Bonar Law, Baldwin, Thatcher, Cameron – the long line of Tory deflation

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Top notch maiden speech from Labour MP and historian Gregg McClymont. Even if maiden speeches are inevitably treated as sponges, his was very stone-like.

I look forward to hearing further comparisons between Tory policy today and Tory policy in the 1920s from him in the future!

Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab):
May I add my congratulations on your election, Mr Deputy Speaker? I noticed that you have the “Directory of Members” to hand. I hope that you will agree that I do not look quite as bad in the flesh as I do in that truly horrific photo.

I come to this House from Cumbernauld, Kilsyth and Kirkintilloch East-a constituency served with great distinction by my predecessor, Rosemary McKenna. Rosemary’s 13 years in Parliament were the culmination of a lifetime of public service. As teacher, councillor, council leader, president of the Convention of Scottish Local Authorities and, latterly, Member of this House, Rosemary served the public with distinction for more than 40 years. Rosemary’s
distinctions are many, but I would like to emphasise her temperament and character. Rosemary’s generous nature, her good humour, and, especially, her serenity served her well. To keep one’s head when all around are losing theirs is an asset in every walk of life, but especially, I suspect, in this place. I am sure that the House will join me in wishing Rosemary well in her retirement.

For those who do not know the geography of my constituency-and I suspect that there are a few-Cumbernauld, Kilsyth and Kirkintilloch East sits at the heart of Scotland, roughly at the centre of a triangle formed by Edinburgh, Glasgow and Stirling. This central location, along with a work force well educated in our excellent local comprehensive schools and colleges, is attractive to employers both private and public. Indeed, Members unlucky enough to receive a call
from the Inland Revenue will, I am sure, take some comfort in the knowledge that they are likely being called from my constituency, home to one of the largest Inland Revenue offices in the country.

The economy of my constituency is, I think, much like the economy of the country: it reflects a symbiotic relationship between the private and the public sectors. That is why I disagree with some of the speeches I have heard-not today, but in previous debates-from Conservative Members, who repeatedly draw a stark distinction between the public and the private. To me, that is rather artificial. Our economy depends on interaction between these two sectors. No man is an island, and neither is any private sector enterprise. In my view, the
private sector could not flourish without a public infrastructure of roads, rail, sanitation, telecoms or, indeed, a people well educated in our public, by which I mean our state, schools.

That is the perspective that underpins the views of Labour Members on the Government’s deficit reduction plan, with all its implications for poverty reduction. Yes, reducing the deficit is important; yes, it is a priority; but cutting before the recovery is established and before confidence is restored is to flirt with disaster. Badly timed public sector cuts of the kind proposed by the Government will not, in my judgment, damage only the public sector, but the private sector, too, as they will reduce demand in the whole economy.

I urge Members on both sides of the House to read the report released today by the Chartered Institute of Personnel and Development, whose chief economist has revised his forecasts. Looking at the proposed Government cuts, he now believes that unemployment will reach 2.95 million by 2012 and remain close to 3 million until 2015. That would be a disaster for the poor: when the economy retracts, it is the poor who suffer most. Substantial reductions in poverty depend on economic growth, because in the end substantial poverty reduction depends on the creation of jobs. I am sure we all agree that the single best poverty reduction programme is creating well-paid, secure jobs.

That is the context in which I raise my concern about how the Government are approaching the deficit, with all its implications for poverty in this country. I recognise, of course, that it is entirely consistent for the Conservatives to advance deflationary economic policies. As a historian, I can see them having been put forward in different guises for 100 years, whether it be by Bonar Law in the 1920s, Mr Baldwin in the 1930s, Mrs Thatcher in the 1980s or the new Prime Minister in 2010. The object is generally the same-to reduce the financial burden on those who tend to vote Conservative. That is understandable.

More depressing, from my point of view, is the Liberal Democrat embrace of this deflationary strategy. One hundred years ago, the Liberal party broke with that kind of economics. In his “People’s Budget”, Lloyd George rejected as inadequate and likely to increase poverty exactly the kind of approach that underpins the new Government’s strategy. I wonder what Lloyd George, Beveridge, and,
above all, Keynes would make of the Liberal Democrat position. I suspect that those great social Liberals would see the Government’s so-called anti-poverty measures-whether they be fractional tax advantages for a minority of married couples, or appeals to the “Big Society”-for what they are. In my judgment, these are measures designed to ease the consciences of those who wish to feel that something is being done about poverty, while the actual priority is that that something” to be done is of minimal cost.

More positively, I hope the Government can be persuaded that poverty reduction depends, as I say, on well-paid secure jobs. I believe that the minimum wage and tax credits are excellent measures that reward work and have done something significant to reduce poverty in this country. I urge the Government, if I may say so, to embrace them with the zeal of a convert.

I also ask the Government to consider the issue of work that pays not too badly, but too well. I welcome the Government’s commitment to ending excessive salaries in the public sector, but I think that we have to look at the private sector, too. Excess public sector pay is not fair and should be curbed, but it is not actively dangerous, whereas inappropriate incentives in the private sector-excessive and poorly calibrated bonuses in particular-have put our entire economy in jeopardy.

Growing up in the new town of Cumbernauld in the 1980s, I saw with my own eyes the harm done by deflationary political economy. It took over a decade of Labour Government to begin to heal the scars left in Cumbernauld, Kilsyth and Kirkintilloch East, and, indeed, in many other parts of the country. We ask not to be targeted again by a new round of deflationary cuts, particularly when the recession was inspired by the financial services sector. What I ask is that the burden is fairly shared.

In the end, I repeat, it is growth that will reduce the deficit in a way that enables the economy to prosper, thus allowing further reductions in poverty to take place. The best way to reduce poverty is to create work with a decent wage, which depends on economic growth. By cutting too fast, too soon, the Government risk a slump in demand across the economy: the result will be even higher unemployment than at present and thus greater poverty too. For me-and, I am sure, for many Members-that is a grim prospect indeed.

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