Section 5 of the European Communities (Amendment) Act 1993

Peter Dowd Excerpts

Tuesday 26th March 2019 Commons Chamber

[Peter Dowd (Bootle) (Lab)]

The Chief Secretary referred to the gnashing of teeth. The only gnashing of teeth going on in this country is by those people who cannot get access to a dentist because of her party’s health policy. She talked about the Tories being the party of business. She may well wish to have a word with the right hon. Member for Uxbridge and South Ruislip (Boris Johnson), who used an Anglo-Saxon phrase in relation to business—the second word was “off”, basically.

If education is so wonderful and marvellous and schools are in such a good state, how come headteachers marched on Downing Street and presented the largest petition about the condition of schools and education? The answer from the right hon. Lady is always more deregulation.

[Elizabeth Truss]

indicated dissent.

[Peter Dowd]

That is what the right hon. Lady said in relation to planning law. It is deregulation—that is what it comes down to. However she wants to dress it up, it is deregulation. Deregulation has got this country into so much trouble in a whole range of areas, including banking and housing. Let us not hear any more about how deregulation is going to solve all the problems of the world. It will not.

After that, I would like to thank the Chief Secretary to the Treasury, and give credit where credit is due. In a speech given on 19 March, the Chief Secretary finally acknowledged that we will now

“throw off the constraints of the post-financial crash world”.

There it is: it is official. It was a financial crash world, not Labour’s crash. But better late than never—apology accepted.

We find ourselves in the absurd and surreal position of debating a motion to approve the Government’s programme of convergence with the EU at a time when the issue of Britain’s membership of the EU is about to bring down yet another Conservative Prime Minister, so the only convergence on the cards is the one between the Prime Minister and her P45. The theological obsession of the European Research Group, which is opposed to any convergence with reality in fact, has hamstrung the Brexit negotiations and left the majority over there—on the Government Benches—as spectators in an unfolding disaster of their own making.

Reflecting on the first time I spoke in the debate on the Government’s convergence programme with the EU, I recall it was just before the snap election in spring 2017. I am sure we all remember that. At the time, prominent newspapers ran headlines such as “Blue Murder” in the sure and certain belief that the Conservatives would wipe out the Labour party, or “Steel of the New Iron Lady”, comparing the Prime Minister to Margaret Thatcher.

[Andrew Bowie (West Aberdeenshire and Kincardine) (Con)]

We’re still in government.

[Peter Dowd]

The hon. Gentleman says that they are still in government, but that is a complete and utter fantasy, and even his honourable colleagues all smiled and smirked at that particular one.

Those supine, oleaginous headlines in the newspapers are gone, along with the words that dare not speak their name, “Strong and stable”. Whatever happened to that? Just two years later, those same newspapers now call for the Prime Minister to resign, stating, “Time’s up, Theresa”. This sea change among the Tories’ biggest supporters in the press sums up the failures of this Government.

While we are on the maritime theme, the Environment Secretary could not even use the limited imagination he has to think up another metaphor, and resorted to the hackneyed one:

“It’s not time to change the captain of the ship”.

What an imagination!

The Prime Minister’s red lines and her intransigence and insistence on a deal that has little or no support in the country or in this House have led us to this crisis. This weekend, we had the ludicrous spectacle—the ludicrous spectacle—of Cabinet Ministers jostling to brief the press about her imminent departure and her would-be likely successor, only to be followed by quick recants and unconvincing oaths of loyalty. It is almost Shakespearian.

The Government’s motion is based on the economic forecast provided by the Office for Budget Responsibility and the Chancellor’s spring statement—what there was of it. I am sure all Members would agree that the work of Robert Chote and his staff at the OBR is indispensable in informing debate and offering an independent forecast of UK economy. [Interruption.] If the hon. Member for Solihull (Julian Knight) wants to intervene, he should feel free to do so, but perhaps he could stop muttering across the Chamber inane comments that nobody can hear and nobody understands, and I suspect he himself does not even understand what he is actually saying.

However, it is worrying that the OBR’s recent forecast continues to be based on the UK securing a Brexit deal, which the Chief Secretary did not even mention, and a smooth transition, which she did not mention, particularly at a time when the Prime Minister continues to keep the option of no deal on the table. It is still there; it has not been taken off. This assumption means that if the UK does leave without a deal or leaves with a poor deal, the OBR’s forecasts will be in serious need of revision.

