on cost and the Government see their role as simply removing regulation, undermining job security and hoping it will work. That will not generate the low and middle-income jobs that we need in the future. Our view is that we can succeed only through a race to the top, by backing innovation and investing in skills, making our economy more competitive and dynamic and earning our way to higher living standards for all.

[Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)]

In my constituency, long-term unemployment has increased by almost 600% in the past two years and 380 people are desperately in need of some sight of the so-called recovery. What was in the Queen’s Speech that will give them any hope?

[Ed Balls]

I am afraid that the Queen’s Speech missed out the key elements of a long-term economic plan that would deliver rising prosperity for all. That is the problem. We know that there is a problem with housing—demand has run ahead of supply—so where was the action in the Queen’s Speech to deliver new towns, Treasury guarantees, planning reform, affordable homes, reform of Help to Buy and a new help to build scheme, which would deliver what we need? We have lower levels of house building than at any time since the 1920s, and the Chancellor is tinkering. It is about time that he showed some leadership on housing; otherwise, the aspirational majority will not get on the housing ladder. The danger is that interest rates will rise much earlier in the recovery than they should, choking off the living standards of people across our country.

The same point applies more widely to the Queen’s Speech. On skills, where was the action to deliver a gold standard for vocational qualifications? Where was the tax on bank bonuses to ensure that every young person who is out of work for a year is guaranteed a job? Where was the action to ensure that we incentivise a non-statutory living wage, improve the minimum wage and tackle the abuse of zero-hours contracts?

Although we welcome the extra investment in child care, that will not happen until the next Parliament. It will fail to help too many families who are struggling with the costs of child care, which have gone up so much. Why will the Chancellor not increase free child care for the under-fives from 15 hours to 25 hours a week for working parents? It is a Labour policy, but it is a good policy and should be in any sensible long-term economic plan.