PARLIAMENTARY DEBATES - United Kingdom Parliament

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91 Debate on the Address 9 MAY 2012 Debate on the Address 92 [Andrew Percy] they involve using a voting system—the single transferable vote—on which the public have had no say. I think that we can safely say after last year’s referendum on the alternative vote that the public have voted against moving to a more proportional system and want to retain first past the post; certainly, that was their choice. I look forward to many of the proposals in the Queen’s Speech, which has three policy areas of which I am particularly supportive. I commend the Government for prioritising jobs and the economy. I also commend them for taking the action that we have already seen in the Humber, where in many areas they have done an awful lot of good—although there is a risk that that could be undone by the caravan tax and regional pay. Broadly speaking, I welcome this Gracious Speech and look forward to the forthcoming debates. 7.56 pm Geraint Davies (Swansea West) (Lab/Co-op): I was interested to listen to the hon. Member for Brigg and Goole (Andrew Percy), whose speech was remarkable for one thing, as has been the case with so many speeches. We are currently seeing a fundamental clash in Europe between democracy and austerity that has been reflected in the polls in France and Greece, and indeed in Britain in the local government elections, with a choice between growth and making cuts to get down the deficit. There seems to be no acknowledgement of the fact that we are hurtling towards a fundamental change that will mean the end of the euro and perhaps the end of Europe as we know it. We need to focus on the need for proactive growth to invest in the capacity for productivity across Europe and to change course while we see the emergence of the far-right-wing parties that have been mentioned by my colleagues. Instead, however, the main preoccupation is still with the House of Lords. I am sure that people like to talk about the intricacies of the House of Lords—about whether having someone elected for 15 years without re-election is really democracy, whether there will be a clash of democracies between the different Chambers and so on—but I think we all know that this is a very difficult issue, and that this is not the time to confront it when we are facing such severe economic issues on our doorsteps and such fundamental changes in the nature of Europe and our exporting prospects. Andrew Percy: I am not sure whether my accent was the problem, but I think I made it very clear that House of Lords reform was a completely marginal issue of absolutely no interest to my constituents. As I said time and again, my constituents expect that the economy and growth should be the priority. Geraint Davies: I am not talking about whether the hon. Gentleman and others referenced growth, but whether they took any notice at all of the fact that across Europe we are seeing these fundamental changes. The economic orthodoxy wants to ignore the wishes of people who are being downtrodden by these austerity measures, and we are facing a real challenge as regards the future of democracy in parts of Europe, the future of the euro, and the future of the European Community. In this year of her diamond jubilee, the Queen should have been given the opportunity to demonstrate that the Government are showing greater leadership by example in developing a proper, coherent strategy for delivering growth instead of cuts to get the deficit down. Instead, we have had the same old medicine with the familiar side effects of less money being spent in the public sector, leading to less money in the private sector and a downward spiral of unemployment and poverty. We have seen that across Europe. What we need in the UK and Europe is a combination of fiscal stimulus and co-ordinated investment. The party with the best record on growth is of course the Labour party. Between 1997 and 2008 there was unprecedented and continuous growth that we had not seen since the war. In 2008, of course, we faced the financial tsunami, and to the credit of my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown) and Barack Obama, the introduction of the fiscal stimulus enabled the world to avoid depression and deliver shallow growth into 2010. Then the Conservatives took over a deficit that was two-thirds caused by financial institutions and one-third caused by the Labour party investing beyond earnings to continue growth. Their immediate response was to announce half a million job cuts, which deflated consumer demand and led to negative growth. Indeed, the deficit projection is up by £150 billion. Mr Geoffrey Cox (Torridge and West Devon) (Con): Does the hon. Gentleman think an 11% annual budget deficit was sustainable? Geraint Davies: No, of course not. The question is what is the most effective way of reducing the deficit is and what the balance should be between growth and cuts. By way of a simple example, I spoke to a business person in Uplands in Swansea, and he said, “I run a business. If I were to make a loss and I sold my tools and laid off all my workers, I’d have no business. I need to tighten up my costs and focus on developing more products and selling them in the marketplace”. The idea that we can solve the deficit just through making cuts is barmy. The focus should be on balancing the books through jobs and growth. Let us examine the situation in Greece. Given the draconian cuts to pensions and jobs, it is no surprise that people cannot see any obvious upside. The money that is being put into Greece is being used to pay down the debt rather than to invest in productive infrastructure that can generate growth. I am not saying that there should be extra money for Greece, but we must consider the balance between the two. The EU could invest in solar forests in Greece to generate energy for the rest of Europe, in connectivity such as railways and roads to boost the holiday industry, in infrastructure in the holiday industry, or in broadband across Greece. At the moment, the £13 billion a year that the EU spends on research and innovation is all spent in the north of Europe. The centres of excellence in Germany, at Oxford and Cambridge and the like get the money, and Greece is regarded as having underdeveloped academic resources. Such policies need changing, because we are a community, not just a market. The way through for Greece is to negotiate a settlement in which debt reduction is balanced by investment in productive infrastructure that can deliver growth and
