Economy and Jobs

Geraint Davies Excerpts

Thursday 29th June 2017 Commons Chamber

[John McDonnell]

By wanting to invest for the long term to turn our economy around and grow it, I was following the advice of a whole range of economists. I also took into account advice that was provided to us from quite a surprising source:

“Now is a good time to invest in genuinely productivity-enhancing infrastructure, and to take advantage of low borrowing costs and our ability to borrow”—

that was the Chancellor of the Exchequer.

Is it something to be proud of that the UK is the only major developed country that has seen economic growth but falling wages? Yesterday we had the absolute chaos of W-turns, S-bends or whatever they have been described as from No. 10 and the Treasury over hints that the pay cap was to be scrapped. It was a disgrace that the coalition of the Tories and the Democratic Unionist party last night voted down our amendment to support public sector workers simply securing a fair pay rise. I will be happy to give way to the Chancellor if he will confirm whether the pay cap is to be lifted and if public sector workers will now get a fair pay rise. Would he like to respond? No. We need that assurance as soon as possible. Ministers are quick to praise the devotion and bravery of our emergency services in the aftermath of tragedies, as we have seen in recent weeks, but last night they could have extended their generosity to giving those brave, conscientious men and women the decent pay rise that many of them need if they are to be lifted out of poverty.

[Geraint Davies (Swansea West) (Lab/Co-op)]

My right hon. Friend will be aware that both the International Monetary Fund and the OECD have said that there is a relationship between inequality and growth—namely, the more inequality, the less growth. Does he not agree that it is not just unfair but unwise to pursue a policy that has led to Britain having the greatest inequality in Europe, rising at the fastest rate? If we were fairer, there would be a bigger cake with fairer shares for all.

[John McDonnell]

Virtually every mainstream economist now, and most mainstream economic institutions, argue that a fairer society is more economically efficient and more sustainable in the long term. That is not what the Chancellor’s supposed record of pride has delivered.