Economic Growth

Jim Cunningham Excerpts

Wednesday 15th May 2013 Commons Chamber

[Mr Osborne]

My hon. Friend is absolutely right. Last year, employment in the UK grew faster than in the US, France, Germany, Japan and the eurozone as a whole. Employment in the UK is now above its pre-recession level. Of course we must go on taking the difficult measures necessary to get our deficit under control, and make sure we support businesses that want to hire people to support the private sector recovery. The path being offered by the Opposition, however, would lead to complete disaster.

[Mr Jim Cunningham (Coventry South) (Lab)]

When the Chancellor’s party was in opposition, the right hon. and learned Member for Rushcliffe (Mr Clarke) took the credit, before the banks collapsed, for the economic prosperity, claiming he had created it when he was Chancellor. How does the current Chancellor answer that point?

[Mr Osborne]

The hon. Gentleman is saying that somehow we have a responsibility for the financial crash or for the problems in the banking industry, but he neatly skips the fact that not only was Labour in office for 13 years, but the shadow Chancellor was the City Minister. He did not have any old job in Government —he was the City Minister when Northern Rock was selling those 120% mortgages and the Royal Bank of Scotland was thinking of taking over ABN AMRO. He is the architect of the tripartite regulation, which failed so catastrophically. He is, literally, the last person to have any credibility on this subject.

--- Later in debate ---

[Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)]

As always, I listened carefully to the Queen’s Speech with the intention of examining how the new measures would affect my constituents. I was also looking for measures that would ease the strain on the families in my constituency who are worried about unemployment and the rising cost of living. I was sadly and expectedly disappointed.

Before listing my concerns, I will place on the record a couple of observations on how we got into the deep economic difficulty that is causing desperate hardship for many families in my constituency. The fundamental error of this stagnant coalition Government was to assume that they could clear the deficit in four years. Their plan was to use the final year in office to hand out sweeteners to the electorate, who would be so overwhelmingly grateful that they would elect a Conservative majority.

Dealing with the deficit is the defining issue facing this country. However, that should never have been conditional on or linked to the outcome of the next election. That was a political fix that was destined to fail. Everybody could see that it was politically too far-fetched, except for the opportunistic Liberal Democrats who disregarded their electoral mandate and traded their principles for government office.

The UK economy is 9% smaller today than was expected when this stagnant Government took over. In 2009-10, the deficit was £159 billion. It is now forecast to be down to £121 billion. However, the public debt overall is rising from £795.5 billion to a predicted £1.1 trillion.

On any reasonable analysis of our economic situation, two significant themes scream out loud and clear. The first is the continual anaemic economic performance and the second is our ability to pay off the debt, which is becoming increasingly strained as a consequence of the first point. While those two heads travel in opposite directions, our economy will never recover. The policies simply have to change. It is time that this stagnant Government chose to put the national interest first and their party political interests second.

Ordinary hard-working people and their families are struggling. Rents and mortgages have to be paid, as do ever-increasing energy and water bills. Families who spent £600 a month to cover those costs in 2005 now spend more than £800 a month. We have record fuel prices and record amounts of people in fuel poverty. We have 1 million young people out of work and left behind. Lending to businesses is continuing to fall. We have soaring unemployment. We have a Chancellor who has to borrow £245 billion more than he planned, who has failed his own economic test of retaining our triple A credit rating and who, over the course of this Parliament, will have delivered growth of a mere 1.7%. Ordinary working people are paying the price of this out-of-touch Government’s economic stagnation.

[Mr Jim Cunningham]

Does my right hon. Friend agree that one of the methods that the Government are using to make ordinary people pay for their incompetence is the bedroom tax?

[Mr Clarke]

My hon. Friend raises a very important point. While we witness the introduction of the second home subsidy, the effects of the bedroom tax are being seen in my constituency, where an estimated 2,128 individuals will be affected, two-thirds of whom are believed to have disabilities. Citizens Advice Scotland has revealed that nearly 800 victims of the welfare axe are desperately seeking its support. Welfare recipients are an easy target, but we should not point the finger too quickly because no job is safe in this economy.

To get our economy moving again, we need investment—investment for jobs, investment for the future and investment in the ordinary hard-working people of our country. We have been treated to a more-of-the-same economic plan, with no change on anything of importance. The Government are cutting taxes for millionaires while cutting support for our economy. Led by the Prime Minister and the Chancellor, this stagnant Cabinet of out-of-touch, upper-class millionaires has run out of ideas and run out of steam, while our country is running out of time. What a way to run Britain.