The choice on the economy – my speech in Bedford

It’s great to be back here in Bedford supporting your campaign.

Because it’s vital that we win here in this marginal constituency – and in seats across this region from Stevenage to Ipswich, Watford to Waveney – if we are to get the Tories out, elect a Labour government and start to rebuild our country for the future.

Seats where we lost in 2010.

Seats where we have worked hard to show that under Ed Miliband’s leadership we have changed our party from the past, shown that we understand where we made mistakes, like on immigration controls and bank regulation.

Seats where working people have seen their living standards fall month after month since that 2010 election and are crying out for change and a better deal than this Conservative-led Government can offer.

And to show that Labour can offer the change that working people are asking – and with just 9 months now until the general election – it’s vital that Labour sets out the choice the country will face next year.

Over the last few days Ed Miliband and the shadow cabinet have been setting out the stark choice Britain will face on leadership, on crime and on the National Health Service.

In the coming weeks we will be setting out the choice on issues like education, jobs, welfare and housing too.

Today I want to talk about the economy:

• The Conservative economic record.

• The real risk they pose for the future.

• And how Labour’s economic plan will make Britain better off and fairer for the future.


Let’s start with the Government’s record on the economy over the last four years.

Last Friday we learned that our economy has, at long last, got back to the size it was before the global financial crisis.

The fact that Conservative strategists are desperate to persuade us all that this is a significant moment for celebration is revealing.

Not only is it two years later than the Chancellor’s original plan said, and three years after the US reached the same point, it’s also the case that, as our population has grown, GDP per head won’t recover to where it was for around another three years – in other words, a lost decade for living standards.

So while David Cameron and George Osborne complacently claim the economy is now fixed, the truth is most people are worse off under the Tories.

Even the Business Secretary Vince Cable has now admitted the truth when he said this weekend that wages have been growing more slowly than prices.

As one Conservative told the Sunday newspapers about his comments: “This is most unhelpful. We’re trying to mark a major milestone and he tells people living standards are falling.”

Of course we shouldn’t forget that Vince Cable and the Lib Dems are part of a Government that’s failing to tackle this cost-of-living crisis, but the Business Secretary is right. Living standards have been falling and are still under pressure.

For working people, average wages after inflation are down by over £1,600 a year since 2010.

Tax and benefit changes since 2010 will leave the average household £974 a year worse off by the time of the next election.

And new analysis today from the House of Commons Library shows that under David Cameron working people will have seen the biggest fall in wages of any Parliament since 1874.

It’s set to be the first time since the 1920s that people are worse off at the end of the Parliament than they were at the beginning.

From a Conservative-led Government that promised to make working people better off back in 2010, this is a dismal record of failure.

But this failure to deliver rising living standards is not the only pledge they have broken.

David Cameron and George Osborne famously said ‘we’re all in this together’, but then gave millionaires a huge tax cut.

A £3 billion tax cut for the top one per cent of earners, while most people were paying hundreds more pounds each year in higher VAT.

They said they’d balance the books by 2015, but borrowing is set to be £75 billion next year – because they choked off the recovery back in 2010 with that reckless first Budget.

They said they’d back the next generation, but apprenticeships for young people are falling and there are still over 800,000 young people out of work including more than 15,000 here in this region.

And they said they’d rebalance the economy, but housebuilding is at its lowest level since the 1920s, net lending to business is down, business investment is lagging behind our competitors and our export growth since 2010 is sixth in the G7.


So it’s no wonder that when David Cameron and George Osborne say everything is going well and that the economy is fixed, many people here in Bedford and across the country say ‘it may be working for you, but it’s not working for me and my family and our community’.

As the former Conservative Chancellor Ken Clarke admitted last month, most people are not feeling any sense of recovery.

Living standards are still squeezed and people are worried and insecure about the future.

That old line Harold Macmillan line – ‘you’ve never had it so good’ – may have resonated in post-war Britain when he first used it here in Bedford as Prime Minister back in 1957.

But nearly sixty years on, every time in Prime Minister’s Questions that David Cameron tries to tell the British people that they’ve never had it so good, I fear it just prompts disbelief that he can be so out of touch.

Because here in Bedford in 2014, what voters are saying to Patrick on the doorstep is very much what people 150 miles north are saying to me in my constituency of Morley and Outwood.

Why are we not sharing in the economic recovery?

Where are the good jobs going to come from?

Will my children have the same chances as my generation?

And how will Britain earn its way in a rapidly changing world?

These are the questions people are asking right across the UK.

But the Tories have no answers to the cost-of-living crisis and the challenges facing Britain.

We know the Tories are not going to deliver a balanced, investment-led recovery that benefits all working people with more of the same:

• A race to the bottom on wages.

• Treasury opposition to a proper industrial strategy.

• Flirting with exit from the European Union.

• Hoping tax cuts at the very top will trickle down.

Working people can’t afford five more years of the same old Tory economics.

Already today, even before living standards have stopped falling, this Government’s failure to get more houses built means there is now a real risk that interest rates will rise prematurely to rein in an unbalanced housing market.

And we know what the next five years will bring.

George Osborne is once again a Tory Chancellor who, having abolished the Regional Development Agencies and backed the Beecroft plan and then tried to persuade workers to trade their rights at work for shares, is now blocking the Heseltine plan to devolve real power and resources to business and local Government to support skills and local innovation.

