Mr Redwood’s response to the Queen’s Speech, 27 May 2015

John Redwood (Wokingham) (Con): I rise to speak for prosperity, not austerity; I speak for England as well as for more powers for Scotland; and I speak for greater democracy as we seek to wrestle power back from the bureaucratic tentacles of Brussels.

Austerity is what was given to this country in 2008-09. Then we had desperate austerity. We had deep recession and the biggest loss of national income than at any time since the second world war. We had families losing jobs, families losing bonuses, families having to take pay cuts. We saw austerity rampant. Since 2010, first the coalition and now the Government, led ably by my right hon. Friend the Prime Minister, are about restoring prosperity for the many, growth to our economy, the extra jobs we need, the higher pay and the better living standards that come from creating that world of opportunity.

We speak not just for prosperity but, yes, for aspiration. We speak for aspiration just as surely as some Opposition Members spoke for envy at the time of the general election. The electors told them that they did not want envy; they wanted aspiration. They do not mind other people doing well, as long as they too have a chance to do well. They are not jealous of people who go to good schools, but they want to go to a good school themselves, or send their children to one. They are not jealous of people who work hard and earn a lot of money, and want to keep a large amount of that money to spend on themselves, but they want the opportunity to do the same. I urge my right hon. Friend the Prime Minister and his colleague the Chancellor of the Exchequer to press on in supporting those very aims. Spreading prosperity ever more widely is what lifts us from austerity and banishes austerity from our land.

Clive Efford (Eltham) (Lab): Before the banking crisis hit in 2008, the right hon. Gentleman was calling for less regulation of the banking system. Does he still hold that position?

John Redwood: If the hon. Gentleman cares to read the economic policy review that I submitted to my right hon. Friend the Chancellor of the Exchequer, he will see that it clearly warned of a banking crash. It said that Labour’s regulatory system—introduced by the hon. Gentleman’s party after the 1997 general election—was not requiring enough cash and capital to be held by the banks, and that that was causing enormous strains, which would go wrong. I saw it coming; he took it down. The Labour party changed the regulatory system, the regulators made a huge mistake, and the banking system powered the recession, which was also furthered by the mistaken budgetary policies pursued by Labour. I am very pleased to see that those who now wish to represent the Labour party as its leader have said sorry for the economic and regulatory mistakes that are made by the hon. Gentleman’s party

Clive Efford rose—

John Redwood: If the hon. Gentleman wants to have another go, by all means let him do so.

Clive Efford: One of the myths that were put around was that the Labour Government maxed out on their credit card. Will the right hon. Gentleman confirm that before the banking crisis hit in 2008, debt as a proportion of the country’s GDP was lower than the level that we inherited in 1997?

John Redwood: What matters is the rate of change. The Labour Government were borrowing too much at a time when the economy was overheating and collecting a lot of tax revenue, and we have been trying to right that mistake ever since.

I think it would be helpful if, in this Parliament, we could have a more grown-up discussion about public spending and tax revenues than we were allowed in the last Parliament, because the meaning of austerity has shifted. It now has a narrower definition than the disaster that hit living standards and individual families in 2008. To the so-called progressive parties, austerity now means not increasing public spending as quickly as they think that it should be increased.

Let me remind the House what successive Red Books—Budget books—have told us about what happened between 2010 and 2015, and what they tell us will happen between 2015 and 2020, subject to the Chancellor’s Budget. It is very easy to remember. Between 2010 and 2015, the coalition Government increased total public spending by £1,000 per person per year, if the final year of those five years is compared with the starting point. The recently elected Conservative Government plan to do exactly the same: they wish to increase total public spending per head by £1,000 per person a year by the end of the current Parliament. That is not a huge rate of growth, but it is not an overall decline or a cut.

Because we inherited such an enormous deficit and could not continue to borrow on such a scale, we were—as a result of VAT increases and the general increase in revenue from some economic growth—charging people £2,000 a head more per year at the end of the last Parliament than the Labour Government did in their last year. This Parliament requires exactly the same increase, without any rate rises but coming from faster growth in the economy. The Red Book’s aim is that we should charge everyone £2,000 extra a year by the end of the Parliament than at the beginning. I think that that is a measured and sensible proposal to rescue us from enormous borrowing and a big debt hole, and I think it can work. I especially welcome the fact that, this time, it will require no tax rises.

Geraint Davies (Swansea West) (Lab/Co-op): The right hon. Gentleman may know that the number of people earning over £20,000 is now 800,000 lower than it was in 2010, and those higher-paying jobs have been chopped up into little part-time, low-wage, zero-hours jobs. That is why the tax revenues are not coming in and that is why debt as a share of GDP has gone from 55% to 80%. Admit it: you have failed.

John Redwood: That is a bit rich from the party that crashed the car and did all the damage to living standards in 2008. Would I like it to be going faster? You bet I would like it to be going faster, and so I am sure would the Prime Minister, but it has to go at a pace that can be achievable without taking risks and making it worse in the way that Labour did.

My party is not the party of low pay. We want people to be better paid. It is just that we have an economic policy that may deliver better pay; the Labour Government’s policy clearly did not, because they drove people out of work. They abolished the bonuses and they drove wages down by their dreadful recession, and that recession was caused by a combination of their mistaken economic policy and, above all, their mistaken misregulation of the banks. They should have stuck with the regulation of the banks we had before ’97. We never did anything like that with the banking system. We never had a run on a major bank under the Conservatives. We never had a big recession created by a banking crash. Labour needs to understand the history and understand that in future we have to follow different policies to try to avoid that.

