Economic Update

Rachel Reeves Excerpts

Tuesday 17th March 2020 Commons Chamber

[Rishi Sunak]

My right hon. Friend has made a good point. I believe that providing liquidity now ensures sustainability for the future, but he is right to identify the further steps that are needed to provide support on fixed costs such as employment, and preserving and incentivising that employment. This is work that we are undertaking as a matter of urgency.

[Rachel Reeves (Leeds West) (Lab)]

For those who are currently off work on statutory sick pay or are self-isolating for public health reasons, who are laid off because there is no work or who are self-employed or low-paid, there is nothing at all in the Chancellor’s package of measures. The Chancellor says that these matters are under review. As a matter of urgency, will he at least increase statutory sick pay to the level of the national living wage, and come back to the House with a package of support that ensures that workers will not be financially penalised for doing the right thing, and will not be unable to pay their bills and rent and put food on the table?

[Rishi Sunak]

We have put £1 billion into the welfare system to provide extra financial security for those people, to speed up both access and the generosity of all those benefits.

Economy and Jobs

Rachel Reeves Excerpts

Monday 20th January 2020 Commons Chamber

[Rachel Reeves (Leeds West) (Lab)]

I welcome the investment that the Chancellor speaks of and the commitment to get to net zero by 2050. Climate change also means more extreme weather events. In Leeds West, we had serious floods in 2015, and yet still the Government refuse to put in the funding to build the flood defences to protect against the one in 200-year flood event that we experienced. When will the Government put the money into that infrastructure?

[Sajid Javid]

That is an important point. I am aware of some of the serious flooding to which the hon. Lady has referred. That is why our national infrastructure plan includes much more funding—significant new funding—for flood defences, and I hope that she will welcome that and support those plans when they come before this House.

Let me also briefly address the amendment in the name of the Leader of the Opposition. Every Labour MP stood on a manifesto that would have cost the average taxpayer an extra £2,400 each year—each and every one of them did that. Labour committed to spending an extra £1.2 trillion over five years, which is equivalent to funding the NHS budget for nine years. It is no wonder that the hon. Member for Salford and Eccles (Rebecca Long Bailey) said, just a few days ago, that the policies that she helped to write lacked “economic credibility”. It is a bit late for that.

Whatever they may say now, every single one of the would-be Labour leaders tried to make the Leader of the Opposition Prime Minister. They endorsed his vision, his world view and his ideas for Britain, and that is why they will never be able to bring the change that the British people voted for. Instead, they are confirming that Labour is the party of the past and that it is out of touch with working people. Labour will just keep on refighting the same old internal battles while this Conservative Government get on with renewing the country.

--- Later in debate ---

[Rachel Reeves (Leeds West) (Lab)]

It is a pleasure to follow the hon. Member for West Worcestershire (Harriett Baldwin), and I echo her concerns about the financial services sector in any future relationship with the European Union. I also put in a plea for the manufacturing sector and its supply chains, which rely on regulatory convergence with our closest trading partners.

I will concentrate my remarks on the employment Bill, but first I will speak about my worries for the economic outlook, especially ahead of the Budget in a few weeks. Business investment, which is essential for our long-term prosperity and productivity, has been falling for six quarters—the sharpest decline for a decade. The economic growth we have seen is anaemic at best, and the economy is likely to have grown by just 1.3% last year, with even lower rates of growth expected this year. That is half the average growth experienced over the past 50 years.

Far too much of the growth we have seen is premised on unsecured household debt, which now stands at more than £15,000 per household—a record 30.4%. We cannot go on like that if we want to build a strong and sustainable economy. Yet we have heard very little, if anything, on that from the Chancellor this afternoon. Many of our cities are growing and have become richer, but inequalities are increasing, too. In other areas, particularly our towns that were once powered by industry, industries have largely disappeared thanks in large part to previous Conservative Governments, leaving an acute legacy of deprivation and disadvantage that I hope the Government will now make their focus.

