Debate on the Address

Debate between Edward Leigh and John Redwood

Tuesday 25th May 2010 Commons Chamber

[Mr John Redwood (Wokingham) (Con)]

I should like to express my gratitude to the voters of Wokingham for renewing their confidence in me and returning me to the House. It is particularly comforting that I got more than half the vote at a time when the idea of the alternative vote is in the wind. I am sure that colleagues will think long and hard about that as they look at their own electoral positions as well as the national interest.

During the general election campaign, my electors—I am sure like those in many other constituencies—expressed their deep sorrow that the Equitable Life victims had not yet been compensated. It is extremely good news to see a Conservative pledge—and perhaps it is also a Lib Dem pledge—honoured immediately in the Queen’s Speech. The compensation is the victims’ due, owing to the bad regulation of that business, and the pledge is that it will now be paid more promptly. We look forward to the statement that is to be made.

An even larger number of my electors in Wokingham were extremely worried about the impact of the very large amount of new housing that the former Government and their regional planning authority were imposing on my constituency. I argued long, and I hope clearly, that, were a Conservative Government to be elected, they should sweep away the regional housing targets and the regional planning system. I argued that the unitary Wokingham borough council should be allowed to make more of its own planning decisions, and my hope was that the new Government would allow the council to come to a wiser judgment about how many new homes should be made available.

Some new homes must be made available, but we must avoid building on floodplains or in back gardens. We must avoid the town cramming and all the other unpleasant features of the last 13 years that my electors had come to dislike. Again, therefore, it is very good news that the coalition has come together and that it has promised in this Queen’s Speech that there will be early action to deal with such matters.

Many of my voters were also extremely worried by the lack of progress by the Environment Agency and the relevant ministry in tackling problems of flooding. These problems have been made particularly acute in my constituency by the over-building in inappropriate places that has been determined by Government inspectors in recent years. I have seen the tragic sight of new homes being completely flooded six months after they were built and sold because they were put in the wrong place by a Government inspector who did not seem to understand the nature of a floodplain. I look forward to the planning system helping with that, but I shall also be calling on my colleagues who are now Ministers to see what else we can do to right the wrongs caused by homes being built in places without adequate flood defences.

I wish to concentrate on the central thrust of the Gracious Speech—the issue of the deficit. “There is no money left”: how kind it was of an outgoing Labour Minister to make that clear. What better independent authentication of all that we said in the general election could we want than that note from the outgoing Chief Secretary to the Treasury? He should know, although I do not quite understand his taste in jokes: none of the rest of us thinks that his remark is at all funny. It is poignant and sad, and it sums up the tragic end of the long Labour Government.

From what we have heard so far in this short debate, there are still Labour Members who do not seem to be able to distinguish between the deficit and the debt. We have already heard one say that he does not think that it is right to start paying down £6 billion of the debt this early. However, we are not talking about paying down—or paying off—£6 billion of the debt. We are talking about trying to stop the debt from going up by quite as much. We are talking about a debt that, on the outgoing Labour Government’s figures, is rising by £150 billion or £160 billion a year. So far, we have come up with a welcome but modest proposal to start to reverse the trend that is our ever-climbing deficit.

We meet as a new Parliament in very difficult and dangerous times, and I think that people have high hopes of us. I think that it was good that there was some democratic renewal in the election: more people wanted to vote, and they took the election seriously and wanted to express an opinion. However, Parliament must understand—as those of us who were in the previous one surely do—that we are on probation. It is up to us to prove to the public that this Parliament can be so much better than the last one, and that we can tackle the serious issues in a sensible way.

Of course, there must be robust debate and challenge to the Executive—and I suspect that that must come not only from those on the Opposition Benches. Of course, there will be periods of humour and light-hearted relief, and the speeches made at the start of this debate were notably good and humorous. However, we must restore the trust of the British people and ensure that they feel proud of their Parliament again. To do that, this Parliament must engage more actively with the Executive, thank and reward them when they get something right and make sure that they understand when they get something wrong. We must press and press the Executive until they get things right, for the sake of the wider public good and the wider national interest.

The country has very warm feelings towards the coalition. I welcome the coalition, as it was the only way we could go forward, given the nature of the election result. It is not for us to criticise the electorate for the judgment they made. Each individual made his or her judgment for good reasons, in good conscience. It is up to us to make the best of the result that they have produced. Looking at the arithmetic, even sensible Labour Members would agree that the only conceivable way of offering this country some stable government for a reasonable period was for the Liberal Democrats and the Conservatives to find how many things they could agree about, and to agree to disagree about the other things and not to highlight them for a period while we offer stable government.

