The Economy

David Anderson Excerpts

Wednesday 22nd June 2011 Commons Chamber

[Sajid Javid]

My hon. Friend is absolutely right. There are some very reliable estimates of unfunded liabilities of central Government standing at over £1 trillion, which would more than double the national debt—not to mention private finance initiative liabilities potentially worth £300 billion.

How can we prevent this from happening again once this Government have brought down our debt? There is a possibility that some time in the future, the public may, against their better wisdom, elect another Labour Government. Perhaps we should consider capping the national debt at a percentage of GDP, so that future Governments who think that they can spend like there is no tomorrow are held back. I am pleased to announce that on 12 July, I will present a ten-minute rule Bill, provisionally titled the national debt cap Bill, to suggest just such a measure.

We have heard a lot from the Labour party about the cuts being savage and reckless. It is easy to make those accusations without looking at the facts. The fact is that the cuts have not even started yet. The first fiscal year of cuts will be this year. It is important to go into the specific numbers. There will be cuts of 0.6% in real terms this year, 1.1% next year, 1.3% the year after and 0.8% in 2014-15. That averages out as a cut of about 0.9% in real terms each year. That is a total cut of 3.7% in real terms. Although such a cut cannot be dismissed, that is the absolute minimum that is necessary to bring sanity back to our public finances.

[Mr David Anderson (Blaydon) (Lab)]

The hon. Gentleman has gone through the figures. Will he say what they will mean in reality for public sector workers in Bromsgrove? How many will lose their jobs?

[Sajid Javid]

What it will mean for all workers in Bromsgrove, including public sector and private sector workers, is that there will be more jobs. They are essential to restore economic credibility. As a result of the announcement of the Government’s credible plan, interest rates are lower in Britain than they were before. Importantly, despite the deficit still being at 10% of GDP, which is higher than in Spain and many other European countries that are facing problems, our interest rates are almost on a par with Germany’s.

If hon. Members want to talk about savage cuts, why do we not consider the great example of Denis Healey? The country was brought to its knees and a bankrupt Britain was ordered by the International Monetary Fund to make cuts that amounted to 3.9%, not over three or four years, but in one year. If that is not a good enough example, let us consider what is happening in the United States, which failed to put its house in order when it had the opportunity and did not introduce a credible plan to tackle its deficit. As a proportion of GDP, its deficit and its national debt are not too different from ours. It is now being forced to introduce cuts in one year of 3.8% in real terms. It is no wonder that the IMF, the CBI, the Federation of Small Businesses and the OECD are all behind us.

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[Mr Wright]

The growth projections are falling rapidly, and have been downcast three times. When I speak to my constituents and businesses in Hartlepool, they are concerned about a lack of confidence and a lack of investment in the future of this country that will undermine our long-term ability to fight the global downturn.

[Mr Anderson]

Is it not the case that, like me, my hon. Friend has been here before, when the Conservative party did exactly the same thing not just in our lifetime, but our fathers’ lifetimes? We know that the actions that the Conservative party takes will result in ordinary people paying the price for its failures.

[Mr Wright]

My hon. Friend represents a seat in the north-east, as I do, and he knows full well that our region has borne the brunt of this recession, like we bore the brunt of the 1980s recession. It does not have to be like this. We have got enormous economic potential in our region that can really contribute to wealth creation in our country, but that is simply not happening.

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[Priti Patel]

I thank my hon. Friend for that comment. The 1970s was also the era of strikes, and as we all know, strikes cost jobs, they do not create them. Before last year’s Budget, we had the deepest recession, record rates of job losses, and national debt increasing to a peacetime record—

[Mr Anderson]

Will the hon. Lady give way?

[Priti Patel]

I have said that I will take only one intervention, because of pressure of time; other Members want to speak.

Families and businesses across the country, and across my constituency, have faced genuine hardship, and I speak as someone from a small family business background. Let us not forget that 12 months ago the country faced a severe sovereign debt crisis. The prospect of Ministers having to go with a begging bowl to the IMF, as Labour did in 1976, was daunting. The Government should be congratulated on bringing Britain back from the brink.

Last year’s emergency Budget was about rescuing the nation’s finances and paying for Labour’s mistakes and its scorched earth policy. The Government have absolutely the right focus: reforming the economy, ensuring jobs and growth for the future, and doing what we can to help families with the cost of living. Last year’s Budget marked the first step towards rebalancing the British economy on to the path of long-term sustainable growth.

I want to highlight three areas in which the Government have laid the foundations for future growth: first, the promotion of business and job creation in the private sector; secondly, focusing on getting people into work, with the creation of half a million private sector jobs, which Labour Members seem to be mocking, which is completely insulting to the people in those jobs; and thirdly, restoring confidence in the British economy. The Government are doing the right thing: sticking to the plan, backed by the IMF, OECD, PIMCO and every major business body in the country, the key objective of which is to put the public finances back on track, after the Labour party maxed out the nation’s credit card.

