amendment of the law

Tom Clarke Excerpts

Tuesday 25th March 2014 Commons Chamber

[Mr Darling]

Absolutely, and the argument that has been with us throughout this Parliament has been about how to ensure that we generate growth to pay down the debt. Part of the problem that the Government have at the moment is that the plan that they started out with did not achieve significant results—it is not the same plan as they are operating now, by the way, because it is running some four years late and is significantly different from the one set out in 2010—because we simply did not have the economic growth that people expected.

One of the most worrying points in the OBR’s report is that it expects our economy to be at full capacity in just four years’ time. Normally, when growth recovers after a recession, as it did in the ’80s and ’90s, it peaks at 3% or perhaps 4%, because spare capacity is being used up. The OBR says that there simply is not spare capacity in the economy at the moment. That should worry us, because if our economy is operating at capacity in four years’ time and inflationary pressures start kicking in, how on earth will we meet the future bills of a mature economy with an ageing society?

I understand that some Government Members are more ideological than others about public expenditure, and understandably, many of them expressed concern about the flooding in the west country earlier this year.

[Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)]

Before my right hon. Friend finishes his interesting speech, will he respond to the concerns among Labour supporters about how the Conservative party keeps reminding us of what it claims was the mess that Labour left behind? Are we therefore to believe that the international recession, which had an impact on Ireland, Iceland, Japan, America and so on, did not have an impact on Britain? Was that his experience?

[Mr Darling]

Having been around at the time, I rather got the impression that it was having an impact on everybody, from communist China to the republican United States and throughout Europe and the whole world. If there is a banking crash, it is not surprising that it has consequences.

To return to my point about the west country, we have to recognise that there are some things that the private sector will never do, and flood defence is one of them, so there will always be a role for the public sector in the economy. I firmly believe in a mixed economy and I am enthusiastic about anything that we can do to help the private sector innovate and invest, but it has to be complemented with investment in science, innovation and so on. The Government have a role in such things.

The Chancellor talks seriously about reducing public expenditure to levels last seen in 1948, but I say to the House and the country that the world in which we lived in 1948 was hugely different from the world that we live in today. Expectations are different and the population is getting older—many Members, not just me, may be grateful in a few years for what the state is willing to do as opposed to what we can do as individuals. That issue affects all parties that will be standing at the 2015 election, and we need to address it, because we cannot allow ourselves to drift into a situation in which it is almost inevitable that our economy will stall and hardly grow. That would lock us into unpalatable and difficult consequences. It is dead easy to sign up to cuts in a debate such as this, but living with the consequences of them—60% of them are still to come—will cause a great deal of pain to constituents of Members on both sides of the House.

Of course we have to deal with the immediate consequences and fall-out of what has happened over the past five years. Some sensible reforms have been announced in relation to savings, but we need to get pensions right, because we have got them wrong in the past. We need to get our economics right in the long-term interests of this country and of future employment and jobs, and I am not sure we are doing that yet.

--- Later in debate ---

[Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)]

Listening to the Chancellor, I could not help but conclude that my constituents simply do not inhabit his world. Indeed, very few people share his world, and therein lies the problem. For example, unemployment in my constituency has risen dramatically. Ten years ago, the figure was 1,500 in total, and that included youth unemployment. Under this Government, it peaked at 3,341, so it more than doubled under the coalition. It is now almost 2,600, but that is well above any acceptable level, especially when it includes over 700 young people without a job.

This is a Chancellor for the wealthy, and, apart from a few gimmicks, this was a Budget for the wealthy. That is what brings me into conflict with him. I acknowledge that the economy of Britain as a nation is far more complex than that of each household. Furthermore, I accept that there will be a disparity in household budgets depending on income and expenditure. However, each household has basic needs that must be fulfilled. My assertion is that the Chancellor is out of touch with hard-working people. He does not get what is obvious to everyone: that families are struggling, especially in my constituency.

We have what I can best describe as a cost of living crisis. Wages are down by £1,600 a year. To many households throughout Britain, that amount of money could be the difference between living in poverty and living reasonably comfortably. I know that the Chancellor does not get it—after all, how could he, when we know that the Bullingdon club uniform costs about £3,500? What is even more a matter for despair is the confirmation by the Office for Budget Responsibility that people will be worse off in 2015 than they were in 2010. We have had the slowest recovery for 100 years, with the Government forecast to borrow over £190 billion more than planned. Ordinary, decent hard-working people are doing all the heavy lifting as regards who is actually bearing the brunt of the austerity measures introduced by this Government.

Businesses in my constituency constantly complain to me that banks have withdrawn their overdraft facility, making it even tougher for them to survive. Bank bonuses are rising again, even though businesses cannot get the financing they need. Just before Christmas, I was most grateful to secure a meeting, with representatives of such a business in my constituency, with the Business Secretary. Although I thank him sincerely, I am puzzled that the Department for Business, Innovation and Skills and the Department for International Development are taking so long to respond.

Another business in my constituency, and in several other Members’ constituencies, Verve car showrooms, went bust. The problem was that many consumers who had paid money for cars or signed up with finance agreements still had not received their cars at the point of administration. With the Sunday Mail, we jointly did our best to expose the poor consumer protection in those unique circumstances. I also wrote to the consumer affairs Minister. The owner of the company, for whom I have no brief, claimed that his company had been stitched up by the banks. Had he been a constituent of mine, I would most certainly have called for an inquiry into the behaviour of the banks.

The Government know full well that energy bills have risen by almost £300 since their election. The most powerful and effective speech on the subject of energy bills was delivered not during the Budget statement, but by my right hon. Friend the Leader of the Opposition during the party conference season. Central to his theme was a freeze on energy bills until 2017 and reform of a broken energy market, which would give consumers a welcome break from huge increases. I have always argued that, in effect, a cartel is operating in the energy market. The energy companies were terrified by the resonance of and public support for that policy. By contrast, the Government appeared incapable and unwilling to stand up for consumers.

This is one subject that unites the entire country. Everyone knows that the energy companies are ripping off households. If I may say so, I was making that point under the previous Government—my assertion is not new, but the Budget is a missed opportunity. My right hon. Friend the Leader of the Opposition set out a coherent strategic plan to introduce transparency and fairness for consumers. Cabinet Ministers sought to undermine that excellent solution to the problem.

That proved conclusively to me, yet again, that this is a Cabinet of millionaires running the Government in favour of the wealthy. [Interruption.] I speak for my constituents. Such selfishness and unfairness will ultimately lead to this Government’s downfall. Until then, I shall continue to expose the less than even-handed treatment dished out to the vast bulk of households—those on medium and modest incomes—while this Government favour the wealthy. This is a Government for the few and what we need is a Government for the many.