Charter for Budget Responsibility

Debate between David Rutley and John Redwood

Tuesday 13th January 2015 Commons Chamber

[David Rutley (Macclesfield) (Con)]

I am grateful for the opportunity to participate in this debate, which is vital. It goes to the heart of the views of this Government and the next Government on fiscal policy. It is about much more, however. It is about the job prospects of people in Macclesfield and the north-west, and millions of people across the country. It is about the prospects of young people getting on to the property ladder. It is about the financial future and how we secure it for people who are planning for retirement or are already in retirement. It also deals with the issue, which many Members have touched on, of who will be tackling the mountain of debt we have faced since the recession. Are we going to pass the buck to the next generation, or is this generation going to do the right thing and tackle the debt burden in the years ahead?

We want to see action now and continue to see public finances getting back under control. The charter for budget responsibility will help the country to achieve that ambition. I support the Government’s aims to see debt fall as a share of GDP by 2016-17, and to return the cyclically adjusted current budget to balance by 2017-18. Those objectives do not, I admit, roll off the tongue, but the impact of turning the deficit into surplus and reducing the burden of debt is vital to bringing our country’s public finances back under control. That is where they need to be. Furthermore, the charter will help people decide which party is serious about getting our public finances under control. There will be a clear choice for voters on 7 May. There is only one party serious about tackling the deficit, getting our house in order and delivering the sustainable economic growth that is so important, and that is the Conservative party.

[Mr Redwood]

Did my hon. Friend hear the shadow Chancellor make it clear that not only does Labour not think that the current debt is excessive, but it would carry on increasing the debt every year of the next Parliament if it was leading it?

[David Rutley]

It always does. It is as if there is a drug that Labour is addicted to called “debt”; they cannot get away from it.

I was fortunate to serve on the Treasury Committee in 2010 when the OBR and the charter for budget responsibility were established, and I spoke in a debate in May 2011 that brought greater insight into Government policy, greater transparency and more trust. I was pleased to participate in it and highlight how the OBR had very quickly become—it still is—an important reference point. Since those early days of the Parliament, which seem a long time ago now, the Government have made clear progress on their long-term economic plan: on economic growth; job creation—1.8 million jobs over this Parliament; unemployment; deficit reduction—down by 50%; and reducing the rate at which the debt is growing. Their ambition and achievement are unprecedented.

Those were important tasks, but the progress has not been without challenges. The OBR, which has been much referenced by Members on both sides of the House, has highlighted how deep the recession was—much deeper than originally anticipated—and how the challenges in the eurozone contributed to the challenges faced by the Government. However, positive progress has been made, and it is vital that the charter be renewed, because further consolidation is required. We need to finish the job of getting public spending firmly under control, as was spelled out by my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) and my hon. Friend the Member for Bury St Edmunds (Mr Ruffley). I support that view. Lower spending will lower the deficit and enable us to lower taxes for working people, which is something that Conservative Members feel passionate about.

Paul Johnson, the director of the Institute for Fiscal Studies, who has been broadly quoted, highlighted in The Times today something that has not been pointed out, which is that this approach is also vital to get the country’s finances better prepared for any future economic crises or recessions. We have to learn the lessons of the economic crisis we are emerging from. This Government have, but the Labour party clearly has not. I will be supporting the charter today because it is critical that we get our finances under control. The Government have found a way forward, and the long-term economic plan is delivering. The charter will take us a step closer to achieving our important ambitions for businesses and the public of this great country, and I will be supporting it.

Europe

Debate between David Rutley and John Redwood

Wednesday 30th January 2013 Commons Chamber

[David Rutley]

There is an opportunity for Europe to respond, but it is not responding—in fact, it has been caught completely flat-footed by the economic crisis and is not responding properly. We want that to change.

[Mr Redwood]

Is not the true pessimism the Labour pessimism that says that Britain is not big enough and strong enough to have a strong presence in the world and that we have to kowtow to Germany and France to achieve that?

[David Rutley]

As so often, I agree with my right hon. Friend. I hope to build on that thought.

The reality of the world economy is shifting patterns of trade and emerging markets. They have been tapping us on the shoulder for some time and are now tapping even harder. Some hon. Members in the Chamber today may remember John Major pointing out to Peter Mandelson that if we do not notice when reality taps us on the shoulder, one day reality will grab us by the throat. Yet it is sadly clear that the EU has become divorced from reality—from real people and from real lives. When the British people voted to stay in the European Economic Community in 1975, it was for real world reasons—for jobs, for growth and for the common market—and at that time the EEC gave every impression that that was its purpose. The EU needs to give us and our constituents similar cause for optimism today. There is an urgent need for reform and a fundamental resettlement in the UK’s relationship with Europe.

This is not about being little Englanders. It is about being big Britons who want to seize the opportunities available in the global marketplace; so do big Germans, big Swedes and big Danes—not to be confused with Great Danes—and we need to work with them, our reformist friends, against those who should be called little Europeans, who would turn our continent’s shoulder to the world. Just as we led Europe to the single market, we can lead in its completion and help our local businesses and our constituents to compete better on the global stage. The channel is little more than 20 miles across, but the gulf is huge between the global economic horizons of the big Britons we represent and the continental introversion represented by the little Europeans on the Opposition Benches.

The EU has been caught flat-footed in the economic crisis, and the euro—a political creation—has been caught in an economic straitjacket, yet there remains clear political will among many people in the eurozone for it to succeed. That has already led to calls for deeper, thicker integration and less flexibility at national level, and that is not the Europe that was voted for. We are told that we should not demand a Europe à la carte, yet the eurozone members chose to set up a new club within the club of Europe and—perhaps unsurprisingly, given the problems that the euro has caused—they are now demanding a European fixed price set menu. The Prime Minister is resisting this, quite rightly.

The bottom line for our constituents is this: are we better off in or better off out? Are we more likely to create jobs and economic growth, or are we to be suffocated by excessive regulation and told that our national Parliament cannot do anything about it? Those are important questions that we want answered. We do not want to fudge them. The Government have already taken important action, which the Foreign Secretary told us about. We wanted to ensure that, if transfers of power to the EU were proposed, they would have to be put to the British people first, and we have achieved that by creating the referendum lock. Rightly, no further powers can be transferred to the EU without the British people having their say.

The Government have already taken action to kick-start the debate on the resettlement with Europe. The review of the balance of the EU competencies will provide a national audit of what the EU currently does and what it means for our country, and it will provide us with the information that is needed to take future decisions about our relationship with the EU and in the referendum that now, thank goodness, lies ahead.

The House will not be surprised that I regard myself as a Eurosceptic. As I said at the beginning, in scepticism there is hope, contrary to what the right hon. Member for Southampton, Itchen (Mr Denham) said. On the Government Benches and across the country, Euro- scepticism is on the rise. The Prime Minister and the Foreign Secretary are surely right to press for renegotiation before an in/out referendum and to work with our partners for a more competitive EU and one that is worth considering voting for.

Some people have asked, “What are you considering repatriating?” or “What do you want to renegotiate?” I commend the fantastic work that is being led by my hon. Friends the Members for South Northamptonshire and for Daventry (Chris Heaton-Harris) on the Fresh Start project. A wealth of options is being put forward there—worked through, thought through and analysed carefully. Take a look. I think that Opposition Members will find something to learn there.

This negotiation must be aimed, laser-like, at improving our economic position, cutting through red tape, safeguarding our financial services, delivering government at the lowest possible level and trusting the people to have the final say. That is the Conservative way. But in their heads the Opposition, with a few notable exceptions, do not want the British people to have their say. The reality of the Labour Government was the Lisbon treaty, with no promised referendum at the end.