Economic Growth

Pat McFadden Excerpts

Wednesday 15th May 2013 Commons Chamber

[Mr Osborne]

This is a coalition Government with a coalition Queen’s Speech, which contains things such as the single-tier pension, the Care Bill and the help for small employers, which will make a real difference to people across the country. Our view is that the best route to achieving what I know my hon. Friend wants to achieve is by legislating in this House. As the Prime Minister said in his January speech, we now have draft legislation for an in/out referendum on the EU. We have done it in good time for this Session’s ballot for private Members’ Bills. It is now open to any hon. Members who do well in that ballot to adopt the draft Bill that we published yesterday and take it forward as the basis for legislation. As the Prime Minister said yesterday, we will do everything we can to make it law.

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

A moment or two ago the Chancellor said that if the renegotiation that the Prime Minister has set out on produced fundamental change, he would vote to stay in the EU. What will his position be if the renegotiation does not produce much change? That is what happened the last time this was tried in the 1970s. Not much change is not exactly an unlikely prospect, given the attitude of other European member states so far to the Government’s stance.

[Mr Osborne]

I do not think the Prime Minister will fail in his negotiating effort. I do not think the Conservative party will fail in its negotiating effort with the European Union. Do Members know why I do not think we will fail in that effort? The Prime Minister pulled us out of the eurozone bail-outs when everyone said that was impossible. The Prime Minister delivered a cut in the European budget when everyone said that was unachievable. The Prime Minister vetoed a bad treaty when people said that was unprecedented. I am confident we can achieve that new settlement.

There is another reason why I am confident we can achieve that settlement. I see around the table in Europe—around the ECOFIN table, where I was yesterday— many countries as concerned as we are about the future of jobs and investment on the European continent, people who know that the EU is not working as currently arranged.

--- Later in debate ---

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

The central question since the financial crash has been how to secure recovery in tough economic times. When the election took place, economic growth had been restored and unemployment was falling, but since then we have seen precious little growth, and unemployment is rising once again. Dealing with that should have been the central purpose of this Queen’s Speech and this debate.

There are measures in the Queen’s Speech—some worth while—to help small businesses to recruit new employees, which we called for, and to extend apprenticeships, which were significantly expanded during our time in government. However, one is left with the impression that although some of the measures may be worth while, as a whole they are not equal to the depth and durability of our economic problems. In fact, the Government seem to have given up and are waiting desperately for the new Governor of the Bank of England to secure the economic growth that they have so signally failed to secure.

The Queen’s Speech seems to be more about positioning and fear of the UK Independence party than about genuinely dealing with the country’s economic problems. UKIP, however, is a movement against the political establishment as a whole. It is based on a vision of the United Kingdom as it used to be, not as it is or how it will be. I have to say to Government Members that they cannot fight nostalgia with policy or positioning; the only way to answer nostalgia is to offer a better tomorrow, rather than having an argument about a better yesterday.

The Queen’s Speech has been completely overtaken by the argument about Europe. The amendment has attracted more and more signatures, and as it has done so, the Prime Minister’s professed relaxation has become greater and greater—presumably, by 7 o’clock tonight he will be completely asleep. His relaxation is not strength but weakness, and it fools no one. It is not only about the Back Benchers; while he is in the United States arguing for a European-American trade agreement, his own Cabinet Ministers are touring the studios to say that they would vote to come out of the European Union. It all feels very familiar, and it is little wonder that John Major’s former press secretary said this week that

“there are some parallels with the back end of John Major’s premiership.

One of the differences is, that was when the Conservatives had been in power for 17 or 18 years. Now the Conservatives have only been in power in coalition for two or three years.”

No wonder President Obama had to warn the Prime Minister this week that the UK’s influence is greater when we are engaged with and in the European Union. The notion that we can swap membership of the European Union for some other transatlantic embrace is confounded by that warning, which I hope is heard on the Government Benches.

[Dr William McCrea (South Antrim) (DUP)]

Is it not about time that we asked the British people—that the people of the United Kingdom made the decision, rather than politicians dictating to them the future relationship with Europe?

[Mr McFadden]

We then come to the draft Bill. There was no talk of that beforehand, no suggestion of it in the Queen’s Speech. It is a panic response to the amendment, a failed attempt to buy off tonight’s rebels. This tells us so much about how the Government operate—short-term tactics, not long-term strategy. However, the tactics fail to buy off the rebels, who are simply emboldened and come back for more. Even this afternoon we have heard people saying, “2017 is not soon enough. We need the referendum now.”

The truth is that whether the Bill is a private Member’s Bill or a Government Bill in this Parliament, no Parliament can bind the next Parliament. The time to put legislation forward to have a referendum is before the Government want the referendum, not four or five years in advance. The tactics will not work in the short term; they will simply increase the Government’s pain. Instead of stopping banging on about Europe, the Tories are back to doing little else. That is because too many people on the Government Benches care more about this than about the country’s economic problems or about being in government.