Turning to the employment Bill, behind the overall positive employment statistics a few facts should be ringing alarm bells to all of us who care about the living standards and the job security of those we represent, particularly the poorest. We welcome increases in the national minimum wage, even if it is not at a rate that we on the Labour Benches would like it to be, but underpayment has been steadily rising over the past two years. Some one in four workers aged over 25 earning about the legal minimum report that they were underpaid two years ago, yet only seven firms have been prosecuted in the past 10 years for underpayment of the national minimum wage, despite violations being in their thousands. Why is that? Even when fines are levied, the full penalties are not applied. Only half the penalties that could be imposed are being imposed.

If we want our workers to be paid a minimum wage, we must ensure that laws are enforced. I support the Government’s commitment to a single enforcement agency to help workers enforce their rights, but I hope that it will be properly resourced and that the barriers the Government have sought to put in the way of workers looking to enforce their rights through the courts will not be repeated in this Parliament.

I urge the Government to look seriously at the recommendations of the Business, Energy and Industrial Strategy Committee from the previous Parliament, which called for workers to be granted worker status as a default, rather than having to take their case to the courts.

Two other changes not in the Queen’s Speech would also be useful: an actual right to a contract reflecting hours worked, not just a right to request one, and, as the TUC has argued, two weeks’ notice of shifts, rather than an early morning text message to let people know whether they have work that day; and payment when shifts are cancelled without reasonable notice.

Too many firms, particularly in the gig economy, try to get out of paying full taxes, national insurance, the national minimum wage, and holiday and sick pay. That is a disgrace and we need much stronger action, yet the Government have let the issue drift while a growing number of workers miss out on the rights that we have fought so hard to secure both in this Parliament and, indeed, through the European Parliament. It is hardly surprising that work is now no longer always a route out of poverty. Some 14 million people live in poverty, including nearly 5 million children, and 60% of them are in households where at least one person works. This is a problem that is set to get worse under this Government, with the number of people in zero-hour contracts and in bogus self-employment on the rise yet again.

I also want to say something this afternoon about business excess and the lack of regulatory oversight. We are now more than two years on from the collapse of Carillion. When Carillion failed, thousands lost their jobs, suppliers went unpaid and large-scale infrastructure projects, including hospitals in Liverpool and the west midlands, went unfinished. The collapse was caused by the recklessness, hubris and greed of its directors, yet they have not paid the price—others have. Carillion was a notorious late payer. Suppliers had to wait 120 days to be paid, or pay Carillion if they wanted to be paid on time. When it collapsed, 30,000 suppliers were owed £2 billion.

Meanwhile, its pension scheme had a £2.6 billion deficit. Ordinary workers—but not, of course, the directors—will not get the full pension that they were entitled to. Yet its auditors, KPMG, signed off Carillion’s accounts for 19 straight years in a row without qualifying them or raising concerns.

Here we are, two years on, and nothing has changed. The Government’s obsession with outsourcing and privatisation continues. The hands-off regulation and light-touch auditing continues. The employment Bill says it will give more powers to the Small Business Commissioner. That is welcome, but it does not really suggest the degree of urgency or priority that is needed.

The corporate failure and the audit failure happened then and it could just as easily happen today. Our audit firms are too powerful. The assumption that the private sector is always best has to end. Small businesses should not be at the mercy of dominant big businesses that determine whether their suppliers are paid, and regulators should clamp down on abuse and not just turn the other way.

This is not some abstract ideal. It is the basis of an economy that: values workers by paying them a decent wage and offering them some dignity and security in the workplace; supports businesses that play by the rules and invest in our economy while ensuring that big businesses do not exploit the system; and invests in every region and nation of our country—in green energy and transport, infrastructure and skills to help our economy to thrive for everyone.

The Queen’s Speech touches on some of those themes but I fear that it lacks the conviction to do what is needed. There is a common theme in all this: the failure to put in place rules to stop workers being exploited; the chipping away of regulations that protect the most vulnerable; the remorseless faith in the private sector, with more outsourcing and privatisation; and the creation of city Mayors but a reluctance to devolve the power and money to let them do their jobs as effectively as they can.