Similarly, at the spring statement the Chancellor spoke again of this mythical Brexit “deal dividend” that the economy will receive once parliamentarians sign up to the Prime Minister’s deal. According to the Chancellor’s imagination—which is significantly more febrile than the Environment Secretary’s—this “deal dividend” will lead to an increase in the public coffers. However, the Chancellor’s claims have already been debunked by the Treasury Committee, which described the dividend as “not credible” and “not fully consistent” with his own fiscal rules—yes, the rules that keep changing.

Rather than the fantastical picture that the Chief Secretary to the Treasury seeks to paint for our EU partners, I will take the opportunity to outline the real state of the UK economy and the Government’s woeful record. That is where we hear the gnashing of teeth—woeful record. Under the Conservatives, we have faced nine years of politically instituted austerity, which has weakened our economy and pushed our public services to breaking point. The Government’s austerity programme has suppressed incomes by more than £3,600 per household, costing the economy £100 billion; yet austerity is far from over. The departmental spending review that the Chief Secretary mentioned—likely to report in the autumn, as she said—will see real-terms cuts for most Departments. I will sit down if the right hon. Lady would like to give us some more information on that one.

[Elizabeth Truss]

I would be happy to. It is a 1.2% increase in real terms.

--- Later in debate ---

[Peter Dowd]

I do not think that is correct. I am afraid we will have to look at those figures. We will see them and we will hold the Chief Secretary to account when she is at this Dispatch Box and I am at the Dispatch Box where she is now.

[Matt Rodda]

My hon. Friend makes a good point about the complete failure of the Government’s austerity agenda. Earlier, the Chief Secretary mentioned nursery schools. Many school and nursery school heads are experiencing a continuing programme of austerity, which is actually due to get worse. She mentioned that she had a brief conversation with her colleague in the Education Department. [Interruption.] However long the conversation was, the message I have had from headteachers is quite to the contrary; actually, a very short stay of execution has been given, for just one year, when the headteachers I speak to in my Reading constituency need a long-term programme of sustainable investment in nursery schools, rather than warm words.

[Peter Dowd]

My hon. Friend is absolutely right. May I nip back to the point about the 1.2% increase, if I may beg your indulgence, Madam Deputy Speaker? The 1.2% is the overall increase. What will happen—[Interruption.] No; the reality is that some Departments will have major cuts in their budget.

[Rachel Maclean (Redditch) (Con)]

The hon. Gentleman is referring to a number of figures that he claims show a hit to every taxpayer; but 32 million taxpayers have had their taxes reduced under this Government, so they are keeping more of what they earn and they are better off. How many of those 32 million people would see their taxes put up under his proposals, and how many would be poorer under his proposals?

[Peter Dowd]

I will pick up some of those points later.

The reality is that meanwhile, the Government have presided over the slowest recovery since the 1920s—stubborn fact. The OBR has revised down GDP growth, and business investment is now falling. Those are not my figures; they are the OBR’s figures. What about wages? I will touch on the points that the hon. Member for Redditch (Rachel Maclean) raised. Real wages are still lower than they were a decade ago, and according to the OBR,

“average earnings growth remains below the rates typical before the financial crisis”.

These are real people’s real lives—real wages are not going up. For many workers who have seen their wages stagnate, borrowing and debt has plugged the gap. Household debt relative to income is forecast to increase over the next few years.

What about transparency in Government spending? Long gone are the days when Tory Ministers hailed their Government as the most transparent in history—replaced by a culture of secrecy and a disregard for parliamentary convention that saw the Government held in contempt of Parliament for the first time in history. It is not a proud record to have.

Even on transactional issues, such as the regular and timely release of figures for departmental spending of over £25,000, the Government seem to have quietly backslid, in some cases releasing data series late, incomplete, or not at all. The question is: what are they hiding? The Chief Secretary has made much of the Government’s record on the deficit, yet the reality is that on her watch, and that of her predecessor, they have simply passed deficits on to our schools, our hospitals and our local councils, with departmental spending cuts of over £40 billion since 2010.

