Debate on the Address Debate

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Department: Cabinet Office

Debate on the Address

Iain Wright Excerpts
Wednesday 9th May 2012

(12 years, 7 months ago)

Commons Chamber
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Simon Hughes Portrait Simon Hughes
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No, because other colleagues wish to speak and I am bringing my comments to a close.

The new President of France said after he was elected on Sunday that his two priorities were a fairer country and support for the next generation, the young people of France. I think that those are good things for us to champion for our country from these Benches. We need a redistribution of wealth and of work, an end to the obscenity of top pay and a closing of the gap between rich and poor. We need to make sure that work always pays, to create more apprenticeships and a more skilled work force, to give more opportunities for employment and self-employment and to build the largest opportunity for infrastructure investment that we can manage, in all countries and regions of the UK, and the largest affordable programme for housing that we can deliver, particularly social rented housing, which is desperately needed in my constituency and elsewhere. I guess that there is not a single colleague who does not have constituents coming to their surgery every week pleading with them to find somewhere where they and their partner, or they and their parents, or they and their children can live. Young people need a decent careers and youth service, decent work experience, decent mentoring, good apprenticeships and good further and higher education.

To the Prime Minister and the Chancellor, I say, “You were right, of course, to take as many poor people out of tax as you have, but please do not again reduce tax rates for the well-off.” Whatever the balance of equity, it came across very badly, it did not look as if we are all in this together and the evidence does not show that any further reduction will do any greater good for the economy. We have had one Budget which does this and we know the outcome, but no more please. Let us take the poorer out of tax, not the people at the top.

To colleagues here who sometimes have disagreements with the Government—we all do—I say that we have to remain strong, united, determined, liberal and radical. We have to be committed to the things we came here for: the spreading of wealth and power and a cleaner, greener, safer and, above all, fairer Britain.

To the people outside who wonder what we are doing in this difficult coalition, I say that we are clear that we cannot achieve everything we want because in a coalition, by definition, that is not possible, but it is better to be in government influencing a huge amount than in opposition influencing nothing. We are determined to use our influence not unfairly, disproportionately or unreasonably, but this is a partnership of two parties. That is the deal and that is what we will stick to.

We won 16% of the vote in the local elections the other day; we won 23% in the general election. It is not an impossible task over three years to build confidence, but it depends on whether we can get the economy going, help growth, make sure that we are seen to be economically competent and deliver a fairer Britain.

I think that we can do it, and Asquith gave us something 100 years ago this year as an encouragement on our way. In his speech in Nottingham to our party conference, at a time when he was leading one of the greatest Governments in British history, he said this—

Simon Hughes Portrait Simon Hughes
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I was not there, no—not even in my previous life!

Asquith said:

“If we have—and I believe you will see that we have—concentration of purpose, unity of spirit, and unshaken firmness of resolve, then, long and stormy though the voyage may have been before it comes to an end, the ship will find her way with a full cargo into the desired haven.”

Liberal Democrats are determined to deliver us safely on the other side and, much more importantly, to deliver our constituents to a better Britain, with better prospects, higher employment, lower unemployment and a much more secure economy for the five years following 2015 than the one we inherited when we took over in 2010.

Iain Wright Portrait Mr Iain Wright (Hartlepool) (Lab)
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It is a pleasure to follow the right hon. Member for Bermondsey and Old Southwark (Simon Hughes), who I know takes a great interest in Hartlepool—largely because he spent most of the 2004 by-election there trying to stop me becoming a Member.

In his opening and closing remarks, the right hon. Gentleman mentioned elections both general and local, and I have to tell him that after Thursday’s local elections, on Hartlepool borough council the Liberal Democrats now have no representation whatever, which shows the scale of the challenge that he and his party face in terms of getting into bed with the Conservatives.

Mike Crockart Portrait Mike Crockart (Edinburgh West) (LD)
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I am confused by this continuing slur of “getting into bed with the Conservatives”, because in Scotland we now have coalitions of every possible hue, including Labour and Tory coalitions. Does the hon. Gentleman attack those coalitions with the same vigour that he attacks this one here?

Iain Wright Portrait Mr Wright
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I use the phrase “getting into bed with the Tories” not because it is of my own making, but after speaking to my constituents and people elsewhere who were thinking about voting Liberal Democrat, who might have fallen out of love with Labour following the 2005 general election and who wanted to consider something else in 2010, but who now feel let down and betrayed. That is the scale of the challenge that the hon. Gentleman’s party faces with regard to reinvigorating the trust of the people.

