Queen’s Speech

Lord Hain Excerpts

Thursday 17th October 2019 Lords Chamber

[Baroness Jones of Whitchurch]

Absolutely. That was a world crisis that we were dealing with, and would have carried on dealing with if we had been given the opportunity. The Government’s response to that crisis, which was to drive down austerity for nine years, has done nothing to improve the economy, as we have seen and as I have just outlined. So I do not think we can take lessons from the current Government on how to maintain economic security.

[Lord Hain (Lab)]

My noble friend might also remind the noble Baroness who interjected on her that until the financial crisis borrowing was actually at record lows— lower than we inherited from the Major Government—and the national debt was low. We were running sound public finances. It was the global credit crunch that blew that out of the water, not Labour government policies.

[Baroness Jones of Whitchurch]

I am grateful to my noble friend, and of course I concur with his analysis.

I want to talk about what we believe is the Government’s legacy on the biggest crisis of our generation: the impact of climate change. Of course we welcome the announcement of the new Environment Bill, which is very long-awaited, and we look forward to giving it robust and energetic scrutiny when it arrives in this House. We will want to see legally binding targets on air quality, water, waste and biodiversity, and we want to ensure that the Office for Environmental Protection has the necessary powers to hold the Government and public authorities properly to account.

However, the Bill deals with only one department’s contribution to improving our environment and cutting carbon emissions, when what is needed is a whole-government plan on a transformative scale to tackle the climate change emergency. According to the Committee on Climate Change, the UK is way off target to meet its fourth carbon budget of 2023 to 2027 and its fifth carbon budget of 2028 to 2032. Last year the committee set out 25 headline policy actions for the year ahead, but 12 months later only one has been delivered in full and 10 of the actions have not even shown partial progress. The noble Lord, Lord Deben, who chairs the committee, was absolutely right when he said recently, “The whole thing is run by the Government like ‘Dad’s Army’. We can’t possibly go on with this ramshackle system. It doesn’t begin to face the issues”.

The young people of this country understand the climate change emergency all too well, and even some of us crusties understand why the time for action is now. Sadly, the Government consistently fail to give the issue the priority it demands, and this Queen’s Speech represents another failed opportunity. For example, in energy, the collapse of the Government’s new nuclear programme, combined with their opposition to onshore wind and their removal of support for other forms of energy, raises huge questions about how we will source our energy by 2030 and beyond. The Government’s offshore wind sector deal is a helpful step, but there are no consequences if the targets are not met. As we know, the Government’s closure of access to the feed-in tariff for solar power sabotaged the industry before it really got going, with new installations falling by some 90%.

Meanwhile, the Government have failed to capitalise on the enormous potential of tidal power, with first the Severn barrage and now the Swansea Bay project failing to win government support. Instead, the Government seem intent on promoting fracking in the face of overwhelming local opposition to the air pollution, earthquakes and risks to local water quality that it would bring about. Where is the energy Bill in this Queen’s Speech that would deliver the transformation to renewables essential to meeting our climate change targets?

Similarly, we know that transport is the most emitting sector of the UK responsibility, responsible for 27% of our greenhouse gas emissions. Yet it is also the worst performing sector when it comes to reducing carbon emissions, which continue to increase as a result of traffic growth and a lack of public transport alternatives. The lack of electric charging structures for cars continues to hold back our transition to cleaner vehicles. The Government’s Road to Zero strategy to decarbonise road transport, with a plan to end the sale of petrol and diesel cars by 2040, is widely considered weak and unambitious. Clearly, what we need is a major push for electric vehicles and charging points, incentivised by a scrappage scheme for the most polluting vehicles. This would help to deliver our carbon reductions, as well as tackle the scourge of air pollution that is poisoning our children’s health. Where is the transport Bill in this Queen’s Speech, which would have delivered our transformation to a world-leading clean transport economy?

We also need to ensure that agriculture plays its part in reducing greenhouse gases. Intensive agriculture currently contributes nearly 10% of our carbon emissions. Of course, this was an issue beginning to be addressed in the agriculture Bill, which this Government seem in no hurry to debate. However, we welcome the shift in the Bill from supporting land ownership to the principle of delivering public money for public benefit, to improve our natural environment, restore habitats, plant trees and tackle carbon emissions. Sustainable food production is a vital component of that, including action to rethink our diets and understand the provenance and nutritional value of the food we eat, and its impact on biodiversity.

However, this Government have already lost the confidence of farmers, with continuing uncertainty about future funding and punitive no-deal tariffs which would make our farm products uncompetitive. The agriculture Bill will fail in its objectives if we do not prevent farmers and food manufacturers being undercut after Brexit by countries with lower employment, animal welfare and environmental standards.

There is an alternative to a future of economic decline and climate change devastation. This is why, when the election is called, our party will put forward a programme that is truly transformative. It will build an economy that works for all. It will deliver a comprehensive industrial strategy with a national investment bank and regional development banks to help unlock £250 billion of investment for businesses. It will tackle the climate emergency with robust new deadlines for action and a target of 2030 for net zero emissions. It will invest in renewable energy, utilising the full potential of offshore wind, solar and tidal projects. It will harness the huge opportunities that a green economy can bring, with new jobs and investment putting us at the forefront of global innovation.

