Economic Growth

George Howarth Excerpts

Wednesday 15th May 2013 Commons Chamber

[Mr George Howarth (Knowsley) (Lab)]

Can the Chancellor name a single occasion before the banking problems in 2008 when he and his party argued for tighter regulation of the City?

[Mr Osborne]

My party voted against the tripartite arrangement. I do not have the quote with me today—I will send it to the right hon. Gentleman or ensure that my right hon. Friend the Chief Secretary has it for the wind-up—but the shadow Chancellor at the time, my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley), warned in this House that taking prudential regulation away from the Bank of England was a massive mistake and that the Bank of England would not be able to spot the growth of debt bubbles in the economy. Tragically, that is precisely what happened a decade later, and in part the responsibility lies with the people who set up the regulatory system. Is it not extraordinary that Labour Members get up and say that the Conservatives said this or that, yet we are looking at the City Minister at the time? We are looking at the person who, before that, was the chief economic adviser who devised the system and who used to take pleasure in telling everyone that he turned up in government and gave Eddie George a letter saying that he was no longer in charge of banking regulation—that used to be the shadow Chancellor’s story, but he never talks about it now.

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[Mr George Howarth (Knowsley) (Lab)]

I will first say a few words about employment, particularly in the light of statistics released today, and then a few words about Europe. The employment situation in the UK and in my constituency is frankly depressing, and the figures released today by the Office for National Statistics emphasise that. Nationally, 3.8% of those aged 16 to 64 are on jobseeker’s allowance. Today in Knowsley the number of JSA claimants is 4,245, which equates to 6.3% of Knowsley residents, well above the national rate. Similarly, the JSA count for those aged 18 to 24 is 7.2%, whereas in Knowsley it is 13.2%. In my view, therefore, there is no room for complacency.

To be frank, many of the existing opportunities do not reflect the expectations of an ambitious country. Practices such as zero-hour contracts and the use by many high-profile companies of unpaid internships and agency work amount in many cases to systematic exploitation, particularly of young people.

There is growing concern about what is often referred to as the race to the bottom. In The Times a few days ago, the noble Lord Sainsbury of Turville was reported as arguing for a more progressive form of capitalism that recognises social justice and discussing the role that institutions could play in bringing it about. He also rejected the neo-liberal consensus of the past several decades.

Frances O’Grady, the recently appointed general secretary of the TUC, has mentioned the Prime Minister’s ambitions to erode workers’ rights. She said:

“'The Prime Minister wants to ‘repatriate’ those rights, and not because he thinks he can improve them”,

but because he

“wants to make it easier for bad employers to undercut good ones”.

Moreover, on the question of employment rights, Jon Cridland, the director general of the CBI, has said that the Prime Minister’s proposals would not be his starting point in any negotiation. It is clear that there is an emerging consensus that we should be discussing the quality of employment and the opportunities for people, rather than taking away the rights and privileges they already enjoy.

I am a Eurosceptic compared with many on the Labour Benches. I voted against the Maastricht treaty, because it removed the social contract. I am in favour of renegotiating the terms of our EU membership and think there should be a referendum at some point. It is not healthy for our democracy that the relationship between the political classes and the country has eroded to the extent that it has.

Where I part company with the Prime Minister, however, is on the sort of Europe that he wants to renegotiate, which is entirely different from the sort of Europe that I want to be a part of. I believe firmly that there is a case for renegotiation and that it should be followed by a referendum, but I certainly do not agree with the sort of Europe that the Prime Minister wants to bring about.

[Mr Bone]

The right hon. Gentleman is making a thoughtful speech and I understand entirely his position, but will he consider voting for amendment (b)? It does not specify a particular Bill; it just regrets that there is no EU referendum Bill in the Queen’s Speech.

[Mr Howarth]

No, and the reason why I am not prepared to do that is because the hon. Gentleman and the amendment anticipate a different kind of renegotiation from one that I would support. I have given serious thought to supporting the amendment, but it is possible on occasion to agree with the words of an amendment while not necessarily agreeing with the sentiment behind it. I do not want to be associated with a proposal to renegotiate Britain’s involvement in Europe that differs from how I would want it to be conducted. The difference between me and the hon. Gentleman and others who support the amendment is not necessarily over its wording, but over the intention behind it, which I do not want to be associated with.

I hope that in the coming years we will see a different arrangement between Europe and the United Kingdom. I also hope that we can improve people’s working lives and make work pay for a lot more people, particularly young people. I do not believe that that is the direction that this Government want to take, and I hope that when there is a change of Government we will be able to make the changes that I want to see.