Budget Resolutions and Economic Situation

Justine Greening Excerpts

Thursday 24th June 2010 Commons Chamber

[The Economic Secretary to the Treasury (Justine Greening)]

Mr Deputy Speaker, may I start by saying what a pleasure it is to give my first speech as a Minister with you in the Chair? I thank the hon. Member for Wallasey (Ms Eagle) for her kind words. I very much enjoyed debating with her when I was the shadow Minister and I look forward to continuing to do so in government.

We have had a good debate this afternoon and evening. It was broadly meant to be about the Budget in relation to the environment, but we have not heard a lot about that, apart from in the thoughtful speech made by the hon. Member for Southampton, Test (Dr Whitehead). The hon. Member for Eltham (Clive Efford) said that there is little on the environment in the Budget, but given that the Labour Government had stalled on reducing emissions and wanted to go ahead with polluting measures such as a third runway at Heathrow, I am not surprised that the shadow Secretary of State for Energy and Climate Change failed to mention the environment in the half hour that he was on his feet.

I wanted to start by reflecting on the many speeches—23 or 24, by my count—made today, in particular some excellent maiden speeches. I was delighted to hear from my hon. Friend the new Member for Staffordshire Moorlands (Karen Bradley), especially when she said that she is an accountant. Speaking as an accountant myself, I think that this House needs more of us, and I dare say the Opposition could do with a few more as well, so that they can start adding up properly.

We also heard a great maiden speech from my hon. Friend the new Member for Hendon (Mr Offord). I remember his predecessor—indeed, I think I was present in the Chamber during that very long speech he made. If it is the one I remember, it was about animal welfare and lasted more than two and a half hours. On that occasion, the hon. Gentleman said how sad he was that his dog had died, and I intervened at one point to ask whether the dog had died of boredom. He said that it had not.

The new hon. Member for Kingston upon Hull East (Karl Turner), who is no longer in his seat, made a really good maiden speech. I hope he does not go around hitting people like his predecessor did, but his predecessor was certainly a colourful character, who brought his own personality to this place. We will see whether the new Member for the constituency can match him.

I thought the maiden speech of my hon. Friend the Member for Camborne and Redruth (George Eustice) was excellent, especially when he talked about how it is often individuals—their drive, initiative and creativity in working to tackle climate change and developing new technologies—who make all the difference. We should never forget—we on this side of the House certainly do not—that it is individuals who make the difference, not always Government alone. The latter theory has been tested to destruction by the Labour party.

We have heard a number of other speeches this afternoon, not least that of the shadow Secretary of State for Energy and Climate Change, who seemingly failed to mention anything about the environment. I have to say that the public watching the debate and hearing all the contributions from Labour Members would not have thought that they had just been through an election that they lost. It is as though they have learned nothing. They have not even paused to reflect on the message that they have just been given by the British people. They have handed over to this coalition Government an absolute basket-case of an economy, and what we have heard from Labour Members today is what we heard when we were in opposition: they always know better. They knew better in government and now they know better in opposition. They know better than the British Chambers of Commerce, which said

“The Chancellor’s message that Britain is open for business will be welcomed by companies the length and breadth of the country, and across the globe”.

They know better than the CBI, the Federation of Small Businesses, the Governor of the Bank of England, the G20 and the EU, which says that countries such as ours need to get on faster with reducing their fiscal deficit.

[Clive Efford]

Would the hon. Lady care to comment on a quote from the right hon. Member for Wokingham (Mr Redwood), who urged people hit by budget cuts to wear more clothes, turn down the thermostat and eat more vegetables? Is not that just about the most damning indictment of the Budget that we could have, from one of her own colleagues?

[Justine Greening]

The hon. Gentleman continues in the vein that the Opposition have adopted today, which is to try to score cheap political points. The message from the British public at the last election was that they want a constructive debate about how to solve the deep financial crisis that our country faces. We have had nothing from the Opposition. No alternative is being presented to all of the measures that were raised as concerns by Opposition Members. I presume that we can now start ticking them off as measures that the Opposition would say a Labour Government would take. We will rapidly reach the conclusion that there are no measures that the Opposition would take to solve this deficit. After all, they were happy to cancel their spending review, and now they are happy to play no role in having a constructive debate with the public and the Government about how we dig ourselves out of this mess. It is simply not true to say that the Opposition had no role in it. We were running a deficit long before the global crisis hit. That is why we went into the recession first, that is why we came out of it later, and that is why our recession was deeper. We have now had the longest and deepest recession since the second world war under the Labour Government. We need take no lectures from them.

[Matthew Hancock]

Does my hon. Friend agree that the Labour party’s views tend to be based on misrepresentations? For instance, I think that the shadow Minister said that according to the Office for Budget Responsibility on almost every measure things were better, but on the crucial measure of the size of the structural deficit, which is the measure that will not come back with economic growth, things are worse, and that justifies the position that the Government have taken.

