The Economy and Living Standards

Robert Flello Excerpts

Thursday 12th June 2014 Commons Chamber

[Mrs Anne McGuire (Stirling) (Lab)]

It is a privilege to speak in this debate. This is the last opportunity I will have to speak in a Queen’s Speech debate as a Member of this House. I have to say, however, that the Queen’s Speech we heard last week was not nearly as exciting as the first Queen’s Speech I heard in this House in 1997.

I want to pick up on a few of the comments that have been bandied around by those on the Government Benches, not least the hon. Member for Aldershot (Sir Gerald Howarth), whom I have the pleasure, of course, of following. “Tax and spend” is one comment they throw about, but they do not say what that actually means. We can look around our country and our individual constituencies and see what the spend was all about. It was about replacing schools that had not been looked after for tens of years. Many of our schools were Victorian-built, and many of our hospitals had been built at the end of the 19th century, never mind the 20th century.

[Robert Flello (Stoke-on-Trent South) (Lab)]

Will my hon. Friend give way?

[Mrs McGuire]

Very briefly, as I want to take Mr Speaker’s advice.

[Robert Flello]

I agree with everything my right hon. Friend has said, but she will also remember, as I do, Conservative Members standing up time and again and calling for schools and hospitals in their constituencies; and how they have the shameless gall to say otherwise is beyond me.

--- Later in debate ---

[Mr Jack Straw (Blackburn) (Lab)]

We heard a vigorous defence of the Queen’s Speech from the Chancellor of the Exchequer, so it is surprising that so many Conservative Members have voted with their feet and emptied their side of the Chamber, obviously lacking the confidence to speak up in favour of their own Chancellor.

A central part of the Government’s defence of their economic policies is the challenge they make to the competence of and decisions taken by Labour Governments between 1997 and 2010. I was privileged to be a senior member of the Labour Government throughout the term and I am proud of their achievements. As John Major once shrewdly observed, the only people who never make mistakes are those who never make decisions. No more than any Government, did we get all our judgments right, but overall I believe we made the correct judgments, including on the economy. The criticism the current Government make of us is not just wide of the mark; it fails to take account of the contradictory policy positions they were adopting at the time.

The first charge the Chancellor has often made is that the Labour Government did not fix the roof when the sun was shining, but we did—we had to. As my right hon. Friend the Member for Stirling (Mrs McGuire) mentioned, one of the scandals of the Thatcher and Major Governments was their palpable neglect of public services. There were hospitals and schools with leaking roofs and buckets everywhere. There were schools where the sun could literally be seen through the open roof. There is not a Conservative constituency in the country where the roofs of its schools and hospitals were not fixed by the last Labour Government, and no Conservative MP complained about that spending at the time.

That brings me to my second point. I have been through what Conservative shadow Chancellors were saying in response to the Budgets and spending reviews between 2000 and 2010. Yes, there are plenty of passages of criticism, in small print, about the levels of borrowing and taxation to which the Conservatives could, and do, point, but if we look at what they were saying about the spending plans that were leading to all those improvements in their constituencies, we find that a very different story emerges. In 2004, they published a medium-term economic strategy, setting out their plans for the years to 2011-12. The Institute for Fiscal Studies published its own commentary on that, saying that if the Conservatives were to win the forthcoming general election, spending would

“still be higher”

under the Conservative plans

“than it was in every year of Labour’s first term”.

At the 2005 general election, the Conservatives’ main pitch, in the face of Labour criticism, was to reassure voters that no significant cuts would take place if they were elected. The Economist newspaper for 14 April 2005 published a major article under the heading “Much ado about nothing: The Conservatives’ spending plans are strikingly similar to Labour’s”. After the 2005 election, the reassurance that the Conservatives would not be cutting public spending continued, but in even more categorical terms. On 3 September 2007, the “ConservativeHome” website proclaimed:

“Tories will match Labour’s spending plans for the next three years”.

It highlighted an article in The Times of the same date, written by the then shadow Chancellor, which stated:

“I can confirm for the first time”—

he solemnly intoned—

“that a Conservative Government will adopt”

the Labour Government’s spending totals for the years 2008-09 to 2010-11.

[Robert Flello]

Does my right hon. Friend also recall that at the same time the Conservatives, to a person, were calling on the then Labour Government to weaken the oversight and weaken the regulation of the banks to allow them greater freedom?

[Mr Straw]

I absolutely confirm that. As we have accepted, we did not regulate the banks and other financial institutes sufficiently, but the Conservatives at the time were demanding, in this Chamber and outside it, not more regulation but less. Just in case readers did not get the point of the then shadow Chancellor’s article in The Times in September 2007, its headline was “Tories cutting services? That’s a pack of lies”. All the plans for the economy—those of the Conservatives, as much as those of Labour—were knocked badly off course by the global financial crisis. But for all the insinuations we now hear about how Labour ignored the warning signs, there is not a line—not a word—of such predictions in that article, nor anywhere else in what Conservatives were saying at the time.

