amendment of the law

Debate between Lord Darling of Roulanish and Richard Drax

Monday 25th March 2013 Commons Chamber

[Mr Alistair Darling (Edinburgh South West) (Lab)]

I shall follow up shortly the points made by the hon. Member for Bury St Edmunds (Mr Ruffley) on the Bank of England, but first I draw the attention of the House to my entry in the Register of Members’ Financial Interests.

The big problem we face at the moment is lack of growth. Here we are, five years since the crisis hit most western developed economies, yet contrary to what has happened in the past, there is absolutely no sign that growth will return to this country.

[Richard Drax (South Dorset) (Con)]

One of the many reasons we do not have growth is that the Opposition made the country such a client state that we are indebted up to our eyeballs and there is no room for growth.

[Mr Darling]

With due respect to the hon. Gentleman, I anticipated that predictable nonsense. I am grateful to him for intervening, however, not least because he has given me another minute in which to make my case.

As the Office for Budget Responsibility points out, the recession is taking far longer to come out of than any we have seen previously. The principal factor is that in 2007-08 we had a complete collapse of our GDP and that situation has not been recovered in the past five years. Frankly, on the evidence presented by the Chancellor last week, I see little evidence that it is going to happen. As a result, we are borrowing very large sums of money: £120 billion last year, this year and next year.

As I was saying before the hon. Gentleman interrupted, in the Chancellor’s forecasts, yet again in the back three years of the forecast period we see an expectation that growth will go from 2.7% to 2.8% in 2017. That is exactly the same profile that we have seen in each of the Chancellor’s Budgets and autumn statements. The problem is that these sunny uplands are moving to the right each time he stands up. I cannot for the life of me see why anything will be any different in 2017 from the bleak outlook we see today. The problem is that as long as we have low growth we will have high levels of borrowing, and debt is now expected to peak at 85% of our GDP. When we advocate a different approach, the Conservatives and the Liberals say that we are talking about borrowing more, but this Government are borrowing more than they ever imagined they would in 2010, and they are doing so not to invest in things such as infrastructure, but because of the price of their economic failure. That is what many of us have a problem with.