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15 Dec 2008 : Column 914

I want briefly to take issue with my right hon. Friend the Member for Birkenhead (Mr. Field) on training. That is essential. We should not rule out “make work” schemes as part of welfare reform, but they should not replace any emphasis we place on training.

The Government’s work on child poverty has been leading the world. The child poverty Bill will enshrine in law historic commitments to eradicate child poverty in a generation. That is much welcomed. In passing, I note that the Conservatives have refused to make any real pledge on ending child poverty.

Local initiatives and regeneration are crucial to tackling poverty and improving economic regeneration, so I welcome the Local Democracy, Economic Development and Construction Bill, and I hope that it ensures that local authorities can be much more active in economic development in their area.

Finally, I want briefly to thank the Government for putting into the police and crime Bill measures to give local people a greater say over whether to have lap-dancing clubs in their area, and I hope to be called to say more about that on a future occasion.

9.34 pm

Chris Grayling (Epsom and Ewell) (Con): This Queen’s Speech has all the hallmarks of a Government who have been in power too long. It has all the characteristics of a Government who have run out of ideas, and we now have a set of Ministers who no longer have the ability to distinguish between the national interest, their party interest and their own personal interest. At a time of national crisis, we have a Government who are solely interested in securing their own re-election. Never has that been more apparent than during this year’s debate on the Gracious Speech.

What we have is a motley collection of Bills assembled not through some great vision of a different future for our country, but out of pure political expediency, such as the child poverty Bill. We all share the goal of eliminating child poverty and we will support the Bill, but we all know why the Government have chosen this moment to bring the measure forward. They hope that by setting in statute a child poverty target for 2020, we will all now forget that they have effectively abandoned their child poverty target for 2010. Well, I tell them today that we will not let them get away with that one.

Then there is the welfare reform Bill. We all share the goal of radical reform for our welfare state, but we know why the Government have chosen this moment to bring forward that measure, as well. They hope that by rushing to copy Conservative welfare policies, they can deny us an opportunity to challenge them over their wasted decade: 11 years when the number of young people not in education or employment has risen, not fallen; when most of the millions of new jobs they are always reminding us about have gone to migrant workers, not to British people living on benefits; when countless billions of pounds have been thrown at the social problems we face and have made virtually no difference; and when in the good years, the Prime Minister blocked radical reform, when so much more could have been done. Well, we will not let them get away with that one, either. As the hon. Member for Glasgow, South (Mr. Harris) said on his now famous blog last week,


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So instead, what do we get? We get a Gracious Speech that is little more than a diversion; bad news buried; unpopular plans dropped; good ideas pinched; and embarrassing failures masked by high-sounding announcements about the future; and a Gracious Speech with only a handful of measures, compared with those we have come to expect from this Government. This was not a plan for our futures—it was a public relations exercise, and a pretty poor one at that.

Of course, there is another reason why the Government have so little to say at the moment. They have finally run out of money, and now they just do not know what to do. All the promises they made have come to nothing. Just look at what they said in the last two Gracious Speeches. In 2006, they promised to

In 2007, they promised

Two years later, we have the truth. The national debt is set to double within five years. Even the Treasury admits that unemployment is set to rise sharply. The pound has fallen to its lowest level against the euro, leaving millions struggling to afford their family holiday this summer, and now the Government are floundering in trying to find a response. One week, they are promising major new projects to try to ease the impact of economic downturn; the next—in the last few days—they are doing just the opposite, saying that major projects will now have to be delayed.

One of the most breathtaking pieces of hypocrisy that we hear every week from this Government is when they claim that it is their opponents who are inconsistent. This is a Government who say one thing one week, another the next, and a third the week after. Then they stand in front of this House—the Prime Minister is the worst offender—and make claim after claim that would fail any polygraph test that has ever been invented. Most extraordinary of all, the Prime Minister stands up in front of this House and claims to have saved the world. Now he may say it was a slip of the tongue, but we know that he really believes it. Well, I have news for him. It is not just the German Finance Minister who thinks that that is a load of old kugeln. The list of independent international observers who think that Britain is very badly placed indeed to weather the current downturn is getting longer and longer.

However, let us not go overseas for a straightforward view about the Government’s policies. This, from one leading observer, was in The Daily Telegraph on Saturday:

Members who were in the House earlier might recognise those words, because they were repeated—they are from the right hon. Member for Birkenhead (Mr. Field), a Labour Member of Parliament.


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If Labour Members are so confident about the state of our economy and about the viability of the measures unveiled in the pre-Budget report, I ask them to explain two things. Why is the pound falling sharply against the currencies of other countries? Why do they think it will be British people who will be paying more for their holidays this summer—if they can afford them, that is? Back in 1995 the Prime Minister certainly had his own view about a falling currency, when he said:

Never was he more right about that than now, and the markets agree. Why do Labour Members think the international credit markets now view Britain as less credit-worthy than McDonald’s? Could it perhaps be that the world outside now looks at the Prime Minister as being more Clark Kent than Flash Gordon? Our pensioners certainly view him that way. The most immediate victims of the sharp falls in sterling are British pensioners who have chosen to retire overseas. For them, a weak Government really have led to a weak pound, and they are all paying the price for this Government’s failure in a very real way.

