The Economy

Kevin Brennan Excerpts

Wednesday 22nd June 2011 Commons Chamber

[The Chancellor of the Exchequer (Mr George Osborne)]

I beg to move an amendment, to leave out from “House” to the end of the Question and add:

“welcomes the fact that in the last year a record 520,000 new private sector jobs were created, with the second highest rate of net job creation in the G7, exports grew by 13 per cent. and manufacturing activity was 4.2 per cent. higher and the latest labour market data showed the largest fall in unemployment for more than a decade; notes that the Government inherited a budget deficit forecast to be the largest in the G20; further notes that the previous administration and now Opposition has no credible plan to deal with the deficit and that the Shadow Chancellor’s recent proposal for a temporary cut in VAT has been widely criticised for lacking credibility and would put the stability of the economy at risk; notes that the Government has introduced a permanent bank levy that raises more revenue than the previous administration’s one-off bonus tax and that the Government has set out a credible plan that has been endorsed by the IMF, OECD, European Commission and the CBI, that has led to greater stability, lower market interest rates and an affirmation of the UK’s credit rating that had been put at risk by the previous administration; and notes that this stability provides a platform for rebalancing the economy and the Government’s Plan for Growth that includes reducing business taxes, investing in apprenticeships, creating a new Green Investment Bank, reforming the planning system, reducing the burden of regulation and reforming the welfare system to make work pay.”

I very much welcome this debate, and it was certainly worth attending for that priceless phrase, “I do my politics on the record”. That is right up there with, “There will be no whitewash at the White House”, “I did not have sexual relations with that woman” and “No more boom and bust”. Really, we must put that phrase away, because we will need it in the weeks ahead.

It is good that we are discussing the economy, and the shadow Chancellor made a speech about what has happened to the economy over the past year—the subject of this debate—but he completely failed to mention that exports are 13% up, manufacturing is 4% up, investment is 6% up and, most importantly, the 520,000 net new jobs in the private sector. Remember the question a year ago, “Where will the jobs come from over the next year?” Well, we have had 500,000 answers from businesses around this country—indeed, the second highest job creation rate in the G7—but that is not a fact that we are likely to hear from the Opposition, because they are determined to talk this economy down. That is the truth.

[Kevin Brennan (Cardiff West) (Lab)]

What estimate is the Chancellor using for the time lag between his fiscal actions and their effect on growth?

[Mr Osborne]

The decisions that we took in the first few weeks on coming to office provided stability for the economy. That can be seen in the fall in market interest rates and the affirmation of our credit rating. Those things happened within weeks. Of course, some of the structural reforms that we are taking will take longer to come into effect, but that is why our package includes immediate action to bring stability; medium-term action to bring down tax rates, which is happening now; and of course the long-term reforms that I will talk about. That is the point that I should like to make to the hon. Gentleman and others.

I said a year ago, not recently, that the recovery would be choppy. How could it be anything other than choppy, when we are recovering from the greatest recession since the 1930s, the biggest banking crisis in our history, landed with the biggest budget deficit in peacetime? That is the inheritance that the Government has had, and yes, there have been other factors—international headwinds, such as the oil price—[Hon. Members: “Oh.”] Well, there has been a 60% rise in the oil price, which has apparently passed the Opposition by. In the words of the International Monetary Fund, despite all this,

“the repair of the UK economy is underway”,

and the truth is that the Opposition simply do not want to hear it. They broke it, and they cannot bear to see anyone else fixing it.

--- Later in debate ---

[Kevin Brennan]

While the Chancellor is on that subject, can he give a simple answer to a question—yes or no? Did he have advance knowledge that The Daily Telegraph had obtained the shadow Chancellor’s private papers, or any advance knowledge of the stories that it planned to write—as he raised the issue, yes or no?

[Mr Osborne]

This is a debate about the economy. We all enjoyed reading those papers in The Daily Telegraph.

To get the better economy that we all want to see requires the three things that this Government have provided—

--- Later in debate ---

[Mr Osborne]

I will make some progress.

All those policies involved difficult decisions, but they have been opposed by the Labour party. There is one live example that I want to raise: public sector pension reform. The Government want to reform our public sector pensions system to ensure fairness for public sector workers and taxpayers. We asked Lord Hutton, Labour’s former Work and Pensions Secretary, to propose a solution. He produced an interim report and a final report. It is comprehensive, excellent and fair and the coalition Government back it. As everyone knows, we are in negotiations with the public sector trade unions on how it should be implemented. Sadly, a minority of union leaders seem more interested in strike action than in trying to reach a fair deal. At least their position is clear. What is the view of the Labour party? Complete silence. Will someone intervene and answer that?

[Kevin Brennan]

Will the Chancellor give way?

[Mr Osborne]

Right, what is the hon. Gentleman’s view of John Hutton’s report?

[Kevin Brennan]

The Chancellor is not asking the questions; I am intervening. Where is the Chief Secretary to the Treasury? Why is he going out in the middle of negotiations and breaching the good faith of those he is negotiating with? That is the question we need an answer to.

[Mr Osborne]

We are engaged in those negotiations, which the Chief Secretary and the Minister for the Cabinet Office are leading for our side. I have asked a very simple question: does the Labour party back public sector pension reform as set out by John Hutton? [Interruption.] That says it all.