Economic Affairs and Work and Pensions

Rachel Reeves Excerpts

Tuesday 8th June 2010 Commons Chamber

[Mr Darling]

No, I do not agree with that. I think the hon. Gentleman will find that an awful lot of things that went wrong in 2007 were a result of what went wrong in the banking system, not just here but in other parts of the world as well.

[Rachel Reeves (Leeds West) (Lab)]

Does the shadow Chancellor agree with this statement by the Governor of the Bank of England:

“I don’t think you can compare the UK with Greece. There are big differences”?

I suggest that not the least of the differences between our countries is that our debt-to-GDP ratio is about half that of Greece.

[Mr Darling]

The Governor was making a very fair point, as he does on many occasions. It is interesting that even in the past couple of days Government members—the Prime Minister yesterday, and one or two of his ministerial colleagues—are rowing back from direct comparisons with Greece because that may have been very convenient to them in opposition, but it might not be such a good idea now that they hold office.

Our economy is experiencing growth at present, and that is because of the action we took over the past couple of years. I do not intend, as the Chancellor said, to fight the last general election again or to go through everything that happened over the last two or three years—that is, perhaps, for another occasion—but I do say this about the action we took. The fiscal stimulus we put in place—the VAT reduction; the decision to bring forward capital spending; the measures we took to protect people’s jobs and ensure that if people were out of work for a short period we could get them back into work as quickly as possible; the time to pay scheme, which is still helping hundreds of thousands of businesses throughout the country; the car scrappage scheme; and the action we took internationally—have all come together to make sure we came through this recession. Interestingly, although the predominant position of the financial services industry in this country meant that it took us longer to come through into recovery than it took some other countries, Britain has had two quarters of growth whereas other countries, particularly those in continental Europe, have seen their growth slip back and, in some cases, they have slipped into recession. What that tells me is that had the previous Government not taken the action that they did over the past couple of years we would not now be in a position to say, “Yes, our economy is growing.” Equally, our action has meant that although our borrowing is still very high and needs to come down, it is coming down faster than many people believed, even a few months ago.

--- Later in debate ---

[Rachel Reeves (Leeds West) (Lab)]

I would like to thank you, Mr Deputy Speaker, for giving me this opportunity to make my maiden speech. It is a pleasure to follow the hon. Member for Rugby (Mark Pawsey) and other new Members of this House, who have done their constituencies proud today.

It is a huge privilege to have been elected as the Member of Parliament for Leeds West and to succeed John Battle, who represented us here for 23 years. John’s work for Leeds West touched the lives of so many people: fighting for, and getting, compensation for the victims of asbestos poisoning in Armley; supporting the Kirkstall festival in the grounds of our beautiful 12th-century abbey; and working with West Leeds debt forum and Bramley Credit Union to drive loan sharks out of our community. It is those, and John’s many other achievements—I have mentioned only a handful—that are his legacy.

At a constituency surgery recently, a lady took my hand and said that as long as I was half as good as John Battle, she would be happy. I later received a letter from a constituent who asked that I only be a quarter as good. I hope to exceed both their expectations, but I know that in John Battle I have a fantastic role model and a very tough act to follow. I will fight tirelessly for my constituents to be the champion for local people that John was before me.

Most of all, I will fight for jobs, growth and prosperity—the subject of our debate today. Leeds has a proud economic heritage. Leeds West was built on engineering and on textiles. From my home in Hawksworth Wood, people used to be able to hear the hum of the Kirkstall Forge Engineering plant at work. The forge, originally set up by the monks of Kirkstall abbey, continued in operation until 2002. The industrial revolution transformed Leeds, as well. The Leeds-Liverpool canal brought to our city wool spun at the mills that still stand tall in Kirkstall, Armley, Bramley and Rodley. Of course, Leeds was the birthplace of Montague Burton and of Marks and Spencer—a proud industrial, and retail, heritage. The economy was transformed once again under the previous Labour Government. The city centre is now packed with new businesses, shops, museums and galleries.

More than all that, however, under Labour every single person—most of all, every young person—has been given opportunities to recognise and fulfil their potential. It was my own experience of education under the Conservative Governments of the 1980s and 1990s that motivated me to get involved in politics. When I was at school, there were never enough textbooks to go round. There was no money for new school buildings, so our sixth form was a prefab hut in the playground and our library was turned into a classroom. It is therefore with immense pride that I tell the House that my old secondary school is now a specialist college with two new, modern buildings.

Such investment has been seen up and down the country, in all our constituencies. In Leeds West, every single primary school has been rebuilt or refurbished since 1997. In September last year, the new Leeds West academy and Swallow Hill community college opened their doors—proud achievements, transforming lives and communities.

In his maiden speech in 1987, John Battle spoke of his visit to the Bramley jobcentre. Back then, there were just six jobs on offer in the window, with wages ranging from £2 to £2.28 an hour. No parents can bring up a family on £2—not in 1987 and not on today’s equivalent—and no one should be made to work all hours of the day and night and yet remain in poverty. It was that belief and sense of justice and fairness that brought the national minimum wage—one of Labour’s proudest achievements—to the statute book.

Throughout the recession, Labour has not abandoned its commitment to social justice. The future jobs fund helped more than 8,000 young people in Yorkshire to get back to work during these challenging economic times and, under Labour, a generation of young people were not condemned to the scrapheap as happened in the recessions of the 1980s and 1990s. However, the economic recovery is fragile and cannot be taken for granted. We need the passion, enterprise and determination that built the Leeds economy of the past to build the economy of the future. For that to happen, the people of Leeds will look to the Government to be on their side and build a future for Leeds based on high skills, new technologies and new industries, with better transport links—including high-speed rail—and a banking sector that supports industry and small businesses, rather than just being out to make a quick profit. The new Government are right to make the budget deficit a priority, but that must not be at the expense of the recovery that Labour has secured.

I started my career as an economist at the Bank of England and focused on Japan at a time when its economy had been in and out of recession for a decade. Today, debt in Japan is 190% of gross domestic product, which is 2.5 times the level in the UK. Japan’s debt is so high precisely because its Government did not take swift action to ensure that its economy emerged from recession with strong growth. I urge this Government to learn those lessons from history, because the very worst thing for Leeds West and for Britain would be another recession caused by hasty and unfair spending cuts. I fear that the Government are making those mistakes and putting the recovery at risk. The Chancellor of the Exchequer is reducing industrial support for businesses and universities, watering down the regional development agencies and abolishing the support that Labour introduced to get young people back to work. If the Government really are serious about ensuring the recovery, they must put in place policies for jobs and growth.

We know that the causes of this crisis are global, but the pathways out must be local and regional, so I will fight for Leeds West with determination, and I will do so in a responsible way. It would not be responsible or sensible to oppose every spending cut or tax increase. I will encourage this Government when they get it right and acknowledge that, but when they get it wrong and put the economic future of my constituents and the country at risk, I will hold them to account. John Battle showed us that politics can make a difference and that the right values and policies can transform people’s lives. Today more than ever, we need the ambition for justice, equality and fairness that drove John. It is a real honour to serve as the Member of Parliament for Leeds West and, in doing my duty to my constituents, I will act with the hopes, dreams and aspirations of Leeds West as my guide.