Business and the Economy

Barry Gardiner Excerpts

Monday 14th May 2012 Commons Chamber

[Nicholas Soames (Mid Sussex) (Con)]

I start by wholly agreeing with the right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) about House of Lords reform.

It is a great privilege to speak in this debate on the Queen’s Speech in the year of Her Majesty’s diamond jubilee, when all of us across this wonderful country will have an opportunity to celebrate the Queen’s exemplary attention to her duties over the past 60 years, when the Olympics will come to London, and when there will be vast opportunities for Britain to place itself at the centre of world interest.

I am sorry that the principal spokesman for the Opposition, the hon. Member for Streatham (Mr Umunna), has left the Chamber. What he said was really foolish and profoundly ignorant. Anyone who has had anything to do with UK Trade & Investment in the past year will know that it is functioning probably better than it has ever done. Let me tell the House a story. The other day, I went to speak at a dinner in Scotland. It was an international gathering of the whisky industry, and the chairman of probably the biggest company in that industry said to me, “I think you should know that the Government’s export efforts have never been better run, and that the attention from the diplomatic service and our embassies abroad is quite outstanding.” The Government deserve credit for that.

I pay tribute to the work of Lord Green, Lord Marland, and Lord Sassoon, who have led tremendously successful trade missions all over the world—missions that have secured contracts and goods for this country that we have never secured before. Our exports are up £50 billion on previous years. The hon. Gentleman will find that he has done himself no good by speaking as he did of UKTI.

[Barry Gardiner (Brent North) (Lab)]

rose—

[Nicholas Soames]

I hope that the hon. Gentleman will forgive me, but I have only six minutes, and I have a few points to make.

I support and endorse the Queen’s Speech. Much in it deserves and commands support at this very difficult time. The Government are right in their determination to drive the economy forward, to bring the UK’s productivity and growth up to world standard—they are not at that standard at the moment—and to focus on getting the big things right and resolving the stubborn, difficult and often politically very unappealing challenges that have long kept the UK’s economy from fulfilling its true potential. Our national problems are serious. Many of the causes of Britain’s plight cannot justly be blamed on Greece, Brussels, or even the banks. There is the dire state of too many of our schools and thus, through no fault of their own, the poor skills of too many young people; there is the decline in size of our manufacturing industry—an industry that the Germans sustain so well—and there is the plight of small businesses, which are still groaning under oppressive bureaucracy and employment law. We really need to get on and fix those problems. This country remains, on its good days, a wonderfully civilised place, but there is no contradiction in recognising that our traditional national values will not suffice to support us through this century unless they are allied to harder work, vastly improved skills, and a drastic reality check about the standard of living that we have for so long taken for granted.

I wholly endorse the views that my right hon. Friend the Foreign Secretary expressed yesterday in a really interesting, punchy interview in The Sunday Telegraph. He set out clearly the great opportunities for British trade and the great efforts being made to secure them through our outstanding commercial diplomacy. The success of our economy locally, nationally and globally will depend on how we build our economic growth around a tapestry of skills, with science, finance and sound regulation working together. In many ways, the Queen’s Speech sets out a way forward on that. It is worth remembering that growth, as a public policy, can achieve a great deal. It can create jobs and it reduces welfare dependency, but it is not an end in itself.

I am trying to develop an idea that takes advantage of the south of England’s local geography and opportunities. Starting with the south of my constituency, I want to develop an international technology hub between Burgess Hill and Brighton, and between Brighton and Southampton. The work required to deliver improvements to the A27 must happen, and I do not see why that should not be carried out by a public-private partnership of some sort. We need to get on and develop the sort of creative clusters that are essential for economic growth, making the most of the university of Sussex and the brilliant Brighton university, through to Portsmouth and Southampton—an area with ample office space and housing. The advantage of such a scheme is that it contains all the conceptual ideas that begin with the creation of jobs and extend to kick-start a knowledge-based economy. One of the points that the Gracious Speech makes—

--- Later in debate ---

[Barry Gardiner (Brent North) (Lab)]

Thank you, Mr Deputy Speaker. Having spent the afternoon cutting my speech, I shall now have to cross out all the omissions—but, seriously, I am delighted by your ruling.

