Jobs and Growth

Julian Brazier Excerpts

Wednesday 12th October 2011 Commons Chamber

[Mr Tyrie]

I will not answer that at any length, except to say that I am of course making my points in a personal capacity, because as a Committee we may comment on growth after the autumn statement. Let me also point out that the Governor gave a comprehensive reply to the hon. Gentleman’s question when he introduced the second £75 billion tranche of measures. He pointed out that money demand was extremely low at present, and that therefore he thought that the risk of inflation over the next two to three years was extremely low.

[Mr Julian Brazier (Canterbury) (Con)]

Will my hon. Friend give way?

[Mr Tyrie]

I will give way for a second time. I will adopt the same policy as the right hon. Member for Edinburgh South West, and pick up the maximum injury time.

[Mr Brazier]

As well as monetary pressure being extremely low at present, some of the larger ticket items such as commercial and domestic property which are outside the usually looked at measures such as CPI and RPI have been going down rather than up.

[Mr Tyrie]

I broadly agree with that. There is always a problem with measuring inflation—there is always a dispute about exactly how to capture it best—and we will never get it exactly right. I will not go into any further details now, but I agree with the core of what my hon. Friend has said.

Work on both the deficit reduction plan and the recovery plan have been firefighting to deal with our inheritance—less from the right hon. Member for Edinburgh South West than from his predecessor, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown). Let me now deal with the third aspect of the growth strategy, which consists of policies to improve the long-run growth rate and long-run economic performance: what the policy wonks call supply-side reform. The coalition's inheritance needed attention in that regard as well.

A few days ago I made a number of proposals for supply-side reform in a pamphlet, and they seemed to make everyone very excited. The Government growth agenda set out in the spring was a start, but, as the Chancellor said in his party conference speech,

“We need to do more”.

In that pamphlet, in a personal capacity, I made a few suggestions. In a nutshell, we need to work much harder to produce a comprehensive strategy embracing tax, reform of the labour markets, financial regulation, energy policy, transport and competition policy. We have been firefighting so far, but now is the time to start developing that longer-term strategy.

It is worth bearing in mind that it took the Thatcher Administration the best part of four years to get round to doing much of this, and I realise that this type of policy is easy to talk about but difficult to deliver. What matters most is that the creative energies of small businesses in our constituencies are released to increase the long-run growth potential of the economy. That is a big reform job. We have to bear in mind all the time that it involves millions of people—small traders and people working in small businesses—and that it is they who will restore the economy to health, not Governments and not Parliament. We need to make it much easier for them. Let us consider just one area: taxation. The Treasury Committee has flagged up some of the—largely inherited—contradictions and inconsistencies in the tax system, and argues that further tax reforms should be based on a few simple and coherent principles: certainty, simplicity, stability and fairness. We are a long way from achieving that in our tax system and there is a lot still to do. Encouragingly, the Chancellor said he strongly supported tax simplification; he has made that point on a number of occasions and he has created the Office of Tax Simplification.

The Chancellor announced in his speech at last week’s Conservative party conference that he would push ahead with further labour market reforms, and he has mentioned that again today. Of even greater significance could be the Chancellor’s commitment not to push ahead of other European countries on carbon reduction targets. I and many other people have been arguing for that for a long time, all the way back to our deliberations on the Climate Change Act 2008. The rapid pace of carbon reduction will push up business costs and also provoke great controversy, for example in respect of wind farms. Therefore, the Government are right to think again about that policy. It is now crucial that the coming autumn statement gives a decisive push to measures for improving long-run economic performance. It is equally important that that is seen not as a programme for a year, but as a remorseless project for the long term.

For much of the last decade, politicians of both major parties talked as if the economy need no longer be the top priority. For it was an age of abundance: it seemed that we could concentrate on how to spend it and quality-of-life issues. We forgot that most politics is hot air unless the economy can afford to deliver on the promises made by politicians. The complacency about growth that infected both parties encouraged the irresponsible lending and borrowing of the last decade. The electorate have noticed that they were led up the garden path, most notably by the absurd claim that Governments could put an end to boom and bust—so my final point is a presentational one. Politicians and Parliament must demonstrate that the public’s No. 1 priority is also their own No. 1 priority. The electorate’s No. 1 priority at present is to protect their living standards and their children’s prospects.