The Chancellor talks today of Britain’s recovery, and I am delighted that output, after the longest recession in modern history, is now close to where it was six years ago. But although he will not do this, future economic historians will, I believe, judge that part of the reason for the recovery was the wise decisions made by my right hon. Friend the Member for Edinburgh South West (Mr Darling) when he was Chancellor of the Exchequer. Let it also be remembered that, for all the Conservative efforts to rewrite history now, the average level of debt to GDP under Labour was below that of the preceding Conservative Governments and below international averages, not only for the 11 years before the recession took hold, but even when our last two years in power are included. We fixed the roofs, for both sun and storms. By contrast, the Conservatives then were calling simultaneously for lower taxation and lower borrowing but the same spending. How on earth did they think those sums would ever add up?

--- Later in debate ---

[Andrew Gwynne (Denton and Reddish) (Lab)]

It is a pleasure to contribute briefly on the last day of the debate on the Gracious Speech.

The striking thing for me is that the last Queen’s Speech of a Parliament is usually stuffed full of Bills—the last few things that a Government want to get done before a general election—and then there are a load of draft Bills, which are an indication of where that Government want to go if they are lucky enough to secure another term in office.

[Robert Flello]

I recollect that before the 2010 general election, the Conservatives criticised the then Prime Minister for what they called a lightweight Queen’s Speech; by comparison with this one, it looks so heavy as to be unliftable.

[Andrew Gwynne]

I completely agree with my hon. Friend, and the real issue is that this Queen’s Speech is lacking in both those areas—Bills and draft Bills. Perhaps it is unfair to Her Majesty the Queen to say this, but the only memorable part of her Gracious Speech was her announcing a tax on plastic carrier bags. That is rather telling, because despite all the big issues facing my constituents in Denton and Reddish, there is very little in the Queen’s Speech about tackling the cost of living crisis, nothing to ease the pressure on housing which my constituents face, nothing on the NHS—perhaps that is a blessing in disguise—and no vision for a better Britain.

The complacency from Government Members was striking, because this recovery is unequal. Areas such as Denton and Reddish are struggling. I am not a merchant of doom; there are some good indicators. Unemployment is relatively low, at 3.7%. That is welcome but it is still higher than the 2.8% rate when I entered Parliament in 2005. There is an underlying story of low wages and long hours for people in full-time jobs, and many jobs are part-time, on zero-hours contracts and insecure. Of course, that is utterly self-defeating for the taxpayer, because it results in the working poor, whereby we are paying extra in-work benefits to subsidise low wages.

[Robert Flello]

I am enjoying my hon. Friend’s speech immensely. He has hit on that insecurity issue yet again. Last weekend, Stoke-on-Trent saw its 10th foodbank opening up, which surely points to the insecurity that exists.

[Andrew Gwynne]

It absolutely does, and it is a stain on our country’s reputation that so many people in work, as well as those who are out of work, have to rely on charity handouts.

Of course, in my constituency, an in-work benefit that has soared in recent years is housing benefit. I now have 1,000 extra claimants in Stockport and 870 extra claimants in Tameside. Those increases are surely a sign of that insecurity and those low wages. In my constituency, wages are 20% lower than the median for the UK. That is why we need Labour’s deal on the national minimum wage and why we need to put in place living wage agreements.

Youth unemployment is still stubbornly high. I commend Tameside council and, yes, I also commend Stockport council for their efforts to increase the number of apprenticeships, but what we need is a compulsory jobs guarantee, because what really worked for many young people in my constituency was the future jobs fund. It was criminal that this Government axed that very important scheme. We need to upskill the next generation and maximise the benefits of the jobs that have been created in the Manchester city region; in the city centre, in MediaCityUK at Salford Quays and at the airport city. We need to attract new jobs to Tameside and Stockport.

We need to invest in education. It was criminal that many of my schools missed out on Building Schools for the Future, even though my right hon. Friend the Member for Morley and Outwood (Ed Balls) signed off the BSF payments for St Thomas More college, Audenshaw school, All Saints school and Reddish Vale technology college. We need that investment, so that those schools have the same quality of educational facilities that we had in Denton community college.

Lastly, there is a chronic need to build more housing. It is good for jobs, but we need affordable housing both to buy and to rent. We need decent homes in the private rented sector, because far too many of them are squalid, frankly. We need more social housing. I commend New Charter Housing Trust Group for its new build—I was lucky enough to cut the first sod at its new site in Audenshaw—but it barely scratches the surface of what is needed.

This Queen’s Speech lacks ambition. I fear that we will have to wait 11 months for a Labour Government and a proper programme for action.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

After six days of debate on the Queen’s Speech, what have we learned? I have learned that my hon. Friends on the Opposition Benches have been determined to make the points on behalf of their constituents, while Government Members consistently ran out of time.

