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BryanDavies.jpgBryan Davies on the government’s continued failure to invest for economic growth

From a Treasury perspective, today’s Queen’s Speech debate on the economy could not have come at a worse time for this government. The recent Budget was the culmination of six years of Tory failure, with growth, wages, business investment and productivity all revised down – for this year and every year of this Parliament. 

We were told that despite this the books would be balanced by 2019-20. But yesterday, the Office for Budget Responsibility released figures which indicated that this is likely to be added to the long list of failures, reporting a deficit £3.8bn larger than forecast and a £49.6bn increase in public sector net debt to £1,596bn. On top of all of this, our country’s manufacturing and construction sectors remain below their pre-recession peaks. 

At the beginning of this month, the ONS revealed that UK industry fell back into recession as it shrank for the second quarter in a row. Compared with a year ago, manufacturing production in the first quarter fell 1.9% – the biggest fall since 2013. This further decline in output shows once again that our faltering recovery is built on sand. The government has failed to rebalance the economy and it is manufacturing companies in particular that are being hit hard by George Osborne's poor long term planning. 

This is the Conservatives’ track record. So we were looking to the Queen’s Speech for something that indicated that ministers were prepared to own up to their failures and start investing in our economy by building a strong foundation for future growth. 

We largely welcome the Treasury Bills on Lifetime Savings and the Soft Drinks Levy Bills. But we also need a serious industrial strategy to support the high-wage, high-tech industries of the future. The National Infrastructure Commission is a positive step, originally a suggestion by the Labour-commissioned Armitt Review. The government however, has so far failed to end underinvestment in the nation’s infrastructure, support key industries like construction and manufacturing, and tackle regional inequalities.

Boosting our productivity can only be achieved if all parts of the UK are contributing to that growth. The gap between our richest and poorest regions, in terms of disposable income, is the widest of any country in Europe. Little wonder that we fair so badly in terms of productivity when compared to our EU partners. 

Devolution of power will be key to ensuring that we get a more balanced economy. Too often the Chancellor has used the ‘Northern Powerhouse’ as an initiative to disguise the cuts he is imposing and the government’s own figures show that they are not delivering. Only one of the top 15 infrastructure projects receiving the most public funding is in the North of England. 

This same rhetoric is also true when we talk about tax avoidance, with the measures in the current Finance Bill just simply do not go far enough. Despite what this government might say, tax avoidance is still rife. The latest figures from HMRC put the tax gap – ie, the amount between what is owed and what is collected – at £34bn. Up one billion since 2010.

Labour will support measures to tackle criminal finances, so the proposals to hold corporations to account for failures to prevent tax evasion are welcome. Ministers however, shelved similar plans for an offence of a corporate failure to prevent economic crime in September last year. 

The government desperately needs to reassess its priorities and decide who it will stand up for. We need to invest for the long-term to ensure that we tackle the big challenges facing our economy on infrastructure, skills and technology. We also need to develop a proper industrial strategy and lays the foundations to exploit new opportunities and secure the jobs and growth our country needs

Lord Bryan Davies is a Shadow Treasury Minister in the House of Lords

Published 25th May 2016

Where's the strategy, Chancellor?

Bryan Davies on the government’s continued failure to invest for economic growth

MaggieJones2014.jpgMaggie Jones on a Tory legislative programme that avoids tackling the big issues facing Britain

By any measure, the UK is currently facing huge challenges, economically and environmentally. So having won power in 2015, this Queen’s Speech was an opportunity for the Conservative’s, free of the constraints of Coalition, to lay out a decisive programme of action. Instead, it sadly represents a catalogue of missed opportunities and failed ambition.

Economically we are sliding backwards.

All the key indices of success – growth, wages, investment and productivity – are being revised downwards. Exports are struggling despite the weak pound, and manufacturing and construction outputs are down. It is widely acknowledged that we’re becoming too reliant on consumer borrowing and debt. Meanwhile, the Chancellor’s own personal pledge – to balance the books by 2015 – has proved to be an elusive failure. So, we now face we drawn out austerity with a lack of a proper investment strategy to get the economy moving again.

More specifically, the programme lacks measures to tackle the poor banking culture which led to our previous financial crisis. Huge bonuses are continuing to reward short term profit at the expense of long term investment. The scandal of the BHS Board – stripping out the value whilst leaving the taxpayers to bail out the pension fund – highlights a lack of corporate governance controls. The Panama papers have exposed the contempt many wealthy businesses and individuals hold towards our taxation system. If ministers had the courage to address these endemic issues in the Queen’s Speech they would surely have proved to be hugely popular with the electorate.

Similar criticisms can be levelled at the lack of a coherent energy and environment strategy.

