Jobs and Growth

Huw Irranca-Davies Excerpts

Thursday 17th May 2012 Commons Chamber

[Mr Osborne]

British car companies and their supply chain are doing incredibly well exporting their cars around the world as well as selling them at home. Instead of talking down an industry that is so important to the west midlands and to the rest of the country, the hon. Gentleman should be celebrating not just the decision about Ellesmere Port but the expansion of Nissan in Sunderland and the great news we have had about Jaguar Land Rover in Wolverhampton. Those are real success stories and those companies—Nissan, Jaguar Land Rover and Tata—have choices about where to invest all over the world. They could put that money anywhere but they are choosing to invest in the United Kingdom. We should be celebrating that fact today.

[Huw Irranca-Davies (Ogmore) (Lab)]

The company that the Chancellor has missed off the list is, of course, Ford in Bridgend, which has just had new investment. I must point out, however, that that investment was also there under the Labour Government over successive years. On Spain, will the Chancellor explain why in quarter 3 in 2009 to quarter 3 in 2010 growth in the UK was 3.2% and flatlining in Spain, whereas now it is 0.2% in Spain, which is much-maligned for obvious reasons, and we are in recession? What has happened in the first two years of his chancellorship to put us back behind Spain?

[Mr Osborne]

For a start, as of today Spain is in recession, so I am not sure that the hon. Gentleman’s point has a huge amount of force. This claim, which I guess is made only by Opposition Members whom I am looking at now, that the Labour party somehow bequeathed the new Government some enormous golden economic legacy and that we were incredibly fortunate to inherit this massive budget deficit and totally unbalanced economy with no real plan to deal with that debt or deficit—not that we have heard a plan today, either—is absolute nonsense.

We have also had the good news this week, which was of course not mentioned by the shadow Chancellor, that for the second month in a row unemployment has fallen and employment is up. We have 400,000 more people employed than two years ago, and 190,000 fewer people on welfare rolls. Yes, it is an exceptionally difficult economic time and the legacy of debt and disinvestment is a heavy one, but the tough decisions we are making are moving Britain in the right direction.

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[David T. C. Davies]

Monmouthshire county council will have a Conservative-led administration, with help from our great friends in the Liberal Democrat party, with whom it is always a pleasure to work. They were not responsible for causing the mess left by Labour.

I want some answers from Labour Members. I want to know why they left us with a debt of £1 trillion and what exactly they intend to do about it. It seems to me that the basis of their economic theory is Enid Blyton’s “The Faraway Tree”, which children climb to find a land where everything is free and nothing has to be paid for. To me, that is a fairytale; to them, it is an economic theory. They think they can just carry on borrowing and borrowing, and put off until tomorrow what needs to be done today.

[Huw Irranca-Davies]

Can the hon. Gentleman explain why he felt it necessary to write in to his local paper apologising for the incompetence of his Cabinet colleagues? I thought for a moment that he was describing them, not turning his guns on us. Surely it is they who are incompetent—that is what he stated, in black and white.

[David T. C. Davies]

I would never apologise for doing my job as a Back Bencher, which is to scrutinise and to point out that, on occasions, some Cabinet members have done things or prioritised certain policies with which I disagree. What Opposition Members should do is start to apologise, and not only for the £1 trillion debt. What about selling gold at $200 an ounce—400 tonnes of it? What about the £5 billion raid on private sector pensions, which has plunged people who worked in the private sector into poverty? Only one of them has apologised—the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), who left a note saying, “Sorry, we’ve spent all the money.” That is not good enough.

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[Huw Irranca-Davies (Ogmore) (Lab)]

This Queen’s Speech, like previous Budgets, was an opportunity for the coalition to promote growth, but the scale of the jobs and growth challenge facing the UK is matched—thanks to this Chancellor directly and to this Government—only by the scale of paralysis and inaction. Over the previous six quarters, four of which, including the past two, have been negative, the UK economy has contracted by 0.2%. This is a double-dip of the Chancellor’s own making. He has told us that he was acting in our best interests and that, “We’re all in this together; honest Guv’nor, I share your pain.” He told us that he was pursuing his austerity policies to prevent us from becoming like Greece, which was sheer baloney. Instead, he has made our growth more like that of Spain, which has just followed us into recession. Just to illustrate this point further and to show that there was and remains an alternative, I point out that under the Labour chancellorship of my right hon. Friend the Member for Edinburgh South West (Mr Darling), the UK economy grew by 3.2% between quarter 3 of 2009 and quarter 3 of 2010. Under the current Chancellor, the Bank of England’s forecast for growth has again been slashed to 0.8% from 1.25% in 2012 and reduced further for the following year, and many economists are saying that even that is wildly over-optimistic.

The recession is now stretching out to historic proportions, trying to match the extent of the great depression, which lasted for more than 12 quarters. The facts are stark: output is now 4.3% below the level at the beginning of the recession in 2008 and the UK’s position on the world stage has contributed to that, because it has been pitiful. In the UK, it was made clear that everything must be sacrificed to the god of deficit reduction—jobs, growth, and creating confidence in the economy. The process continues, somewhat inevitably now, as the Prime Minister and the Chancellor daily talk up the chances of meltdown in Greece and across the EU in order to show how helpless little old UK can do nothing in the face of those events.

The crisis in Greece and the eurozone has become the stock excuse for this Government to do nothing. “Sorry Miss, the big black dog ran off with my homework” is now “Sorry Miss, the big black Greek storm clouds ran off with my jobs and my growth strategy. It wasn’t my fault.” That is not good enough. The Prime Minister and the Chancellor have to listen. They have to take lessons. They must do better.

It is true that the solutions lie at international level, but that is a reason for taking action, not for hiding from the storm. For the last two years, instead of sitting on the sidelines like Johnny no mates, we should have been leading by example, encouraging policies of growth as well as policies of deficit reduction. What is tragic is that the UK, which has previously been in so many ways a progressive force in the EU and globally, has now become a showcase for austerity and zero growth.

Let us be clear: if Labour had won the election, we would have had to deal with the deficit, but we would have done it in a more measured way, promoting growth, not just pain. We could not have escaped the pain, but it would have been distributed more fairly, not dumped on the backs of children, the disabled, women, the poor and hard-pressed middle-income families. Because our approach would have prioritised growth, we would even have got the deficit down, rather than increasing it as the coalition Government have done.

The Government do not get it. They are way out of touch. They never really believed we were all in it together—certainly not bankers and Cabinet Ministers. In areas where jobs could have been created, deficit reduction has blinded them to all sense. The Queen’s Speech has done nothing to change that. This is government for the privileged and the very wealthy few, not for the hard-pressed and the wealth-creating many.