Rail Strikes

Debate between John McDonnell and Steve Brine

Wednesday 15th June 2022 Commons Chamber

[John McDonnell (Hayes and Harlington) (Lab)]

Let me clarify one point if I may. There has been reference to RMT donations to individual Members and the declaration of interests. I thought the declaration of interests was annual, but I make it absolutely clear that the RMT contributed to my constituency party during the general election, which I declared properly and of which I am proud. RMT members were the first to move at the TUC that the Labour party should be established; that union is part of our movement. I am proud to be supported by it and I am proud to be part of the RMT parliamentary group. That gives me a relationship with workers in the railway estate in my constituency, which enables me to speak with some authority—I try, anyway—on rail matters. Let me put that to rest: I am proud of the support that it gives to my constituency party.

[Steve Brine (Winchester) (Con)]

Will the right hon. Gentleman give way?

[John McDonnell]

If it is on that, no, because there are more important points to be honest.

We need to return the debate to what the dispute is about. I refer to the hon. Member for Bexhill and Battle (Huw Merriman). The union has three demands in the negotiations so I will make three points. The first demand is for no compulsory redundancies—compulsory is the key word. There has never been a time when the RMT has not negotiated job losses, but there has always been a principle that they should not be compulsory. I remember that Bob Crow never lost a dispute, and neither has Mick Lynch, because they are sensible about the nature of the disputes that they get into.

UK Economy

Debate between John McDonnell and Steve Brine

Wednesday 29th June 2016 Commons Chamber

[John McDonnell]

I shall come on to that later in my speech. I want to deal with the implications of the Chancellor’s statement on Monday for future Budgets, if I may. In a situation like this, it is essential to introduce some clarity. There is great uncertainty, both for those fearing for their jobs and those worried about the volatility of the financial markets over the last few days. It is up to us—I mean the whole House—to secure some clarity and a clear sense of direction in our debate.

Let me clarify why the referendum result has led to this situation. There were warnings that a vote to leave would produce this shock. Economic forecasting is, as we know, not an exact science, even at best, but every forecaster with any credibility pointed towards a significant negative shock from a leave vote. The main disagreements were about the size of that shock, and I have to say that the warnings should have been heeded. It was irresponsible of those campaigning for leave not just to gloss over them, but to make the claim that a leave vote would lead only to warm sunny uplands. The truth is that the shock is already significant and could rapidly worsen if action is not taken.

We welcome the Governor of the Bank of England’s commitment to take steps to extend liquidity provision to banks if necessary, and to stand ready with further measures. We welcome the fact that the Chancellor has been in urgent consultation during the weekend with those in the financial services industry and our international partners. We will support measures to stabilise the markets and dampen volatility, but with the firm caveat that these measures—this was the point made by my hon. Friend the Member for Coventry South (Mr Cunningham)—should not impose costs on households or small businesses. Despite his earlier statements, the Chancellor has ruled out his previous contractionary emergency Budget until the fiscal position is made clear, and this is to be strongly welcomed.

To move forward, we have to be honest in our assessment of the current situation if we are to ensure that the correct remedies are agreed for the future. We do not share the Chancellor’s assessment, as he knows, of the broader economic picture. His claim that the roof was fixed while the sun was shining belies the reality. The leave vote is having a greater impact because the roof has not been fixed, as we saw in the Office for Budget Responsibility’s assessment of the UK’s fiscal position that was published alongside this year’s Budget.

[Steve Brine (Winchester) (Con)]

I agree with the hon. Gentleman’s approach to the debate. Employment rates in our country are now at a record high—in my constituency it is up 60% since 2010. Capital requirements for the banks are some 10 times what they were in the past six years and the budget deficit is down from 11% to 3% this year. I think that that was what the Chancellor was talking about when he referred to fixing the roof. What position does the hon. Gentleman think the UK economy would have been in now, after last week’s vote, if we had not taken those measures?

[John McDonnell]

I remember the Chancellor promising that the deficit would have been eradicated last year. Although we welcome the jobs that the hon. Gentleman mentions, many of them are, unfortunately, insecure and poorly paid. However, we welcomed and supported the capital requirements relating to banks. I hope that the Conservatives can accept that balanced assessment.