Then we must consider the savers. Why have this Government so little to say about the fortunes of savers? As interest rates are slashed to try to respond to the economic failings of this Government, what have Ministers to say to those who are seeing their retirement incomes slashed as well? The answer is nothing, not even words of comfort. Indeed, when I appeared alongside the Minister for Employment and Welfare Reform on the BBC’s “Politics Show” a couple of weeks ago, it was worse than that, because he was just plain dismissive of the challenge our savers face, and he is the No. 2 Minister in the Department that is supposed to be responsible for the welfare of older people. Ministers would not even take steps to suspend the annuities rule for those pensioners being forced to make long-term commitments in a turbulent market.

This week, there has been yet another insult to the very large number of pensioners who lost money in Equitable Life. The ombudsman’s ruling could not have been clearer; the Government have an obligation to respond. The Prime Minister promised a full response by Christmas. So what happened last week? The promised statement was kicked into the long grass of the new year. Ministers say that they will be doing something then. Well, I have a message for all those pensioners: I would not trust this Prime Minister further than I could throw him, and nor should they.

I say that because what we have today in Britain is a Prime Minister who quite simply cannot be trusted. He leads a set of Ministers who deliberately misuse national statistics to win themselves favourable headlines, who systematically, week by week, in this House misrepresent the views of those who dare to oppose them, and who no longer originate ideas, but just copy the best from their opponents. This is a Government who have one single overriding objective: to hold on to the trappings of power, no matter the consequences for the future of this country, for those stranded on lengthening dole queues, for the people who have built up and nurtured businesses that create employment for millions and for those who have put aside money for retirement and now find themselves squeezed and squeezed.


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This Gracious speech does not offer a way forward to a better Britain. It contains no ideas about how to stem the tide of recession and begin to rebuild wealth and sustainable employment for all our futures, and no ideas about how to tackle the social breakdown affecting so many parts of our country. It no longer contains principles and philosophy; it just plagiarises the Government’s opponents in the hope that they can be denied political advantage. It is about one thing, and one thing alone: power. Well, I say to Ministers tonight that Britain deserves better. When a Government no longer have a vision for the country they seek to lead, when a Government no longer have fresh ideas to bring to bear on the challenges we face and when a Government are more interested in holding on to office than in using it for the advantage of every citizen in this country, it is time for them to go.

9.44 pm

The Secretary of State for Work and Pensions (James Purnell): This had been rather a good debate until the hon. Member for Epsom and Ewell (Chris Grayling) made his speech, but I will start by talking about the debate. There were good contributions from Members on both sides of the House. My hon. Friends the Members for Wakefield (Mary Creagh), for Coventry, South (Mr. Cunningham), for Glasgow, Central (Mr. Sarwar) and for City of Durham (Dr. Blackman-Woods) all spoke passionately about their constituencies and what they think the Government need to do.

In particular, I pay tribute to the speech made by my right hon. Friend the Member for Stirling (Mrs. McGuire), who rightly spoke about the high expectations that we should have of disabled people, but also of the high support that we should give them because they have high expectations for themselves. They well remember the fantastic work that she did on their behalf.

My hon. Friend the Member for Warwick and Leamington (Mr. Plaskitt) made a brilliant speech about bank regulation. I was lost for most of it, but he really seemed to know what he was talking about. My right hon. Friend the Member for Croydon, North (Malcolm Wicks) made an erudite speech in which he spoke passionately about welfare reform and the value he attaches to it.

I congratulate my hon. Friend the Member for West Ham (Lyn Brown), who highlighted the problem for many of her constituents of being trapped in temporary accommodation. There is an important issue there that needs to be addressed, and the housing benefit proposals are the right way to do that. It is also worth saying that a number of Members on both sides of the House welcomed the increases in the access to work budget. I am glad that that has been recognised as being able to make a significant difference to people.

The Gracious Speech will introduce measures to strengthen our economy, help people to save, involve communities, and improve health and education. Yes, it does— [Interruption.] I paid tribute to a number of Members from the other side of the House. [Interruption.] The Conservative Whip, the hon. Member for North-East Bedfordshire (Alistair Burt), who is in his place, welcomed the access to work— [Interruption.] My right hon.
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Friend the Member for Birkenhead (Mr. Field) is not an Opposition Member; he is a Labour MP. [Interruption.] Well, he made a good speech, and I can respond specifically to the point that he made.

My right hon. Friend said that we should be doing more in terms of community work for young people—and we absolutely agree. That is why we will be fast-tracking people who have been out of education or training on to the flexible new deal where there is indeed a requirement for them to be doing full-time work in return for their benefits, and we will be taking it further. That is an important point, and one on which we agree.

