Autumn Statement

Lord Davies of Oldham Excerpts

Thursday 4th December 2014 Lords Chamber

[Lord Davies of Oldham (Lab)]

My Lords, this has been an excellent debate and I congratulate the noble Viscount, Lord Younger, on introducing it and on concentrating in his contribution on skills and productivity, which are very important for the future of our economy. I fear that it is an issue we have neglected for too long and for which we have failed to produce the necessary solutions. I have taken great pleasure in a great deal of this debate having revolved around these issues. Clearly, as my noble friend Lord Whitty emphasised, unskilled labour operating on low wages and paying negligible tax impacts on all aspects of the economy. Part of the problem is that, while the Government can congratulate themselves on increasing employment, they actually find that that employment is not resulting in the resources necessary for the Government to meet some of their obvious targets.

I also congratulate the noble Lord, Lord Rose, on his maiden speech. We shall all benefit from his vast business experience in our economics debates. I can assure him that, on other occasions, the House will be more generous in the time it allocates to Back-Benchers. Yesterday, it was two minutes for Back-Benchers; five minutes today was an improvement, but it does not do justice to those who want to express themselves on such an important issue. I hope we can prevail on those responsible for business in the House to allow extended time on major debates such as this one in the future.

My noble friend Lord Adonis spoke very strongly about the skills agenda. A great deal of our economic problems revolve around our underskilled workforce. However, he went on, as we would have anticipated from his record in the past, to consider the issue of infrastructure. I am sure that the ears of the noble Lord, Lord Deighton, pricked and his eyes lit up when my noble friend got on to the area on which he would want to express strong views to the House. We pressed the Minister yesterday, but not with entire success: perhaps we did not ask the question with the same degree of precision as my noble friend Lord Adonis did. He emphasised that the Government had postponed anything to do with airport capacity until after the election, so that was a five-year delay on major infrastructure with regard to aviation. We were given a roads programme, but it is very difficult to identify when anything will start or be completed. My noble friend Lord Hollick said yesterday that he could identify only £100 million devoted to infrastructure over the next four years, so that did not look as though it will produce a great deal. I hope, therefore, that the Minister will be as convincing as possible about the emphasis that the Government are putting on infrastructure, where they will get the resources from, just how much money is involved and the timetable for it. There is not much point in talking about the Northern Hub and introducing better trains for the north and HS3 if we do not have a timetable, or—from what we can see—any resources being devoted to them in the near future. I hope, therefore, that the Minister will reassure the House on that.

Of course, the Government are trying to suggest that there is a success story implicit in the Autumn Statement; that the progress they have made in getting the deficit down, conveniently forgetting—as the noble Lord, Lord Skidelsky, emphasised—that the promise was that the deficit would be wiped out by 2015. However, it is quite clear not only that we will have a severe deficit for a time to come and that it has had a recent increase, but also that the price is going to be paid in public expenditure cuts. We know where they are going to fall: on certain key projects relating to the necessary aspect of public expenditure; on government departments, where it is even suggested that some could even be closed down; and, most frightening of all, cuts in welfare. We know how addicted Conservative Chancellors, in particular, are to an onslaught on welfare, but there are an awful lot of people in this country who, through absolutely no fault of their own, are dependent on some support in order to live a remotely civilised life. They will bear a dreadful brunt of that Budget. The Government suggested that 80% of the cuts were already through, but bodies that should know say that the cuts are only half way there at present, and we have a very grim immediate future ahead. There have been anxieties, and the right reverend Prelate the Bishop of Portsmouth emphasised that there would be certain people bearing the brunt of the Government’s failure who ill deserve to be hit in this way.

I heard what my noble friend Lord Desai said about productivity. There is sufficient gloom around regarding the difficulties with the economy without an informed, expert analysis of just how difficult it is to increase productivity and how we were doomed to have a poor future record on that. I do not agree; I think it is a question of where there is a will, there is a way. Where this is a concentration of resources in action, we can see significant improvements and we certainly need to do so. Of course, as the noble Lord, Lord Skidelsky, identified, because we are so poorly placed with regard to the workforce, the Government’s record in the past four years has been woeful in their declared objective of removing the deficit. This was also emphasised by the noble Lord, Lord Bilimoria. How on earth can the Government expect to be believed on their future promises when their absolutely cardinal promises made in the past have led to failure?

There are two promises that have been emphasised at the highest possible level. The Prime Minister said that the deficit would be removed by 2015 and that immigration would be down in the tens of thousands, when its current figure is 200,000. Contrary to what the noble Lord, Lord Palumbo, suggested when he said that politicians never pay the price for failure, the Prime Minister said, “If we fail, then we can be voted out”. That is a consolation devoutly to be wished on this side of the House.

In relation to that, I was grateful for the contribution made by my noble friend Lady Donaghy on the important fact that the one thing that never seems to pass government lips at any time is any recognition that the rampant increase in inequality in our society over the last two decades or so has had any impact on the welfare of our society. Serious academic treatises have established that the good society, and the greater contingent society, is when differentials are narrowed. What are we seeing here under this Administration? They are being widened continually by deliberate actions of the Government.

I, too, suffer from the constraints of time, but I am grateful to all who have contributed to this debate. The reason for my failure to refer to every single contribution is obvious: just one half-minute for each person would take me beyond my time. I hope that the House will appreciate those constraints.