The real problem with the Government and the Conservative ideology is that they do not allow for a challenge to the neo-liberal economic model and do not account for the social value of the public sphere—the glue that binds our society together. While the Government speak on some of these themes, I do not believe that they have the willingness to see them through to deliver the economy that we need.

Oral Answers to Questions

Rachel Reeves Excerpts

Tuesday 7th January 2020 Commons Chamber

[Mr Speaker]

I call Rachel Reeves.

[Rachel Reeves (Leeds West) (Lab)]

indicated dissent.

[Mr Speaker]

Let us take somebody else then.

Spending Round 2019

Rachel Reeves Excerpts

Wednesday 4th September 2019 Commons Chamber

[Sajid Javid]

Let me take this opportunity to thank my hon. Friend for all the work that he has done in relation to self-build homes and more generally, in promoting easier access to homes for everyone. We are discussing that issue with the Ministry of Housing, Communities and Local Government, but I will pursue it further and get back to him.

[Rachel Reeves (Leeds West) (Lab)]

I am surprised that the Chancellor has the cheek to call this a spending review because it is nothing of the sort. It is no surprise that the Office for Budget Responsibility did not dignify it with its own economic and fiscal analysis, as normally happens with spending reviews.

When the Chancellor made his three-year commitment to school spending, he said that he recognised the importance of schools’ being able to plan. May I ask him whether local authorities should also be able to plan for the future when investing in social care and youth services and tackling homelessness? If he thinks that they should be able to do that, why did they not get a three-year settlement as well?

[Sajid Javid]

Let me first say gently to the hon. Lady that this is a spending round. I have not referred to it as a spending review. As she may know, a spending review normally covers a number of years, whereas a spending round covers a single year. She said that I had not “dignified” it with an OBR forecast. No spending review or spending round comes with an OBR forecast; that is normally the case with a Budget, and there are two forecasts a year. I thought that she might already know that, but I am happy to let her know now. She also talked about the funding of sectors such as social care and youth services. I did refer to those: I set out plans for next year, but also plans for the future involving, for example, the new youth investment fund.

Oral Answers to Questions

Rachel Reeves Excerpts

Tuesday 2nd July 2019 Commons Chamber

[Robert Jenrick]

Clearly, it is not possible to progress this matter until we have greater certainty about our exit from the European Union. Those Members of this House who want to see this matter progressed should be voting to leave at every opportunity, as we on the Government side have done. The important thing to point out on regional disparities is that this Government are investing far more than the previous Labour Government. In fact, £430 million a week more in real terms is being invested by this Government than under the previous Labour Government on infrastructure in all parts of the UK.

[Rachel Reeves (Leeds West) (Lab)]

4. What fiscal steps the Government are taking to support the northern powerhouse.

[The Exchequer Secretary to the Treasury (Robert Jenrick)]

The Government are supporting the northern powerhouse through devolution deals for, among others, Manchester, Liverpool, the West Midlands and, most recently, North of Tyne, as well as through over £13 billion of investment in better transport across the north. In addition, we have invested over £3 billion from the local growth fund in the region since 2015, and we committed at the Budget to announce a renewed northern powerhouse strategy later this year.

[Rachel Reeves]

It is quite an achievement for the Minister to get up and say that without any sense of irony whatsoever. The truth is that we have had the incredibly disappointing news this week that Pacer trains in the north of England will not be removed by the end of this year, as previously promised. Despite the warm words about the northern powerhouse, the truth is that since 2014 spending on transport in the south of England has risen twice as fast as in the north of England. Will the Minister use the spending review as an opportunity to rectify these imbalances and finally give meaning to those words, “the northern powerhouse”?

Oral Answers to Questions

Rachel Reeves Excerpts

Tuesday 21st May 2019 Commons Chamber

[Elizabeth Truss]

We are currently assessing the report of the Climate Change Committee on this subject. No doubt the right hon. Gentleman is a regular reader of the Treasury Green Book on the way we assess investments. Last year, in the new Green Book, we specifically included looking at natural capital as a way of making that assessment. That is one of the lenses through which we shall be looking at the spending review.

