Finance (No. 3) Bill

Chris Leslie Excerpts

Tuesday 26th April 2011 Commons Chamber

[Alec Shelbrooke]

Again, that illustrates my earlier point: when the figures are brought down to a smaller level, people can understand their full impact and the state of the nation’s finances. When I compare that to our personal finances, I say to people, “For every £1 we’ve spent, we’ve borrowed 25p. How long would your household finances survive with that sort of economics?” They simply would not. Indeed, the increase in private debt and in people’s credit card debts, with some even committing suicide because they used credit cards to pay off credit cards, is a lesson that Governments should learn.

Let us look at the growth and debt figures. Our debt is 10.4% of GDP, Spain’s is 9.2% and Portugal’s is 9.1%, but I do not see our interest rates on the gilt markets being as high as Portugal’s. My hon. Friend the Member for North East Somerset made an excellent point when he described the percentage rates being below RPI by 300 unit points, or 500 unit points below normal. That shows that a credible plan had to be put in place.

I find it distressing when we get into this argument with the Opposition, who say, “You don’t need to do all this.” I will give the House an analogy. For 13 years, the previous Government fed everybody chocolate and burgers, and every person in this country now weighs 35 stone. Along comes the doctor, in the form of this Government, who says, “I’m afraid if you don’t lose at least 20 stone you are going to die very young and it is going to be disastrous for you.”

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Your doctor said that?

[Alec Shelbrooke]

Yes, probably! I am in a rotund position to say this, and I certainly speak with a certain authority on these matters, but it is never easy to lose weight, as indeed I can testify. I am getting married in a month’s time—[Hon. Members: “Hear, hear!”] Thank you. I am desperately trying to lose weight, and it is not easy, but it is never easy for someone if the previous lot who fed them when they were trying to lose weight say, “Go on, have another bacon sandwich, it won’t do you any harm. Have another chocolate. We’ll pay for that on the credit card by the way, which we’ve nicked off you.” But seriously, if we do not get the economy under control, we will find that it leads to the situation that we see in Portugal.

What does that mean to the public? The Opposition have attacked the Government and said that they have not done anything to protect people, but what would higher interest rates do to people? We have had an interest rate of 0.5% for well over a year. We used to think that 3% or 4% was a low interest rate when the Bank of England maintained it at that level for a good period of the last decade. If the interest rate went back to 4% in the next six months, what effect would that have on the people of this country? Having spent a great deal of time with interest rates at an historically low rate, they have learned to live within those means. We do not have the option to go back to 4% interest rates—that would be a disaster for hard-working families. Ironically, it could increase the pound’s value against the dollar, reduce the oil price and reduce petrol prices—I suppose there is a quid pro quo to everything—but let us not get away from the fact that going back to what we then thought were historically low interest rates would be seen as an absolute disaster.

I get annoyed with the twisting of the Keynesian argument when people say that in times of recession Governments should pour money into an economy. That was only half the truth: the other half was to invest it in capital investment.