The Economy and Living Standards

Edward Leigh Excerpts

Thursday 12th June 2014 Commons Chamber

[Ed Balls]

In a second.

As I said, the first mistake is to bury our heads in the sand. The second mistake is to attempt to appease those who say that the problem is rapid globalisation and technological change and that therefore the simplest thing to do is to put up trade barriers, stop all migration to Britain and leave the European Union. That is the wrong approach as well.

We all know the depth of concern about immigration in our country, but when the Prime Minister claimed, foolishly, that he would reduce net migration to the tens of thousands, “no ifs, no buts”, he did the cause of sensible and progressive immigration reform no good at all, because he has failed. Net migration has not come down to the tens of thousands; it has stuck stubbornly above 200,000 a year. Even the Chancellor has admitted that the Government will not meet their immigration target. Sending ad vans around the country urging immigrants to go home has only undermined their credibility. That is not the right approach on this issue.

We need clear reform on this matter. We need tough new laws to stop agencies and employers exploiting cheap migrant labour to undercut wages and jobs. We need to strengthen our border controls, not weaken them. We need to ensure that people who come to this country can learn English, and we must provide the support to make that happen. We need fairer rules to make sure that people who come here contribute, cannot claim benefits when they arrive and can more easily be deported if they commit a crime. We need to reform the free movement of labour in Europe through longer transitional controls, stronger employment protection and restrictions on benefits. Those are the things that we have to do. We need reform, not posturing and pandering.

[Sir Edward Leigh (Gainsborough) (Con)]

But the fact remains that too many traditional, working-class voters voted UKIP in the European elections. That is a serious problem for both political parties. Should we not now regret that there was such unrestricted immigration from eastern Europe? Can we not learn the lessons of that?

[Ed Balls]

I am very happy to say to the hon. Gentleman that not having transitional controls in 2004 was a mistake, and one that we all still deal with the consequences of. The question is whether we should have allies in Europe whom we can persuade to do things better for the future or walk away from our European partners and find that we are treated with disdain in the decision-making halls of Europe. That is the real question for statesmanship and politics in our country at the moment.

Our view on that question is clear. We say that there is no future for Britain in walking away from the European Union. It is the biggest single market for the companies, regions and countries of the United Kingdom. We have to reform Europe to make it work better for Britain, but we are much more likely to win the arguments if we are fully engaged, rather than having one foot out of the door.

The Prime Minister and the Chancellor used to agree with that argument. They came though the Lobby with us in 2011 to oppose an arbitrary timetable for an EU referendum. Then, they changed their minds. The Prime Minister flounced out of a summit and decided to appease Tory Back Benchers by performing a U-turn. In the memorable words of Lord Heseltine,

“To commit to a referendum about a negotiation that hasn’t begun, on a timescale you cannot predict, on an outcome that’s unknown, where Britain’s appeal as an inward investment market would be the centre of the debate, seems to me like an unnecessary gamble.”

--- Later in debate ---

[Sir Edward Leigh (Gainsborough) (Con)]

The whole House has great respect for the right hon. Member for Blackburn (Mr Straw), who, as always, was careful to acknowledge that the previous Labour Government did make some mistakes. One of those has been all over the newspapers this morning. It was a decision that he was closely involved in and that I voted against: the decision to invade Iraq. That has proved to be one of the single most disastrous decisions ever made in foreign policy, and we have reduced that country to chaos. There are also lessons to be learned for the future, when next we think of involving ourselves in foreign countries with military ventures, whether in Ukraine or Syria.

The right hon. Gentleman was also generous in his description of the very difficult economic decisions that both Governments have grappled with. Of course he is right to say that the roof has to be fixed, but I am sure he would accept it when I say, as a former Chairman of the Public Accounts Committee, that there were productivity declines in areas such as the NHS and that extraordinary waste was involved in the rapid increases in expenditure, particularly on health and education. I am sure that both Governments have a lot to learn about that. I agree with him that we were probably wrong to agree to commit ourselves to accepting Labour’s spending plans, which were too high, and I have consistently argued that we should have addressed the deficit even quicker. It is a matter of regret that we are still spending more than ever before. That highlights the key challenge that both parties face: we have to keep addressing this deficit.