At the centre of the OBR’s pessimistic assessment was the stagnation of UK productivity. According to the latest available data, between 2007 and 2014—Members on both sides of the House have raised this point—productivity did not grow. That is the worst performance by any G7 economy, and it means that today, on average, every hour worked in the UK is a third less productive than in the United States, Germany or France. This productivity stagnation has happened on the present Chancellor’s watch. It is clear that his long-term economic strategy has failed, as he has not secured the basis for long-term growth. Can we at least agree that from now on that we need a comprehensive strategy to deal with the productivity crisis?

Over the past few years, growth has relied too much on two things. First, although the economy has produced a large number of jobs, they have been poorly paid and insecure. Secondly, growth is unfortunately becoming more and more dependent on a return to household borrowing. We have not yet hit the level of 2008, but the OBR forecasts an unprecedented five years of continual household deficits.

Alongside our deficit with the rest of the world, our current account deficit has widened to its highest level since the 18th century. At 7% of gross domestic product, it is the largest current account deficit in any major developed economy. To finance the gap, borrowing from the rest of the world and the sale of UK assets have reached record levels, alongside assets sales to the rest of the world involving a range of facilities, to some of which there have been significant objections in the House. Relative to GDP, the UK now has a larger overseas debt than any other major developed country. We have been able to finance the current account deficit, despite weak productivity growth, because of what Mark Carney described, in a recent lecture, as “the kindness of strangers”.

The Economy and Work

Debate between John McDonnell and Steve Brine

Thursday 26th May 2016 Commons Chamber

[John McDonnell]

I will in a second. Millions of people are now self-employed, but their average earnings have fallen by 22% since the right hon. Member for Tatton (Mr Osborne) became Chancellor. The Queen’s Speech tells us that the Government plan to create an economy

“where work is rewarded.”

Nothing could be further from the truth. Those who work hardest are being punished with cuts to tax credits, but tax dodgers and the super-rich are rewarded with tax cuts.

[Steve Brine (Winchester) (Con)]

On the subject of jobs, the former Leader of the Opposition—he is a proven winner who the shadow Chancellor and the current Leader of the Opposition want back on the Front Bench—said that the Government’s policy would cost 1.2 million jobs. Does the shadow Chancellor concede that that was plain wrong?

[John McDonnell]

As I said earlier, rather than invest, employers have tried to use cheap labour, and that has had an impact on wages and living conditions, which is unacceptable.

This Government have failed and will continue to fail on every measure they set themselves. They have failed in their target to reduce the debt, on their welfare cap target, and on their target to close the deficit. The Government have lost their way. Gone is the pretence of being the new “workers party”, as was trumpeted so loudly last summer. That disappeared when they started cutting in-work benefits. The Government wander around from crisis to crisis, looking for another U-turn to make. Cuts to personal independence payments were scrapped, as was forced academisation. Measures to address the tampon tax and cuts to renewables subsidies were abandoned. Only one policy directive seems to hold this sorry excuse for a Government together, and that is the policy—in defiance of all sound economic advice—to impose spending cuts of a viciousness not seen in this country for generations.

There is consensus across this House that a strong economy is the foundation on which all else can be built. This Government have not created a strong economy—strong on rhetoric perhaps, and strong on creative accountancy, as the last Budget revealed, but the Chancellor’s economy is a jerry-built structure that rests on a recovery built on sand. The Chancellor has had plenty of opportunities to “fix the roof when the sun was shining” —as he so memorably put it in happier times—but he has simply failed. That would have meant taking a different approach, and we all hope that once the referendum is out of the way, the economy will pick up. Without change, however, the trajectory for our economy is clear.

We are trapped in a low-wage, low-skill, low-investment and low-productivity economy. We need a Government who adopt a sensible and credible fiscal rule, enabling long-term and patient investment in our economy, and we need a Government who use record low interest rates to invest in the future. As a minimum, the Government should now invest in the infrastructure, skills and technology that can help to transform how this economy operates. We need a Government who clamp down on tax avoidance. They could go further and overhaul a tax system that is manifestly failing to levy fair rates on those who can pay the most.

We need a Government with an industrial policy who back the steel industry, and who work with our European partners to clamp down on the flooding of our markets with cheap subsidised Chinese steel. The Government could also seek to transform the institutions that govern our economy, from the Treasury to the great corporations, unlocking potential that is otherwise wasted when vested interests dominate decision-making. The Queen’s Speech was an opportunity for the Government to accept that austerity has failed and to change course, but it was not taken. If the Government cannot write a speech for Her Majesty to undo the damage they have inflicted and set out a confident course for this country’s economy, it is clearly time for Labour to lead the way.

