Budget Resolutions
Debate between Damian Collins and Matt Western(9 months ago)
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Damian Collins (Folkestone and Hythe) (Con)
The Chancellor of the Exchequer made one announcement in the Budget statement that has not been referred to today but is relevant given the contributions made so far: the Government will sell the last of their remaining stake in NatWest bank, formerly the Royal Bank of Scotland Group. Of course, we all remember that the Royal Bank of Scotland Group, once the world’s largest bank, ran out of money and would have collapsed if not for a complete Government bail-out. It would have gone down and taken with it the livelihoods, jobs and mortgages of millions of people in this country, having an effect on the entire banking system. It has taken us nearly 16 years to get to a position in which the Government can sell their stake in the bank and return it to fully private ownership.
That is an important benchmark, because it is easy to pretend—as a number of hon. Members have tried to do—that 2010, when the Conservative party was elected, was a year zero and there were no issues from the past that we had to deal with. We came into government on the back of that banking crisis. Both parties acknowledged that the bail-out of the banks was necessary, inevitable and the right thing to do, but it came with a cost attached. It came with the recognition that the huge amount of increased Government debt required to take that stake in the banks would at some point have to be paid back, and that the massive shock to the global economy and our economy and the recession it created would lead to consolidations in public spending.
However, it was the Conservative party—working in coalition at the time—that had to put those plans in place. We inherited no detailed plan from the Labour party; no difficult political decisions were made about where spending would be cut or how debt would be repaid. That was entirely left to the Conservative party to do, and that is what we did. We fixed the roof when we had the chance to do so, and because we controlled debt and got it falling again, when the next shock came in the form of the covid pandemic—nothing anyone could have predicted or known about—we were in a position to respond. We could increase borrowing again to make the necessary decisions to protect people’s jobs and homes, create the furlough scheme and give the economy the support it needed. We could make those decisions because we had regained international trust in the British economy and in our Government, and we could borrow money to do so.
Damian Collins
I will in a moment.
Yes, borrowing has gone up, and taxes have gone up to pay for it. That is an inevitable consequence of those two massive global events that took place: one under the last Labour Government; and one under the Conservative Government in the shape of the covid pandemic. I do not remember the Labour party ever criticising the furlough scheme or the support that was put in place, or suggesting that it should not have been done.
Damian Collins
No, I did not say that at all. What I said was that we picked up the pieces of an international banking crisis, with no plan from the previous Government for how that would be paid for. It was entirely down to the Conservative party to find that money. The criticism was that the previous Labour Government were increasing borrowing before the banking crisis hit. They were already borrowing for political reasons—to sustain spending they could not afford—and then had to bail out the banks on top of that. If Members are going to criticise the past 14 years of Government, let us start where the problem started, which was before we came into power. We were required to pick up the pieces of the mess we inherited.
There are big things that happen, which require responsible Governments to take big, responsible decisions. That sometimes means that they have to put up taxes in order to pay for borrowing to get through a crisis. Let us not pretend that that is not the case, but the question is whether Governments have a serious, credible plan and whether they are prepared to be honest with the British people about what that plan entails. On the back of the pandemic, we have had to put up taxes and borrowing to pay for that. We have done that, and we are now at a decision point. As the economy recovers and the OBR projects that debt will fall, what can we do? What path should we go down? As the Chancellor has set out, the priority of this Government is to recognise that because taxes had to go up to pay for the pandemic, we want to reduce taxes when we can. We want to lift that burden from the British people and start to reduce taxes.
If any hon. Members want to come in at this point, I am happy to give way.
Matt Western
I will, because I was trying to intervene a few moments ago, as the hon. Gentleman will hopefully recall. My point was simply going to be that during the mid-2010s, there was a fantastic opportunity to invest in our infrastructure—repairing our schools and so on—when interest rates were at a record long-term low, and that opportunity was missed. Does the hon. Gentleman not regret that?