Debate on the Address

Gareth Thomas Excerpts

Tuesday 10th May 2022 Commons Chamber

[Gareth Thomas (Harrow West) (Lab/Co-op)]

I very much welcome the remarks of the hon. Member for Waveney (Peter Aldous) about Bob Blizzard. I had the great privilege of being elected at the same time as him, and as we learned together and with others how this place works—and, indeed, how it perhaps does not work quite so well—I had many conversations with him. I heard of his passing last week from a friend of his in my constituency, and I feel very sad that such a good man and such a great figure in the Labour party has been lost to us.

What stands out from the Prime Minister’s speech this afternoon is a complete failure to understand just how poor his Government’s response has been to date to the desperate circumstances of too many of my constituents because of the cost of living crisis, and particularly because of the huge hike in energy bills, which have gone up by at least 70% since 2010. Ministers have been complacent and too slow to act. The average household bill is now about £2,000 a year, and in October it could rise to almost £3,000. Everyone in the country is affected, but for many the huge rise in bills means some devastating and very difficult choices. For those who are the most vulnerable in our country, the choice is: do they feed themselves or do they put the heating on? Similarly, one small business owner explained to me recently how his energy bill is going up from £1,200 a month now to £2,400 in June.

More than 2 million adults have gone without food for a whole day in the past month and 2.5 million children now regularly miss meals or have to have smaller meals. In the 21st century, in one of the richest countries in the world, that is a truly shocking indication of the Government’s failure. A sustained and meaningful plan to tackle immediately the cost of living and food security crises is needed. We should have been told today when an emergency Budget was going to be brought forward to tackle those issues. My right hon. and learned Friend the Leader of the Opposition’s suggestion of a cut in energy bills funded by a windfall tax to help everyone is entirely sensible, and further help for those on average or very low incomes will be critical, too. An increase in social security payments, with an uplift in universal credit, is the obvious way to do that.

One particular, but unsurprising disappointment about the Gracious Speech was the absence again of the much-promised employment Bill, leaving far too many vulnerable to bad employers. Making sure those in work are treated fairly, with respect, and have decent incomes is fundamental to the even greater country that Britain can be. It is why all public services should be supported to pay a genuine living wage, why sick pay should be extended too and why an employment Bill is needed to rein in the worst employers—for example, to outlaw fire and rehire and to increase the penalties for discrimination against women having a baby. It should have been in the Queen’s Speech.

On the economy more generally, energy price hikes, widespread inflation, interest rate rises and growing concerns that the economy is going into recession only underline how badly the economy has been run for the past decade. Indeed, over the last 10 years, Britain’s growth in exports has lagged significantly behind the rest of the G7, yet there is little recognition or action by the Treasury or other key Departments. Between 2010 and 2020, American exports of goods and services to the rest of the world rose by over 14%. Germany saw growth over the same period of over 13% in its exports. Across the G7, average growth in exports was 10%, yet Britain, under the Conservative party over the same decade, managed growth of just 4%. Even Italy saw faster export growth.

Indeed, we saw a decline in exports to the world’s fastest growing economies in the G20 over that period: since 2010, goods exports to G20 countries have gone down 10%. We lost our position as the world’s biggest centre for financial services in 2018 to New York. We missed—even allowing for covid—by a huge margin, George Osborne’s target to treble exports. Exports matter: they are crucial to business growth and to generating tax receipts; they are a factor in our soft power; and they are fundamental for job creation. Indeed, jobs linked to exports pay higher than average wages, so not properly supporting exporters is only going to prolong the cost of living crisis and hold back economic growth.

The Conservative party’s failure to take serious steps to address the problems businesses are facing trying to get into European markets will only exacerbate that problem. The Prime Minister thinks it is down to a lack of ambition by exporters. We need as a country to make Brexit work better. We are not going to be rejoining the European Union, but we do need to sort out the problems in the deal that the Prime Minister negotiated with Brussels. We should be negotiating a veterinary agreement, and sorting out mutual recognition for the qualifications of our professionals so they can travel and trade with ease across Europe. We should be tackling visa problems for our creative industries, accelerating investment in digital borders and trying to build more productive relationships with our key allies.

