Oral Answers to Questions
Debate between Kwasi Kwarteng and Phil Wilson(5 years, 1 month ago)
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Phil Wilson (Sedgefield) (Lab)
Sedgefield is home to the largest business park in the north-east of England, with 500 companies and 10,000 to 12,000 jobs. More than 50% of the jobs and businesses there rely in some way on trade with the EU. If the Secretary of State has her way and there is no more frictionless trade with the EU, no more customs union and no access to the single market as there is now, does she not have a responsibility to publish an economic assessment on the effects that will have on my constituents’ jobs?
amendment of the law
Debate between Kwasi Kwarteng and Phil Wilson(10 years, 8 months ago)
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Kwasi Kwarteng
That is absolutely right. The right hon. Gentleman’s principal fault was that he thought he had abolished the business cycle—no more boom and bust. He essentially believed—and it is incredible to think he did believe this—that he had discovered perpetual motion and that the laws of economics and of economic gravity had been suspended or abolished. That was the problem we were in: we were borrowing money even when the economy was growing. In 2004 I recall the economy grew at 3%, yet we ran a deficit of 3%. There is no Keynesian in the world who would suggest it was a good policy to borrow 3% of GDP when the economy was growing, yet the previous Government persisted in doing that.
Kwasi Kwarteng
It is quite true that the economic and financial crisis that hit in 2007-08 was a global phenomenon, but our country was in the worst position of any in the OECD to deal with that problem because of the poor management of our public finances in the six years before the crisis hit.
Germany is not a bastion of hard right-wing fiscal conservatism, yet it managed to reduce its spending right through the first decade of this century. It started to reduce public spending in 2004 and 2005. Today the Federal Government have a balanced Budget because of the prudent housekeeping and fiscal management of the previous German Government, first under Schröder and the Social Democratic party and then continued under Merkel. By contrast, in this country at that time we saw a total dereliction of duty by the Government.
Kwasi Kwarteng
We saw an expanding public sector, big public expenditure and tax revenues which frankly could never meet the expenditure that the Government were embarked upon. So talking about what happened in 2010 can never be repeated enough times and must never be forgotten: in 2010 this coalition Government inherited the biggest deficit in our peacetime history.
Kwasi Kwarteng
I can see that Members opposite are eager to intervene and rightly so, because that was a shocking record of public financial management, and they are absolutely right to be indignant about what I am saying because it is the simple truth. They fell asleep at the wheel and left this country with an enormous deficit.
Phil Wilson
If what the hon. Gentleman is saying is true and he has the answer to everything we did wrong, why did the current Chancellor—the then shadow Chancellor—agree with our expenditure plans in 2008?
Kwasi Kwarteng
I have publicly said that I think that was a mistake. It was a mistake to stick to Labour’s spending plans when we were running six or seven years of straight deficits. I do not understand how that makes any sense in financial management terms.
Kwasi Kwarteng
No. The hon. Gentleman has had his say and I want to finish my speech, given that I have little time left.
It is very important that we remember exactly what the last Government did. In 2010, as everyone remembers, we had a deficit of £160 billion, which was the largest peacetime deficit. It is a remarkable testament to this Government that they have managed to reduce it by a third and at the same preside over economic growth. That is an extraordinary record, and I am very happy to meet my constituents and seek re-election on that basis.
I know that we should not be too obsessed with polls, but the one consistent thing emerging from the polling evidence over this whole period is that the British people consistently blame the last Government for the deficit and for the economic crisis we are in. There is an intuitive understanding that the Labour Government spent too much money, and that this coalition Government have been elected with a mandate to sort out the mess that Labour made. Intuitively, people across our constituencies get this, and that is why the Labour party, even through all these difficult times, continues to perform very poorly in the opinion polls and has yet to win the confidence of our countrymen and women.
Industry (Government Support)
Debate between Kwasi Kwarteng and Phil Wilson(14 years, 5 months ago)
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Kwasi Kwarteng
During the 2005 election, we were—[Interruption]. If I may continue.
The general Aladdin’s lamp approach was shown to be absurd. As the then Government kept rubbing the lamp and the genie came out, they asked for money, but the genie suddenly became rather less giving. At one point, the genie—in form of the right hon. Member for Birmingham, Hodge Hill (Mr Byrne)—wrote a letter and said, “There is no money. We have run out of money.” The reason why we have done so is simply that we were spending too much.
I have a Methodist background. My mother is a Methodist lay preacher, and she would tell the Sunday school, which I attended, about the seven fat years and the seven lean years. Those hon. Members who know the Old Testament will remember that Joseph had a dream in which he dreamt of seven fat cows and then the seven lean cows. [Interruption.] This is not very complicated; it is quite simple actually, so please bear with me. I know that Labour Members have concentration problems sometimes. I am sorry—it was a long time ago. The pharaoh had the dream and he spoke to Joseph. [Interruption.] This is very important and interesting. He asked, “What does this mean?” and Joseph said very simply, “You will have seven fat years and seven lean years.” The whole point is that we are meant to save money in the fat years, so that we can spend it in the lean years. The Labour Government comprehensively failed to do that. They thought that the fat years would run indefinitely. They thought that they had abolished boom and bust.
The point of telling that simple story is to show comprehensively the reason for the cuts mentioned by the hon. Gentleman—I forget his constituency. [Hon. Members: “Sedgefield.”] I apologise; I was perhaps confusing him with another Member for Sedgefield. The hon. Member for Sedgefield (Phil Wilson) referred to them as Tory cuts, but the simple story of Labour’s failure to rein in Government spending in the boom is why we must make these cuts. They are not coming out of the blue or from savageness.
Phil Wilson
I was pointing out that, because of Government intervention, we were creating jobs, especially in the north-east of England, through the regional development agencies. We were not creating poverty; we were creating growth and prosperity. We took action when we were in government before the last election, and 500,000 fewer people are out of work than if we had not done so.
Kwasi Kwarteng
With respect, the idea that, somehow, our wealth was purely predicated on Government spending is exactly the principle that Conservative Members have problems with.