[Rachel Reeves (Leeds West) (Lab)]

19. Climate change is increasing the risk of flooding, and despite devastating floods in my constituency in 2015, the Government have not yet committed funding for the one-in-200-year scheme that the Chief Secretary knows is needed to protect businesses in Kirkstall in my constituency. The gap now is just £23 million, so will the Government make it a priority in the comprehensive spending review, even if that spending review is just for one year?

[Elizabeth Truss]

I agree with the hon. Lady that Leeds does need flood protection. I remember visiting with her a few years ago to see the scheme. We have already achieved phase 1 with the £32 million for that, and the Government are putting forward £65 million for phase 2. My understanding is that Leeds City Council is keen to work with us on that, and we are keen to make progress.

Spring Statement

Rachel Reeves Excerpts

Wednesday 13th March 2019 Commons Chamber

[Mr Speaker]

The hon. Member for Manchester Central (Lucy Powell), who is ordinarily known for her buoyant and enthusiastic smile, was gesticulating at the Chancellor to speed up. I think she was auditioning for the role of Speaker, and presumably seeking to give the right hon. Gentleman a masterclass in brevity, notwithstanding her desire often to make her own point with enormous eloquence but at not inconsiderable length—but we will see.

[Rachel Reeves (Leeds West) (Lab)]

In today’s forecast from the OBR, GDP growth this year is being revised down by 0.4%. The largest downward revision is to business investment—a downward revision of 3.2%. Business investment is now expected to shrink by 1% this year after shrinking by 1% last year. The Federation of Small Businesses says today that confidence is at “rock bottom”. The CBI says on tariffs that there has been

“no consultation with business and no time to prepare”,

and that this is

“a sledgehammer for our economy.”

Does the Chancellor recognise that businesses are losing patience with this Government and that unless businesses invest and help to grow our economy, productivity and wages are going to stay at rock bottom? What is he going to do to reverse this incredibly worrying and dangerous reduction in business investment?

Finance (No. 3) Bill

Rachel Reeves Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 8th January 2019 Commons Chamber

[Yvette Cooper]

The amendment provides a parliamentary safeguard. It does not, in itself, solve any of the many Brexit issues that we have, but it does provide an additional parliamentary safeguard that says that the Government cannot use the powers in clause 89 to implement no deal without first coming back to Parliament to ask for permission and support for a no deal. The hon. Gentleman is right that there may be other powers that the Government may choose to use. There may be other issues that they may choose to pursue, but this is our opportunity within this Bill to address these powers. That is why it is an important one to come around.

I have heard four sets of objections to the amendment. Some say that it is irresponsible; that it is somehow holding the Government to ransom on powers that they need. Some say that it is undesirable and perhaps even unpatriotic because they think that no deal is a good outcome and should not be ruled out. Some say that it is unnecessary because the Prime Minister’s deal is the best way forward. Some suggest that it is unstrategic because we need the threat of no deal to force a decision one way or another. I want to take each of those objections in turn because each of them is wrong.

First, on the charge that this is an irresponsible amendment, the amendment does not affect the normal Treasury and Government operations; those carry on as normal. It simply requires the Government to get Parliament’s permission if they want to use these powers to pursue no deal. Even if there is deadlock, the amendment provides a way forward. Let us suppose that Parliament votes against any deal that is put and also votes against no deal, and the Government still desperately want to use the clause 89 powers. In that event, they could follow paragraph (b) of the amendment if they still want to use the powers they need to apply to extend article 50. So in fact, this is an extremely responsible amendment. The irresponsible thing to do would be just to stand back and hope for the best, or to stand back and allow the Government to drift towards no deal without any attempt to put the safeguards in place to prevent that from happening.

