John McDonnell MP
We face a climate emergency & a social emergency. But the Queen’s Speech & policy direction laid out so far by the Chancellor are crushingly disappointing. They fail dramatically to demonstrate the sense of urgency & scale of action required. pic.twitter.com/7ZzyG0SM9a
— John McDonnell MP (@johnmcdonnellMP) January 20, 2020
Mr Speaker, you have been in this House as long as me.
So you will know that the classic approach of a good Queen’s Speech and the subsequent Queen’s Speech debate combines an assessment of the position of the country, a state of the nation address, with at least some attempt to address the issues facing our people.
I have to say on both counts the latest Queen’s Speech process is by any stretch crushingly disappointing.
I believe that the view that will come to be associated with this government may well be disappointment.
There appears to be no appreciation of the lives so many of our fellow citizens live or the often heartrending problems they face or the crises that challenge us all.
The government’s programme set out in the Queen’s Speech
- Fails to reverse a decade of austerity: which is, as the IFS has said, is ‘baked in’ to this Government’s economic policies
- Fails to tackle insecure work
- Fails to end in-work poverty
- And fails to introduce a real Living Wage
- And fails to address the brutal hardship caused by Universal Credit.
We are facing a twin emergency.
A social emergency resulting from a decade of harsh austerity and decline.
And a climate emergency which is an existential threat to our planet and which, as we have seen only too well in Australia and Indonesia, is rapidly spiralling beyond our control.
Last year this House resolved that we face a climate emergency.
I believe that we should also resolve that there is a social emergency in this country.
In the last 3 months in this Chamber we have had debates on the Spending Review and the last Queen’s Speech in which Honourable Members have highlighted report after report
exposing the impacts of a decade of austerity.
Let me take one example.
If we are to lay any claim to being a compassionate or even a civilised society,
surely an effective test is how we care for our children.
On this count this government fails appallingly.
Surely no government could ignore organisations like the Children’s Society and Child Poverty Action Group, who have reported to us that there remain over 4 million of our children living in poverty.
That’s one child in three living in poverty.
125,000 of these children are homeless, living in temporary accommodation.
The effects on our children of living in poverty are well documented by the Children’s Society. These children are more likely to have poor physical health, experience mental health problems, have a low sense of wellbeing, underachieve at school and experience stigma and bullying.
The shocking statistic though is that 70% of children living in poverty are in households where someone is in work.
Living in families that have been, as the Children’s Society has described, hit by a perfect storm of low wages, insecure jobs and benefit cuts.
The result is that this government has achieved the historic distinction of being the first modern government to break the link between securing work and being lifted out of poverty.
The Chancellor has boasted of recent wage rises being at record levels compared with the last 10 years.
It’s a bizarre boast.
They are only at a 10 year record because his government has kept wage growth so low for the last decade.
Average real wages are still less than they were before the financial crisis.
The Resolution Foundation has described the last decade as the worst for wage growth since Napoleonic times.
The recent increase in the minimum wage announced with such a fanfare by the government , reneges on the minimal commitment the government made that it would be £9 an hour by this year.
The UK is the only major developed economy where wages fell at the same time as the economy grew after the financial crisis.
The government seems to believe that the answer to low pay is raising national insurance and tax thresholds.
This is the least effective means to tackle poverty.
According to the IFS only 3% of the gains from raising the National Insurance threshold would go to the poorest 20% in our society.
A £3 billion cut to employees and self employed National Insurance contributions would raise incomes of this group by 0.1% and just pales into insignificance in comparison
with the losses endured from benefit and tax credit cuts since 2010.
It’s also worth bearing in mind that whilst the heaviest burden of austerity has been forced upon the poorest in our society this government has given away £70 billion of tax cuts to the corporations and rich.
We have also heard Ministers refer to a so-called jobs miracle. Of course, we all welcome increased employment but look behind the global figures and you find nearly 4 million people are now in insecure jobs with no guaranteed hours.
900,000 are on zero hours contracts.
Britain also has one of the highest levels of inequality of income in the developed world. A FTSE 100 chief executive will be paid more in 3 days than the average worker’s annual wage.
The gender pay gap is 17.3%.
An intergenerational pay gap exists of over 20%.
An 8% pay gap for black workers.
15% for disabled workers.
There is nothing in this Queen’s Speech that will address these grotesque levels of inequality in our society and at work on the scale that is needed.
The reverse is true as the government launches another assault on trade union rights
and, in particular, the right to withdraw one’s labour.
The Chancellor has also rejected future dynamic alignment with EU employment rights and standards.
There is a real fear that this prefaces the fulfilment of ambitions to undermine workers’ rights and conditions.
Wage levels are low in part because under this government the UK has experienced a productivity crisis. Over the past decade, productivity grew at its slowest level in 60 years. A German or French worker produces in 4 days what a British worker produces in 5.
This is not because the UK worker is any less industrious. It’s because investment in the UK has been broadly weaker than the rest of the G7 countries especially since 2016 and investment is currently stagnating.
And this has been exacerbated by the lack of investment in human capital, in training and in skills.
In his interview in the FT at the weekend the Chancellor highlighted the role Further Education colleges could play in raising productivity by promoting lifelong learning and skills training.
As someone who also benefited from Further Education whilst I was on the shop floor I fully agree.
But the reality is that this government has brought FE to its knees with the IFS suggesting at least £1.16 billion is needed just to reverse the cuts.