Let us be explicit: Labour rejects the failed and cruel austerity programme adopted by this Government. Instead, working in partnership with business, entrepreneurs and workers, Labour would create an entrepreneurial state to support innovation, create wealth, and drive growth, and we would share the proceeds of that growth fairly. By investing in our economy, Labour would lay the foundations of a new society that is radically fairer, more equal, and more democratic—an alternative based on a prosperous economy that is economically sound, environmentally sustainable, and where such prosperity is shared by all.

Budget Resolutions and Economic Situation

Debate between John McDonnell and Steve Brine

Tuesday 22nd March 2016 Commons Chamber

[John McDonnell]

That language has been used by the Conservative party. Let me return to the Budget. The hon. Member for Braintree (James Cleverly), who has now left us, asked me to return to the Budget, so let me press on.

Even worse, there is still no certainty about further welfare cuts. We were told yesterday by the new Secretary of State for Work and Pensions—this was repeated today—that there were to be no further cuts to welfare in this Parliament. Within minutes, the Treasury were briefing to correct the Secretary of State, as that then became “no planned cuts”. There is complete confusion—chaos on chaos. Nobody believes or has any confidence in the mealy-mouthed assurances that are being given today.

[Steve Brine]

Will the hon. Gentleman give way?

[John McDonnell]

In a second.

The PIP withdrawal now leaves a £4.4 billion hole in the Chancellor’s Budget, as has been consistently pointed out by my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper).

[Steve Brine]

Will the hon. Gentleman give way?

[John McDonnell]

Let me finish this point.

The simple fact is that the sums in the Budget, as my right hon. Friend pointed out, simply do not add up anymore. They simply do not compute.

[John McDonnell]

Cuts upon cuts, and who to? The most vulnerable in our society.

[Steve Brine]

I believe that the shadow Chancellor and the Leader of the Opposition, with whom I have served on Select Committees, are decent men. The shadow Chancellor said five minutes ago that he did not agree with a single policy introduced by the former Secretary of State for Work and Pensions during his time in office. Given the shadow Chancellor’s new fiscal responsibility, with the new rules he announced just a week or so ago, will he tell the House—people will be looking to him, because he is the shadow Chancellor—whether he would keep the welfare cap? If he cannot tell me that, will he tell me just one single saving that he could make from the welfare budget?

[John McDonnell]

We supported the welfare cap. I find it ironic that that point is being made on behalf of a Government who are not meeting their own welfare cap. They are breaching it and then moving it up. They are moving the goalposts again.

Let us be clear that the £4.4 billion black hole in the Chancellor’s Budget means either further cuts in departmental budgets and to benefits, or stealth taxes. No solution has been announced today. We are told that all this will be resolved by the autumn. Between now and then, no public sector job, benefit or service will be safe.

Tax Avoidance and Multinational Companies

Debate between John McDonnell and Steve Brine

Wednesday 3rd February 2016 Commons Chamber

[John McDonnell]

In due course; let me press on a little further.

As last week wore on, there was a growing sense of outrage at the Google sweetheart deal. Many felt betrayed by the Chancellor. We supported the Chancellor on the introduction of the diverted profits tax legislation to tackle firms using complex profit-shifting schemes to avoid tax. It was referred to as “the Google tax”. We learned last week that Google will not be paying a penny under that legislation.

We also supported the Chancellor in seeking international agreements on tackling tax avoidance, but we discovered at the weekend that Conservative MEPs had been directed by the Chancellor on at least six occasions to vote against the very tax avoidance measures being introduced by the EU that the Chancellor told us he was supposedly promoting.

[Steve Brine (Winchester) (Con)]

I know the shadow Chancellor seeks consensus when he can and I am listening to what he says. I have been doing some totting up and I reckon that there have been about 40 changes to tax law since this Government have been in office, which has led to about £12 billion being raised since 2010. For the record, does he welcome that?

[John McDonnell]

Of course; I have welcomed that. I have just been saying that I have supported the Chancellor on each piece of legislation that he has introduced to tackle tax avoidance and tax evasion. This deal flies in the face of everything the hon. Gentleman and I have been supporting in the Chamber.