Charter for Budget Responsibility

Debate between Ed Balls and Ben Gummer

Wednesday 26th March 2014 Commons Chamber

[Ed Balls]

No.

[Ben Gummer (Ipswich) (Con)]

rose—

[Ed Balls]

I will give way to the hon. Gentleman.

[Ben Gummer]

I thank the right hon. Gentleman for giving way. He chooses his words carefully, but he should know that youth unemployment is lower than it was in 2010, and not only that: it is lower than it was before the crisis partly caused by his Government.

[Ed Balls]

In the constituency of Ipswich there has been a 140% rise in long-term youth unemployment over 12 months, and long-term youth unemployment is a real problem. I am glad the hon. Gentleman intervened because I was reading his Hansard remarks from 2012 when he said that asking the Office for Budget Responsibility to audit the parties’ manifestos at the next election was the right thing to do. He said there was no reason why that could not be done. I will come back to him in a moment on that one.

We support the welfare cap. We will make different and fairer choices to keep the social security bill down and tackle the root causes of higher welfare spending. Let me explain—

--- Later in debate ---

[Ed Balls]

rose—

[Ben Gummer]

I will give way, but does the right hon. Gentleman want to let me finish my point before he intervenes? [Interruption.] I will say merely that I was proposing a fiscal rule on the Swedish model in which, as the Swedes have, there would be an opportunity for all parties’ budgets to be judged. That clearly is not possible under the existing settlement, not least because the head of the OBR said it would not be.

[Ed Balls]

I most certainly would not want to misrepresent the hon. Gentleman, so let me read out the quote from Hansard. He said:

“I…further suggest that the Office for Budget Responsibility be required to assess the major parties’ manifestos at election time, at the request of those parties…A similar role is performed by the Congressional Budget Office in the United States, and there is no reason why it cannot be so here.”—[Official Report, 25 January 2012; Vol. 539, c. 305.]

I agree, and so does the head of the OBR, and this can be done before the next election. In no way have I misrepresented the hon. Gentleman—the problem is that he disagrees with the Chancellor.

[Ben Gummer]

Actually, I do not. If the shadow Chancellor reads further, he will find the key point. There is an entire portion beforehand suggesting something, which his colleague, the hon. Member for Leeds West (Rachel Reeves), said that the Opposition disagreed with. Here we come to the crux of the matter. The fact is that people will not believe the Chancellor when he talks about sticking to a cap—[Interruption.] I mean the shadow Chancellor—[Interruption.] Yes, it is as close as he will get. He was the author of the golden rule, which claimed that there would be no excess debt over the economic cycle of his Government. None the less from 2002, the Government were running a deficit—[Interruption.] Will he deny that the Government were running a deficit from 2002?

[Ed Balls]

We said that we would balance the current Budget over the cycle, which is exactly what is in the mandate before us. It says that there will be

“a forward-looking target to achieve cyclically-adjusted current balance by the end of the rolling, five-year forecast period.”

That is the golden rule. If the hon. Gentleman is attacking the golden rule, it is the second thing on which he is attacking the Chancellor today.

[Ben Gummer]

The shadow Chancellor is again digging himself into a hole. He wrote a golden rule that claimed that there were would be no deficit over the cycle. He ran a deficit and he is now proposing that there should be a cap on welfare spending. I wish to pin him precisely on the terms of his agreement with the Government. What he has told his Back Benchers in private seems to be rather different from what he is saying in public. [Hon. Members: “Ah.”] Let me list what we have within the frame of the welfare cap proposed by my right hon. Friend. If the shadow Chancellor disagrees with any one of these items, he should stand up and intervene, and his own Back Benchers can draw their own inferences. We have the attendance allowance, bereavement benefits, carer’s allowance, Christmas bonus, disability living allowance, employment and support allowance, financial assistance scheme, housing benefit, incapacity benefit, income support, industrial injuries benefit, in-work credit, maternity allowance, pension credit, personal independence payment, return to work credit, severe disablement allowance, social fund, cold weather payments, statutory adoption pay and statutory maternity pay, statutory paternity pay, universal credit, winter fuel payments, personal tax credits, child benefit and tax-free child care. Is there any single element of that that he would change in the next five years?

[Ed Balls]

indicated dissent.

[Ben Gummer]

Not at all. Now his Back Benchers may wish to draw their own inference from that. In private, the shadow Chancellor has been going round saying that he would change it. He would put one in and take one out. [Hon. Members: “Ah.”] Even in the House, he will say that he will supplement one benefit—withdrawing the winter fuel allowance from richer pensioners will raise £100 million and he would use it to pay for the reversal of the under-occupancy charge, which will cost £500 million. How does he make up that £400 million difference? He has been forced to come to this House to explain his maths. That is precisely why this cap is important. It forces a degree of accountability on the shadow Chancellor in making him explain to the British public how his sums add up, when it is clear that they do not. How does he account for the £400 million difference between the two? [Interruption.] I wish to know the answer as does the British public. [Interruption.]

The Economy

Debate between Ed Balls and Ben Gummer

Wednesday 22nd June 2011 Commons Chamber

[Ed Balls]

I will give way in a second.

