Finance Bill

Jacob Rees-Mogg Excerpts

Tuesday 20th July 2010 Commons Chamber

[Mr Deputy Speaker (Mr Nigel Evans)]

It is very much up to hon. Members whether to take any interventions or a number of interventions, but what I have heard from the hon. Lady tells me that she is going to take no interventions during her speech.

[Jacob Rees-Mogg]

On a point of order, Mr Deputy Speaker. The hon. Lady said that she was not taking any interventions because the debate had to finish in an hour. The Order Paper, however, says the debate may continue until any hour. Can you explain to a new Member which is correct, Mr Deputy Speaker?

[Mr Deputy Speaker]

Funnily enough, I was waiting for that point of order to be made earlier. The Order Paper is always correct, and this debate could indeed go on until any time.

--- Later in debate ---

[Mr Chuka Umunna (Streatham) (Lab)]

The measures in the Bill and the emergency Budget in general have been called many things. The Chancellor has described them as “tough but fair”, the Prime Minister has described them as “open” and “responsible” and the Exchequer Secretary, who is no longer in his place, has referred to the comments of the Chief Secretary on the Bill’s Second Reading. The four characteristics that the Chief Secretary chose to attribute to the Bill and the emergency Budget were “fair”, “business-friendly”, “responsible” and “unavoidable”. I shall address each of those in turn and relatively quickly as I understand that others wish to speak.

First, however, I want to consider the premise on which the Bill is being marketed to us. According to the coalition, the Bill addresses the need to reduce the deficit that was caused by profligacy of the previous Government. In Committee, the right hon. Member for Wokingham (Mr Redwood) said that “we are where we are because of the utter mess bequeathed to us by Labour in the last Government”. It seems that reference to this supposed mess has become mandatory in all interventions by Cabinet Ministers and Members on the Government side for the duration of the Bill’s passage through the House.

In the coalition’s view, the credit crunch is but a minor detail when studying the public sector debt: the liquidity crisis that took hold of financial markets from August 2007 is just a blip; central banks having to step in to provide extra liquidity from there on is a minor detail; and the collapse of Lehman Brothers in September 2008 is insignificant. In adopting that stance, they utterly fail, as my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne) has pointed out, to acknowledge the huge role that the international banking crisis played in relation to the state of the public finances and our economy at large.

[Jacob Rees-Mogg]

Will the hon. Gentleman give way?

[Mr Umunna]

I wish to make a bit of progress, but I might give way in a bit.

I wish to acknowledge that the Conservative side of the happy couple that is our coalition is at least consistent in its approach. The Conservatives fail to acknowledge the gravity of the financial crisis and its effect on our economy now and they failed to acknowledge the gravity of the crisis back in the autumn of 2008 when the Labour Government and others around the world took decisive action to save the financial services sector from itself and to protect the deposits of our constituents. The current Prime Minister and his Chancellor were then advocating the complete opposite—a do-nothing approach.

Let us be clear. Whatever those on the Government Benches say, no serious economist currently claims that the deficit can be disassociated from the global credit crunch I have just described. The credit crunch led the last Government to spend billions to prop up the financial services sector and to support our economy in the face of a global economic downturn that caused tax receipts to plummet and benefit payments to increase.