Almost the first words that Her Majesty said in her speech today were:

“My Ministers’ first priority will be to reduce the deficit and restore economic stability.”

Those words were almost identical to the ones that the Queen uttered in the first Session of this Parliament, two years ago, when she stated:

“The first priority is to reduce the deficit and restore economic growth.”

In the intervening two years, the Government have done little that they set themselves on both counts. They have had to borrow about £150 billion more than they originally forecast back in 2010, and they have failed to deal effectively with the deficit and to restore economic growth, because they have focused exclusively—some might say almost obsessively—on the former, reducing the deficit, instead of giving sufficient priority to the latter, economic growth. It should not be an either/or game. Tax revenues are lower because of weak demand and reduced consumer spending, while expenditure is rising because of the need to pay out more in unemployment benefits. The British economy is now in a more perilous state than when the Government took office two years ago.

The Prime Minister and the Chancellor will trot out the excuse of the difficulties experienced in the eurozone, and there is some truth in that, but they cannot escape the fact that the retreat into recession has been caused almost directly by their actions and policies. We are experiencing this country’s longest downturn since the 1920s. Britain is emerging from the deep global recession of 2008-09 more slowly than from previous recessions and, crucially, more slowly than our main economic competitors, meaning that our rivals in the global marketplace are stealing a march on us. The actions of this Government today are compromising our competitiveness in the global economy of tomorrow.

The US economy grew by 3% in the last quarter of 2011 and by 2.2% in the first quarter of this year. Alongside Greece and Italy, Spain is generally—almost universally—acknowledged to be one of the economic basket cases of the eurozone, but even the Spanish economy grew more in 2011 than Britain’s. Today’s publication of UK retail figures, which show a 3.3% fall year on year—the largest fall in more than a year—demonstrates the general weakness of the economy, the lack of demand and the fragility of consumer confidence.

Mel Stride Portrait Mel Stride (Central Devon) (Con)
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Will the hon. Gentleman congratulate the Government on maintaining our triple A credit rating status and acknowledge the fact that we have among the lowest long-term interest rates in the world at the moment? That is a major achievement.

Iain Wright Portrait Mr Wright
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We do have those things, but we have no growth. I fear that the rehashing of phrases in the Gracious Speech today—often word-for-word repeats of what was said in 2010—will mean that the Government will continue to insist on economic policies that consign the country to a decade of stagnation, anaemic growth, mass unemployment and rising social division.

Andrew Murrison Portrait Dr Murrison
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Will the hon. Gentleman explain how high interest rates will stimulate growth?

Iain Wright Portrait Mr Wright
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High interest rates do not stimulate growth, but, equally, low interest rates indicate that there is no economic stimulus whatever. We need a rounder, more holistic approach to economic policy that focuses not solely on reducing the deficit, but on making sure that we can stimulate the economy to embark on jobs and growth.

Meg Hillier Portrait Meg Hillier
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Does my hon. Friend agree that one of the challenges is the issue of businesses not being able to get loans? The Prime Minister spoke with enthusiasm about Project Merlin and the loan guarantee scheme, but that is not delivering to businesses. There is no contradiction between cutting a deficit and getting banks to lend. It is in the Government’s power to do so, but they are not acting.

Iain Wright Portrait Mr Wright
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I absolutely agree. Later, I want to mention that we need more investment and to unlock investor confidence and provide more business investment. That is at terminally low rates at the moment.

Emphasis should have been given to a new finance Bill with measures to boost demand in the economy and put more money in the pockets of millions, rather than prioritising tax cuts for millionaires and tax rises for pensioners. Communities such as mine in Hartlepool and the wider north-east see a Government presiding over unprecedented cuts to income, living standards and public services, huge rises in unemployment and matters being made worse by Government measures such as the rise in VAT, hikes in student fees, cuts to tax credits and increased taxes for pensioners.

At the same time, the Chancellor is insisting that the country can afford to give those earning more than £150,000 a year a tax cut and that, in the current climate, millionaires should be given priority and pay about £40,000 a year less in tax. A new finance Bill could have set about repairing some of the damage from the previous Finance Bill, which has been carried over into this Session; it could have put us on the path to economic recovery, jobs and growth.

