Full speech text:
Interest rates, inflation, commodity prices, wage rates and fuel costs are part of our everyday conversation now in a way that they haven’t been since the 70s.
We even all became experts on bond yields for a week last autumn, and tracking the exchange rate against the dollar was briefly a national pastime.
Liz Truss’s lasting and only gift to the nation is that we all now know what a liability driven investment is.
But I’m afraid that this elevated interest in the economy means that people are worried.
They are worried about paying the bills, about the cost and availability of food in the shops, and about the value of their income against the rising cost of living.
And how could they not be worried?
In the last 12 months, inflation has reached levels I’ve not seen in my lifetime, interest rates have gone up to 4%, having been below 1% for nearly 15 years, and, even with the Energy Price Guarantee, energy bills have doubled.
Not only has this Government failed to get a grip of the cost-of-living crisis. They’re hitting hard working families with unfair tax rises. Whilst at the same time leaving our schools and hospitals stretched to breaking point.
Friends, we come together again after an unprecedented period of national turbulence.
Brexit, the pandemic and Putin’s illegal invasion of Ukraine have all tested our national resources in different ways.
It is time to reflect on the lessons we have learned about the strengths and weaknesses of our national economy so that we can set the right path for the future.
There is one measure in which the UK tops the European rankings under the Conservatives.
And that is income inequality.
Under their policies, there are greater disparities in income between the richest and poorest in the UK than almost anywhere else in Europe. And the lowest income households in the UK are more than 20 per cent poorer than their counterparts in France and Germany.
This is the true cost of the cost-of-living crisis under the Conservatives.
The Liberal Democrats are the party of equality, opportunity and inclusion. We understand that if we want to improve Britain’s prospects, we have to start with those on the lowest incomes.
If there is one thing that all parts of the political spectrum can agree on, it is that the UK needs to grow its economy.
Under the Conservatives, so much of the UK’s potential is going untapped: anaemic growth; weaker investment; falling living standards. Britain deserves so much better.
Economic growth will not just deliver prosperity for individuals. It will also raise the funds we need to invest in our public services.
But, to be effective and sustainable, growth must also combat inequality.
We need to bring into our economy the people who have been excluded by this Government. And we must remove the barriers preventing them from succeeding.
And I see so much ambition and opportunity all across the UK.
All that is lacking is the right political leadership to harness it.
Under the Conservatives, our economy is being held back by a lack of people and skills.
I cannot think of a sector, or business group, or public service that I have spoken to in the last eighteen months that hasn’t told me about its difficulties in attracting workers:
The NHS; schools; the police force; hospitality; manufacturing; engineering; HGV drivers; construction; IT.
Under this Government, there is no sector in our economy that has access to the skills it needs.
One of the key drivers of workforce shortages is ill health.
Because of this Government’s neglect, our NHS and social care are stretched to breaking point: more than seven million people are waiting for treatment. And thousands can’t get discharged from hospital when they’re ready, because there’s no one there to look after them.
There are 165,000 vacancies in our social care sector.
Fill these vacancies, and you could ease pressure on our NHS; cut discharge times; and let people return to their work quicker.
The Conservatives simply don’t get that to fix the workforce, you need to fix social care first.
But Liberal Democrats do.
So we are calling on the Government to put in place a minimum wage for carers, giving them a pay boost of £2 an hour.
This wouldn’t just be a recognition of their vital work. It would go a huge way towards attracting new workers to the sector, helping our NHS and our economy.
A fair and pragmatic plan that the Government could comfortably afford if they reversed their massive tax cuts for big banks.
But there’s another challenge, and that’s giving people the skills they need to succeed. And here too, we are being failed by this Government.
We need a better offer for school leavers, to ensure that they can access the education that will unlock their potential; and the skills our economy needs for the future.
We all know that apprenticeships have a huge role to play in this. And yes, we need more of them. But let’s also make them more attractive .
Consider the options open to an 18-year old school leaver right now.
They could choose to take up a typical high street job - say in retail or hospitality.
It might not be the job of their dreams, but it’s a foot on the job ladder, and pays enough to make ends meet.
But if they were to take up an apprenticeship, and perhaps pursue their true interests – in engineering, IT, or business – they’d be in for a nasty surprise: an “apprentice’s wage” of just £4.81 an hour. That’s nearly half the National Living Wage. Shockingly low, and nowhere near enough to get through the month.