David Cameron is once again a Tory leader caving into his Eurosceptic backbenchers – putting the party interest before the national interest by flirting with walking away from the EU. This would be a disaster for British jobs and businesses.

And we know the Tories’ real economic plan – it’s to cut taxes at the top and hope that wealth will just trickle-down.

Having already cut taxes for millionaires in this Parliament, they’re champing at the bit to do it again if they win the election – cutting the top rate of tax for people earning over £150,000 again from 45p to 40p.

Another tax cut worth £3 billion for the richest one per cent of our country.

We know George Osborne wanted to cut it down to 40p in his omnishambles Budget two years ago. David Cameron won’t rule out doing it. And Boris Johnson and the right are now demanding it.

And now today the cat has been let out of the bag. David Cameron’s close Cabinet colleague – the Minister for Government Policy Oliver Lewtin – has let it slip.

He’s advocating the old right-wing idea of a flat tax if the Tories win the election. That means lower taxes for the richest and higher taxes for everyone else.

The IFS has calculated that for a flat tax to be revenue neutral it would have to set at be 31 per cent. That would be a huge increase for 24 million people on middle and low incomes currently paying the basic rate at 20p.

George Osborne said ten years ago he found the idea very exciting. And behind closed doors the Conservatives are talking about it again today.

This is the real Tory agenda for a second term…

… the same old Tories standing up for the few, while everyone else is left behind.

And it shows just how much is at stake next year.


We know that the next Labour Government will face great challenges.

The failure of the Conservatives to deliver rising living standards for the many and not just a few at the top, their failure to deliver a balanced recovery and their failure to balance the books means the next Labour Government will face a daunting task..

But we are determined to rise to the challenge with long-term changes to create an economy that works for all working people, not just a few.

So Labour’s economic plan will make Britain better off and fairer for the future.

It’s a radical and credible plan based on big reform, not big spending.

First, we will support working people, make work pay and tackle insecurity in the labour market.

That means expanding free childcare for working parents, freezing energy bills, introducing a lower 10p starting rate of tax, increasing the minimum wage, ending the exploitative use of zero-hours contracts and giving tax breaks to firms that pay the living wage.

Second, we need to create more good jobs and ensure young people have the skills they need to succeed.

So Labour will boost apprenticeships, transform vocational education and ensure there is a paid starter job for every young person out of work for over a year – a compulsory jobs guarantee funded by a tax on bank bonuses that will help 2,500 young people here in the East of England.

Third, we have got to build a stronger and more balanced economy.

So a vital part of our plan is to get at least 200,000 new homes built a year, devolving more power and funding to city and county regions and investing for the long-term with an independent national infrastructure commission to end the dither and delay on the big decisions we need to make for the future.

Fourth, we will promote long-term reform and competition in markets like energy and banking so they work better for consumers and businesses and support long-term investment too.

So we welcome the Bank of England’s announcement today that bank bonuses will now be clawed back if things go wrong, alongside tougher regulation and strengthened criminal penalties.

And because Ed Miliband and I have repeatedly called for an inquiry into bank competition, it’s welcome that the Competition and Markets Authority is now set to start this work later this year. As we said in January, in the next parliament we want to see at least two new challenger banks and a market share test to ensure the market stays competitive for the long term.

Fifth, we will back British businesses by cutting business rates, maintaining the most competitive corporation tax in the G7, establishing a proper British Investment Bank and arguing for Britain to stay in a reformed European Union.

And finally, I am clear that the next Labour government will get the deficit down where this Government has failed.

As our National Policy Forum voted for last weekend, Labour will balance the books and get the national debt falling as soon as possible in the next Parliament. We will legislate for these tough fiscal rules in the first year after the next election and they will be independently monitored by the Office for Budget Responsibility.

But we will do so in a fairer way, including by reversing David Cameron’s tax cut for millionaires, tackling tax avoidance and cutting the winter fuel allowance for the richest pensioners.

To help restore trust in politics and improve the quality of debate at the next election, we also want the Office for Budget Responsibility to be allowed to independently audit the spending and tax commitments in our election manifesto – and those of the other main political parties.

The fact that George Osborne is desperate to block this shows that he not only wants to carry on peddling untruths and smears about Labour’s plans but is running scared from having his own manifesto subject to independent scrutiny too.


So this is the stark choice we face next year.

A choice between a Labour plan to make Britain better off and fairer for the future – with rising living standards for the many, not just a few – or more of the same from the same old Tories.

More good jobs with Labour or a race to the bottom on wages under the Tories.

The books balanced fairly with Labour or ordinary families hit first under the Tories.

Reforms to make Europe work better for Britain with Labour, or sleepwalking to the EU exit door and putting millions of jobs at risk under the Tories.

Tax cuts for millions on middle and low incomes with Labour or another tax cut for millionaires under the Tories.

This is the most important election in a generation.

For millions of people struggling to make ends meet.

For hundreds of thousands of young people out of work.

And for businesses large and small who know Britain’s future is in Europe…

… we can’t risk another Tory government.

So let’s go out there and win it.

Thank you.

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Posted July 30th, 2014 by Ed

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