I am sure that Labour Members will play endless games suggesting that a Liberal Democrat said one thing and a Conservative said another before the election, but they should move on. It is not interesting. We all know that—we were fighting each other in an election. We still disagree about some fundamental issues—we have been open and honest about that—and that has not suddenly changed. But what we agree about is very important. We agree that this country is in a huge mess. We agree that this country needs stable government to start to turn it round, and we agree that the only conceivable combination that has the numbers to work is the Liberal Democrats and the Conservatives working together. We also agree that the prime task is to start to tackle the deficit before it overwhelms us.

Many Labour Members still think that it is wrong to reduce public spending to reduce the deficit. Some of them mistakenly tell us that if we cut public spending—by £6.2 billion, to pluck a recent figure out of the air—it will take £6.2 billion out of the economy and will therefore help to collapse the economy further. The Labour party should understand that every £1 that is spent and borrowed by the Government has to come from the private sector. We are not printing money any more—that was the Labour idea for a year and even they agree that we cannot continue to do that. So every £1 that we need to borrow this year has to come from the private sector—from a company or individual who will lend it to the Government, but if they lend it to the Government, they cannot spend it or use it themselves. So it is not taking money out of the economy: it is just saying that we need a better balance in the economy.

If we do not get a private sector-led recovery, we will not cure the deficit, we will not prop up and develop the public services, and we will not have the increase in the tax revenues that we need to make a success of our large and expensive public sector. The only way out of this deficit crisis is a strong, private sector-led recovery.

[Mr Edward Leigh (Gainsborough) (Con)]

My right hon. Friend has spent many years in the private sector. Having also studied efficiency savings in the public sector, does he agree that £6 billion—or 1%—is just a start, and that huge gains could possibly be made, especially in IT projects and the general management of Whitehall?

[Mr Redwood]

I entirely agree. I have in the past been actively involved in British industry, and 3% per annum efficiency gains is a normal target. It is not done by undermining the product, reducing its quality or providing the customer with a worse service: it is done while giving customers a better service and raising the quality of the product, through technology, training and energising and motivating the work force through reward and incentive. We need to do that in the public sector now, on a large scale, because we have had 10 wasted years in which the Government made no progress and put too much money in without asking for enough back—doing too little for too much. We now need to create a public sector that does more for less in the important areas such as health and education, and does less for less in areas such as ID cards and the authoritarian state that Labour introduced.

We are meeting at a time of grave crisis for our European neighbours in the euro area. As one who campaigned strenuously and volubly against the United Kingdom joining the euro, I take no great pleasure in saying that all the things that we thought could go wrong with the euro are now unfortunately doing so, even without this country. I am very proud of all those who joined us in that campaign and kept sterling out. It is the one thing that the Government most recently ejected from office got right—they managed to stay out of the euro. That was a very sensible judgment on which I always congratulated them and backed them at the time. Had Britain gone into the euro, the state of British public finances and the different nature of the British economy and its founder currency, sterling, would by now have shattered the euro. Our great contribution to euroland unity was keeping our currency out, and I think that I could now find many German and French people and experts who would agree that we have made their problem a lot easier by not being in the euro.

When we used to say, “Beware of Greece! That is why we need to control our deficit”, the previous Government were always keen to tell us, “Oh, but Greece is in a totally different position.” Well they were wrong in this sense: if we do the figures properly, we see that total borrowing in Greece, in relation to its economy, is no bigger than total borrowing by the UK Government in relation to our economy. Colleagues have set out endlessly that the true debt and liability of the state in Britain is £3 trillion, not just under £1 trillion, as the previous Government used to say. Furthermore, our deficit is every bit as big as Greece’s, as we know from the awful figures that we have seen. So in that sense, we are just like Greece, and if the markets have got to the point with Greece where they are saying, “We will not carry on lending you money, because we think that you have over-borrowed”, we could get to that point in the United Kingdom too. It is that argument that has brought several Liberal Democrats round to our way of thinking, which is that we need urgent action. During the election we saw the Greek crisis being enacted at the same time as we were talking to electors, making it clear how dangerous the situation was.