The Economy

Debate between George Freeman and Frank Dobson

Tuesday 11th December 2012 Commons Chamber

[Frank Dobson]

Does the hon. Gentleman not think it rather odd that the Government are unprepared to give any estimate of how many of those “new private sector jobs” are ones that have been outsourced by the public sector? Has it not been estimated that even in the field of further education, the total approaches 200,000?

[George Freeman]

I am grateful for that intervention because it gives me the chance to make the fundamental point that Labour Members seem constantly unable to grasp—that every penny they spend from this Dispatch Box is money that has to be taken off this country’s citizens in tax, and that they will receive it only if it is earned by the private sector. It is the private sector that ultimately earns the money that the public sector spends. This Government’s rebalancing programme to restore our public finances will allow us once again to spend on the public sector sustainably with moneys earned by the private sector. That is one of the most crucial and important reforms made by this Government, and I welcome it.

Yes, the Office for Budget Responsibility has made clear what the Chancellor has consistently said—that this will be a long a fragile recovery and that it has been made worse by the crisis in the sclerotic eurozone, with the debts of the 2008 recession now being clearer than they were at the time. That has become clear not least because we now have the OBR—another of this Government’s important reforms—putting some transparency and honesty at the heart of Government statistics. That is not always comfortable, but it is an important—

[Frank Dobson]

Will the hon. Gentleman give way?

[George Freeman]

No, I have already given way to the right hon. Gentleman.

Of course we are in the process of a long and slow recovery, but the evidence—in terms of new jobs, the data on private sector growth, and the business community’s strong support for this statement and the measures previously announced by the Government—suggests that the policy of rebalancing the economy is right and working. We must have an economy that is led by the private sector. We need to do more to support industry and the knowledge economy, which this Government are doing, and we need to do more to support regional growth outside Greater London and the south-eastern area.

It is an irony of the last Labour Government that, despite preaching the language of regional economics, what it came down to was a vast tax transfer through the regional development agency structure. In my own field, more than £15 billion was spent on business support, but according to the Richard report, only 0.5% of that was received by businesses on the ground floor, as it were. The last Government embarked on a major boom in regional spending, but it was not sustainable. One of the sadnesses of this crisis is that many of the people who were offered jobs during that boom in the public sector are paying the price now. That is not their fault; it is the fault of those who were running the economy at the time, and I for one am waiting for them to say sorry.

The net growth figures are low at present, but that disguises a very important and profoundly positive change. We have rightly taken money out of the public sector in order to rebalance the economy and bring our public finances under control. The fact that the net growth figures are positive is a sign of the profound growth that is beginning to happen in the private sector, and which bodes well for our public finances in the long term.

I welcome the Government’s plan A-plus, which is intended to restore our public finances and get the deficit under control, and I welcome the fact that the annual deficit is now down by 25%, although there is more to be done. The plan is also intended to free up money to be invested in infrastructure. More than £20 billion has been committed to infrastructure projects that are long overdue, and last week £600 million of extra investment in science and the knowledge economy was announced. I shall say more about that in a moment. The truth is that we need a plan A-plus plus plus, but we do not need the plan B espoused by the Opposition. That B stands for borrowing, it stands for the bankruptcy of our public finances, and it stands for Balls.