Not only is this a huge injustice - especially for young people. It’s exactly the wrong incentive if we’re looking to build the workforce of the future.
So if the Government truly cares about skills, I’ve got an idea for them: end this unfair tax on young people’s ambition, and scrap the insultingly low “apprentice’s wage.”
Give everyone equal access to the minimum wage. This would be a pay rise of up to 98%, opening a pathway to better paid jobs in the future.
And employers need more help with apprenticeships too.
The system put in place by the Conservatives in 2017 has led to a precipitous fall in apprenticeship starts. And around half a billion set aside for on-the-job training, through the so-called “apprenticeship levy”, goes unspent each year.
This is a shocking waste of money, especially in the face of a skills crisis.
By coincidence, the Association of Colleges estimate that the Further Education sector needs a funding boost of half a billion if it is to keep pace with the demands of the economy for additional skills.
So why doesn’t the Government funnel these much-needed funds to our colleges and train more young people in the skills we need? And reform the Apprenticeship Levy into a broader, more flexible skills and training levy?
Alongside measures to boost our workforce, we need to boost private sector investment into our businesses.
The Conservatives’ policy on this has failed badly. Their constant flip-flopping on tax and investment rules, and their badly targeted incentives have not achieved the growth they promised us.
What they should be doing instead is introduce the kinds of incentives that have been proven to boost productivity. Like tax breaks for training, to ensure that employees can continue to develop their skills, both for their own benefit and for the benefit of their employers.
Or allowances for digital investment, to enable businesses to invest quickly and early in the newest digital tools to make productivity gains.
And most importantly: encouraging proper; ambitious; bold investment in energy efficiency.
Whether that’s for switching a fleet to electric cars, or installing solar panels, reducing demand for energy is not only essential to decarbonising our industrial sector, but also for bringing down production costs.
The Conservatives should restore the research and development tax breaks they cut, to enable businesses to fully explore the opportunities opening up in Artificial Intelligence and Robotics, and to ensure that the UK can continue to be a powerhouse of technical innovation.
If we wish to release the inherent potential of our economy, we need to develop our markets and meet the challenges of the future.
A significant contributor to the country’s poor economic performance under the Conservatives is our reduced levels of trade with our European partners.
This was of course a well-anticipated outcome of the Government’s policy of leaving the European Union.
Erecting trade barriers with our nearest neighbours has not been matched by an increase in trade with the rest of the world. This is despite the Conservative’s promises of a multitude of lucrative trade agreements awaiting our departure from the EU.
The Centre for European Reform estimates that, thanks to the Conservatives’ actions, the UK economy is already 5.5% poorer than it could have been.
It’s not just the trade barriers they erected two years ago. The UK has also seen a dramatic decline in investment since 2016.
The biggest driver of this trend is the chaos and instability wrought by the Conservatives.
Their ideological obsession with erecting barriers to trade with our neighbours and friends;
Supporting the most reckless Prime Minister in modern political history, who provoked division with our closest allies to support his personal ambitions.
And continuing to threaten to unilaterally break international treaties.
All of these have undermined investors’ confidence in the UK.
And that confidence will not return as long as the Conservatives are in power.
The recovery of the UK economy, for the benefit of all its citizens, depends upon the Conservatives losing the next General Election - a goal to which I know everyone in this room is 100% committed.
There is another goal to which we are all committed, perhaps the only goal more urgent than ousting this terrible government.
I refer of course to the achievement of Net Zero.
Under the Conservatives, we’re not where we need to be.
Action from the Government is lagging behind the progress we need to make.
The private sector stands ready with the capital, skills and innovative capacity to decarbonise transport, energy and industry, but are lacking leadership and strategy from the government.
We urgently need a bold plan for green investment.
In new technologies, like tidal power, hydrogen and battery technology.
In green skills for the future.
And in long overdue projects, like the far-reaching home insulation scheme that our draughty houses are crying out for.
Over the last eight years, Conservative mismanagement has badly hurt the UK economy.
Britain deserves so much better than the lack of a plan, the lack of leadership, the lack of commitment to the country’s best interests that we see from the Conservatives.
We need a Government that will rally together the public and private sector to get the most out of our people, our natural resources and all the other advantages that the UK has to offer.
To deliver a future that’s fairer, greener and more prosperous for everyone, all across these islands.
- Sarah Olney MP