These are the kind of radical reforms needed to kickstart our economy. I look forward to hearing the contributions from other noble Lords, particularly the maiden speeches we will hear today. I am sure noble Lords will add their expertise to the list of necessary and radical reforms needed today.

--- Later in debate ---

[Lord Hain]

My Lords, I too welcome the speech of the right reverend Prelate the Bishop of Bristol, especially what she said on climate change. I also honour her mother as one of the suffragettes of the Church of England.

On the same morning that the UK Supreme Court judged the Prime Minister to have tried unlawfully to prorogue Parliament, Boris Johnson outlined to a New York business audience his vision of a post-Brexit Britain. It was one of the UK undercutting European tax rates and adopting lower regulatory standards than those set by the EU: a low-tax, lightly regulated haven on the EU’s doorstep, uninterested in competing on a level playing field and intent on provoking and winning a race to the bottom to create a Singapore-upon-Thames. It was difficult to discern that dismal vision in the Queen’s Speech, with rumours of a rift between the Chancellor and the Prime Minister over who gets to announce which tax cuts and spending plans, and when. The Chancellor wears his humble origins on his sleeve while the Prime Minister sees himself as the Incredible Hulk: the madder he gets, the stronger he gets. What a pair they are: Javid and Goliath.

The Government want us to believe that they are turning the page on austerity, abandoning the ideological approach that has driven Tory party policy for the past 10 years. Instead of “Keep Calm and Carry on Cutting” they have adopted the Vera Lynn wartime song, “It’s a Lovely Day Tomorrow”: you just wait and see. There is to be nearly £14 billion in extra public spending next year, with the priority going to health and social care, policing and prisons, and schools. That is in complete contrast with both David Cameron’s recent verdict that his Government did not cut enough and George Osborne’s boast that Britain had been squeezed more tightly than any of the advanced western economies. But on closer inspection, the Prime Minister’s brave new world bears a striking family resemblance to the cruel real world that Britain has been enduring for the past decade. Next year’s rise in public spending restores barely 10% of the £140 billion of public spending cuts and tax rises that 10 years of Tory austerity add up to. This decade of savage cuts puts next year’s puny spending rises into perspective.

The Institute for Fiscal Studies reckons that next year’s extra public spending will reverse only 15% of the per capita cuts to non-health areas since 2010. It falls well short of the amount needed to return all departments’ budgets to their pre-austerity levels. The new Tory stance on austerity does not take us back to 2010 and it does not undo a decade of carnage. Public services that have struggled by on starvation rations are not suddenly being fully funded. The Tory squeeze may be less severe in the future, but the economy is still in a fiscal straitjacket, so that even if, improbably, all goes swimmingly well over the next few years, Britain will not recover from past cuts for many years to come.

Since 2010, Tory austerity measures have over- whelmingly been public spending cuts, so the best way of ending austerity is surely to give top priority to boosting public spending to repair the damage done to public services. Tax cuts should take second place. However, in the Tory leadership election, the Prime Minister proposed to increase the higher rate threshold for income tax and to raise the point at which people start paying national insurance contributions. The former would cost some £9 billion a year, with most of the giveaway going to those on high incomes. The latter could cost up to £17 billion, depending on how high the national insurance threshold is raised. The Prime Minister clearly wants to include £10 billion to £20 billion of tax cuts in the Autumn Budget, plus the already announced £14 billion public spending increases. However, according to the Institute for Fiscal Studies, the last 10 years of austerity consisted of 80% public spending cuts and 20% tax rises. Nevertheless, the government-proclaimed way of ending austerity is to make tax cuts at least 50% of the package. Those are absolutely the wrong priorities. The compelling need now is surely to focus extra resources on rebuilding our public services, not on tax cuts, especially not for those on the highest incomes.

Boosting public spending also means expanding current public spending on staff and services, not just on extra capital spending on infrastructure. Both are needed. The Economist expects that UK growth this year will be only 1.1%. Even that looks optimistic. This is the fifth year in a row that growth has been slower than the year before. The economy has been falling further and further behind the Chancellor’s new growth target, held back by Tory austerity and the 2016 Brexit vote. Britain is already back at the bottom of the G7 growth league table. We are uncomfortably close to recession and the budget deficit has stopped falling. The reason it is right to borrow and invest now is that the economy is running out of steam.

Monetary policy has lost its potency. Record lows leave minimal scope for further interest rates cuts. Quantitative easing by the Bank of England has flooded the economy with money that has been spent largely on existing assets, boosting property values and share prices, rather than on newly produced output. But these historically very low interest rates make extra public investment financed by borrowing both affordable and very attractive. Government should be using this opportunity to raise public investment to a new, prolonged plateau of higher spending, such as a green new deal to tackle the climate change emergency and building hundreds of thousands more homes. Instead, the Government have produced Britain’s Brexit calamity, with disastrous results: business investment has stalled, last month’s retail sales were the worst for 25 years, and productivity is poor and falling. Things could get still worse with Brexit—especially a still-possible no-deal Brexit—on the horizon. This is a disastrous picture with which to produce the Queen’s Speech.