Instead of being positive and optimistic, Labour Members have the audacity to talk our economy down. They sneer at this, but when they do so they talk down to the enterprising individuals who run independent shops and small businesses, who create jobs and have the initiative to invest, start new businesses and generate welcome prosperity for our country. That should not be overlooked. The Opposition’s dogmatic attitude to those who work hard, pay their taxes and contribute to our economy is starkly obvious, and I believe that they should never again be trusted with the nation’s economic finances.

The Government are boosting manufacturing, jobs and growth by cutting key taxes for business and entrepreneurs and scrapping much regulation, although I think that we could scrap even more, particularly the gold-plated stuff that comes out of Europe. They are also giving more support to young people by providing 50,000 more apprenticeships, as well as work experience schemes. At long last we can start making things in this country again.

Let me end by making a salutary point. There is no doubt that it will take time for the economy to recover fully given the extent of our dreadful legacy, but throughout the business world, from investors in the City to small shopkeepers and small businessmen, it is recognised that we have a business-friendly Government who are committed to cutting the deficit and promoting job creation and investment.

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[Mr David Anderson (Blaydon) (Lab)]

The past 13 months have been framed by Conservative Members talking about deficit denial, but the truth is that what we have gone through is deficit deceit. They have spun a tale that ignores the fact that what we went through when we saw the failure of the big banks was a failure of capitalism in this country. They never mentioned the fact that Lehman Brothers, HSBC, Lloyds and Northern Rock had collapsed. They ignored the fact that we had light-touch regulation, which they had criticised for not being light enough. The situation that we got into was not just about what our party had done—it was supported by the Tories and by the capitalist system.

When the collapse happened, we took tough decisions not to repeat Tory mistakes—not only those of the ’80s and ’90s, but of the 1930s. We refused to accept, and we still do, that unemployment was a price worth paying. The reality is that the Conservatives still believe that and always have believed it. They ignored the fact that the Labour Government were praised at the G20 meeting in Pittsburgh and by the OECD for the work that we did. In fact, the OECD said that the Labour Government had led the world and prevented a recession from becoming a depression.

The Tories must have been happy, because all they wanted to do was stand back and let the market take the course. We have seen them do that in the past. They did it in the 1930s when my father was 14 years old and was sent to work in the coal mines—one of the most dangerous jobs in the world. One thousand men a year were being killed in British coal mines—one every six hours—and someone was injured every two minutes. They went home to houses that were not fit to live in. They had poverty wages, desperate living conditions at home and at work, and no respite. It took a world war and a Labour Government to address those appalling conditions.

The Tories have a long memory, and when they got back into power in the 1980s they went back to the same programme that they had in the 1930s. Under the banner they are flying today—“There is no alternative”—they attacked working people and closed mines, steelworks and shipyards. They used the same language when they outsourced hundreds of thousands of workers from councils, hospitals and universities. They cut their terms and conditions, undermined their security and decimated the services they delivered. Does that sound familiar? Yes, because they are doing it again today, and the Liberal Democrats—those who are here—are backing them up.

[John Hemming (Birmingham, Yardley) (LD)]

The hon. Gentleman’s party’s solution is to borrow more money. From whom is it going to borrow it and how much interest is it going to pay?

[Mr Anderson]

My party’s policy is not to borrow more money—it is to increase taxes on bankers and make those people pay.

[John Hemming]

rose—

[Mr Anderson]

Sit down and shut up.

The Tories have made deliberate decisions and claimed that there are no alternatives. When my party came back into government in 1997, the people from where I came from said they wanted us to put right the attacks that had happened in the 1980s. They said, “We’re sick of living in second-class conditions.” That is why I am proud, and my party is proud, of what we did.

[Mr Hanson]

May I remind my hon. Friend that at the last election the Liberal Democrats wanted to spend more than the Labour party?

[Mr Anderson]

I was not going to discuss the Liberal Democrats because they are obviously not relevant to this country any more. I thought that perhaps they were outside unveiling a new placard about the bombshell or signing a few pledges; obviously, they are too busy to come in here.

[John Hemming]

rose—

[Mr Anderson]

I am not going any further.

I am proud of what we did. We put record investment into the national health service. We had the Decent Homes programme, which, in my local council area, provided £360 million to put right homes that were desperately in need of it. There was a huge improvement in school results. We had more doctors, nurses and police on the beat. We had the national minimum wage, peace in Northern Ireland, new schools and hospitals, better health outcomes, and record numbers at university and in work. We also had—Conservative Members have not mentioned this while attacking the economic progress of our Government—a record period of growth over more than 11 years before we were hit by the global crisis.

What is certain is that the Conservatives and their yellow human shields, the Liberal Democrats, will never learn from history. They want to ignore the history of ordinary men and women. Indeed, when the Chancellor was asked in 2007 about his memories of the miners’ strike, he said:

“I’m trying to see if I can honestly remember.”

What we have is a party that selectively forgets the past, including the suffering and misery of a generation of people whose only crime was to want to live in security, bring their kids up well, have a good life and go to work. The Conservatives refuse to remember those things. They are doomed to repeat the mistakes of the past, and ordinary people will pay for those mistakes.