[Mr Jim Cunningham]

When we talk about more money being put into Departments, whether for education or the health service, we have to remember that any additional money starts from a lower base. The Government are partially replacing what they took out in the first place. People do not seem to understand that major point. They said that austerity was over, but we still have it. Yes, people are in jobs, but they are very low-paid jobs. That is not taking people out of poverty; that is keeping people in poverty. What interests me the most, however, is that nothing has been said about further education, which has had major cuts. If the Government want to continue with austerity, they have to do something about further education.

[Peter Dowd]

My hon. Friend has obviously been reading Labour’s “Funding Britain’s Future” document, in which we picked up on that particular point. The hon. Member for Redditch mentioned tax cuts. Try telling that to people who have had 15% and 16% rises in their council tax, because the Government have shunted that on to the people. They are still taxpayers. Try mentioning to them that they have fantastic local services, when increases to their council tax do not even cover social care bills.

The Chief Secretary has bragged about the so-called Tory jobs miracle. However, she made no mention in the speech of the fact that it is built on insecure work, low pay and regional disparities. We have nearly 4 million people in insecure work and nearly 3 million people working under 15 hours a week across the UK. Workers in the north-east earn around £200 less than those in London, reifying the regional imbalance.

[Simon Hoare]

I hate to shoot the hon. Gentleman’s unicorn just as he has started to ride it, but 90% of new jobs created are full-time jobs. This is a total myth that his party keeps peddling. It belies the hard work, initiative and enterprise of the British people. Is it not time to stop misleading?

[Peter Dowd]

Try telling that to the 3 million people in insecure work. It is okay hon. Members jumping up and being outraged at the facts. The facts are stubborn, I completely grant them that. We are not living in the halcyon world that the hon. Member thinks we are living in. There are 3 million people living in insecure work. That is not acceptable in a modern society. The Chief Secretary has done nothing to help headteachers who having to close schools early or the 87 people a day dying while they are waiting for social care, or to assist the nurses, doctors, police officers, social workers, road sweepers, fire fighters, security services staff, civil servants or the back-office staff who keep all those services running day in, day out and night in, night out. Those are the so-called vested interests the Chief Secretary refers to in her regular speeches.

The Chief Secretary recently visited Felixstowe, Walsall and Tadcaster—commiserations to the people of Felixstowe, Walsall and Tadcaster. She said that people want

“the local roads fixed and not to have to sit in a traffic jam.”

Well, the Government are in a big jam at the moment. She went on:

“They want a less crowded commute into work. They want the basics sorted.”

This is after nine years of Tory Government! Where has she been? Did she really have to ask that question? A report today highlights that there are 2 million potholes out there with a £10 billion backlog of repairs under the Tories. No wonder people are sitting in traffic jams—they cannot get through the road for potholes. That is the reality under the Tories. Anyone with a scintilla of awareness already knows the answer to that. The good people of north Lincolnshire were certainly aware of it when I was in Crowle on Saturday, campaigning to rid them of their useless Tory council with the excellent Labour candidates. They want the Transport Secretary to do his job, and they want the Chief Secretary to do hers.

What about productivity—another abysmal failure of Tory economic policy? Productivity remains weaker than in most other advanced economies. The fact is that the Government have failed to prepare the UK economy for the future. Britain’s infrastructure ranks behind that of Germany, France, the USA and Japan in terms of quality, and its rate of public investment is among the lowest in the OECD.

[Elizabeth Truss]

Is it not the case that in 1997 the Labour Government cancelled the road building programme?

[Peter Dowd]

Yes—to invest in public transport. We now have the Chief Secretary to the Treasury resorting to decisions made by a Labour Government two decades ago. That is how grim it has got for the Conservatives’ arguments—they are talking about something that happened 20 years ago.

Despite that, the Government have cut planned public sector investment. Their failure to negotiate a credible Brexit deal has already led to huge uncertainty, stifling investment and putting jobs at risk. Manufacturing is in recession; numerous employers have announced job losses; and businesses that rely on the EU supply chain have been left in confusion and despair—like most Government Members, who are in confusion and despair at the actions of the Prime Minister.

