Autumn Statement

Lord Clarke of Nottingham Excerpts

Wednesday 3rd December 2014 Commons Chamber

[Mr Osborne]

With that performance, we see why the right hon. Gentleman is totally unfit to be put in charge of the nation’s finances in six months’ time. We have had an object lesson in how not to plan an autumn statement reply before hearing the autumn statement. That was what he expected to hear, as we know because he went round the TV studios over the past few weeks predicting it. He said that the deficit would go up this year. He said it last month, he said it last week, he said it on Sunday. I have his words. He said that the Chancellor is going to have to make an autumn statement where he is

“going to have to say that the economy is weakening, the deficit is getting larger”.

I have just quoted independent forecasts which show that the economy is stronger, the deficit is falling and the debt is lower in every future year. The shadow Chancellor got it completely wrong.

It is hardly surprising that his party has such low economic credibility when the shadow Chancellor repeatedly makes predictions about the British economy that turn out to be completely wrong. No more boom and bust, he said—wrong. A double-dip recession, he predicted—completely wrong. He has spent the past three months betting the entire credibility of the Labour party’s response to the autumn statement on the prediction of a massive deterioration in the public finances and the deficit going up, and he got that completely wrong. People say there is a split in the leadership of the Labour party. They are right. It is between people who get the deficit figures completely wrong and people who forget about the deficit altogether.

The Opposition have no economic credibility and they have policies that show that they are not up to the job. The shadow Chancellor mentioned his homes tax. We still do not know what the Labour party’s view is of the stamp duty reforms. I guess we will find out in the next few days. We do not have a clue what its views are on the postgraduate changes or the infrastructure investments that we have announced. The right hon. Gentleman spoke about his homes tax. This is what the Labour party thinks about his homes tax. The Chair of the Public Accounts Committee says:

“I don’t think it’s the world’s most sensible idea.”

The former Housing Minister, the right hon. Member for Greenwich and Woolwich (Mr Raynsford), says that it hits the “cash poor”. The right hon. Member for Tottenham (Mr Lammy) says it is “a tax on London”, and the right hon. Member for Dulwich and West Norwood (Dame Tessa Jowell) says:

“Let’s stop calling it a ‘mansion tax’…these are family homes”.

One of Labour’s council group leaders summed it up best when they said it was “completely bonkers”. That is the housing policy—to put taxes on housing.

The shadow Chancellor asked about our tax cut on apprentices. His jobs tax policy is to increase national insurance. He talks about pensions. His pensions policy is to tax pensions. He asked me a couple of questions about savings in the public finances. I was hoping that he was going to give me some suggestions for savings that we can make in the public finances. I have had to do a bit of research myself about what his party’s policy is.

The Opposition have conducted what is called a zero-based review for the past year and identified two surplus assets that the Government should sell. The first is the Queen Elizabeth II conference centre. The shadow Chancellor first proposed selling that in 2001 and seems to have forgotten that it is the only bit of Government that pays us an income. The other thing they found to pay down the national debt—it is in the Labour party document—is a restaurant in St James’s park, estimated to be worth £6.7 million. That is 0.005% of the national debt, so their national economic policy is literally out to lunch.

That is the problem that we have seen in the right hon. Gentleman’s reply. He has absolutely no answers to the economic challenges that Britain faces. He has no credibility and no workable policies because Labour has no workable plan. We are five months away from a general election in which people will have to choose their Government. The most serious responsibility incumbent on anyone seeking office is to show that they can provide economic stability to the nation and protect the families who live here. The Opposition do not have a clue how to do that. They do not have a plan. Their whole response today shows that they would take Britain back to square one. Britain has pulled itself out of the economic crisis that the shadow Chancellor created, and we are not going to let him take us back there.

[Mr Kenneth Clarke (Rushcliffe) (Con)]

Does my right hon. Friend recall, as I do, that the shadow Chancellor was the right-hand man of the Chancellor who presided over the credit crunch, the banking collapse and the incurring of the biggest deficit in the G20, and does he not find his conversion to rigid fiscal discipline and the pursuit of fiscal surpluses absolutely quaint and ridiculous?

On a more serious note, my right hon. Friend is proposing to devolve considerable powers, in a very welcome way and to varying degrees, to the different nations and cities of the United Kingdom. Can he reassure us that he will combine that with firm and enforceable commitments to financial responsibility so that he and the UK Treasury can retain overall responsibility for the stability of sterling and our economy, because not every local government Labour leader can be trusted to follow the clear and effective path that he has followed in getting our debt back under control?

[Mr Osborne]

My right hon. and learned Friend makes a good observation about the shadow Chancellor’s career. I should pay tribute—probably for the first time—to the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), who this week announced his retirement: first, for his commitment to advancing international development and to British aid, which I fully support; and secondly, because when he was shadow Chancellor, as we all remember, he built up a really compelling case for fiscal discipline. That, in part, is why the Labour party won the 1997 general election. That stands in such marked contrast to the shambles we see from the pair sitting opposite me now, who subsequently advised him.

On my right hon. and learned Friend the former Chancellor’s good point about devolution, of course both local government and the different nations of the United Kingdom—the devolution arrangements apply to both—will have in place robust arrangements that protect taxpayers across the United Kingdom. That is certainly an important part of the Smith commission report and how we must take it forward. It is also at the heart of the devolution settlements that we have discussed with English local authorities.