Future Government Spending

Helen Goodman Excerpts

Wednesday 4th March 2015 Commons Chamber

[Chris Leslie]

The hon. Gentleman is misrepresenting the OBR’s views. It is clear, as the Institute for Fiscal Studies has said today, that the global banking crisis had a devastating effect not just on this country’s public finances, but across the world. Conspicuous by its absence from the hon. Gentleman’s comments was any evidence that he had said in the past that public expenditure plans were all wrong. The Chancellor of the Exchequer and the Prime Minister signed up to support all the previous Government’s proposals.

[Helen Goodman (Bishop Auckland) (Lab)]

Does my hon. Friend agree that Government Members should be reminded of chart 1.1 of the OBR report, which shows that total managed expenditure rose from 36% to 40% of GDP between 1998 and 2008, and then from 40% to 46% by 2009? In other words, the biggest part came from the banking crisis.

[Chris Leslie]

If we had a Government who understood that a connection exists between living standards, the health of our economy and the health of our public finances, perhaps we could make some progress on deficit reduction and tackle some of those issues. Instead, recent figures show that the gap between what the Government spend and their income is perpetuating at a very high level. I think it came down from £80 billion in the first nine months of last year to £74 billion in the first nine months of this year. The deficit reduction strategy is a thing of the past for this Government, because they do not realise how stagnant wages have pulled the rug from underneath it.

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[Mr Gauke]

So there we have it—that is the complaint from the Opposition. Their big problem is that we have not cleared up their mess fast enough. That is the essence of their argument. They have opposed every difficult decision we took on the path towards recovery—every spending cut and every welfare change. As for the deficit, they usually forget to mention it. All the rhetoric we are hearing from them is about how they would reverse the decisions that we have taken and presumably turn the clock back to 2010—the time when we had the worst deficit in peacetime history, when we were borrowing £1 for every £4 spent, when we had an economy whose ability to pay its way was questioned internationally, and when the outlook of the Labour Government could be summed up by the note left by the then Chief Secretary to the Treasury, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne):

“I’m afraid there is no money.”

This Government have made great steps forward to get us out of that mess. In 2014, our growth rate was 2.6%—the highest of any major advanced economy. Our deficit is down by half as a percentage of GDP. Thanks to the stability that we have put in place, businesses have created 2.16 million private sector jobs since the first quarter of 2010, each and every one representing someone in the UK who is now standing on their own two feet. Some 2.1 million more entrepreneurships have been set up, with over 750,000 more businesses than in 2010. That has all happened under this Government.

[Helen Goodman]

Can the Minister explain why the real Chief Secretary is not responding to this debate? Is it because when the OBR finally audited the Government’s future plans and found that they would take us back to the 1930s, the other coalition partner peeled off and left the Tories isolated?

--- Later in debate ---

[Mr Gauke]

My hon. Friend is absolutely right. It is right that we highlight that point. They do not like our spending plans, but what are they going to do? Are they willing to borrow more? Are they willing to tax more? It must be one or the other or both. Which is it to be: a borrowing bombshell or a tax bombshell?

[Helen Goodman]

rose—

[Mr William Bain (Glasgow North East) (Lab)]

rose—

[Mr Gauke]

I will give way to the hon. Lady. She will give us an answer.

[Helen Goodman]

I want to bring the Minister back to the point he was making about five minutes ago, when he said that there should be £12 billion of cuts to the welfare budget. Would he like to spell out for the House and the nation what those £12 billion of cuts will be?

[Mr Gauke]

We will set out the full details in due course, but we have already said that £3 billion of that will come from freezing benefits. If the Labour party is ruling out touching the welfare budget, which is a considerable part of public spending, where else is the money coming from?