The internecine warfare within the Conservative party has paralysed the Government yet again, while the economy and many people’s livelihoods hang in the balance. It is affecting people’s livelihoods, manufacturing and business—more vested interests to be ridiculed and ignored by the Chief Secretary to the Treasury. All that while the Government are reporting to our EU partners that everything in the garden is rosy—no pun intended, Madam Deputy Speaker. Surely it is time for the Chief Secretary to acknowledge that the only Brexit that will gain majority support is Labour’s alternative plan: a permanent customs union, a strong relationship with the single market and full guarantees of workers’ rights and environmental protections.

The Government’s assessment of the UK economy is not based in reality. It does not account for the Conservatives’ catastrophic record of austerity, which continues to destroy our public services and suffocate the economy. It pays no regard to the Tory failure on wages, which remain lower than they were a decade ago. In addition to radio silence on productivity, there is little mention of the lack of public investment in our infrastructure. In short, the Government’s assessment says far more about the ideological position of Tory Ministers and their insolvent ideas than it does about the actual economy. It says more about the hubris of a Government who have stayed in office well past their sell-by date and do not recognise the experiences of ordinary people.

In summary, economic growth stands at 1.2%; productivity is 35% below the Germans’; household debt as a proportion of income is set to rise from 139% to 143% by 2024; the national debt still stands at 82% of GDP—the Conservatives have doubled the national debt —and the deficit is £22.8 billion. That is the Conservative Government’s record after nine years of economic incompetence. That epitomises why the country needs a Labour Government that will put jobs and our economy first and invest to rebuild Britain for the many, not the few. I urge Members to reject the motion.

--- Later in debate ---

[Simon Hoare]

In an intervention on the shadow Chief Secretary, the hon. Gentleman referred to something that I am sure we have all heard from headteachers in our constituencies. Whether we are talking about national insurance, about pensions or about the demands of special educational needs, although increased DFE expenditure is going into most of our schools, it is nowhere near enough. We are asking schools to do more for more pupils with not quite as much money as they need. That is why I make the distinction. I welcome the increase, but new money is required, particularly as the range and the choice become wider and deeper.

I challenge anyone who represents a rural constituency, as I do, not to share my views on rural schools. I was delighted when the Chief Secretary took my point about the needs of maintenance. The costs of heating and running a whole estate of Victorian primary schools are greater than those in new build, perhaps in an urban setting, although that is not to say that there are no Victorian schools in urban settings. Such schools do not provide a good learning environment. Last month, I visited Motcombe primary school in my constituency. In a small classroom, one child is effectively being fried against a not particularly adequate heater, because the school does not have enough money to replace the heating system.

We must make a balanced judgment: we must aim to take those at the lowest end of the earning spectrum out of taxation, while also investing properly. We must strike that sensitive and sophisticated balance. My right hon. Friend was absolutely right: it is not just the big and sexy that we must consider, but schemes for local roads such as the C13 and the A350 in my constituency, and support for those who wish to remedy the rural broadband and mobile blackspots, which could become engines of economic growth and entrepreneurialism.

That takes me to my closing point, to which the hon. Member for Bootle alluded. Some of our recent debates appear to have pitted my party against the Government. I am sorry—I meant to say “against business”. [Laughter.] That was not a Freudian slip—or perhaps it was.

Business is the engine that generates the tax that delivers the services. We cannot have a hostile viewpoint; we cannot have a hostile environment for UK business to flourish. Without a flourishing business sector, without the freeing up of the entrepreneurial spirit that underpins the British character, the proceeds of growth—

[Peter Dowd]

rose—

[Simon Hoare]

I am drawing to a conclusion.

We all want to see the proceeds of growth and the investment in our public services that is required.

[Alison Thewliss (Glasgow Central) (SNP)]

I beg to move amendment (a), in line 1, leave out from “House” to end, and add

“declines to approve for the purposes of section 5 of the European Communities (Amendment) Act 1993 the Government’s assessment of the medium term economic and fiscal position as set out in the latest Budget document and the Office for Budget Responsibility’s most recent Economic and Fiscal outlook and Fiscal Sustainability Report, because it does not contain detailed analysis of the impact of the Withdrawal Agreement and the Framework for the Future Relationship with the EU on the UK’s economic and fiscal position; and calls on the Government to publish an assessment containing that analysis immediately.”.