Oral Answers to Questions

Julian Brazier Excerpts

Tuesday 6th September 2011 Commons Chamber

[Mr Speaker]

Order. I am grateful to the hon. Member for Montgomeryshire (Glyn Davies), but his question bears no relation to the responsibilities of the current Government and we will therefore leave it there.

[Mr Julian Brazier (Canterbury) (Con)]

Would my right hon. Friend accept that the fact that the euro has strengthened as a currency indicates that the markets believe that the weaker countries will not be able to push water up hill for much longer and are bound to drop out of the euro before very long?

[Mr Osborne]

I do not think that it would be appropriate for me to comment directly on the value of the euro, but I would observe that we have a weak US dollar and that that may have had an impact on the value of the euro. As I said just now, it is important for us to focus on the task in hand, which is implementing the agreement most recently signed on 21 July by the eurozone. Of course we can and should have a discussion about the future of the euro and its governance arrangements—and that is important—but the euro is here to stay and we have to ensure that it works for Europe. I do not want Britain to be part of the euro, and there is no prospect of that happening—[Interruption.] Labour Members seem to forget that they are still committed in principle to joining the euro. This Government will not join the euro, but it is in our interests that the euro works.

Eurozone (Contingency Plans)

Julian Brazier Excerpts

Monday 20th June 2011 Commons Chamber

[Mr Hoban]

The hon. Gentleman makes an important point. In the event of a default, there would be consequences for the strength of bank balance sheets across Europe. That is why we are going through a stress-testing process across Europe at the moment to determine the consequences of various scenarios on the strength of bank balance sheets. UK banks have strengthened their balance sheets significantly and they hold high levels of capital. That will give them some insulation against the impact of a default.

[Mr Julian Brazier (Canterbury) (Con)]

I welcome my hon. Friend’s commitments on the non-IMF involvement of British funds in another bail-out for Greece. Does he accept that a country running a large balance of payments deficit can pay off foreign debts only if it is able to reverse that balance, and that to do that, it has to devalue? The man from Brussels cannot make water run uphill.

[Mr Hoban]

My hon. Friend has pointed to one way in which a country can regain competitiveness—through devaluation. There are other ways, including reducing labour costs and increasing productivity, and all those actions should be taken to ensure that the Greek economy and those elsewhere in the eurozone reach a much stronger position.

Office for Budget Responsibility

Julian Brazier Excerpts

Monday 14th June 2010 Commons Chamber

[Mr Osborne]

The fiscal mandate will be set out in the Budget. I am disappointed that the right hon. Gentleman was not elected as Chair of the Public Accounts Committee, but perhaps from his current position he will begin to propose cuts—as I said, cuts were even pencilled in to the previous Government’s plans—before concerning himself with our proposals.

[Mr Julian Brazier (Canterbury) (Con)]

While sharing my right hon. Friend’s dismay at the inheritance he has acquired—the picture is even worse than it once appeared—may I urge him to accelerate the plans that the Conservatives set out at election time to encourage lending by the banks, especially to small businesses, because the money supply figures are at an almost unprecedented low, and there is a real danger that we could see a further downturn?

[Mr Osborne]

My hon. Friend is absolutely right to be concerned about the lending figures out there in the economy, and I hope to have more to say on that in the Budget.

Oral Answers to Questions

Julian Brazier Excerpts

Tuesday 8th June 2010 Commons Chamber

[Mr Julian Brazier (Canterbury) (Con)]

Does my hon. Friend agree that the main reason for the scale of child poverty in this country is that we have inherited a benefit system that punishes thrift, work and traditional families? If the right hon. Member for Birkenhead (Mr Field) does indeed think the unthinkable, will we, unlike the previous Government, support him?

[Justine Greening]

Unlike the previous Government, we all recognise that child poverty is about much more than just money. If we are to be successful in improving children’s life chances, wherever they start their lives in this country, we need to look at a little bit more than the child tax credit; we need to look far more broadly. We need to look at issues around health and education. That is one of the matters that we will consider over the coming months. It is vital to realise that if we do not tackle the root causes of child poverty, we are very unlikely to tackle the symptoms. Of course, the ultimate way of tackling child poverty is sorting out our economy and getting people back into jobs, so that children are not in workless households in the first place.