Achieving Economic Growth

Debate between Mike Amesbury and Simon Clarke

Wednesday 18th May 2022 Commons Chamber

[The Chief Secretary to the Treasury (Mr Simon Clarke)]

It is a privilege to respond to this debate on behalf of the Government. I have to say that I thought that was an uncharacteristically poor speech by the shadow Chancellor, and one that failed to rise to the magnitude of the moment. In the shadow of the pandemic and with war on our continent, everyone understands that these are challenging times and that people are anxious about the future. The measure of a Government of any colour is the determination and imagination with which they respond to the challenges of the day. We responded quickly and comprehensively to the greatest challenge of our generation at the outset of the pandemic. Looking forward, we are helping to create the conditions for economic growth by investing in skills, helping businesses to grow and building the infrastructure that provides the backbone of every economy around the world. The crucial thing—the reason that today’s debate is so important—is that we focus on that growth, and this Queen’s Speech does just that.

Let me begin by noting that overall our economy has proved very resilient. Last year the UK was the fastest-growing economy in the G7. Growth in the first quarter—[Interruption.] If Opposition Members listened, they might learn something. Growth in the first quarter was stronger than in the US, Germany and Italy, and pushed output to 0.7% above its pre-pandemic level at the end of 2019. The IMF forecasts that the UK will be the second-fastest growing G7 economy this year, and that, after other economies have caught up as they recover more slowly from the pandemic, we will have the fastest growth in 2025 and 2026.

Far from the dire forecasts about unemployment in 2020 being realised, we see that unemployment has fallen back to just 3.7%, which is below pre-pandemic levels and the lowest since 1974. The fact that 12 million jobs and incomes were protected during the pandemic, that unemployment is now lower than before the pandemic and that we were the fastest-growing economy in the G7 last year is all thanks to the careful economic stewardship of my right hon. Friend the Chancellor and this Conservative Government.

[Mike Amesbury (Weaver Vale) (Lab)]

Given that inflation is now at 9%—I think that that is a 40-year high—does the Minister regret abandoning the triple lock and putting so many pensioners into poverty?

[Mr Clarke]

As I will set out during my remarks, we have to be very careful, in setting our tax and welfare policies, that we do not worsen the very problems we are trying to manage. That is an important dynamic that we have to hold in balance as we seek to set fair offers on all these subjects.

It is still little more than two years since the onset of the pandemic and, as the Prime Minister told the House this week, its impact has been enormous, with the largest recession on record requiring a Government response amounting to nearly £400 billion. As the House well knows, the Government moved heaven and earth to support our economy, doing things that only weeks earlier no one could ever have expected us to even need to do, and those efforts worked. Human nature being human nature, it is easy to take it for granted when disaster is avoided, but there was nothing inevitable about this. The House and this country owe my right hon. Friend the Chancellor our thanks for steering us through the situation in such strong condition. The challenges we face now are global in origin and impact. We are seeing inflation as a consequence of the unsteady and tentative unlocking of the global economy post-pandemic. One need only look at cities such as Shanghai to see how disrupted the global supply chains currently are. This is particularly concentrated in fields such as energy and food.