I was curious to hear the Chief Secretary to the Treasury start by saying she is so glad that this is the last statement she will ever have to make to the EU. I cannot agree, and the Scottish National party cannot agree either. It is surreal to be standing here days from the original day of departure from the EU attempting to fulfil this legal obligation as though things were business as usual. These past few days prove beyond any doubt that we could not be any further from business as usual in this House; we are absolutely through the looking glass. Events are developing every day around what kind of country we are going to be left with; there are grave concerns about the future from every aspect of civic society. So I certainly do not share the Chief Secretary’s optimism that there is a bright future ahead.

The Chief Secretary talked about young people. Young people are the most pro-EU group in this country, and it is their future that this Government want to take away, so shame on her for not recognising the limitations that young people will face when they want to set up businesses, when they want to trade with the EU, when they want to travel and advance their education and opportunities in life.

I do not wish by way of proposing the amendment to diminish the work that the Office for Budget Responsibility does. My colleagues on these Benches and I will always welcome efforts to make public accounts more transparent and independent. The OBR has conducted this analysis rightfully and properly within its remit, but unfortunately this is precisely the reason why the SNP cannot support the approval of this statement tonight: because the OBR can only make forecasts on the basis of stated Government policy regardless of whether the policy is likely to be achieved or, as the hon. Member for North Dorset (Simon Hoare) said, whether it is his party against the Government, or whether in fact the right hon. Member for West Dorset (Sir Oliver Letwin) is now the Prime Minister, because who knows? It is a Dorset thing; Dorset is leading the rebellion against their own Government. That is very interesting—and I see how happy the hon. Member for North Dorset is to be doing so. It is an absolute shambles when a Member who ought to be supporting the Government ends up leading the charge against them—although that is not at all uncommon these days; it is part of the whole madness of this Government.

The latest OBR fiscal sustainability report was published on 17 July 2018. It does not reflect the reality of the Prime Minister’s proposed deal, which was published much later, on 25 November 2018. In the OBR’s outline of the assumptions made in its economic and fiscal outlook, it is clear that the terms of the UK’s departure from the EU are unclear and that there is “no meaningful basis” on which to predict the nature of the relationship between the UK and EU. That is the situation in which we have we remained.

I checked and I have £3.52 in my purse and I would be as well throwing it down the stank as putting it on any outcome of the UK leaving the EU, so it would be an understatement to say that I could find it risky to endorse a fiscal spending plan based on one assumption of our future relationship with Europe. It is ludicrous for MPs to be asked to approve this motion without having any sight of any analysis of the Prime Minister’s deal. It is our job in this place as MPs to scrutinise the UK Government, but we are not being given the opportunity to do so effectively.

The Prime Minister has said that such an analysis of her deal does exist. She confirmed it in a letter to my colleague, the right hon. Member for Ross, Skye and Lochaber (Ian Blackford), so why will the Prime Minister not share the details of that analysis with the House? Is it because she knows, as we all know, that the economists are right and her deal will be bad for GDP, public finances and the living standards of all our constituents?

GDP growth has gone from being the highest in the G7 before the EU referendum to the lowest today. Imports have been slower than for other G7 countries, despite an unprecedented drop in the value of sterling, and it is interesting that for some time now the exchange rate on the cash machines at Glasgow airport, which I see when I come down to London every week, has been taken off, because nobody would take any money out if they saw how dreadful it was.

Inward and outward foreign direct investment have dropped, with some analysis suggesting that the drop in inward FDI is as much as 19% compared with a no-Brexit scenario, and we are starting to see job losses on a regular basis across these islands. It is no coincidence that this is happening. The Brexit job loss index says that more than 200,000 jobs have been lost already, without the UK having even left. In a no-deal scenario, Scotland can expect to lose 100,000 jobs, according to research by the Fraser of Allander Institute, which is based in my constituency. Speaking of my constituency, I recall hearing from a significant business there on Friday afternoon. It says that it is going down from a five-day week to a four-day week, that it has laid off temporary staff and that it is losing orders because of the uncertainty of this Government. It is unacceptable that businesses the length and breadth of these islands are being put into this position because of an internal dispute within the Tory party.

