Budget Resolutions and Economic Situation

Debate between Liam Byrne and Steve Baker

Friday 22nd March 2013 Commons Chamber

[Mr Byrne]

The words of the chief economist Olivier Blanchard are clear: the Government are on the wrong fiscal path, and we know that the Business Secretary agrees with us.

[Steve Baker (Wycombe) (Con)]

The right hon. Gentleman is telling a tale of catastrophe. I do not doubt that the country is awash with suffering, but may I draw his attention to UK industrial production, which is at a 20-year low? The point is that it collapsed under his watch: UK industrial production collapsed to a 20-year low under his watch. Will he not just admit that it was his Government who dropped us into this mess?

[Mr Byrne]

We have unemployment rising and debt that is £245 billion higher than forecast. The hon. Gentleman should be ashamed of that record.

We needed a Budget to get unemployment down and we did not get one. I hoped to see a Budget that delivered for those who are out of work, but what did we get instead? The conclusion of the OBR was clear that the impact of the Budget on growth would be so significant that it would amount to precisely zero. That is what the Secretary of State has managed to negotiate from the Chancellor. He has been turned over, stitched up and done like a kipper yet again.

Any sensible Secretary of State, faced with a collapsing Work programme and rising unemployment, would surely ask for more help today, not tomorrow. People out of work need help today, not in the years to come. What did we see instead? The OBR has weighed up the efforts of the Secretary of State and the Chancellor and it has concluded that what is in hand is going so well that unemployment will not go down next year, but up—and that is against the projections set out in the 2010 Budget. Next year the International Labour Organisation measure of unemployment is expected to rise from 7.9% to 8%, and the claimant count is set to rise by another 50,000. What is even worse is that the OBR says that the welfare bill will not go down either—it will go up, including for housing benefit. Spending on social security benefits will now be £21 billion higher than the Chancellor first planned.