In December, the government were party to a historic agreement in Paris to tackle climate change but it required each signatory to draw up specific proposals on how to achieve this. Since then, there has been a deafening silence from the UK government, the policies of which have instead reversed our previous progress towards climate safety. Other governments are pressing on with investment in renewable energy whilst ours cuts subsidies and pushes fledgling renewable innovators into bankruptcy.

Ministers also seem intent on ducking the rather urgent environmental crisis caused by poor air quality – which is killing thousands of people each year. Despite the recent ruling of the Supreme Court that the UK government was in breach of the Clean Air Act and should take action to rectify this, its response has been poor. So much so, that they will shortly be back in court to explain their lack of a meaningful response.

Once again, had they taken bold action on the issue rather than prevaricating it would have been hugely popular. In contrast, London’s new Mayor, Sadiq Khan has shown the way by taking immediate and decisive action – doubling the size of the clean air charging zones with a much tighter timescale.

Sadiq has also taken immediate action to quadruple the proportion of affordable homes in new developments and to insist that new homes are marketed to Londoners for six months before being made available to foreign investors. His policies contrast with the government’s failures on housing, which has resulted in 200,000 fewer home owners, a squeeze on the supply of social housing and a 33% increase in the number of families accepted as homeless.

In London and other places, Labour is showing what can be achieved if you invest in communities and act on local concerns. This is why we welcome moves for further devolution. But the shift in power has to be matched by fair funding. So far, cuts to local government have hit the most deprived areas the hardest. So we will scrutinise carefully the funding formula which follows any further devolved responsibility.

Although we welcome some of the measures in the Queen’s Speech, our overall assessment is that the programme fails to address the key issues now facing our country. It’s both a wasted opportunity and a failure of leadership, and these themes will no doubt form a backdrop to the deliberation on bills in the months ahead.

Baroness Maggie Jones of Whitchurch is a Shadow DEFRA and DECC Minister in the House of Lords. She tweets @WhitchurchGirl

Published 25th May 2016

Opportunities missed

Maggie Jones on a Tory legislative programme that avoids tackling the big issues facing Britain

Charlie_Falconer_new.jpgCharlie Falconer on why Ministers must end their brinkmanship over the Human Rights Act

The disastrous proposals to scrap the Human Rights Act and replace it with a British Bill of Rights should be dropped immediately. They are at best pointless and at worst dangerous. They would weaken Britain’s standing in the world and send the wrong message to repressive regimes worldwide.

Earlier this month, the House of Lords EU Committee questioned the very need for such a Bill at all noting that the current proposals appear ‘a far less ambitious proposal than the one outlined in the Conservative Party manifesto’.

The Committee were equally damning on Michael Gove’s evidence to them, saying ’The proposals the Secretary of State outlined did not appear to depart significantly from the Human Rights Act—we note in particular that all the rights contained within the ECHR are likely to be affirmed in any British Bill of Rights. His evidence left us unsure why a British Bill of Rights was really necessary’. They are hardly alone in their criticism but then these are proposals which are riddled with errors.

It is a strange concept of a British Bill of Rights that would likely be refused legislative consent by the Scottish Parliament, be opposed by the Welsh Assembly, would frustrate and complicate the Good Friday Agreement, and has troubled the Government of Ireland. The question has to be asked whether or not it is worth is at all?

Mr Gove has bemoaned a “human rights culture”. Try telling that the vulnerable and the needy who have relied on the Act.

Try telling that also to the family of Corporal Ann-Marie Element. After reporting two colleagues for rape she then described how she had been ostracised and bullied as a result. In 2011, she took her own life. Her family then used Article 2 of the Act to secure an inquest. That led to a series of recommendations which improved the military justice system. It also brought about the creation of a Service Complaints Ombudsman, with the power to investigate independently the substance of complaints.

Cases like that of Ann-Marie remind us why so many of us fought for the values of justice, tolerance and respect that the Act embodies.

Labour’s position is as crystal clear now as it was in our last general election manifesto, which said: ‘Thanks to the Human Rights Act, some of our most vulnerable citizens, including disabled people and victims of crime, have been given a powerful means of redress. The Conservatives want to leave the European Convention of Human Rights, and abolish the Human Rights Act’.

That is why we will both fight to defend the Act and stand up against any attempt to weaken or dilute human rights in this country or abroad. We call on the government to end this game of political brinkmanship now and reaffirm our commitment to remaining a signatory of the European Convention on Human Rights come what may. Our human rights are simply too important to be treated this way. It is time for Ministers to listen to the growing criticism and to end this human rights farce.

Lord Charlie Falconer is Labour’s Shadow Justice Secretary

Published 24th May 2016

The farce awakens

Charlie Falconer on why Ministers must end their brinkmanship over the Human Rights Act

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