The second objection is from those who think that no deal is a good option, or at least a good enough option not to rule it out. That is reckless. The damage to manufacturing industry, on which many of our constituencies rely, would be too serious. One local factory has said to me that the cost of its imports will double in price if we go to WTO tariffs. Another has told me that its European parent company would be under pressure to switch production to continental factories to avoid delays. Burberry has hundreds of jobs in my constituency, making clothing that is sold all over the world. It has written to me about the risks and concerns about delays to its supply chain. Its letter says:

“My hope in writing to you is that you will work with your colleagues across Parliament to ensure that there is no scenario possible where a No-Deal Brexit is a possibility.”

That is what I am doing.

[Rachel Reeves (Leeds West) (Lab)]

I thank my right hon. Friend for for tabling this amendment, which is so important. The Business, Energy and Industrial Strategy Committee has taken evidence from a number of businesses in the past few weeks, including Nestlé, Toyota and Airbus. Each one of them, and many others too, have said that the most dangerous thing would be to leave the European Union without a deal, which would have catastrophic impacts on their businesses and on the people who work for them. For that reason alone, anything that we can do to avoid a hard Brexit and going on to WTO rules, as some Members suggest, is the most important thing. This amendment at least helps to provide some safeguards to stop that from happening.

Leaving the EU: Economic Analysis

Rachel Reeves Excerpts

Wednesday 28th November 2018 Commons Chamber

[Mel Stride]

My hon. Friend has invited me to go into some of the technical detail of what has been put before the House this afternoon. Let me direct him to my earlier remarks about the work that Stephen Nickell will be doing. It will be very detailed and very forensic, and will deal with all the assumptions, including the trading assumptions to which my hon. Friend has referred. Of course, that information will in time—in a short time—be available to the House.

[Rachel Reeves (Leeds West) (Lab)]

However people vote, they expect the Government to put our national interest first. The deal on which we will vote in 13 days’ time clearly does not do that, and we are now confronted with circumstances in which the Prime Minister and the Chancellor are expecting us to vote for a deal that they know—and we all know—means that our economy will grow more slowly, and we will have a smaller economy with fewer jobs and less investment. No one voted for that in the referendum in June 2016, so can the Minister understand why so few MPs are going to vote for this deal in 13 days’ time?

[Mel Stride]

What the British people voted for in 2016 was this. They voted for a responsible Government to enter into robust negotiations with the European Union on behalf of the British people and secure a deal which safeguards our economy, the jobs and the economic future of all our constituents, but which also—critically— delivers on several other issues including an end to free movement, an end to the common fisheries policy and the common agricultural policy, control of our borders, not sending vast sums of money to the European Union, maintaining the integrity of the United Kingdom, and ensuring that we are able to go out and strike trade deals around the world as a global country. That is what we are delivering on.

Oral Answers to Questions

Rachel Reeves Excerpts

Tuesday 3rd July 2018 Commons Chamber

[Mr Hammond]

Yes. Female employment is indeed vitally important, and it has grown to a record high of 71.3%. As the labour market tightens, it is not just fair for us to make it possible and attractive for women to take part in the workforce; it is absolutely essential from an economic point of view. Dealing with any concealed discrimination is key to making it possible for women not only to enter the workforce, but to progress within the workforce to highly paid and rewarding jobs.

[Rachel Reeves (Leeds West) (Lab)]

One way to reduce unemployment is to encourage self-employment, and 4.8 million people are now self-employed. While that is welcome, there is a real problem of bogus self-employment, which is costing workers their rights and depriving the Treasury of tax revenue. Next week it will be a whole year since Matthew Taylor published his review “Good work” for the Government. When will they finally implement his recommendations and crack down on bogus self-employment?

[Mr Hammond]

The hon. Lady is right on both counts. Self-employment is an important contributor to our economy and genuine self-employment is very much to be encouraged, but there is a problem of bogus self-employment. People who are essentially employed are not paying the proper taxes and operating according to the proper rules for people who are employed, and in some cases employers are concealing the employment of people for their own selfish reasons. We need to deal with both those counts.