First, I should apologise to you, Mr Speaker. I stepped out of the Chamber but got a bit interrupted and my return to my place was delayed by five years. I am pleased to be back and in a moment I will remind hon. Members of what I was speaking about five years ago, when I was rudely interrupted—by democracy, of course—because it has a curious echo. A Conservative Member, whom I shall name in a moment because he is still a Member, had said:
“Cabinet Ministers, including the Schools Secretary, have been tripping over themselves to claim that they have to cut only x hundred million or y hundred million pounds from their budgets. The truth is that they do not know how much they will have to cut, because they do not know what their budgets will be as the Chancellor has not told them and he has not told the electorate.”
That sounds a bit familiar. My response was:
“The hon. Gentleman decries the Chancellor for lacking credibility, vision, energy and new ideas”.
We still have huge problems with the economy. In a moment, I will deal with the two big myths about the economy, but first I should briefly like to pay the tribute due to my predecessor, Paul Uppal. I acknowledge, as do many of my constituents, the amount of work he did in the constituency, how honest he was and how frequently he visited the constituency. I thank the voters of Wolverhampton South West for electing me this year for the third time, and I have to say that it was a lot easier than it was five years ago, when I had the millstone of Gordon Brown around my neck.
The first myth of the two that I shall delineate is the Labour myth on the economy, which is that there was no problem with the economy when the world economic meltdown occurred in 2008 and that all our economic problems thereafter were due solely to world factors. That is a myth and it goes back to 2001. Some of my colleagues may recall the Labour slogan for the 2001 general election, which was “an end to boom and bust”. That was brought forward by Messrs Brown and Balls. It was economic nonsense. I am a Keynesian, but whether we are talking about Kondratiev long waves or whatever, for 300 years capitalism has been cyclical, and that nonsense about an end to boom and bust was on none of my election material. It continued with the nonsense of the private finance initiative, which was a sleight of hand to disguise Government borrowing and, sadly, a sleight of hand that continued under the coalition Government.
The Labour Government continued with the nonsense of light-touch regulation and a Treasury Minister, one Ed Balls, boasting that Labour had become the financial capital of the world because we did not have the millstone of the Sarbanes-Oxley Act, which was introduced in 2002 in the United States of America after the problems caused by WorldCom and Enron. The nonsense continued, as has been adverted to tonight, with the fact that we ran a deficit in seven of the 10 years in which Labour was in office before the meltdown in 2008. We should not have done. By the time we got to the world economic meltdown in 2008, our structural deficit just before it, according to the OECD, was 3.1%. That meant that when the wave came in from across the ocean it overtopped our defences much more than it should have done because our economic defences were not as high as they should have been. I have to say to the House, to make it clear, that before the world economic meltdown I made all the points I have just made to my then Labour colleagues.
The second myth paraded tonight is the wonderful economic performance of the coalition Government. Most of that is complete nonsense. Let us start with the deficit. The deficit is still £90 billion and still 5% of GDP. In the past five years, the national debt has gone up by 55%. We have a balance of trade crisis because we are not exporting enough. GDP per capita is still below what it was in 2008, productivity is down, we have rising personal debt, soaring house prices, jobs that people are forced into or forced into in a sense—such as bogus self-employment jobs, minimum wage jobs and jobs on zero-hours contracts—and falling living standards. Much of the economic growth we have seen in the past six months has not been prompted by anything the coalition Government did but by something the SNP Members will know about—that is, falling oil prices.
Mr Mitchell talked earlier about the problems of a deficit because of the intergenerational transmission of debt. What the coalition Government have done and what this new Government have proposed to do is carry on privatising intergenerational debt in two main ways: through soaring house prices so that young people cannot afford a house; and through a huge rise in student debt for the half of young people who go to university. That is simply privatising the transmission of debt to the next generation and it totally undercuts what the coalition Government and the new Government have said about needing to get the deficit down to protect the next generation. I agree with that aim, but all they are doing is privatising it.
This Government will either have to borrow money, as the last Government did, to meet their promises, such as an £8 billion rabbit out of a hat for the NHS, or they will have to put up taxes. However, they have restricted themselves in the Gracious Speech so that they cannot put up income tax, VAT or national insurance contributions. Growth will not get them out of the hole, so I therefore suspect that they will cut even more than they have said that they will.
What we need in our economy is Government borrowing to invest in infrastructure and training and to stimulate economic growth, and Government borrowing for house building so that we have bricks and mortar to show for it. Let us face it, when most people in this country buy a house—although perhaps not some Conservatives, with their inherited wealth—they borrow money to do so. It is what we all do. To drive productivity, we need to drive up the minimum wage and to get rid of zero-hours contracts, which are exploitative. We need restored rights for employees at work, because that will drive investors to substitute capital for labour, which will drive productivity. We also need a bit more compassion, frankly, in our society and in our Government.
What we need from the Labour side is not only a recognition that economic faults were made before 2008, not just by Brown and Balls but by a lot of them. We need to challenge the power structure of this country. Yes, I support devolution, whether it is the northern powerhouse or something from my own west midlands or wherever, but I want a Government who intervene in markets and break up the big banks, which are too big to fail and will land us with another crisis all over again. Capitalism is cyclical. I do not know when that might happen; if I did, I could make a lot of money. We need to break up those big banks. We need to regulate the energy companies a whole lot more. They are ripping off all our constituents. We need to raise the tax on the richest. We need to abolish phoney non-dom status. Above all—this is one of the key lessons from the electorate both for the Conservative party, which has its majority, and for the Labour party—we have to recognise that one of the appeals of UKIP is that it represents itself as not part of the London-centric political élite. Believe me, we in Wolverhampton do not like that élite. I do not want to see any more of it, but I see nothing whatever in the Queen’s Speech to address the imbalance of power in our country.