My hon. Friends have been diligent in pointing out all the items that have been conspicuous by their absence from the Queen’s Speech. My hon. Friend the Member for Edinburgh East (Sheila Gilmore), my right hon. Friend the Member for Blackburn (Mr Straw) and my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) made this point, as did my hon. Friend the Member for Coventry South (Mr Cunningham), my right hon. Friend the Member for Derby South (Margaret Beckett), my hon. Friends the Members for Huddersfield (Mr Sheerman), for Birmingham, Erdington (Jack Dromey), for Glasgow North (Ann McKechin), for Preston (Mark Hendrick), for Bolton South East (Yasmin Qureshi) and for Hartlepool (Mr Wright), my right hon. Friend the Member for Oldham West and Royton (Mr Meacher), my hon. Friend the Member for Denton and Reddish—I have listed him already; that is how good his speech was—my hon. Friends the Members for Liverpool, Wavertree (Luciana Berger), for Livingston (Graeme Morrice), and for Wrexham (Ian Lucas) and many more. I apologise to the hon. Friends I have been unable to mention.

We did not get the measures we wanted in the Queen’s Speech. Many hon. Friends mentioned cigarette packaging and smoking in cars, which were not included. There was nothing on border controls and no mention of the national health service. My hon. Friends should not be surprised by the paucity of the Government’s legislative programme, because it is not by accident; it is by design. It is a deliberate strategy to avoid time-consuming legislation that would be difficult for this House to deal with. They want to scrape the barnacles off the bottom of the boat, as Lynton Crosby famously put it, because they do not want anything to get in the way of the image they want to craft ahead of the general election.

This Queen’s Speech is not about rising to the challenges that the public want the Government to confront; it is all about giving the appearance of activity, but not real activity itself. It is about image, not substance. It is about the theatrics of government, not getting on with real reforms. It is also about repeating more and more promises, rather than fulfilling the ones they made in the first place. Look at what they promised on making work pay, again in the Queen’s Speech. Strangely, they made that promise in the 2010 Queen’s Speech. This time they made a promise about cutting red tape, which they also promised to do in 2010. They made a promise this time, as they did in 2010, about balancing the books and eradicating the deficit. We know that the Chancellor’s failure to generate growth for three years after the general election means that they have failed to meet that promise.

Of course, we must not forget one of the most foolhardy promises of all: to bring immigration down to the tens of thousands. In his solemn pledge on that, the Prime Minister said, “no ifs, no buts”. That was what they guaranteed. It is amazing that there was no mention of that pledge in the Queen’s Speech. But promises are difficult. These are tough times and, because of the Chancellor’s failure to get a grip and generate growth early enough, public finances are in a difficult state.

We are going to find times tough in the next Parliament and lower priorities will have to get less funding. What is the reaction of Government Members to these difficult circumstances? Do they knuckle down? Do they redouble their efforts, roll up their sleeves and try to do something about the challenges facing this country? Absolutely not. They switch on to autopilot mode and go into “coasting”, and we end with a legislative programme, such as the one we have, that does not confront the problems that the country faces.

Yes, we hear in the Queen’s Speech that the Government want to help small and medium-sized enterprises with late payments, but what about helping businesses with real lending support and the banks that should be helping those businesses get the equity in and get the growth that we need in our economy? We hear in the Queen’s Speech that the Government want to help with penalties where the minimum wage is not paid, but what about the real reform strengthening the minimum wage and ensuring that we link it to average earnings to make an appreciable difference? The Government want pensions flexibility. We welcome that, but what about the advice and guidance that those retirees will need in order to avoid problems further down the line? The Government even talk about child care tax relief eventually, but what about 25 hours of free child care for three and four-year-olds? That would be possible if the Government only pulled their finger out and collected the bank levy as they are supposed to do.

We do not see these measures because the Government do not understand the challenges that the public face. They do not offer a long-term economic plan. This is a Government obsessed with short-term political calculations—the phony concern of those who are focused more on the appearance of introducing reform than on the reality of undertaking reform.

[Robert Flello]

On pensions, the £5 billion or whatever figure will go into the Treasury from the Government’s proposals will be more than offset when, no doubt under a future Labour Government, the chickens come home to roost and mis-selling scandals hit. It will be a Labour Government who have to pick up the mess.

[Chris Leslie]

That is why we want to see the full detail of the advice and guidance that need to be put in place. The Government do not like hearing it, but these are the questions that have to be answered. Those answers were not in the Queen’s Speech.

It was not a long-term economic plan that we got in the Queen’s Speech, but a set of short-term obsessions focused on political calculations. The Queen took less than 10 minutes to read out the speech that she was given, yet for most of our constituents it offers zero progress on their concerns. The parties in government think that all is fine with the economy—everything is going perfectly well—but how detached from reality can they get?

The Financial Secretary will no doubt speak shortly and she can quote all the economic data she likes, but I have to tell her that for many people this is an economy that is about low pay, zero hours and, for those who are struggling, food banks. She can quote GDP statistics in recent months, but we are seeing an economy where the very wealthiest 1% in society are doing particularly well and seeing their share of the cake grow while the rest of the population are seeing their share shrink further and further. The Government may be satisfied with this state of affairs, but the Opposition are not.

In the remaining 11 months before the general election, we should have a substantial and meaningful legislative programme which tackles some of these problems, rather than the set of headlines and press releases that have been strung together for effect.