If asked to identify what is most surprising about the Queen’s Speech, I would have to say it is finding that this Government consider it a priority to remove the rights of ordinary working people and to make it easier to fire people—and not just to fire people, but to fire them unfairly. We have 2.7 million people unemployed, we have a double-dip recession—the first in 37 years—and we see this Government putting through legislation to make people more insecure. How does that build confidence in our economy? How does that serve to increase productivity? It does not.

That is just one part of the injustice that lies at the heart of this Queen’s Speech—which explains why so many Opposition Members have spoken about it. It is not just an unforeseen consequence, and it is not proposed merely in the mistaken belief that it will get the economy going. We recognise this for what it is: a deliberate political philosophy. It is a deliberate attack on the rights of working people, and I have to say that while one would expect that from the Conservatives, the fact that the Liberal Democrats have colluded in it in quite the way that they have is to their eternal disgrace. I hope working people will punish them accordingly.

The director general of the CBI identified a different test by which to judge this Queen’s Speech: whether it will help business to grow. He mentioned the energy Bill and the regulatory reform Bill. While he said he did not have much confidence in the regulatory reform Bill, he said he thought there was a chance that the energy Bill might help in this regard. I wish that were the case, but I fear Mr Cridland has let his optimism get the better of his customary forensic analysis. We have been promised sight of a draft Bill for pre-legislative scrutiny on 22 May —or, to be more precise, we were promised it for 20 minutes on the Department of Energy and Climate Change website on the afternoon of the Queen’s Speech, but then the commitment to the 22 May was taken down. Will the Minister responding to the debate tell the House whether, and when, that Bill will be published in draft form?

The Government’s draft Bill to reform the electricity market to deliver “secure, clean and affordable” energy will need to go a great deal further than the current four pillars set out by the Department. The Government are not prepared to introduce real competition into the electricity markets, because they do not dare break up the vertical integration of the wholesale and retail elements of the big six electricity companies as they fear losing the investment they so desperately need to replace the 25% of existing energy generation that will go off stream by 2020. Some £200 billion of investment is required in the energy sector and the price of that investment, in the Government’s mind, is a quiescent Government, cowering in the face of the big six and unwilling to regulate to open up the market to the competition and the free market forces that they say they believe in. The effect will be higher costs for small and medium-sized businesses and, of course, for domestic consumers.

The energy crisis facing this country will do more to undermine prosperity than anything else in the next 10 years, except perhaps the impact of the death throes of the eurozone. I am not a traditional fan of the speeches of the right hon. Member for Wokingham (Mr Redwood) and the hon. Member for Stone (Mr Cash), but today they rightly pointed out the effect on the UK of the shrinking of the European economy. It is worth reflecting on the fact that although the total amount of Greek debt owned by UK banks and the UK Government together is an eye-watering €14.2 billion, the French Government alone hold €15 billion of this debt and French banks hold a catastrophic €42 billion, giving France a €57 billion exposure. We now have a French President calling for a growth package to go alongside the financial stability and austerity measures agreed by the 25. France needs Germany and the European Central Bank to fund an ever-expanding Greek bail-out to stop the implosion of French banks. Simultaneously, France needs Germany and the ECB to provide liquidity to stimulate the growth that the new President has made his political priority. Does any Government Member seriously believe that EDF, a company owned by the French Government, will not be under Gallic pressure to invest in its home market in preference to the UK and that that will not have a dramatic impact on the investment capacity and potential in the UK over the next five years?

Only two out of the big six—Centrica and Scottish and Southern—have the UK as their primary investment focus, and what all of them look for is a clarity of purpose and a stability of regulatory regime that creates the right investment climate for long-term energy investments to achieve their expected return. This Government, in just two years, have spectacularly undermined business investors’ confidence. With the carbon reduction commitment, the Government retrospectively snatched £1 billion from business. With the North sea tax regime changes, they sent shock waves throughout not just the big oil companies, but the whole investor market. Of course, with the solar photovoltaic feed-in tariff, the Government became a laughing stock for investors. But the laughter will stop as the desperate truth sinks in that business no longer regards the UK as a stable investment regime, and the UK courts have compounded that by ruling against the Government on these issues.

That is what is going to undermine the possibility of growth in this economy: the lack of business investment in the energy markets and the way in which generation capacity will go off stream after 2017, with businesses then not just paying more for their power, but not being able to get it. That will be because this Government are failing the absolute cast-iron test of putting through real structural reform in the energy market. That is what business has called for, that is what business knows it is not getting and that is why business has condemned this Government for a weak and feeble Queen’s Speech.