The centrepiece of the Prime Minister’s strategy is renegotiation. We have been here before, too. Harold Wilson had exactly the same strategy in the 1970s—renegotiate, then hold a referendum. He put the conclusions to the House in March 1975. To those who have not read them, I recommend that they do so. They will find plenty about beef, butter and sugar, but nothing about fundamentally altered terms of membership.

When today’s Prime Minister is asked what he wants from the renegotiation, the only specific he mentions is the working time directive. The working time directive was already renegotiated in the previous Parliament. We dealt with the on-call issue and the preservation of the UK’s opt-out. The important thing about that is that it was done without threatening to leave the European Union. If that is all that the Prime Minister can come up with, no one will believe it. Of course the European Union needs reform. It needs to be more flexible and less rigid and it needs to concentrate more on growth and jobs. The Prime Minister has a far greater chance of achieving those goals if he is not threatening to leave at the same time. This is a broader argument about our vision of the UK. Is it to be engaged or is it to retreat into nostalgia? I know which I prefer.

--- Later in debate ---

[Chris Leslie (Nottingham East) (Lab/Co-op)]

I thank my hon. Friend the Member for Corby (Andy Sawford) and my many other hon. Friends for their consistently strong arguments about the shortcomings of the Gracious Speech. It is a Queen’s Speech that lacks vision, substance and coherence. It lacks any answers to the big challenges that Britain faces. As such, it is entirely typical of this pitiful excuse for a Government. It is as though they could not be bothered to think through the legislation that is needed to get our economy moving, perhaps because their minds were elsewhere. We know where their minds were. Downing street has been caught in the headlights. It is fixated with internal party management and is frantically trying to hold it all together, when what we really need is a Prime Minister and a Chancellor who can focus relentlessly on the weaknesses in our economy and on the action needed to kick-start growth. They are so distracted, however, that they have lost sight of the things that matter most to the British people.

Youth unemployment still stands at nearly 1 million, and the Work programme is so useless that the number of young people on the dole for more than a year has tripled since it was introduced. At the spending review in 2010, the Chancellor said that there would be at least 6% economic growth by now, but we have seen barely more than 1%. As my hon. Friends have pointed out, house building is at its lowest level since the 1920s, yet the Government housing scheme offers a better subsidy for second home buyers than for building new homes. The construction sector is collapsing on this Government’s watch, but only seven projects from the list of 576 in their infrastructure plan are actually completed or operational. That is pathetic.

The Government promised to help 400,000 businesses with a national insurance holiday for new firms, but they have helped barely 5% of them. They are now having to replace that legislation. We are experiencing the slowest economic recovery for more than 100 years, and deficit reduction has ground firmly to a halt. When we hear the Government claim that they have cut the deficit by a third, we must remember that it was the same last year as it was the year before, and that it will be the same again this year. It is no wonder that they have lost the triple A credit ratings that they promised to preserve. It is a simple lesson: if the economy is flatlining, they should not be surprised if the deficit stubbornly remains high.

The Government are either too weak to admit that they have made mistakes or too distracted to see it for themselves. As a result, we are left with a legislative agenda that fails to rise to the challenges facing our country. These Ministers see consumers and businesses that lack confidence and they see weak economic demand, but their Government’s response is to pull back from the role that they should play, pull the rug from beneath the feet of those who are trying to move forward, pull away the safety net from families facing hardship and pull up the drawbridge against the entrepreneurs and investment that our country needs.

Where is the jobs Bill to ensure that all the long-term unemployed are offered a decent job opportunity on at least the minimum wage, with the private sector in partnership with the Government? We could do all that, and cover the costs, if only the Chancellor would stop being so weak towards the banks and instead make them pay their fair share. Where is the finance Bill to reverse the unfair tax cuts for the richest 1% and to help to make work pay with a 10p starting rate of income tax? Where are the measures that my hon. Friends have so eloquently called for to tackle rip-off energy bills, extortionate train fares and rogue landlords? Where is the action, the drive, the activity? Nowhere, because the Government are frozen to the spot.

It says everything about the hollowness of this Government that the Queen’s Speech debate today has been totally dominated by one subject that is not even in it. Where once we had a Conservative Prime Minister who boasted of her convictions, tonight we have a Conservative Cabinet united only by their abstention. As that Prime Minister once said, this is not leadership but “followership”. The truth is that this Queen’s Speech is not a legislative programme of a functioning Government; it is a sticking-plaster programme trying desperately to hold things together while Conservative MPs kick lumps out of the Prime Minister.

A week ago, the Prime Minister did not think that an EU referendum was important enough to put in the Queen’s Speech, but a week later we find that it is the first Bill that the Government have published. If they want a referendum, why are they not supporting the amendment; if they do not want a referendum, why have they drafted their Bill?

