Finance Bill

Debate between Dan Byles and Clive Efford

Tuesday 6th July 2010 Commons Chamber

[Clive Efford]

My hon. Friend is right. That applies not just to individuals but to businesses. Many people are expressing concern about the impact of this emergency Budget.

On 8 April, the Deputy Prime Minister said on Sky News:

“We will not have to raise VAT to deliver our promises. The Conservatives will. Let me repeat that: our plans do not require a rise in VAT. The Tory plans do.”

Well, we all know it is a Tory plan now, do we not? And we all know who is voting for it.

What are the public to make of this sudden about-face? Who has the moral mandate for this level of tax increase and for taking this proportion of tax to pay for the deficit as opposed to rolling back the state? Where is the mandate for making the poorest pay for this Budget as they will? More importantly, however, where is the contribution from the banks?

[Dan Byles (North Warwickshire) (Con)]

The hon. Gentleman has given us an interesting list of quotes and dates. Will he point to the date on which his own Front-Bench team ruled out raising VAT during the general election?

[Clive Efford]

The hon. Gentleman is new to the House—and he might well be new to politics—but I am sure that, if he looks in his history books and reads all the quotes, he will find that most parties going into an election do not rule out such an increase, unlike in the foolish statements made on “Newsnight” by the now Prime Minister and during the general election by the Liberal Democrats.

Now there is trouble at’ mill—we have some problems here—because Sir Alan Budd has resigned. Can anyone tell me how a man who only a short while ago described his job as

“the most exciting challenge of my professional life”

can have given up so quickly? This man must have the most exciting job coming up to give up such a prospect already. How have we lost the head of the Office for Budget Responsibility so quickly? Perhaps my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne) can tell me whether there is a revolving door at the Treasury. We lost the first Chief Secretary to the Treasury and now we have lost the head of the OBR. They are going in and out so quickly that, if they have not got a revolving door, they should put one in pretty quick. It would make it much more efficient for people when leaving their posts so quickly.

What has changed Sir Alan Budd’s mind? Has he changed his mind? The Treasury is assuming that growth in the private sector will create 2.5 million jobs in the next five years to compensate for the spending squeeze. Can the Minister tell me when since the second world war the private sector has ever grown that quickly? When has it ever created that many jobs? We have had unprecedented growth over the past 13 years, and it only just created that many jobs in that period. How can these projections point towards the creation of 2.5 million jobs? Perhaps the Liberal Democrats are going to tell us, because they had a cup of tea with the Governor of the Bank of England, after which we saw a miraculous turnaround—perhaps there was something in the tea. Perhaps they can now explain to us what was said that convinced them that miraculous growth in the private sector was going to solve this country’s economic problems, as we undergo the most unprecedented assault on the state ever attempted in peacetime.

We have also seen figures leaked from the Treasury. The Government expect between 500,000 and 600,000 jobs to go in the public sector and between 600,000 and 700,000 to disappear in the private sector up to 2015, but how is it that the figures leaked from the Treasury contradicted the figures from the OBR? I am wondering about that, so perhaps someone can give me an answer, because the figures are compiled by the very same people. Treasury officials compile the figures for the OBR, and the leaked figures are from the Treasury. I am therefore a little bit confused, but perhaps somebody can explain that one for me—perhaps the Liberal Democrats have an answer for us, as they are so enthusiastic about the Budget.

The Chancellor has said that some have suggested that there is a choice between dealing with our debts and going for growth, but that this is a false choice, and I agree with him. There is indeed a choice, as Sir Alan Budd also agrees. However, the OBR actually agreed with the figures for growth based on our March Budget and the figures for unemployment; in fact, it considered our figures to be conservative. The March Budget statement was also able to announce that debt had been reduced by £11 billion, which is an important point. The debt had been reduced because there was more income tax, more national insurance, more VAT income and more tax from businesses. A further announcement was made subsequent to the general election, with a further reduction of £5 billion, to which my right hon. Friend the Member for Birmingham, Hodge Hill referred in his opening speech for the Opposition.