Living Standards

Debate between Kwasi Kwarteng and Gloria De Piero

Wednesday 4th September 2013 Commons Chamber

[Kwasi Kwarteng]

Absolutely right. My hon. Friend mentions hypocrisy, and I think that has framed the approach of Labour Members on this issue. They have spoken really from either side of their mouths. On one hand they decry the difficult measures that we have had to implement and, on the other, they refuse to apologise or accept any responsibility for the appalling fiscal situation that they bequeathed to this Government.

[Gloria De Piero (Ashfield) (Lab)]

How did the hon. Gentleman feel when he learned in April that bonuses in finance and business services rose by 82.2% compared with the same month a year ago?

[Kwasi Kwarteng]

The hon. Lady will remember that the bonus pool under the Labour Government was far bigger. It was outrageous. Indeed, it was Lord Mandelson who suggested that he was very relaxed about people getting “filthy rich”. That was the legacy of new Labour: debt, credit, massive bonuses and a totally irresponsible way of running the economy. Such irresponsibility is largely responsible for the situation we are in. We have had to follow a deficit reduction strategy. That is working and the deficit has fallen by a third over the past three years, from £160 billion to about £115 billion. That is a signal success. We see not only deficit reduction, but—the jury is out on this, but I am confident—economic recovery. This is very successful stewardship of the economy. It is not only Government Members who agree with that assessment. Let us look at the opinion polls. Even though it is true that Labour is maintaining a slim lead, on the economic question and the question of the credibility of economic policy, Labour, and the shadow Chancellor and Leader of the Opposition as a team, consistently under-poll the Chancellor and Prime Minister as economic stewards, because the public have not forgotten the appalling mess that Labour left behind. Despite three difficult years, the public refuse to accept that Labour has any ideas or solutions to our difficult problems. They are well aware of the appalling fiscal situation that Labour Members left behind.

Let us look at some of the figures on fuel duty increases. We have suspended the fuel duty escalator and prices have not gone up. We have taken many low-paid people out of the tax system. People will recognise that the Government’s efforts have been partly successful. We have not reached the promised land and the goal that we set, but we are getting there. People realise that any return to the Labour policies of spend, borrow and spend even more will be fatal to the recovery. The hon. Member for Coventry North West (Mr Robinson) mentioned killing off the recovery. The quickest way to kill off any recovery would be a return of the Labour party to government. In my view and the view of many of my constituents, that would be a form of national economic suicide. As a nation, we must address and debate living standards, but we must also put them in the context of the appalling economic and fiscal situation that Labour Members left behind. It is hypocritical and disingenuous of them to blame the coalition Government for the mess they created and bequeathed.

Finally, I should say a few words of optimism. It is clear that there is a renewed sense of optimism in the economic community. I am not rash enough to suggest that the path ahead will be smooth. There will be checks and times when there are doubts, but the general trend and direction is clear. The latest Office for Budget Responsibility forecast, from March—it seems likely to be upgraded—predicted that average earnings in 2014 would increase faster than consumer prices index inflation. It also predicts that, by 2016, living standards will be growing twice as fast as inflation. We might well have reached an inflection point that will prove the success and wisdom of the Government’s polices.