Oral Answers to Questions
Debate between Alison McGovern and Lord Johnson of Marylebone(7 years, 8 months ago)
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Joseph Johnson
The space industry has an important role to play in driving growth across the UK, and the Government are working closely with the sector to make that a reality. I am pleased that the Leicester and Leicestershire local enterprise partnership is grasping this opportunity. The Satellite Applications Catapult has funded a centre of excellence in the east midlands for the past three years, focused on linking industry to local and national expertise. In addition, the UK Space Agency is supporting business incubators in Leicester, Nottingham and Loughborough to develop innovative space start-ups.
Alison McGovern (Wirral South) (Lab)
Page 98 of the Government’s industrial strategy talks about the importance of long-term institutions. Many of those who work in the science-based industries in Wirral and elsewhere feel that the single market is a long-term institution that has served them well. Has the Minister asked the Prime Minister to change course and keep our country in the single market?
Joseph Johnson
The UK is a powerhouse of academic research, and our collaborations with institutions in Europe and around the world are an important part of that success. Through the industrial strategy, we want to continue to play to our great strengths as a science and research powerhouse, and we will continue to welcome agreements to collaborate with our European partners on major science and technology programmes in years to come.
Amendment of the Law
Debate between Alison McGovern and Lord Johnson of Marylebone(13 years, 8 months ago)
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Joseph Johnson
The hon. Gentleman may be a great economic expert, but he might find that the world’s foremost economists and international financial organisations, from the International Monetary Fund to the OECD—the entire gamut of respected economic thought—see this fiscal consolidation as necessary. There is no backsliding, which I applaud.
Before those interventions, I was saying that Portugal is moving ever closer to becoming the third eurozone periphery country to need a bail-out. Borrowing costs are again rising to a new euro-era high in Ireland, which desperately needs eurozone members at tomorrow’s summit to reach a political compromise on revised lending terms.
By contrast, Britain is a different story, thanks to the credible policies in the emergency Budget last June and the policies announced in October’s spending review. There is no sign whatever of any funding problems in the gilts market—quite the opposite—and we must prize that achievement. We have saved our triple A credit rating, which was under threat of downgrade in the last months of the previous Government, and kept our borrowing costs close to historic lows.
The coalition Government have earned the respect of the international capital markets and have their confidence, because the combination of a tight fiscal and a loose monetary policy remains the best chance of avoiding a sovereign debt crisis while ensuring acceptable increases in GDP. Britain simply could not for long run a budget deficit of 11% of GDP—the second highest in the OECD—without taking the unacceptable risk of losing the confidence of the bond markets. Almost a year on, the wisdom of taking decisive action to reduce the risk of sovereign debt crisis is obvious to all except perhaps Labour Members. Even Gavyn Davies, the Labour-supporting economist, conceded in yesterday’s Financial Times that getting the deficit down was a “defensible decision”.
A debt crisis would have been disastrous for growth and unemployment, as many European nations are now discovering. Furthermore, unlike those countries, Britain can, and is, using monetary and exchange rate policy to offset the fiscal tightening, as my right hon. Friend the Member for Wokingham said. I hope that that will keep the economy recovering.
As I have said, all manner of international bodies, from the IMF to the OECD, are unanimous in urging the Chancellor to stay the fiscal course that he has so consistently outlined for this country. Yes, real GDP growth may have dipped temporarily as consumers’ expenditure has been weakened, and today’s growth forecasts for 2011 from the Office for Budget Responsibility may be a little lower than we would have liked. However—
Joseph Johnson
I will continue, if I may.
However, business surveys have been much stronger than the official data, and the Institute for Fiscal Studies says that the chances of a double-dip recession are no more than 20%. Even Gavyn Davies, the great Labour-supporting economist, admits that this figure is
“not high enough to jettison the government’s main strategy, with the loss of credibility which that would imply.”
Mr Davies is, of course, completely right. Maintaining the current policy remains the best bet for Britain in the medium to long term, and that is what matters most.