Iain Wright Portrait Mr Wright
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I hope that the hon. Lady will agree.

Andrea Leadsom Portrait Andrea Leadsom
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It seems rather astonishing that the hon. Gentleman should be suggesting that the Government should be spending more money. Does he run a household budget as I do? When people are trying to feed a family, it is clear that if they borrow lots of money and pay extremely high interest rates—because their intention is to borrow even more money—that will not get them into any position to balance their budget or move on from the parlous state in which they find themselves. Is the hon. Gentleman not aware that we are already paying £200 million a day in interest, just to service the debt that his Government incurred?

Iain Wright Portrait Mr Wright
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What I am suggesting is that if the Government were serious about economic growth and promoting the conditions for competitiveness and enterprise, they would be doing a lot more to stimulate growth and job creation. For example, they could have announced a British investment bank Bill, which would have provided a clear and welcome acknowledgement that active partnership between Government and productive businesses will allow the state to ensure that growth capital is provided to the small and medium-sized businesses that need it, for which the market has failed.

Active partnership between Government and businesses can work. Successful modern economies such as Singapore and Germany do it, and their economies will see long-term, sustainable business success and economic growth as a result. Even the US, supposedly the most free market economy on earth, does it; we saw the likes of fast-growing young companies such as Apple and Intel receive growth funding through the US Government’s small business investment company programme. On the subject of active government in the US, why did not the Gracious Speech include the British equivalent of President Obama’s Jumpstart Our Business Startups Act, which is designed to increase the number of jobs and to kick-start initial public offerings for companies and ensure that they have access to finance for growth? We should be doing the same here.

Mel Stride Portrait Mel Stride
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Does the hon. Gentleman recognise that according to Companies House there were more new business start-ups in the last quarter than at any time since this Government came to office?

Iain Wright Portrait Mr Wright
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You will never hear from me, Mr Deputy Speaker, any criticism of trying to get as many start-ups as possible. I would welcome a culture of enterprise and allowing businesses to grow, but firms that are starting up are being penalised by not being given access to finance and capital to allow them to do so.

The Gracious Speech referred to the introduction of

“legislation to reform competition law to promote enterprise and fair markets.”

I hope that the Government will confirm that that Bill will contain measures to curb excessive executive remuneration and encourage increased shareholder activism, as that was not specifically mentioned in the Queen’s Speech. I also hope that they will legislate to implement all—I emphasise all—the sensible and widely accepted recommendations of the High Pay Commission earlier this year on matters such as simplification of executive remuneration, standardisation of reporting to ensure that meaningful comparisons can take place, and, importantly, the inclusion of employee representation on remuneration committees. Recent events at the likes of UBS, Trinity Mirror, Barclays, AstraZeneca and Aviva have shown that there is shareholder appetite for ensuring that poor performance is not rewarded through excessive pay. I hope that the High Pay Commission’s recommendations will be implemented in full.

I hope that the reference in the Queen’s Speech to “repealing unnecessary legislation” will not mean stripping away workers’ rights. Making it easier to fire people does not create jobs, employment or economic growth; instead, such an environment creates a Victorian-mill-owner culture of bad bosses being accepted and enshrined in legislation. It will do nothing to stimulate consumer confidence or growth in demand, which are so very vital. It is also wrong to suggest that the level of employment protection and rises in unemployment are closely correlated, as David Blanchflower points out in his article in The Independent today. He argues that Germany and the Netherlands have much higher levels of employment protection than the UK but experienced a much smaller rise in unemployment during the recession and its aftermath.

Iain Wright Portrait Mr Wright
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I hope that the Government will recognise that point in taking forward legislation, and that the hon. Lady will recognise it as well.

Andrea Leadsom Portrait Andrea Leadsom
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I agree that we have got into a position in this country whereby certain big businesses have behaved extremely badly towards their employees, and towards capitalism itself. That has not been about true entrepreneurism but just money for old rope. Does the hon. Gentleman agree that the answer to that is to change the way in which we do corporate governance by introducing new powers for shareholders to ensure that they can hold to account the chief executives and boards of such companies?