93 Debate on the Address 9 MAY 2012 Debate on the Address 94 help Greece pay its way. It is not for the EU simply to say, “You are poor, you’ve spent too much, we’ll make you poorer”. Britain should take a lead and invest in growth in our own backyard and in team GB. We should work together to provide coherence about economic growth. In my area, I am instrumental in bringing together stakeholders from the Swansea bay city region. Swansea council, Neath Port Talbot council, which is next door, and Pembrokeshire and Cardiganshire have made a joint submission to the Welsh Government saying that they want to work together within a city region of some 750,000 people rather than operate independently. They want to have joint marketing and inward investment strategies and put more pressure on the Government to provide the infrastructure to deliver growth. The right hon. Member for Dwyfor Meirionnydd (Mr Llwyd) mentioned that if Wales had the £1.9 billion that is equivalent to what is being spent on High Speed 2, it could invest in, for example, the electrification of the railway to Swansea or reducing the toll on the Severn bridge, as the Government have done on the Humber bridge. That would stimulate trade coming into south Wales and enable a coherent, joined-up approach to economic development, working in tandem with industry and academia to move economic growth forward. Alongside a fiscal stimulus, such joining up of the economic capabilities of councils across Britain, targeting emerging consumer markets, is the basis of a coherent growth plan that can move us forward. That is better than the Conservative party’s preoccupation with savage cuts affecting the most vulnerable, which are also happening in Greece. I hope that there is a golden future for the Swansea bay city region. Increasingly, people will realise that it is a great location to go to. It has environmental beauty, and the roll-out of broadband means that people can move out there. The costs of setting up a business are much lower than in London, and I hope that Swansea’s premier division status—it has the premier football team in Wales—will help us move forward. I say that with no disrespect to Cardiff, who I know did not get into the premier league, so there is just one premier league team in Wales. The region is a cultural centre. It was the birthplace of Dylan Thomas, whose centenary will be acclaimed in 2014. It is a centre for tourism and for sport, so there is a package of activity that makes people want to visit the Swansea bay city region, invest in it and move there. The future is bright. We ask the Government for a bit more support for infrastructure, as part of a growth plan, so that we can work together to create jobs and wealth. That is the only real solution to getting the deficit down, rather than simply cutting again and again. What we need now is to follow the example given in 2008 by Obama and my right hon. Friend the Member for Kirkcaldy and Cowdenbeath, who averted a depression. We must have a co-ordinated approach across Europe so that we can move forward together before it is too late. We all know the adage: give a man a fish—I should say give a person a fish, or in this case give Greece a fish—and he can eat for a day, but give him a rod and he can eat for a year. Now, we are cutting the fish in half so that he is hungry by lunchtime. We need to get the balance right between investment in infrastructure and cuts. I would have liked at the centre of the Queen’s Speech bold new initiatives for Britain that could provide leadership for Europe and help us move forward in the world. 8.7 pm Charlie Elphicke (Dover) (Con): It is a pleasure, as ever, to follow the hon. Member for Swansea West (Geraint Davies), who gave a particular view of economic theory and how to get economies growing. He will not be surprised to know that I completely disagree with most of his prescriptions. Geraint Davies: I’m an economist and you’re not. Charlie Elphicke: He is an economist. Andrew Percy: All the more reason to ignore him. Charlie Elphicke: Yes, and no doubt five different views could be advanced. We all agree about the key point of the Queen’s Speech and the challenge facing this country. When I talk to my constituents in Dover and Deal and ask, “What is your priority?”, they say, “It’s the economy, stupid”—President Clinton made much of that point in his first election campaign. The economy is the heartland, and it is essential that we have more jobs and money in Britain. We have had a very difficult time for the past four years, and the situation is challenging for many families in my constituency, who are struggling to get by and have not had a pay rise for a very long time. They are struggling to keep hold of a job while we seek to rebuild out of the mess that went before. I therefore particularly welcome the fact that the Government’s first priority is to reduce the deficit and restore economic stability. The hon. Member for Swansea West has a prescription along the lines of saying that if we did not cut so far and so fast, all would be fine. The difficulty with that is that we would need to borrow more money. If we did that, we would threaten our economic credibility, which would mean rising interest rates on Government debt. If that happened, interest rates would increase for businesses and home owners. We have been lucky because we have same level of deficit as Greece, but the markets trust our economic policy and our cracking down on and reducing the deficit. That means that our interest rates are similar to those in Germany, while we still have a deficit the size of Greece’s, albeit one that is falling. Andrew Percy: There is another point to be made. The Opposition position is almost like telling someone with a £10,000 credit card bill, “Go and get another £5,000 on the credit card because you’ll feel a bit better today.” However, at some time in the future, the credit card company will come knocking. The Labour party wants us to increase the £120 million in debt interest every day by borrowing even more, which would mean that we had even less to invest in the public services that our constituents want and deserve. Charlie Elphicke: My hon. Friend is right. One does not fix a debt crisis by borrowing more money—it makes no sense. It is the economics of the madhouse,
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