Global Economy

Debate between Jeremy Corbyn and George Osborne

Thursday 11th August 2011 Commons Chamber

[Mr Osborne]

My hon. Friend asks a good question, which is being asked in the markets at present. I have to say that one of the causes of the instability in the last couple of weeks has been loose comments by Finance Ministers on issues such as that which he raises, so I will “take the Fifth” and not comment.

[Jeremy Corbyn (Islington North) (Lab)]

Does the Chancellor of the Exchequer have any concerns about the unaccountable power of the credit rating agencies, who, seemingly at a whim, can cause disasters to be visited on small and vulnerable economies, increase interest rates, and lead to public spending cuts and devastation to many poor people’s lives? Does he not think it is time that these rating agencies are brought under some kind of accountable control?

[Mr Osborne]

It might surprise the hon. Gentleman to learn that I agree with at least part of what he says: we do have concerns about how the credit rating agencies have operated. That is why we have been part of the European discussions to get some European rules on credit rating agencies put in place, and I think they are appropriate. I disagree with the hon. Gentleman, however, on blaming all of what is happening on credit rating agencies. However imperfect they might be, credit rating agencies are trying to give market investors some idea of the credit worthiness of countries and companies. The truth is that they have not led to the spending cuts. The reason why we have had to undertake spending cuts is that this country is currently spending close to 50% of GDP on public expenditure, which is far higher than the historical average under Conservative and Labour Governments. That is why we are having to act. We are doing so because we have a record budget deficit—the highest in our peacetime history and the highest in the G20.

Comprehensive Spending Review

Debate between Jeremy Corbyn and George Osborne

Wednesday 20th October 2010 Commons Chamber

[Mr Osborne]

If my hon. Friend has not yet had the opportunity to do so, he should look at chart 1.1 in the book produced by the Treasury, which shows that a structural deficit was emerging throughout the past decade and that that made Britain particularly ill-prepared for what happened in our banks. Of course, the poor regulation of our banking system meant that this country was probably affected more than any other, except for Iceland and perhaps Ireland. We are trying to sort that out, by addressing not only the public finances, but the regulation of the banks. As I say, if we had fixed the roof when the sun was shining, we would have been in a better condition to deal with the storms.

[Jeremy Corbyn (Islington North) (Lab)]

The Chancellor will be aware that housing is the biggest and most serious problem facing people in my constituency, because of overcrowding and a shortage of social housing. His proposals in July to cap housing benefit render at risk the lives of many people living in private rented accommodation, where the rent is paid by housing benefit, and his proposals now to have two tiers of council tenure do not sit very well, because one tenant will be living in secure accommodation on a fixed rent of about £100 a week whereas their next-door neighbour, because of an accident of dates, will be paying at least twice that in rent and will have no security of tenure. How does that fit with the notion that we are all in it together?

[Mr Osborne]

There is a problem in social housing, but frankly the party that the hon. Gentleman supported in this House—on and off—for 13 years did absolutely nothing to address it. We are trying to reform social housing provision so that more homes are built and so that there is more availability of socially rented properties, unlike the fall that we have seen recently. He talks about his constituents and he must ask himself—I certainly confronted this—whether it was fair to ask the people of his constituency who go out to work to fund housing benefit bills of £50,000, £60,000 or £70,000 a year. That is totally unaffordable to the working people of Islington. We have introduced what I think is a perfectly reasonable rule that the average family out of work should not get more in benefits than the average family earns in work. I find it difficult to see how people could object to that.