I wish I was surprised that the Gracious Speech did not give consumers significant new powers to hold the businesses that aspire to serve them to account. Water bills have rocketed since privatisation. Sewage spills, deliberate or not, are at shocking levels, underlining the insufficient levels of investment, while executive pay and profits for the often overseas owners of water companies continue to be too high, and clearly at the expense of treating water users—consumers—properly. Why do water companies not have to answer properly to their customers? Complaints are at record levels, yet Ministers continue to give the boards of water companies the benefit of the doubt. Why do not Ministers support the consumers of water companies to co-ordinate properly at each English water company, to elect a representative to the board and to have the right to sign off the board’s accounts, executive remuneration and its investment plans? Why is there not action to stop excessive profits and to stop the diversion of funds that could support investment to pay dividends to shareholders?

Similarly, the shocking level of energy bills only underlines the lack of agency that consumers have in energy markets. Even before the current crisis, it was clear big companies dominated the market too much, so new thinking on how to give consumers more agency in energy markets in the long term is essential to shape energy security, shift patterns of ownership and accelerate that switch to lower-carbon, renewable systems. Indeed, where is the serious plan to tackle the climate crisis? If the Government had backed the Opposition’s plans, we could double our onshore wind capacity to power an extra 10 million homes, back tidal power, triple solar power by 2030 and accelerate energy insulation to reduce the bills of working families and pensioners.

On financial services, it is there that, in the last 12 months, it is most apparent that Ministers have not shown enough interest in consumers. British banking is dominated by four large banks, which provide 70% of current accounts. Even the most generous think that recent measures to boost competition are having only limited impact. Banks are closing branches fast. Increasingly, it is mutual and co-operative financial services that are having to step in to maintain branches and support the high street. Building societies, credit unions and mutual financial insurers need legislative reform to enable them to get the capital they need to invest in new products, new IT and new markets. One boss of a mutual insurer with experience in other countries described the UK at the moment as a uniquely difficult regulatory environment for that insurer.

The shocking attempt last year to demutualise Liverpool Victoria demonstrated the need for legislative change to strip out the remaining incentives for boards to try to demutualise and to give the consumer-owners of those mutuals more powers, as well as the need to address the capital-raising difficulties that many mutuals have, and which have already been resolved in other countries, such as Australia.

In theory, the Financial Conduct Authority is supposed to stand up for consumers. It did not do so during the LV debacle and almost £35 million of owners’ money was wasted as a result. The FCA did not stand up for British Steel pensioners either and it certainly did not during the mutual minibonds scandal. It does not have the resources, and it does not have the appetite clearly, to really stand up for consumers. It has too many other things to do, so I wonder whether a separate consumer ombudsman is now needed, with the sole objective of standing up for consumers, with significant information gathering and class action powers.

Voters in Harrow decided, sadly, to end my local party’s leadership of Harrow Council. We have some work to do as a local party to understand and, crucially, to face up to why voters collectively made that decision. In time, there will, I am sure, be much for us to be proud of about the council’s actions under Labour control, particularly the response to covid, but we have to confront now the question of whether, despite cuts in Government funding to Harrow Council of more than 90%, better council services could have been provided.

One particular concern locally was recent revelations that the council had been hit by fraud, with media reports suggesting that up to £2 million that could have been spent on repairing pavements and roads had disappeared. That is money that local people paid out through their council tax and other tax bills and they have every reason to be angry about such behaviour. To be fair, the previous council leadership acted immediately. It investigated and those responsible have been sacked. The police were called in, and supported as they investigated, too. That money taken wrongly needs to be reclaimed and, if prosecutions are appropriate—and why wouldn’t they be?—they need to happen. I expect the new council leadership to lead that charge.