A decade of denying opportunities to the very people whose skills have been desperately needed to fire up our economy.
Alongside skills, a vibrant economy needs to invest in the future if we are to compete in the Fourth Industrial Revolution. But on investment in Research and Development the UK is now 11th in the EU.
Lack of investment in infrastructure and R and D has resulted in productivity in many regions of the UK going backwards. The Kerslake 2070 report identified a £40 billion productivity gap in three northern regions compared with the south.
This has produced in this country some of the worst regional inequality in all of Europe.
Planned transport investment in London is 2.6 times higher per capita than in the North.
After a decade of decline, at long last the government at least seems to acknowledge its mistake in refusing to invest in the regions: Something we have been crying out for – for years.
But its not just about capital investment in infrastructure. It’s also about the desperate need for revenue investment in the social infrastructure of our regions and nations.
Many cities and towns in the north have borne the brunt of austerity. Seven out of the 10 cities with the largest cuts in the country are in the north east, north west or Yorkshire.
Imitation is called the highest form of flattery.
So on this side I suppose we should be flattered that the government is now looking to rewrite the Green Book to reorient the investment decisions towards the regions outside of London and the South East. An exercise that we undertook two years ago.
I also suppose we should be flattered by the government now following Labour in adopting a fiscal rule that enables it to take advantage of low interest rates to borrow to invest.
Something we have advocated for over 4 years.
This is the third or fourth fiscal rule of this government. I have lost count.
None of them have been adhered to, which largely defeats the object of having fiscal rules.
So it will be interesting to see how long this one lasts and how far it is achieved.
The problem is that even if the Government used all of the headroom its new fiscal rule allows, the government is only paying lip service to the need to invest at scale and in the long term.
The amount of new investment mooted by the Chancellor is nowhere near the scale needed to address the dilapidation of our infrastructure outside of London.
And it’s certainly not of the scale needed if we are to tackle climate change.
From what we have heard so far the maximum amount of increased investment talked about by the Chancellor is less than today’s estimate of the cost of HS2.
As for the idea in the FT interview of splitting the Treasury and sending some of its officials out to work in satellite officers outside of London: it appears a pale imitation of Labour’s plans not just for regional offices, but to move whole sections of the Treasury to the North and the Bank of England to Birmingham, and for a National Investment Bank similarly to be located outside of London.
If the government is going to plagiarise Labour’s policies I feel it at least has a duty to do so competently.
What all of these have in common is a failure to tackle the root causes of the problems which the Government pays lip service to. The grotesque inequalities in income and wealth.
The concentration of wealth and power in the hands of a few.
The ownership of the economy by the elite, with the vast majority locked out of decision making, with no say over how the economy works and who it works for.
An economy increasingly serving the few not the many.
There’s no sign that the Government recognises the root causes of the crises we face, whether social or environmental – or at least no sign of them doing anything about it.
Of course, all of these investment proposals will count for nothing if the government fails to secure a post Brexit trade deal with our EU partners that protects jobs.
On that score its hardly surprising that business fears rose when the Chancellor in his weekend interview when he in cavalier fashion threatened to throw our manufacturing sector under a bus.
As he rejected the calls from businesses for alignment with the EU to ensure his own government’s long standing promise of frictionless trade he casually said, and I quote: “There will be an impact on business one way or the other: some will benefit, some won’t.”
Let’s be clear, if frictionless trade is not achieved in the future trade deal or at worst in no deal, in the “some won’t” category is the bulk of our manufacturing sector, including cars, aerospace, pharmaceuticals and food and drink.
One recent estimate identified already that over the last decade there has been a loss of 600,000 jobs in manufacturing in this country. Today business leaders and unions warn his promise to split from EU rules will cost billions and damage UK manufacturing.
Bizarrely the Chancellor blamed the manufacturing companies for not preparing already for any regulatory divergence coming out of any future trade deal when nobody knows what the new trade deal rules will be and the Chancellor himself declined to say which regulations he wanted to ditch or amend.
There is an element of either Samuel Beckett or Kafka about the Chancellor and I am not exactly sure which at the moment.
We hear that the Rt Honourable Member for Bromsgrove is the only Minister secure in his job in the forthcoming possible night of the long knives reshuffle in February.
I wish him well but I caution him that the Prime Minster may well be preserving him for taking the hit if the trade deal outcome goes pear shaped as is likely if frictionless trade is not achieved.
Mr Speaker, I am aware that there are many new members who wish to make their maiden speeches today.
It’s important that the front benches do not take too much time so that we can accommodate the new members.
I wish them all well.
There is so much more to be said about the operation of our economy.
The failure of the government to effectively address tax avoidance and evasion and money laundering that infects our financial system.
Despite the scandals within the City and within our accountancy and audit systems, the failure to address our failing regulatory structures and, yes, the desperate need to harness our economy effectively to end our dependence on fossil fuel and to do so much sooner than the inadequate target date of 2050.
We will have some opportunity to address these and other issues in the run up to the budget.
But for now, let me conclude by cautioning the government that this Queen’s Speech fails dramatically to demonstrate the sense of urgency and scale of action needed, to provide the decade of renewal they promise.
Our people have endured a decade of decline.
On what is laid out in this Queen’s Speech and the policy direction laid out so far by the Chancellor, they face not a decade of renewal but a decade of disappointment.
And we already have had a foretaste of the dangerous politics that disappointment and disillusion produces.
I beg to move the amendment standing in my name and my Honourable Friends.