Amendment of the Law

Debate between John Redwood and Stuart Bell

Wednesday 23rd March 2011 Commons Chamber

[Sir Stuart Bell (Middlesbrough) (Lab)]

I am grateful for the opportunity to speak early and to follow the hon. Member for Chichester (Mr Tyrie). He made three points that I would like to take up. First, he referred to the reduction in the deficit over the next four to five years and said that he thought that that would cause grave concern and bring great pressure to bear on the Government not to continue with the programme. He is perfectly right: £146 billion will be reduced to £122 billion, which will be reduced to £70 billion, which will be reduced to £26 billion in the years 2015-16. That is a massive and steep drop and will have serious consequences for the public sector, which the hon. Gentleman acknowledged.

In his Budget speech, the Chancellor did not mention the welfare state or the point on which the hon. Member for Chichester finished his speech, which is the balance between the public and private sectors. We will see a clear imbalance between the public and private sectors as regards the question of whether the public sector can shed jobs and whether they can go into the private sector. That is an interesting point that will be followed closely in the north-east of England, where some 47% of employment is in the public sector. We will then see the difficulties and dangers of moving quickly and rapidly with such a massive debt reduction over four to five years.

Harold Wilson once said that one man’s pay rise was another man’s ticket to the dole queue, but the deficit reduction we are talking about today involves one man’s job passing from the public sector to the dole queue. I must tell the hon. Member for Chichester, since he made the point, that he must remember that those who work in the public sector are producers who pay taxes and consume and to remove them from that sector with such a drastic and rapid reduction in the deficit will not add to the prosperity or standard of living of our people.

[Mr John Redwood (Wokingham) (Con)]

The hon. Gentleman should remember that the Chancellor has announced today that over five years, this Government plan to borrow an additional £485 billion—or a 50% increase in official state debt. They are not paying down the deficit or paying off the debt—they are just trying to borrow a little less each year, but it is still adding a huge amount to the national mortgage.

[Sir Stuart Bell]

I was much amused when statements were made about how the debt was reduced, how much we had to pay off and how much the Labour Government borrowed. In the month of February, the Government borrowed £11 billion when they should have borrowed £8 billion. It is perfectly correct that we have mixed up the structural deficit with the overall deficit, but public spending will continue to go up. There was a certain sleight of hand from the Chancellor when he made his Budget speech.

--- Later in debate ---

[Sir Stuart Bell]

I am glad that the right hon. Gentleman added the words “any time yet” to his remarks about joining the euro, because it is inevitable that, over many years, we will join the euro. Tomorrow and the day after, 17 euro states will get together and put forward a proper plan for competitiveness within the euro. For the first time in our history, the United Kingdom is excluded.

[Mr Redwood]

If those countries come up with good ideas, we can adopt them, and if they come up with bad ideas, we would be wise to sidestep them; that is exactly the freedom that I and others have argued for passionately over many years, and that the Government wish to enjoy if all goes well.

The hon. Gentleman also said that the reductions could prove difficult. Believe it or not, I did not become a Member of Parliament to have teachers sacked from my schools or doctors sacked from my surgeries; I want them to be well paid and well funded, and I want sensible growth in numbers where there is extra demand. We are all of that view—it is quite misleading of the Opposition to suggest that some of us do not appreciate that and do not want that for our constituents—but it has to be affordable. It has to be within the power of the free enterprise part of the economy to pay for that out of reasonable taxation in a way that does not damage our growth; that is so important.

The Government have managed to find an extra £70 billion of cash spending for the fifth year of the plan, compared with in the start year. It is crucial that we keep public sector costs down, so that the maximum amount possible can go to improving service and quality, and, in some cases, to improving the amount of service, and the minimum goes on extra costs and extra inefficiencies. All parties will say in office that they want more efficiently run public services, but they have to will not only the end but the means. That is why the reforms on which the Government are embarking are so important. It is crucial that the Government listen, and that sensible criticisms be taken on board, but public services have to be reformed so that we can say to people in five years’ time, “You are getting more for that £70 billion. We haven’t had to cut things that really matter, because we have managed things better and have found a bit of extra money.”