The Economy

Part of the debate – in the House of Commons at 4:59 pm on 8th July 2020.

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Photo of Edward Davey Edward Davey Liberal Democrat Spokesperson (Treasury), Acting Leader, Liberal Democrats, Liberal Democrat Spokesperson (Social Justice) 4:59 pm, 8th July 2020

I give almost two cheers for the short-term measures announced today, but less than one for the medium and long-term measures. The Chancellor will have to produce a much more coherent economic strategy if we are to deal with unemployment in the medium term and with inequality and climate change, which are still massive challenges for our country.

In the short term, the job retention bonus looks good, particularly on the back of the furlough scheme. The VAT cut for the hospitality and leisure sector is also good, but there was nothing for the self-employed; they have been left behind—they have been excluded—and that is just not good enough. The kick-start programme for young people looks good, but why only six months of training? If we are really going to help young people come back and retrain, we have to give them far more than that. And I do not think that the stamp duty measure is going to be a huge boost to people. For a start, the housing market is already picking up now that people are able to buy again, as demand was already there. Secondly, this tax cut will get capitalised in the price; house prices will just go up, not serving anyone, and that will mainly go to the better-off. I would rather have seen help for renters, help for homeless people, and building homes—that is the way to tackle the housing problem in our country.

When it comes to the medium-term, this package is just not up to the moment. We have a serious economic crisis, the like we have never seen, and it comes on the back of the threats that will be posed to parts of our economy from Brexit. We also have the climate change challenge and the global issues caused by the tensions in trade between China and the US. All these things will dampen the global economy and our economy, and I just do not think that the package we have heard today really amounts to anywhere near enough if we are serious about protecting jobs and getting that green transition.

It is difficult to look at the figures and do a proper analysis, given that there is so little data in this plan for jobs, but it looks like this may be the smallest fiscal stimulus in the whole of the G7. So to put this into context, this is not the massive boost that people are saying.

If we really want a fiscal stimulus, we should be talking about the longer term and about the new industries. I was very proud when I was Secretary of State for Energy and Climate Change that we really boosted renewables. We nearly quadrupled renewable power. We became the world leader in offshore wind. We saw jobs created in declining economies such as those in Hull, Grimsby and Lowestoft, thanks to the policies we put in place on the basis of green jobs. Where is that ambition here? I do not see it. There is nothing on hydrogen, as has been said, and no real push for renewables, no real push to make sure that we bring in investment in nature and environmental improvements as part of the climate change challenge, and very little more on green transport.

I say to the Ministers on the Treasury Bench that what we wanted above all, for short-term jobs and long-term benefits for the climate and the economy, was a home insulation package that was much bolder. There is a former Prime Minister who used to say, “Education, education, education,” and I say, “Insulation, insulation, insulation.” I want jobs in every village, town and city across our country. That will be the way to really make sure we do not have a blight on our economy and a blight on young people, and really get a grip.