The Economy and Pensions

Part of Orders of the Day – in the House of Commons at 3:09 pm on 14th November 2007.

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Photo of Michael Meacher Michael Meacher Labour, Oldham West and Royton 3:09 pm, 14th November 2007

I think that that is implied. A better work-life balance, not just for women but for men, too, is gravely lacking in this country and that is one of our biggest drawbacks. I repeat that we have by far the longest working hours, so I welcome what is proposed and I accept the vision that the hon. Lady described.

The Government need some commanding themes by which their distinctive vision can be clearly understood. I want to propose three. The first is democratisation, which my right hon. Friend the Prime Minister adumbrated in his first statement to Parliament, and extremely welcome it was too. However, democratisation must stretch a great deal further than giving Parliament a right to vote before the country goes to war, as I think he realises. Parliament needs real new powers on a much broader front. Some examples include powers to elect Select Committee members and ratify Cabinet nominations made by the Prime Minister—that is not a particularly traumatic proposal, because something similar already happens with congressional hearings in the United States. Other examples are the power to approve the membership and terms of reference of committees of inquiry proposed by the Prime Minister and the power to set up our own parliamentary commissions to investigate particular issues—a recent example about which I feel strongly is extraordinary rendition—when the Government refuse to do so.

However, it is not just in Parliament that there is a democratic deficit. An even bigger one now exists outside. Over the past 30 years power has become so centralised and the regulatory authorities gradually so enfeebled that, so far from corporate power being regulated, the biggest businesses have increasingly co-opted the powers of the state for their own commercial ends. Let me give a few recent examples: the current loosening of controls over power station, airport and incinerator developments, which are part of the Queen's Speech; the failure to regulate unhealthy food advertising because of objections from the food industry, despite the growing obesity epidemic; the notorious withdrawal of the Serious Fraud Office investigation into allegations of corruption against BAE Systems; and the relaxation of the gaming laws to permit a flood of gambling casinos.

It sometimes seems as though accountability has all but vanished, at least in some parts of this country. Perhaps the most telling example, which has already been discussed at length today, is Northern Rock. The crisis is now costing £23 billion in loans from the taxpayer, plus, I understand, a £2 billion interest charge—almost equal to the entire annual defence budget—and yet nobody is held responsible. The Bank of England, the Financial Services Authority and the Treasury are all blaming each other. What action is being taken, and by whom, to face up to the fundamental mistakes that led up to the crisis, including the reckless lending practices of the chief executive of Northern Rock and the flawed structure of regulation put in place a decade ago?

The question has to be asked: why was Northern Rock not temporarily taken into public ownership—not back into public ownership; it was never in public ownership—as was done in the secondary banking crisis in 1974, in order to avoid a run on the bank and retain depositors' confidence without such a colossal haemorrhage of public funds? The answer, which says something significant about the structure of power in our country, is that the neo-liberal agenda of deregulation, privatisation and unfettered markets is, unaccountably, still being imposed above everything else, even at phenomenal cost to the taxpayer, so that public ownership is not seriously mooted as an alternative.

This issue has not yet been touched on, but what action are the Government going to take to address the mania for securitisation, collateralised debt obligations and all the other opaque and dodgy financial derivatives that have so dramatically and comprehensively destabilised the markets? Despite all their deregulating instincts, do the Government not acknowledge that stricter regulation of the financial markets is now necessary if the frenzy—it will no doubt go into abeyance for a time because of the current crisis, but it will return—for newfangled financial instruments that are deliberately designed to be deceptive about risk and value is to be curbed?

That is all about one section of society—the élite end—but what about the other end? There again, the checks and balances against the arbitrary use of power have been and remain severely restricted. Civil liberties have been eroded, as we are all aware. The introduction of ID cards and two months' detention without charge, both of which I deplore, are still being mooted. Workers who have been in their jobs for less than two years can still be arbitrarily dismissed without any rights, while temporary and agency workers remain an exploited underclass. Of course, that is mainly at the behest of the CBI; and if I may say so, the Government should stand up to the CBI rather more resolutely. Accountability or, indeed, any redress for alleged misdemeanours by the police, judges, banks, private utilities or big corporations is, as all hon. Members will know from their surgeries, often hard to get, if not almost impossible. It is not unfair to say that powerlessness is widely felt to be endemic throughout society. I believe that the Prime Minister and the Government want to deal with that, but doing so will require a great deal more than focus groups or citizens' juries.

A second commanding theme that the Government —this Labour Government—should prioritise is a fair, balanced, participatory society. That means dealing with the scandal—it is no less than that—of excessive inequality that has now reached grotesque levels. The Chancellor was absolutely right to say that the Government have a highly creditable record on child poverty. They have reduced it by more than 600,000 from the record level of 3 million that it reached under the Tories, and they have made it clear that they intend to go much further. The problem is that, while poverty has been reduced, the income and wealth of the rich have increased disproportionately, and inequalities have therefore grown. We have now reached a position in which a worker on the minimum wage gets about £200 a week, and if he happens to work for one of the top FTSE 100 companies his boss will be getting a staggering £70,000 a week, according to the latest surveys. That is 350 times more. I defy anyone to justify that.

Given the present private equity excesses—they will no doubt be blunted by the banking crisis—and the fact that capital and business taxation is at its lowest for a century and direct and indirect taxes are now pretty regressive, we are now in danger of returning, unless we are very careful, to the polarised—income-polarised, at least—class system of the Edwardian era. Redistribution is a taboo word that has been banished from the political vocabulary for far too long, but it needs urgently to be reintroduced. It was not helpful that in the pre-Budget report the 6 per cent. richest in our society who pay inheritance tax were handed a gain of some £1.4 billion a year, while working tax credits for the poorest children were increased by only 40p a week.

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