The Economy and Work

Lord Evans of Rainow Excerpts

Thursday 26th May 2016 Commons Chamber

[Mr Osborne]

I saw the unwelcome news about the Shell job losses. Working with the Scottish Government, we will do everything we can to help the people who have lost their jobs and make sure that this industry, vital to our country, is protected at a time of low global oil prices. That is why we have worked with Aberdeen on the new city deal and to improve the harbour; and that is why, in the Budget, we chose, as the big tax measures in this area, the abolition of petroleum revenue taxation and a halving of the supplementary charge. We are ready and stand willing to help this industry at this difficult time, because it is world class and we want to make sure we get as much oil out of the North sea basin as we can.

We are also addressing, in the Queen’s Speech, other challenges in the British economy, such as the low savings rate, which we have had for many decades. We have reformed pensions and given pensioners access to their pension pots—250,000 pensioners have already made use of that innovation. I can also tell the House that today at our request—we asked it to impose a charge cap on exiting those pensions—the Financial Conduct Authority has announced that there will be just a 1% cap, which is lower than the range it was consulting on.

The Queen’s Speech also contains a proposal for the lifetime ISA that I announced in the Budget, so that young people no longer have to choose between saving for their home and saving for their retirement. In the words of Martin Lewis, the personal finance guru, it is the biggest change in personal savings this country has ever seen.

[Graham Evans (Weaver Vale) (Con)]

Martin Lewis, a very good man, just so happens to come from Weaver Vale. Will the Chancellor remind the House that pensions have gone up by more than £1,000 since the Government introduced their measures in 2010? I am proud of what they have done for pensioners through the triple lock. Will he remind the House of the good work we have done?

[Mr Osborne]

As a result of the triple lock on pensions, we have made huge strides in eliminating pensioner poverty in this country and seen the biggest real increases in the basic state pension for generations. I am proud that that has happened under a Conservative Government.

One of our biggest reforms, which also features in the Queen’s Speech, is the radical devolution of power across our United Kingdom. We have already devolved substantial new tax and spending powers to Scotland; there is a major piece of proposed legislation for Wales; we are creating powerful new elected mayors, which are proving an attractive opportunity for shadow Cabinet members who think that their careers are not going anywhere in this place; and we have radical reforms to business rates, which people have talked about for many decades. When we came to office in 2010—when the Prime Minister first became Prime Minister—80% of council revenues were handed down in central Government grants, almost all of which were ring-fenced. Now, by 2020, 100% of local government revenues will stay with local communities. That is giving power to the people in a devolution revolution.

With record employment and one of the fast-growing economies in the advanced world, it would be easy to think, “Job done”, and to take our foot off the accelerator. By doing so, we could avoid controversy, duck confrontation and settle for a quiet life, but if we did that we would be failing the British people and would watch as their living standards and opportunities slowly declined. I did not come into politics to see that happen. I do not want to turn around to my children, as we watch other nations power ahead, make the new scientific advances, build the new high-speed railways and embrace the latest technologies, and say, “That used to be us. That used to be Great Britain.” I want this country and the people living in it to be the great success story of the 21st century. To make that happen, there will be controversy and battles ahead—making change and confronting vested interests are always difficult—but this Queen’s Speech demonstrates that we are ready and that when it comes to standing up for the hard-working people of Britain, we are up for the fight.

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[Graham Evans (Weaver Vale) (Con)]

It is a great pleasure to speak about this Gracious Speech, which puts opportunity and life chances at the heart of our society. It is a one nation Queen’s Speech, and Britain is forecast to grow faster than any other major advanced economy in 2016. Growth is forecast to exceed 2% each and every year this decade, meaning that in 10 to 15 years we could be the biggest economy in Europe, outstripping the German economy. Average weekly wages have risen by 2.1% since last year, and the Office for Budget Responsibility forecasts that 2.9 million workers will benefit directly from the introduction of the national living wage, and estimates that a further 6 million could see a pay rise as a result of the ripple effect.

This Government were elected to back working people, and the best way to do that is to let them keep more of the money they earn. The personal allowance will rise further to £11,500 by 2017-18, giving 31 million people across the country a tax cut. This Queen’s Speech makes it easier for people on low incomes to save. The lifetime savings Bill will introduce a help to save scheme, providing a 50% Government bonus on up to £50 of monthly savings, helping more than 3 million of the lowest earners to put money aside.

Over the past year, we have got on with delivering our manifesto commitments to give people security and opportunity at every stage of their life. Some 16% of working age people in the UK are disabled or have a health condition. The Government are committed to halving the gap between the employment rates of disabled and non-disabled people, to ensure that disabled people have opportunities to fulfil their potential and realise their aspirations. We spend around £50 billion every year on benefits to support people with disabilities or health conditions, which is 6% of all Government spending. That represents 2.5% of our GDP, and is significantly above spending in countries such as France and Germany, and the OECD average of 2.2%.