It is interesting that the hon. Member for Epsom and Ewell barely mentioned welfare reform or child poverty. I was grateful for some small mentions, although I was slightly worried when I read his amendment, which does not mention them at all. Welfare reform used to be his favourite subject, but he has gone mysteriously silent on it. Why has he done that? Exactly because he starts from the politics and ends up with the wrong policy.

That is Conservative Front Benchers’ problem on so many things. It is their problem on the economy. They start from the politics and consistently end up with the wrong policy. When they thought that the Northern Rock nationalisation would be unpopular they opposed it, because they started with the politics and ended up with the wrong policy.

When Conservative Front Benchers thought that it would be statesmanlike to support the Government on bank recapitalisation, they decided to support the Government. But again, they worried that they were in the wrong place on the politics. A consensus, even one so obviously in the national interest, does not allow the Opposition to play politics, so they moved again and decided to announce that they would cut public spending.

Because the Opposition started from the politics, they ended up with only one clear policy: to do nothing to help, and simply to let the recession take its course. That is exactly the policy that they adopted in the 1980s and the 1990s, when they said that unemployment was a price worth paying. That is exactly what they believe today.

We disagree. We disagree with the idea that people should be abandoned. We disagree, above all else, with the idea that nothing can be done. If we can support the economy, the recession can be shallower and shorter, which means less costly to the Exchequer—and most of all, less costly for individuals, families and communities around our country. We understand that good policy involves both social justice and good economics. The Opposition understand neither.

The shadow Chancellor was at his most thoughtful today. That is not saying much, for him, but he was trying to make an argument. However, his argument had one Achilles heel, which became clear when the Chief Secretary to the Treasury asked him how he would fund the extra spending for pensioners and on children. He had no answer to that, because he has boxed himself in. He says that he does not believe in the extra borrowing, but that means that he would not be able to support the extra spending on pensioners, as
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he would not be able to afford it. He can stand up and intervene now, if he wants to, and tell us how he would fund the extra £60 a week that we are giving pensioners in January. How would he fund the extra money that we have put into pension credit—the biggest uprating ever? He is welcome to intervene, but he would have no money for that, either. How would he fund the extra £3 billion in public spending on infrastructure? He can stand up and say how he would fund that, but he has no way of saying—

Stewart Hosie rose—

James Purnell: I do not think that the shadow Chancellor needs help from the Scottish National party—things are not quite that bad for him yet. He has no way of funding any of those things, because he has boxed himself in by saying that he wants to cut public spending in the future, but not to do the borrowing now. That means that the Conservatives would not be able to afford the extra help that we have said that we will put in place and—worse than that—in the middle of a recession, far from helping people more, they would be cutting spending, just as they did in the ’80s. They would cut spending and make the recession worse.

Stewart Hosie: The Secretary of State talks about the £3 billion. Will he confirm that that is not new money, but re-profiled money brought forward from future spending years? It is nothing to do with the borrowing: money is being brought forward from future years, where there will be a gap.

James Purnell: Exactly. They have not done that in Scotland, and they could be doing it. I hope that the hon. Gentleman will be argue for that in Scotland, so that we have the same support for people across the United Kingdom as we have in England. He should argue for that with his Government in Scotland.

We believe that the Opposition have got themselves into a position on economics where they would do nothing to help people. That would mean that the recession would be longer. If in the 1990s they had taken action similar to what we are doing now, they would have been able to reduce the effect of the recession on the UK. We believe that if a timely fiscal stimulus with a similar impact on GDP had been applied at the beginning of the recession in the 1990s, some 300,000 jobs might not have been lost. Some 300,000 people who lost their jobs would not have done so, reducing the costs to them, to our communities and to the Exchequer. The Opposition simply do not understand that.

The Opposition do not want to admit that they would do nothing. They do not want to admit what they really believe, which is that nothing can be done. They want to erect a smokescreen of measures instead. They want to pretend that those measures are far-reaching but they do not want to say that they would cost any more. They want to have a national loan guarantee scheme without saying that it would cost any more money. They want to cut national insurance for employers, but they pretend that that
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would be entirely and immediately self-funding. They want to put £3 billion extra on the working tax credit, without saying where any of the money would come from. The smokescreen distracts from the fact that the Opposition have no idea what they would do, and that they would do nothing to help people through the recession.

In contrast to the Tory smokescreen, we are offering real help. To rescue the banks, we recapitalised them. To help SMEs, we announced billions to support their credit and their exports. To help companies with their tax bills, we have said that we will defer payments until the company recovers. As we have also said how we would pay for those changes, interest rates have been able to fall, unlike what happened in the ’90s recession, when interest rates had to stay artificially high because of the economic policy of the Government at the time.

We are not returning to the policy of the 1970s, but are following the advice of the Institute of Directors, the CBI and the Governor of the Bank of England, who are hardly Scargillites. Indeed, the Governor of the Bank of England said:


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