I also wish to speak for England. I am very pleased that the Gracious Speech says that there will be early progress in making sure that those MPs elected for England can make more of the decisions that relate only to England. I hear that the SNP are already saying that that should be in legislation. I think it is entirely right that in the first instance it should be done by amending the Standing Orders of this House of Commons. It can be done simply and quickly, and it is judge-proof and it is proof against challenges from outside this place. If we want a sovereign Parliament, sometimes this Parliament has to act in a sovereign way, and surely we can be sovereign over our own votes and procedures.

Pete Wishart (Perth and North Perthshire) (SNP): The right hon. Gentleman is, I think, a champion of Parliament and parliamentary procedures, so surely he agrees that we have to debate this issue? There has to be a Bill; there has to be legislation. It is not good enough just to change the Standing Orders of the House for something so constitutionally important.

John Redwood: Of course there will be a debate, and the SNP can use all the parliamentary procedures, which some of its Members know well, to make sure that the issue is properly scrutinised and debated, but we do not need a great piece of legislation. We just need an agreement on who votes on what. It is not that complicated, it is extremely popular outside this House, and it was clearly offered to the British people by the Conservative party. It was one of several policies in our manifesto which were about twice as popular as the Conservative party itself, and we were the most popular party when people did not really like any of the parties in the election very much. They backed us, but they backed some of our policies rather more.

Sir William Cash (Stone) (Con): I rise to support my right hon. Friend’s extremely relevant comments. The legislation has of course already been passed, in the form of the devolution Act in 1998. That is what devolved the functions. That is why it is necessary and fair to make sure that, through our Standing Orders, the English people know that they get exclusive rights over their own legislation.

John Redwood: I am grateful to my hon. Friend. To those who say we have not thought through this issue I would point out that we wrote many papers on it in opposition and that we thought it through over a 15-year period—it was in the 2001 Conservative manifesto—so the proposals should come as no surprise to anyone who is interested in the subject or who has been following the debates.

The third point I strongly support in the Gracious Speech is that at last we will get a referendum on our relationship with the European Union. Any honest Government picking up the task today should say to the British people that we need a new relationship because now the euro is driving so many of the changes in the EU. Those in the euro need much closer and stronger centralised government; they need to stand behind each other rather more. They are going to need common benefit systems and common cash transfer systems, and they are going to need to send support from the richer to the poorer areas, just as we do within our Union of the United Kingdom—if one part falls on hard times, the other parts pay more tax and send it the money. There is a mutual insurance or solidarity system which should appeal to all those of a socialist mind; it even appeals to me, because I think when some are down on their luck within such a union, they should be supported by others in the union. The United Kingdom has very clearly, and quite rightly, never elected a party that wanted to join the euro. The public have no appetite to join it; they have no wish to start raising more taxes in Britain in order to send financial assistance to Greece, Portugal or Spain, although those countries desperately need it.

Of course we need to define a new relationship with the emerging, closely centralised political union of which our colleagues in the EU now speak all too often, and I am pleased that my right hon. Friend the Prime Minister is taking on this difficult and tricky task. There will be a range of views within and among the parties on this issue, so a referendum would be a good way of making the final decision. I urge my right hon. Friend to bear in mind that what the British people, and many in this Parliament, want is to restore the British people’s right to make up their mind and their MPs’ right to ensure that the British people’s views are reflected in what happens here. At the moment, it is all about borders, immigration and welfare systems, and at the general election the British people expressed a strong wish for change on those matters. We need Ministers who can deliver those changes, but some of them are neither legal nor possible under our current EU arrangements.

In the future, the British people might want to see changes in other areas. They might want cheaper energy, for example, but they would discover that their politicians were not entirely able to deliver it because energy is hedged by many European rules, laws and requirements. Britain therefore needs some way of dealing with a situation in which, because of European rules, elected Ministers are unable to act on a matter of consummate importance to the British people. We might be able to do certain things, because we can get a special deal through not being in the euro—that relates to how much centralised government the countries in the eurozone, which we must keep out of, are going to take to themselves. Adopting that more widely might help with their other problems, because at the moment we are seeing a series of collisions between the will of the people following the elections in countries such as Greece and perhaps Spain, and what the European establishment is dishing out by way of policy.

If Opposition Members dislike austerity, they should study what has happened in Greece. It has seen very large public expenditure cuts, of a kind that I would not have supported, at a time when its economy was imploding and its banking system was broken, and its GDP has fallen by 25% since 2008. Let us imagine how we would feel if that had been inflicted on us by policies from Brussels. Thank heavens that those of us who made the case against the euro persuaded others to keep us out, because there but for the grace of God would have gone Britain into a euro-scheme that can deliver untold damage and austerity. Who would want 50% youth unemployment? That is what they have in several parts of southern

Europe now, thanks to the devastating austerity machine that is the euro. I urge my right hon. Friend the Prime Minister to take advantage of our non-membership of the euro to negotiate a democratic settlement for us, so that if we need something for our prosperity, this House will be able to deliver it.