Budget Resolutions

Desmond Swayne Excerpts

Wednesday 30th October 2024 Commons Chamber

[Sir Desmond Swayne (New Forest West) (Con)]

rose—

[Liam Byrne]

We aimed to get the right balance between spending restraint, budget rises, growth and time. Balancing those four ingredients was at the heart of any Budget judgment, and our judgment would have halved the deficit within four years and seen debt falling by 2016. Our obsession was to avoid the double-dip recession that had been experienced in Japan and to ensure we escaped the perils of widening inequality that we had seen in the United States. Mr Osborne chose a different path, and he was supported by the right hon. Member for New Forest West (Sir Desmond Swayne), to whom it is my pleasure to give way.

[Sir Desmond Swayne]

The reality, as the right hon. Gentleman knows because he wrote to his successor about it, is that he left us with a deficit that stood at fully 10%, as against the 4.3%—and in sharp decline—that we have bequeathed to this Government.

[Liam Byrne]

Let us be really clear about what has been bequeathed to this Government. The right hon. Gentleman is right that back in 2010, at the height of the financial crash, the deficit went up. What happens in a financial crash is that the economy has a heart attack: spending continues, because to cut spending would be to deepen a recession and turn it into a depression, tax receipts fall off a cliff, and the role of Government is to sustain a country through that kind of crisis. The deficit rose to £154.4 billion, yet today how much interest do we pay on the debt we have been bequeathed? We pay £104 billion in interest alone, which is almost the entirety of the deficit we had back in 2010.

It is important for the House to recognise that that happened because Mr Osborne chose a balance that was different. He chose to load his austerity programme on public spending cuts. Actually, he eventually arrived at the same settlement that Labour proposed in 2010, but he took four or five years to get there and he put the economy into recession. If memory serves me correctly, he blamed it on some light snow. That austerity programme was followed by a Brexit that was bungled, and then the chaos of the former Prime Minister.

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[Sir Desmond Swayne (New Forest West) (Con)]

It is an enormous pleasure to follow the hon. Member for Motherwell, Wishaw and Carluke (Pamela Nash). Until recently, my cousin was a minister in Carluke.

Let me give the House a piece of Swahili wisdom. Howezi kuwafukuza swala wawili: you cannot chase two antelope. That, however, is exactly what the Government have been doing since they were elected. They announced immediately after the election, and repeated today, that their overriding priority was to secure economic growth by investing, investing, investing, but in reality their main effort was elsewhere. Their main effort was a creating a narrative in the public mind that they had inherited a wasteland, the worst inheritance of any Government since kingdom come: that the wicked Tories had operated a scorched earth policy leaving absolutely everything broken, nothing working, and a huge black hole. As a consequence, things would have to get worse before they could get better, and there would be implications for tax in the forthcoming Budget—and, of course, we have discovered that today.

The reality is that investment requires an optimistic outlook. By pouring such a bucket of cold water on the British economy, what the Government achieved was to reverse what was soaring business confidence and turn it into absolutely collapsing business confidence; and business confidence is the key to investment, not the great binge of borrowing that the Government are about to enter into.

[Tom Hayes (Bournemouth East) (Lab)]

Would the right hon. Gentleman welcome the £63 billion of investment that came through the international investment summit as a result of the election of a Labour Government? That money had been held back until the election, and the election led to the investment of those billions of pounds. Is that not a sign of significant business confidence in our country?

[Sir Desmond Swayne]

Much of it reannounced, and much of it put at risk by the behaviour of the Transport Secretary, but nevertheless an achievement. Of course I welcome any inward investment. What I think is a huge risk is a great borrowing binge for exactly the sort of investment that we saw throughout the 1960s and 1970s, which never delivered. Real investment—investment that improves productivity—is that which is undertaken largely by medium and small firms to invest in their own enterprises, but it is crowded out by the increased costs that are entirely a consequence of the Government’s great borrowing binge. On that basis, this Budget is a disaster.

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[David Pinto-Duschinsky (Hendon) (Lab)]

I thank my right hon. Friend the Chancellor for her Budget statement, which brought into sharp focus the choice that the country faces. The stakes could not be higher: we face a choice between beginning down a path of national renewal with today’s Budget, or continuing decline and denial if we tread the path of the Conservative party.

We cannot fix our problems until we face up to them. The Conservatives parrot empty fantasies about their legacy, but the truth is that they have left our economy, our public services and our finances in ruins. The figures are stark: according to the World Bank, since 2014, real income per capita has only grown by 6%. That is without historical precedent. Poverty and hardship have risen, and meanwhile Britain has fallen behind. Since 2010, if we had kept up with comparable countries, the average household would now be over £8,000 richer. While our economy has languished, our public services have been run into the ground. NHS waiting lists have more than doubled. Criminal prosecutions and convictions have halved in recent years. Our schools struggle to recruit expert teachers. Our prisons are bursting. The list goes on and on.

That stagnation is not some kind of accident—some kind of economic act of God. Rather, it is the result of decisions made by the Conservative party. Under Liz Truss, the Conservatives crashed the economy, sending bills and interest rates soaring, but the Truss disaster was but one instalment of their 14-year story of economic mismanagement. Investment is the downpayment we make today to ensure prosperity tomorrow, yet for 14 years the Conservatives turned that logic on its head, mortgaging our future to pay for their political gimmicks and undeliverable plans. They invested 50% less as a proportion of GDP than our peers and hamstrung private investment, leaving us consistently at the bottom of the league table for business investment.

That may sound abstract, but the effects are all too real. Over the past decade, we have built only half as much motorway as Germany and a fifth as much rail track as Spain. Our overstretched hospitals have only half the average number of CT scanners seen in other OECD countries, and our crumbling schools have only half the number of electronic whiteboards. Today, Britain has barely half the capital per worker of comparable countries. No wonder we are growing slower—no wonder our public services are at breaking point.

The Conservatives failed the British people, and rather than coming clean, they overspent, hid the problems from the public, and hid the scale of their irresponsibility even from the Government’s own budget watchdog: a £22 billion black hole, an emergency reserve spent three times over, with no money put aside for the infected blood crisis or the Post Office scandals. It was a festival of fiscal recklessness. For example, according to the IFS, the Conservatives spent the asylum support budget 25 times over, costing every man, woman and child in the country £110. Their cover-up has been laid bare by the review published by the OBR today, yet they remain in complete denial. They have no shame, and importantly, they have no plan.

As the Chancellor’s statement has shown, though, where the Conservatives jeopardised our future, this Government will fix the foundations. This Budget will deliver stability, putting our public finances on a sound footing. Unlike the Conservative party, this Chancellor will never gamble with Britain’s future. Instead, she will begin the work of delivering the investment that our economy and public services need, launching new investments, injecting over £6 billion into our crumbling schools and boosting the NHS with record investment. She will protect the payslips of working people, she will drive forward reform, and she will deliver the change the country voted for. It will not be easy, and change will not happen overnight. The Conservatives have left a terrible inheritance and, as we have heard throughout this debate, they have absolutely nothing to say about the answers they would offer.

[Sir Desmond Swayne]

Will the hon. Gentleman give way?

[David Pinto-Duschinsky]

No, thank you. I am winding up.

As the Chancellor has made clear, our Government will not shy away from taking the steps needed. We will not let our ambition be dimmed. To govern is to choose, and the Conservative party chose to put party before country. This Government and this Chancellor are making a different choice—to invest and rebuild, to fix our NHS, to protect people’s payslips and to deliver change. We are putting our country first. It is a choice that will give us our future back, and we should all support it.