Economic Growth

William Bain Excerpts

Wednesday 15th May 2013 Commons Chamber

[Mr William Bain (Glasgow North East) (Lab)]

The country is still in the midst of the longest slump for 140 years. We need to generate 2.6% of GDP and more than 900,000 jobs to match the output and employment rates we achieved before the financial crisis struck. Four years into what should have been a recovery, we have unemployment locked at an unacceptable 2.5 million, under-employment among young people at nearly one in five, construction output falling, the IMF describing Britain’s economy as severely demand-constrained, and the OECD saying that our society is increasingly unequal. Yet what has the country seen in this debate today? It has seen an out-of-touch Chancellor, an isolated and absent Prime Minister, a decaying coalition and a weak Queen’s Speech that cannot meet the aspirations of our people. A governing coalition riven with divisions over Europe, welfare and child care cannot unite the country on jobs and growth.

The Gracious Address should have contained measures to inject demand into the economy and offer hope to our struggling construction and manufacturing sectors, but instead it simply compounds the Chancellor’s obstinate refusal to use fiscal policy to ease the pressures on ordinary households. Only this morning, the Office for National Statistics revealed that in the first quarter of this year, pay excluding bonuses rose at its lowest level since 2001, at a mere 0.8%. The OBR’s March fiscal outlook reveals that the decline in real-wage forecasts since December would cost ordinary households a further £200 this year, which is more than four times what the Government are handing back through their increase in the personal tax allowance. The squeeze on incomes is tightening its grip on millions of households, and without an easing of that burden by the Government, the day of real recovery will remain far off.

A Gracious Speech that was focused on the issues of the country, rather than on managing fractures within the coalition, would have contained a jobs Bill to help 2,000 young people in Scotland who have been out of work for more than two years to get back into work.Even with a modest fall in joblessness today, more than 11% of the working-age population in my constituency is unemployed, which is utterly unacceptable. We know from our friends and neighbours the scarring effect that long-term unemployment has on people’s health and, if they can find another job after that period of unemployment, their earnings and job satisfaction. In the UK, 18 to 24-year-olds are now 10% less likely to be in work than they were in 2008. We should be following the successful example of countries such as Sweden with a jobs guarantee—initially for people out of work for two years or longer, but eventually extended to those jobless for a year or more—that would be paid for by a tax on bank bonuses and by limiting the pension tax relief that top rate taxpayers receive to 20p in the pound.

A Queen’s Speech that was focused on the issues of the country would also have contained a financial services Bill to reform our banks, creating a default power to separate investment banking from retail banking—if needed—to stabilise the economy, and new regional-based banks to boost investment and lending to our small and medium-sized enterprises.

Families in Scotland are losing £28.63 a week on average through the cumulative effects of this Government’s welfare and wages policies. That should have been addressed in this Queen’s Speech by cutting VAT, to put an average of £450 a year back into the pockets of 67,000 voters in my constituency. There should also have been a consumer rights Bill, to help nearly 6,400 over-75s in my constituency to receive an average £200 reduction in their energy bills this year.

We need a one nation Government who will build an economy for everyone in our society, not just—as is increasingly happening—for people at the top. We need that one nation Government as much in Glasgow as in every nation and region of our United Kingdom.

[Madam Deputy Speaker (Dawn Primarolo)]

I call Andy Sawford to speak. Could I ask you to resume your seat at 6.35 pm to enable the wind-ups to start?