The Economy and Living Standards

Debate between Ed Balls and Lord Bellingham

Thursday 12th June 2014 Commons Chamber

[Ed Balls]

I will give way in one second.

My greatest concern on the agenda of how we can deliver more good jobs for the future is the Chancellor’s commitment to delivering a balanced economic recovery.



If we look at what is actually happening, it is true that the economy is growing, but within the G7, it is still only the UK and Italy that have not recovered to their pre-crisis peaks in output. With the rise in the population, it will take a full 10 years for income per head to recover to where it was in 2007. Worse than that is the level of business investment.

I am pleased that there are finally signs that business investment is starting to pick up, but as of now, we have the fourth lowest level of business investment in the European Union. Only Cyprus, Greece and Ireland are lower than the United Kingdom. Our export growth is sixth in the G7, 16th in the G20 and 22nd in the EU since 2010. Our research and development expenditure is the lowest in the G7. Lending to business is still falling. There has been a 12% fall in infrastructure output since 2010. Public investment is being cut next year. Those are not figures about which we can be complacent.

[Mr Henry Bellingham (North West Norfolk) (Con)]

The right hon. Gentleman is talking about investment, but he is being quite selective. In respect of foreign direct investment, is he aware that the UK secured nearly 800 new projects last year—the highest ever—and that we have 20% of all FDI in the EU? Is that not a very good sign indeed?

[Ed Balls]

Of course that is good news. For decades, we have been an open, global trading nation that attracts investment from around the world, and I want to keep it that way. However, complacency is not the way to make that happen. We have to face up to the reality that living standards are falling because, as the International Monetary Fund said in its report last week, our recovery is characterised by woefully low productivity growth. That is why living standards and wages are still falling, even as growth returns. Unless we face up to that challenge, we will have substantial problems.