The current Government are winning the economic argument because there remains a lack of coherence in Labour’s spending plans. The whole country realises that there has been this monumental waste and the Government are addressing it. Perhaps we could have done more and we could have done it in a better way, but we are seeking to address it. This Labour Opposition, unlike the Labour Opposition before 1997, who accepted our spending plans before 1997, do not apparently have a coherent economic message to address that. We know that elections are won on the economy.

At the moment, we cannot deny that 2 million extra jobs have been created in the private sector, and I have to say, following an intervention from the Opposition Benches, that they have not all come from ex-members of the Bullingdon club. There are a lot of ordinary people who are getting these jobs. The Opposition have to address that problem, and we have to concentrate on the economy. It was significant and a bit of an innovation that, in the Gracious Speech, the Queen often mentioned the economy.

[Mr Straw]

I am extremely grateful to the hon. Gentleman for giving way and for his generosity towards me. Yes, of course I accept the 2 million figure that he mentioned, but does he acknowledge that a significant element of that 2 million, whether we like it or not, is composed of those migrants who have come in, about which he so much complains?

[Sir Edward Leigh]

Yes, of course I acknowledge that, but the point I want to make is that it is by concentrating on the economy during the last year of this Government that we will establish our credibility as a party of government. What worries me is that although there is so much in this Queen’s Speech that is excellent, especially the Bill dealing with pensions, we still sometimes forget the essential lesson that, as a Conservative party and a Conservative Government, where we do conservative things and address the economy in a conservative way, we win. Where we indulge in modernising gimmicks, we stumble and start to lose. Sometimes, we forget that. When we do conservative things, such as cutting the deficit, introducing a benefit cap and attempting—not enough—to deal with immigration, we win.

I am still worried about a couple of things in the Queen’s Speech. Is it really essential, when we are trying to address record spending and difficulties in the economy, to start talking about eradicating plastic bags in supermarkets? Is that a priority? Is it essential to start talking about the recall of MPs? It may at first sight be populist and popular, but it is very difficult to administer and probably will not solve any problems. For centuries, rogue MPs have consistently been kicked out of this place, so let us concentrate on the economy.

[Mark Hendrick (Preston) (Lab/Co-op)]

By modernising, which the hon. Gentleman is very much against, does he mean reneging on the pledge to commit 0.7% of the gross national product to international aid, which was a manifesto promise of the three major parties in this country?

[Sir Edward Leigh]

That is a manifesto promise. My views on that are well known. I have two daughters working in international development in Africa, and I am proud of the efforts that we have made on international aid. I am totally committed to spending properly on international aid, but the Department for International Development, like every other Department, must spend what we can afford to spend and what we need to spend. Frankly, it is somewhat economically illiterate to insist by legislation or by other means that a Department sets a fixed percentage of GNP on aid, health or anything else. What happens if there is a recession and the economy contracts? We could end up spending less on aid. I have consistently made that argument, but I am grateful to the hon. Gentleman for his intervention.

My point is that we must concentrate on the economy. We still face enormous challenges. It is very difficult to get to grips with some of these challenges while we are in a coalition Government. A lot has been made of immigration in this debate. The truth is that we have made a mistake—the shadow Chancellor was generous enough in response to my intervention to accept that—in allowing such high immigration from eastern Europe. We all accept that, especially when economies diverge so greatly, as happens between Bulgaria and Romania and ours. It cannot be accepted in the long term that there should be an untrammelled right of immigration from poorly performing economies to our own. We just have to accept that. Therefore, the European Union rules on this must be reformed. I should like to see legislation put in place, but it will not be possible while we are in a coalition.

We also have to address the problem of the referendum. The British people deserve a referendum. Nobody under the age of 55 has been given a referendum. It is virtually impossible to get a referendum Bill through via the private Member’s procedure. The referendum Bill should be in the Queen’s Speech. It should be a Government Bill. I say to my hon. Friends the Liberal Democrats, who are sitting in front of me, that they cannot deny the right of the British people to have a choice.

We need to address the concept of human rights. I am a great supporter of the Council of Europe and all its work; I am a member of it. The fact is that we cannot continue to have a proactive European Court of Human Rights in Strasbourg, which is defeating the efforts of the former Home Secretary, the right hon. Member for Blackburn (Mr Straw), and many others to deal with terrorism. There is much more that we need to do, which is why, for all that the coalition has achieved, we must get a clear result at the next general election. I hope from the bottom of my heart that it is a Conservative victory, so that we can address the very serious problems that still afflict our nation.