In the past two years, 365,000 disabled people have moved into work, with more than 3.3 million now in employment. Halving the disability employment gap, means helping around 1 million more disabled people to achieve their ambition of finding work. Later this year, I will be holding my first Weaver Vale Disability Confident fair. I give the Government credit for bringing forward this fantastic scheme to truly challenge attitudes to employing those with disabilities.

As a Cheshire MP I can say that INEOS Chlor and Tata Chemicals are significant employers for those living in Runcorn and Northwich. I recently met Ginni Rometty, the CEO of IBM, to talk about cognitive technology and artificial intelligence. Cognitive technologies are the future for this country.

Energy-intensive industries, and the jobs associated with them, are almost exclusively located outside of London. They are often high-skill, high-wage jobs. They form a vital part of the northern powerhouse, and regional growth and development. I am committed to closing the north-south divide. Our great northern cities and regions can be greater than the sum of their parts. The northern powerhouse is underpinned by world-class transport linking our great cities and regions to drive up productivity and our economic revival.

Colleagues will know that I have been campaigning to reinstate the Halton curve line for many years now. I am delighted to report that the final business case was examined by the Liverpool city region combined authority in April and it has approved the plans. That is significant because it will enable travel from north Wales to Cheshire, Merseyside and Greater Manchester.

This is a one nation Queen’s Speech from a one nation Government. As someone who was born and grew up on a council estate, the Conservative party is the party of aspiration. I commend the Speech to the House.

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[Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)]

In the few minutes available, I shall primarily address issues relating to the criminal finance Bill. In introducing the subject, I can do no better than recognise the extremely thoughtful contribution of the right hon. and learned Member for Rushcliffe (Mr Clarke) on Tuesday. In his peroration, he made these comments in referring to the Bill:

“we in this country are very bad at dealing with white-collar crime, and there is growing awareness of that. If someone wishes to rob a bank, they go to the LIBOR market; they do not put on a balaclava and pick up a shotgun—that is much less profitable… I hope I can be reassured that the Bill will tackle not just tax evasion, which is quite rightly high on the public agenda, but money laundering.”

He concluded this part of his speech by saying:

“London is still the money-laundering capital of the world.”—[Official Report, 24 May 2016; Vol. 611, c. 450.]

The right hon. and learned Gentleman rightly pointed out the nature of the challenge we face. Many of the biggest crooks are working in the City of London. This is a major challenge that we should all be willing to address. It would be commendable if the Government eventually produced a very strong Bill, but as is sometimes said in my part of the world, “I hae ma doubts”.

If people’s behaviour and motivation are so important, that raises a fundamental concern in my mind about the flawed approach to economics that seems to dominate much of current thinking. We find that Treasury civil servants and central bankers have presided over not only corrupt practices and economic failure, but intellectual failure, too. For example, their devotion to what most people know as neo-classical economics led to their failure to anticipate the largest recession since the 1930s, and revealed their powerlessness as policymakers in the face of the subsequent stagnation of output.

The penchant of the neo-classicals for putting all their eggs in the basket of simple mathematical and statistical forecasting is based on remarkably few variables, which leads them to ignore economic problems that are not easy to measure—whether they be legal or illegal. Even Mervyn King in his book “The End of Alchemy” hinted at this critique when pointing out the failure of existing models to take into account critical changes such as the political reforms in China that led to its rapid growth. I add the inability to see how attractive the City of London has become to—

[Graham Evans]

Will the hon. Gentleman give way?

[Roger Mullin]

Certainly.

[Graham Evans]

The hon. Gentleman has mentioned London on several occasions, which makes me wonder whether there are no issues with people from Edinburgh. I remind him that Sir Fred Goodwin was a Scotsman in the Royal Bank of Scotland at the time. The hon. Gentleman should not insinuate that crooks end up only in London.

[Roger Mullin]

I thank the hon. Gentleman for the extra minute, but I never implied that at all. If he had been here at the beginning of my speech and was listening to it, he might have realised that I was citing the words of the right hon. and learned Member for Rushcliffe, who was sitting in the same place on Tuesday, and it was he who raised this very issue. If the hon. Gentleman wants to take issue with the castigation of the City of London, I suggest he looks to his own colleagues rather than to me.

Time does not permit me to go into a more detailed analysis of what needs to be done, so let me make a few suggestions. I think it would be useful if we vastly strengthened support for whistleblowing to give employees within banks and financial institutions greater confidence in raising issues such as suspected money laundering and the management of illegal assets.

As I reflect on what my hon. Friend the Member for Dundee East (Stewart Hosie) said, I believe it would be wise for the Treasury to convene a commission into the simplification of the tax code. Put simply, the more complicated we construct a tax code, the easier it is for those will mal intentions to find their way into securing gains for themselves at the expense of others. I hope we get a Bill of some substance. I hope that the Government truly wish to address those vested interests that do us all so much harm.