Economic Affairs and Work and Pensions

Barry Sheerman Excerpts

Tuesday 8th June 2010 Commons Chamber

[Mr Darling]

First, I said on many occasions that the right thing to do was to hold a spending review this year, before the end of the current review period ran out. There is still a lot of uncertainty, as I shall explain later, and the hon. Lady would do well to remember that at present, while we are coming out of recovery, our growth is modest. I hope we will see recovery secured, but what is happening in continental Europe and other parts of the world shows that we are not out of the woods yet and there is still a lot of uncertainty around. On the hon. Lady’s main point, however—which I dare say her colleagues will make too—our borrowing and debt levels rose for exactly the same reason as they are rising in America, Japan, Italy, France, Germany and just about every other country in the world: because we went through the deepest global recession in modern times. The hon. Lady might also want to remember that until well into 2008 the Conservatives, far from condemning our spending, were supporting our spending plans. They are therefore in no position to say now that they were opposing all this in times past. That is simply not right.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

rose—

[Charlie Elphicke (Dover) (Con)]

rose—

[Mr Darling]

I will give way to my hon. Friend the Member for Huddersfield (Mr Sheerman), and then I shall make some progress.

[Mr Sheerman]

Will the shadow Chancellor join me in recommending Sam Brittan’s article in the Financial Times last week entitled “Now is the time to ask: ‘What crisis?’”? He is a Conservative and he supports the coalition Government, but he says that it does nobody any good to exaggerate the state of the British economy, which he believes is much stronger than that of most of our competitors.

[Mr Darling]

I think it is necessary for anyone charged with responsibility for the British economy to take a measured approach. If things are difficult, they have a duty to speak out, even when that causes them some problems, as I found out myself a couple of years ago. I think it is better that we do that, than not. Equally, however, it does no good to go running around saying the situation is absolutely terrible and dire, because sooner or later we may find that the markets call our bluff; we may find that one day they say, “Whatever you do, it isn’t enough.” I believe that that approach is as irresponsible as saying nothing about a difficult situation.

We must discuss these matters in a reasoned and rational manner, because while it is important that we identify the things that need to be put right, equally we must not give an impression counter to the fact that, fundamentally we have an economy that is coming through this period, that we can get through it and ensure that we have growth, which is absolutely critical in the future. Running around scaremongering and raising all sorts of fears could have the perverse effects of turning market sentiment against us, which we do not need, and of dampening consumer and investor confidence, which is simply not necessary.

--- Later in debate ---

[Mr Osborne]

I want to make a little progress because a lot of Members on both sides of the House want to make their maiden speeches. I will give way in a little while, perhaps, to Members who stood up.

Of course, the economic situation is the backdrop to the Queen’s Speech. Our country is borrowing £156 billion a year. Our national debt has doubled and is set to double again. Those Opposition Members who think that this is some abstract problem should pay heed to the warning noises from the European continent. Countries that cannot live within their means face high interest rates, greater economic shocks and larger debt interest bills.

Let us consider this one fact, raised by my hon. Friend the Member for Suffolk Coastal (Dr Coffey), which the previous Chancellor refused to publish. The only reason she can deploy that fact in the Chamber is that this Government published it. It is that, on the spending plans that we inherited from the previous Government, British taxpayers are going to pay £70 billion a year in debt interest by the end of this Parliament. That is higher than the education budget, it is higher than the defence budget, and it is far higher than the policing budget. That figure was kept secret from the British people, but we will publish it because people need to know where their money is going.

[Mr Sheerman]

A lot of brickbats will be thrown across the Chamber today. Surely all hon. Members, on both sides of the House, as people who care about the long-term future of our economy, agree that cuts are necessary, but is it sensible to cut widely and deeply before private investment has recovered?

[Mr Osborne]

At least the hon. Gentleman acknowledges—it is the first time, either in this debate or in Treasury questions, that we have heard this from those on the Opposition Benches—that cuts have to come. [Hon. Members: “The shadow Chancellor said that.”] I am sorry, but we have just listened to a speech by the shadow Chancellor in which he explained why we should not be trying to accelerate the reduction in our structural deficit, despite the advice of the Governor of the Bank of England, the European Commission, the OECD, the G20, virtually every international investor in the UK economy and virtually every business organisation that represents businesses in this economy. The hon. Gentleman acknowledges at least that there have to be cuts. The offer that I make to him—he may take this up; I am not sure that his colleagues will—is to engage in a proper conversation in the Chamber over the next three or four months about the decisions that will obviously have an important impact on the way the Government function over many years to come.