The draft Bill that the Government have rushed out—I do not know whether the Chief Secretary or the Chancellor had a hand in the very technical drafting of the one side of A4—had nothing to do with consulting the public; it was all about silencing the Conservative party’s internal divisions. They are not so much a coalition as a contradiction. There are three parties in this Government: the two faces of the Conservative party in league with the Liberal Democrats—perhaps best represented by the Chief Secretary to the Treasury, to whom I wish many happy returns today. Hon. Members will be interested to know that this right hon. Gentleman spent a decade of his life before entering this House making the case for a federal Europe. What a triumph it is for the Government Whips facing a difficult vote on Europe that the final speech in support of the Government’s programme should come from the former chief spokesman for the campaign to join the euro. You couldn’t make it up, Madam Deputy Speaker. The sad truth is that this Government are too weak, too divided and too distracted; they are fiddling on about Europe while the economy burns.

[Mr McFadden]

On the subject of the Government’s tactics over the rushed, panicked publication of this referendum Bill, does my hon. Friend agree that today’s debate shows that the tactic has already failed because during the debate the people who wanted this were already asking the Government to go further by having the referendum this side of the general election rather than after the next one?

[Chris Leslie]

The Prime Minister said yesterday, “No more concessions; that is the line in the sand; this is as far as they will go.” It is amazing to think, though, that he has to keep feeding the beast. The problem is that Conservative Members are carrying on a bit like the strange man in the corner of that country pub endlessly moaning about the dreadful threat of outsiders and incomers. I have to tell them that if they spend all their time trying to be like UKIP, they should not be surprised when people vote for the real thing.

We are left with a Government increasingly out of touch with the real problems facing real families across Britain. Tonight, it is those families that are paying the price: higher taxes because growth is stagnant and lower living standards because wages are falling. Every year that goes by while our economy stands still and while our Government are divided and distracted, our international competitors get further and further ahead.

The Queen’s Speech lists 15 Bills that look as though full time has been called for this Parliament, not just the end of the first half of it. The Government’s legislative agenda, supposedly to drive Britain forward, did not even make it from Downing Street to the Cabinet Office before running out of support. We should look at their child care strategy, stumbling in more directions than a toddler learning to walk. They are not going to convince the public that it is sensible to have one nursery worker looking after six two-year-olds on their own if they cannot even persuade their own Deputy Prime Minister. Surely, the Prime Minister of all people must know how difficult it is single-handedly to watch over a group of immature and disobedient trouble-makers, constantly throwing tantrums. They cannot even manage the basics.

Just at the moment when we need a strong voice for the United Kingdom arguing for the reforms and change of direction we need across the European economy, we get a Prime Minister saying one thing, an Education Secretary who is not here and a Defence Secretary who is not here saying another, while his Back Benchers are revolting and the Deputy Prime Minister is wielding his veto. Our country and our partners deserve better than that. Britain needs to be leading in Europe, not leaving Europe, and the Prime Minister should be brave enough to say it. He should stand up to those who are undermining his authority. On the very day when he was extolling the virtues of a new EU trade deal with the United States, his own Ministers implied that they would rather turn their backs on that £10 billion advantage.

The amendment has blown the last semblance of unity in the coalition to smithereens. The Prime Minister could not even tell his own troops to vote against it, so we have ended up with the absurd spectacle of Ministers being told to abstain while the Prime Minister is supposedly “chillaxed” about the rest of them supporting it. The Prime Minister should not be relaxed when those on his own side express regrets about his own Government and his own Queen’s Speech; he should be embarrassed by it. He should not “chill” at the thought; he should be chilled by it. He should have led from the start and asserted his authority, but he is too weak, and his party is too divided and distracted to be brought into line.

The fact is that this in/out, in/out, hokey-cokey referendum policy sends all the wrong signals. The Prime Minister’s party is left leaderless, and the country is left rudderless. Make no mistake, Madam Deputy Speaker: there is a real-world price to be paid for this weakness, and it will be paid in jobs, with inward investors left mystified about whether or not they would have access to a single market with 500 million customers if they came here.

When will the Conservatives realise that the top priority for this country must be the strength of our economy, not their obsession with Europe? The Prime Minister once said:

“Instead of talking about the things that most people care about… we were banging on about Europe.”

They are back to banging on, and on, and on—not about jobs, not about growth, not about recovery, but about Europe, yesterday, today and tomorrow. They are too distracted to see what needs to be done, too divided to agree on how to do it, and too weak to take the action that the country needs. Weak, divided, distracted: we see a Government who are slowly imploding under the weight of their own contradictions.

Britain, at home and in Europe, needs a Government who are strong enough to make the tough decisions for our country’s future, united in seeing those decisions through, and focused on securing growth and recovery. That is the only genuine way of improving our national finances. Britain needs that one nation Government and we need it now, but sadly, with this Queen’s Speech, with this Government and with this Prime Minister, Britain must wait.