Budget Resolutions

Debate between Liam Byrne and Mark Harper

Wednesday 11th March 2020 Commons Chamber

[Mr Mark Harper (Forest of Dean) (Con)]

It is a great pleasure to follow the right hon. Member for Birmingham, Hodge Hill (Liam Byrne), because I did not spot in his remarks his declaration of interest as the opponent of the fantastic Andy Street in the west midlands mayoral contest, which coloured his remarks—

[Liam Byrne]

It is not a financial interest.

[Mr Harper]

I was teasing. It is also a great pleasure because one would not know from listening to the right hon. Gentleman’s remarks and criticism of our economic record that he was, of course, the outgoing Chief Secretary to the Treasury who had to write the note reminding us all that there was “no money”. [Interruption.] I hear the groans from Labour Members, but it is worth reminding them that the difficult decisions we had to take from 2010 onwards were all because we were left an unsustainable budget deficit, the highest in the developed world, and it had to be dealt with.

[Liam Byrne]

The right hon. Gentleman is a sophisticated thinker, so I will give him a sophisticated intervention. The judgment that had to be made in 2010 was how we closed the deficit. We said that one third of it should be closed by spending cuts and two thirds of it by taxes. The former Chancellor George Osborne changed that judgment, seeking to close 90% of the deficit with spending cuts. That slowed the economy and meant that instead of having falling debt by 2016 we still had rising debt. The judgments were wrong, which is why things went off track.

[Mr Harper]

I fundamentally do not agree with the right hon. Gentleman on that, and I will come on to say a little about tax in my remarks. I do not agree with him because the tax burden is very high and was then. I forget which Opposition Member alleged this, but we have never said that the financial policies of the Labour party in government caused the financial crisis, as that was a much more complicated problem. Our criticism of the Labour Government, particularly under Gordon Brown as Chancellor, was that they assumed when they made their spending judgments that there would be perpetual economic growth and that there would never be a downturn. The root problem is that they were spending too much money, assuming that the tax revenues would continue forever, and when the financial crisis happened and the tax revenues fell, we were spending too much money. That had to be dealt with and we had to make the necessary decisions.

--- Later in debate ---

[Liam Byrne]

I just want to say that the Conservative party backed our spending plans up until November 2009.

[Mr Harper]

I do not agree with that either. We had to make some difficult decisions when the crash happened and they were the right decisions. As the Chancellor set out today, because we made those difficult decisions and put the economy in good shape, we are well positioned to deal with the challenge facing the country and the challenge of tackling the coronavirus.