Economy, Pensions and Welfare

Part of Debate on the Address – in the House of Commons at 9:34 pm on 15th December 2008.

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Photo of Chris Grayling Chris Grayling Shadow Secretary of State for Work and Pensions 9:34 pm, 15th December 2008

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 Mr. Harris said on his now famous blog last week,

"what a pity we weren't more radical in our first or second term."

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

"maintain low inflation, sound public finances and high employment."—[ Hansard, House of Lords, 15 November 2006; Vol. 687, c. 1.]

In 2007, they promised

"policies to secure a stable and strong economy, with...sound public finances, and high levels of employment."—[ Hansard, House of Lords, 6 November 2007; Vol. 696, c. 3.]

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:

"Worse still, few people believe that Gordon Brown's strategy to mitigate the impact of a mega-recession on jobs is likely to work. The Government has dangerously raised the stakes by borrowing an additional £20 billion to finance its VAT cuts. What is the sense of this policy when firms are rushing to cut prices by up to 50 per cent? A 2.5 point cut in VAT is simply spitting in the wind of the economic hurricane that is gaining strength."

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

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:

"A weak currency is the sign of a weak economy, which is the sign of a weak government".

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.

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.

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