The OBR has not explicitly modelled the effects of a no-deal Brexit on the economy, but the London School of Economics has suggested that if the UK Government were to stick to their frankly unreasonable targets for reducing net migration, it would not be unreasonable to expect a long-term decline in output and productivity. The UK Government’s shambolic Brexit deal would also be hugely damaging, because EU nationals contribute hugely to our society and our economy. The Government’s aim to reduce the number of EU nationals here by 80% would have a massive impact on the UK’s economy, on population growth and, quite frankly, on our ability to survive as a country. The Government do not want poor people to have children—they have brought in the two-child limit—and they do not want people to come to this country and build their lives here, but we have an ageing population. Where do they think we are going to get the people from? I have absolutely no idea, and neither do they.

On top of all this, income inequality has risen since the Brexit vote to the extent that on two occasions the OBR could not predict the levels of tax that the Treasury was going to receive from the 1% in society. The tax windfall that the Chancellor is celebrating is not a sign that the economy performing well; it is a sign of deep-seated inequality, which is worsening under the UK Tory Government.

[Peter Dowd]

I am sure the hon. Lady is aware that, according to the Institute for Fiscal Studies, an extra £5 billion will be required to maintain services in line with population growth, along with an appropriate number of people to support those services.

[Alison Thewliss]

The hon. Gentleman makes an excellent point, and he is absolutely correct. Without people, the economy will falter. That is the economic reality.

The Resolution Foundation has said that the income tax take is up 8% so far this year, but that that is coming from the very highest earners. The wages at the bottom continue to stagnate. If the OBR cannot openly predict the short-term economic performance, it is unreasonable to ask the House to sign off on its guidance. It is more difficult now for families to survive on the money they have. Since the vote, the cost of bread is up 11%, the cost of butter is up 23% and the cost of milk is up 11%—and we still have not left the EU. If people cannot afford to put bread and butter on the table, this economy is heading for the drain.

It is a well-established fact that Scotland did not vote for or particularly want to leave the EU. I checked just before I stood up to speak, and 13,920 of my constituents have now signed the petition to revoke article 50. The Prime Minister has consistently ignored attempts by the Scottish Parliament to find any kind of compromise solution, such as staying in the customs union and the single market, which would limit the damage of this hard Tory Brexit. If she wants to drag Scotland out of the EU against its will, she should have the bottle to come to this House and present the analysis that she says exists. She should have the courage to tell people that it will cost jobs and businesses and that she cannot make guarantees about the future.

If the Prime Minister does not believe that her Brexit deal can stand up to scrutiny in this House, the UK Government need to face up to reality and ditch Brexit altogether by revoking article 50. They are throwing good money after bad on no-deal planning, on fridges, on staged traffic jams and on botched ferry contracts, when they could be spending that money on lifting the awful austerity cuts that we have seen over the past nine years. The Chief Secretary to the Treasury talks about going round the country and listening to people’s public spending priorities, but I bet none of them talked about spending £33 million on Eurotunnel due to the shambles created by the Secretary of State for Transport, or about the £1 billion to bribe the Democratic Unionist party in an attempt to keep the Government in power.

Day after day in my constituency, I see the impact of this Government’s callous approach to cost-cutting. I see the benefits freeze, which is expected to cost families £800 a year, on top of the £900 a year that the Bank of England says Brexit is already costing every family. I see the two-child policy, which leaves families nearly £3,000 a year worse off if they have a third child and which makes a woman with three children on a 16-hour contract work the equivalent of 45 hours to make up the difference. I also see the thousands of pounds a year being lost by the WASPI women who are no longer entitled to their side of the pension bargain, having had their pensions cruelly stolen by previous Governments and by this one as well. How can any Minister look the population in the eye and say, “There is no money for you,” when the Government are asking us to sign a blank cheque for a hard Brexit?

I am a lifelong campaigner for Scottish independence and scarcely have I seen a clearer case for it than the shambles of the Conservatives and the incompetence of the Labour party in opposing them. The UK Government’s incompetence is changing hearts and minds all over Scotland on the merits of independence, and I hope that there will soon be an opportunity for the people of Scotland to take matters into their own hands.