The fact is that the scale of the fiscal hit to demand and growth in Britain this year and next is unprecedented. It is happening when interest rates are already low, so they cannot be cut, and when other countries are trying to reduce their deficits at the same time. Confidence is also hit by the public debate about when mortgage rates will have to go up because of the Chancellor’s own-goal on inflation through the rise in VAT. That is why there is a problem. Instead, all we get from the Chancellor and the Conservative party is excuse after excuse.

[Ben Gummer (Ipswich) (Con)]

The right hon. Gentleman has already mentioned the OBR, the IMF, the EU, the OECD and the CBI, each of which supports the Government’s policy and says that any deviation would be a mistake. What is his answer to them?

[Ed Balls]

It is good to see the IMF supporting the Government of the day. The IMF not supporting the Government of the day would be a catastrophe, and exactly the same has always been true, historically, for the OECD. There is no doubt that business has a growing worry about what is going on. There is also a growing worry in Ipswich, not least shown by a Labour local election victory there just a few weeks ago. I am disappointed that the hon. Gentleman’s colleague the hon. Member for West Suffolk (Matthew Hancock) is not in the Chamber, but obviously this local campaign is catching on. I congratulate the hon. Member for Ipswich (Ben Gummer) on his campaign to save school crossings, to get more funding for them from schools or parent-teacher associations, and his lobbying of the Secretary of State for Education to ensure that education in Ipswich gets the extra money it needs. “Save Sure Start from Cuts”—it is obviously all catching on.

[Ben Gummer]

rose—

[Ed Balls]

I have plenty more; we will come to them in a second. Just think, “Good publicity, good publicity, it’s all good publicity.” It did not do the hon. Member for West Suffolk any harm; it did not do him any good either.

We do not hear much from the Chancellor these days about snow being the explanation for the contraction of the economy at the end of the year, because as he knew at the time, it also snowed in America, Germany and France, and they all posted stronger growth. In fact, Denmark, Ireland, Greece and Portugal were the only other countries with falling output in the last quarter of 2010. The Chancellor of all people, a regular skier on Europe’s slopes, should have known that even in winter it does not snow in Greece and Portugal. Instead we hear a new weather-related line. He blames the global headwinds, factors outside his control—rising oil prices, food prices, the eurozone, the Japanese earthquake, all reasons why prudent Chancellors should always be vigilant and choose caution over complacency. It is ironic to hear the Chancellor and the Prime Minister blame the rest of the world for Britain’s economic difficulties, as they did the opposite for their last four years in opposition.

Compared with other countries facing the same global headwinds, we are doing worse. We have gone from being in the top half of the EU economic league, to fourth from bottom in the past few months. It is no wonder that the OECD Deputy Secretary-General said a few weeks ago that

“we see merit in slowing the pace of fiscal consolidation if there is not so good news on the growth front”.

Even the IMF has said that

“there are significant risks to inflation, growth and unemployment”.

The excuses are not working, and the Chancellor is starting to be rumbled.

Amendment of the Law

Debate between Ed Balls and Ben Gummer

Thursday 24th March 2011 Commons Chamber

[Ed Balls]

On the latest figures, the British economy was not growing at all—in fact, it had contracted by 0.6%.

I see the hon. Gentleman’s press releases regularly. They come across my desk two or three times a day. I want to give him some support. [Interruption.] I want to give him some support. The hon. Gentleman has a campaign to reverse the cancellation of funding for a dilapidated school in his constituency following the cancellation of Building Schools for the Future. I am right behind him. He has called for a new pedestrian crossing and to unblock the money for it, which is being blocked by a Tory council. I am with him. He has campaigned to keep his local library open. I am right behind him on that one. He wants to keep Thetford forest safe. Yes, I am with him on that one. He asks how we can deal with the pressures on the voluntary sector. I have to say, I think that he is in the wrong party.

Under Labour’s plan, the economy was set to grow strongly. [Interruption.] I have just given the hon. Gentleman more publicity than he had in three months from all those press releases.

[Ben Gummer (Ipswich) (Con)]

On the Labour plan, the right hon. Gentleman said this morning on the “Today” programme that we went into the recession with a low deficit. Is an average deficit of 2.9% low in his mind, or was that a mis-speak?

[Ed Balls]

I do not want to give the hon. Gentleman an economics lesson, but he needs to be able to differentiate his deficits from his debts. The fact is that we went into the downturn with a low deficit. We were borrowing to invest. Our national debt was lower than that of America, Germany, France and Italy, and lower than the national debt that we inherited from the Conservatives. We will not take any lectures from them on fiscal profligacy. Who was it who raised taxes 22 times in the 1990s?

Under Labour’s plan, the economy was set to grow strongly, unemployment was falling, and we were on track to halve the deficit in four years. Everything has now changed. But what changed? The change was the arrival of a new Conservative Chancellor who was determined not to halve the deficit in a Parliament, but to eliminate it entirely with an immediate hike to VAT, the deepest spending cuts our country has experienced in 70 years and the largest spending cuts of any major country in the world. America has a big deficit, but it is cutting it at a steadier pace and keeping its jobs programme in place. Its economy is now growing strongly and unemployment is falling.