[Justine Greening]

My hon. Friend is absolutely right. Let us just talk about the Office for Budget Responsibility. I still cannot quite work out whether the Opposition support it. I am happy to take an intervention from the shadow Secretary of State to clarify that. We are none the wiser.

On the point about changing forecasts, and the OBR forecast pre-Budget and its forecast on the Budget, let me be clear about what it said about comparing those two forecasts. If the Opposition have any shred of credibility, I hope that they will pay attention to this. At the bottom of page 94 of the Red Book it says it is

“misleading to interpret the difference between the pre-Budget and Budget forecasts as the economic impact of the Budget measures.”

The Opposition want it all ways. They want to quote some figures and, as my hon. Friend says, conveniently forget the key figure, which showed that the structural deficit was worse. They want partially to welcome it warmly, but to ignore what it says about the impact of comparing false statistics. They do the debate, which is important for people throughout the country as we go through an incredibly difficult process, a real disservice, because the British public need them to play a role, which should be for them as the Opposition to come up with some constructive comments. It would have been better if they could have come up with some kind of an alternative, but we have had none today.

We need take no lectures from the Opposition about fairness. This is the party that did a pensions raid. This is the party that came up with the 10p tax fiasco. This is the party that widened the gap between rich and poor. This is the party that told us we had an end to boom and bust. It is no wonder the savings ratio in Britain went down. If people had listened to the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown)—who knows where he is now?—they would never have thought that they needed to save for a rainy day. The British people get it, because they have started paying down their debts, but the Opposition parties have totally missed the point. They seem to be living in a post-election bubble, and they have not taken a moment even to reflect on what has happened or on the verdict of the British voters, let alone to reach the stage at which they might apologise for the mess that they handed over to the coalition Government. The two parties in government have taken the decision that they need to work together for the British public’s interest in order to find a resolution to our crisis, and to get ourselves out of this financial mess.

[Toby Perkins]

The hon. Lady has referred to the election result a couple of times, but we remember the election result in 1997 after a long period of Conservative Government, when that party lost so badly that it was out of power for 13 years. If people were so dissatisfied with the Labour Government, how come the Conservatives could not even secure a majority?

[Justine Greening]

The hon. Gentleman, if he is not careful, might be projecting the political fate of his own party. With this Budget, we want to ensure above all else that we start addressing our country’s dire financial situation. By the end of this Parliament, we will have started to return to a sustainable set of public finances which puts us in a position to make sure that our debt is more affordable. He might think it acceptable that the average taxpayer pays almost £1,400 in interest to service the debt that his party racked up, but I do not, and over a period of years we want to get into a position where our debt is affordable once again. The process will not be quick; it will take us time, because of the gravity of the situation.

Let us make no mistake: we have no time to wait. Before the election, we had only to look across the water at some of our European partners to see what was happening to their countries. I shall draw an analogy, because in Spain the equivalent of the bank manager—the markets—said that they simply were not willing to lend to that country at the same rate of interest as previously. That debt now costs Spain’s taxpayers millions of pounds more in interest than it did when their credit rating was better. Greece has gone one step further and, effectively, has the bailiffs knocking on the door.

Our Budget was all about ensuring that we do not reach the position where the bank manager says that he is going to raise interest rates on us. We as a nation cannot afford it, and British households cannot afford it. We definitely do not want to reach the stage where we have the bailiffs knocking on the door, which is what has effectively happened in Greece. I am concerned, however, because in spite of everything that has happened in our country, including the election and the state of our public finances, we have still not heard a meaningful debate from the Opposition.

[Dr Whitehead]

As the subject of today’s debate is supposed to be energy and climate change, I wonder whether the hon. Lady has anything at all to say about the extent to which the Budget might facilitate a recovery towards a low-carbon economy, or whether, as I suspect the case may be, she does not.

[Justine Greening]

I am pleased that the hon. Gentleman has given me the chance to finish on that subject, because I wanted to take the time to talk about the environment in the context of the Budget.

We have said that we are determined to make progress on setting up a green investment bank; we have talked about ensuring that the green deal works, because it is critical that our housing stock be made more environmentally friendly; and, of course, the final piece of the Budget was about ensuring that we can move to a low-carbon economy that does not just put our energy strategy on a more sustainable footing, but includes the jobs that can be part of the green enterprise economy that we want to set up.

The hon. Gentleman was right to raise the matter, because too often the issue of climate change and the environment has been exclusive—the idea being, “If you can afford to save the planet, you can do it.” We want to make sure that everybody in our country is able to be part of tackling climate change. That is why the green deal and the green investment bank are so important. The supply side of technologies is critical in ensuring that these markets can get the finance they need. I can absolutely assure the hon. Gentleman—