Iain Wright Portrait Mr Wright
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I would certainly agree with making improvements to this country’s corporate governance model. Germany has a good model, and although it cannot be replicated exactly, it is something that we should consider. I have mentioned the recommendations of the High Pay Commission, which referred to employee involvement in remuneration. I hope that that approach will continue. By having a responsible capitalist agenda, we can make improvements to secure long-term sustainable growth in this country. Perhaps the hon. Lady and I can agree on that.

Helen Grant Portrait Mrs Grant
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Does the hon. Gentleman agree that extreme and unreasonable levels of employment protection can be a disincentive to enterprise?

Iain Wright Portrait Mr Wright
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I speak to businesses in my constituency and elsewhere virtually every day, and they are not telling me that they are hindered in that way. This goes to a wider point about the Queen’s Speech and about the Government’s having the wrong priorities and the wrong values in this respect. I am arguing that we should be concentrating on increasing employment and having a system whereby we can secure long-term sustainable business growth for this country. We should be making it easier for people to hire workers, not fire them.

I hope, too, that the reference in the Queen’s Speech to the limiting of state inspection of businesses will not serve as a cover for further cuts to the Health and Safety Executive’s budget or an undermining of the safety regime in the workplace. On 28 April we commemorated workers memorial day and were reminded that 20,000 people would die prematurely this year from injuries sustained or diseases contracted as a result of unsatisfactory health and safety in the workplace. Fatalities in the construction industry have risen in the past year, and responsible Governments and businesses recognise that a comprehensive safety regime, suitably audited, actually enhances productivity and efficiency and ultimately has a beneficial effect on the bottom line. I therefore hope that workers’ health and safety rights will not be stripped away.

The Queen’s Speech referred to the Government’s commitment to

“improve the lives of children and families”,

with which the whole House would agree. However, today’s report by the Joseph Rowntree Foundation forecasts that child poverty will increase in the next decade. It concludes by stating that the Government should take a more targeted approach to employment programmes and aim them at families in my constituency and elsewhere who often have not seen meaningful or sustained work for three generations or so. That could break the cycle of unemployment, poverty, deprivation and the loss of ambition and aspiration. There was nothing in the Queen’s Speech to allow that to take place.

The most serious issue facing Hartlepool both socially and economically is the level of unemployment, which is higher now than it was at the height of the global recession in 2008. Youth unemployment is a particular concern. One in four young men in my constituency are out of work, which will cause immense social and economic problems in the next 20, 30 or 40 years. The Government really need to deal with that, and measures such as the abolition of the future jobs fund, the cancellation of education maintenance allowance and the hike in tuition fees do not help young people in my constituency. I wanted to see in the Gracious Speech something like a future jobs fund or a skills and retraining Bill, to ensure that my constituency and others were best placed to come out of their economic difficulties in a better position than when they went into them. Sadly, the Queen’s Speech was lacking in that regard.

Helen Grant Portrait Mrs Grant
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Does the hon. Gentleman not agree, though, that policies on flexible working and shared parental leave will have the effect of keeping people in work?

Iain Wright Portrait Mr Wright
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I believe the balance that the Labour Government struck was probably about right. There will always be different emphases, but I reiterate the point that I made in answer to a previous intervention. Businesses say to me, “We want to have the conditions for growth. We want to be able to hire workers. The issue is not about being able to fire workers more easily—that is not what we are about.” The emphasis and priorities that the Government have set out in the Gracious Speech and elsewhere are completely wrong.

It astonishes me that after only two years, the Government seem to have run out of steam. The rehashing of words and phrases in the Queen’s Speech is evidence of that. It is difficult to think of the big reforming Governments of the past century—the right hon. Member for Bermondsey and Old Southwark mentioned Asquith, and we can think about Attlee, Thatcher or Blair—being devoid of policy areas only 24 months after being elected. Governments used to talk about relaunches after two terms of office, not after two years. The Government have no sense of national mission and have not set out the values that are really needed or what they want the British economy to look like in 2020 or 2030. They lack, in the eloquent words of the Business Secretary, a “compelling vision” of where they want to take the economy.

As The Sunday Times stated this weekend:

“People now regard this as a government that fails on the three i’s: it is incoherent, incompetent and has run out of ideas.”

Today’s Queen’s Speech provided the opportunity for a true and meaningful relaunch, which could have ensured that the Government reassessed their values and priorities and tried again. They failed to do that. This country and my constituency, particularly its young people, will suffer the consequences of that missed opportunity for decades to come.