Amendment of the Law

Lord Mann Excerpts

Thursday 24th March 2011 Commons Chamber

[Ed Balls]

The hon. Gentleman knows the answer. We went into the downturn with a deficit that was low and covered our borrowing for investment. [Interruption.] It was low. We had low national debt—lower than France, Germany or Japan. We then had a global financial crisis, which hit the American and British economies hard. Our economy had a larger financial services sector than others—that was precisely why we did not join the single currency in 2003—so of course America and Britain were harder hit than other countries by the financially driven recession.

If we had not let the deficit go up, which some hon. Members now seem to think we should not have done, the result would have been unemployment above 3 million rather than it peaking at 2.5 million. The economy would have gone from recession into depression. That is the economics of the situation. The question is, who did a good job of getting the deficit down? We had the deficit coming down, unemployment coming down and growth going up, but a year later we have unemployment going up, inflation going up and the economy ground to a halt. As a result, borrowing will be £45 billion higher, not lower.

[John Mann (Bassetlaw) (Lab)]

My right hon. Friend may be able to assist me with some statistics that are missing from the Government’s document “The Plan for Growth”. I can see nothing in it about what has happened in the past 15 years. The chart showing growth under the last Government is missing. Similarly, there are no international comparisons showing what is happening to our growth compared with other countries, and what was happening under the last Government.

[Ed Balls]

The reality was that we had a long period of sustained growth and low inflation, and we reversed the high unemployment of the 1980s and 1990s. We put behind us the instability of the Tory years by making—[Interruption.] If the Chancellor wants to make an intervention, we are still waiting.

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[Vince Cable]

I would have thought that Opposition Members who want the economy to flourish and new jobs in their constituencies welcomed the fact that I and other Ministers spend a lot of our time talking to potential inward investors. That is good not only for them but for the British companies that then become part of their supply chain and whose confidence is reinforced.

Especially for small businesses, growth requires the Government not to put unnecessary obstacles in the way. When we searched the archives, we discovered that we had inherited a stock of 21,800 regulations and that the last Government were responsible for roughly 10,000 of them. Rather sad people like me who have spent some of the best years of our political lives in Statutory Instrument Committees will have seen all of that happening.

We have taken action to stop the gold-plating of EU regulations, to ensure that every new regulation is matched by the value of an “out”, and to mandate sunset clauses. We have launched a reform of the expensive and time-consuming tribunal system, and we have injected common sense into Health and Safety Executive inspections. The Budget confirmed the statement I made last week that there will be a three-year moratorium on new regulation affecting micro-businesses with fewer than 10 employees.

[John Mann]

You should be ashamed of yourself.

[Vince Cable]

Not at all; we should be proud of lifting regulation from small companies that generate employment, which every Member should be concerned about.

[John Mann]

Will the right hon. Gentleman give way?

[Vince Cable]

No, I have taken a lot of interventions, and the hon. Gentleman has already made his intervention from a sedentary position.

The role of government is not only to get out of the way when they are blocking growth, but to intervene when there is a genuine market failure. Training is one such area, and we are seeking to alleviate the problem by supporting apprenticeships. When we came into office, 150,000 apprenticeships were planned for 2010-11 to be part-funded by government. We have increased that number, even in an environment of cuts, by 75,000 over the spending review period and in this Budget we have added another 50,000. The problems of training are massive. Let us remind ourselves that we inherited a system in which 14% of the adult population have poor literacy skills—we are talking about the reading age of a 12-year-old—and 19% have grossly inadequate mathematical skills. That is the base from which we start. [Interruption.] A lot of people, both in this House and outside it, would take this issue of innumeracy among the public much more seriously than the Labour Front-Bench team.

In the Budget, the Government have also invested further in science, particularly in research infrastructure. Through a combination of policies—the protection of the ring-fencing of the science budget; the legislative action to protect scientists and others from libel action; and the launching of the technology and innovation centre and advanced manufacturing—we have made a very firm declaration of support for the science community and the commercial application of science.

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[Vince Cable]

I probably was going to disappoint my right hon. Friend, because the Chancellor covered those issues very well yesterday. However, there is a lot more where that came from.

[John Mann]

rose—

[Vince Cable]

I am not going to take any more interventions.

I return to the issue of fairness. When we first came into office, the major attack from the Opposition was that we were going to hit the poorest hardest. When it became clear that we were producing policies to protect the state pension, increase child tax credits, give preferential treatment to low-paid workers in the public sector and lift low-paid workers out of tax, attention shifted to the so-called “squeezed middle”, which has been variously defined to encompass 90% of the population.

The truth of the situation is that as a result of the financial crash and the recession that followed, Britain is a significantly poorer country than we were several years ago, so living standards have been squeezed. As the Governor of the Bank of England said,

“the real consequences of this crisis are only now beginning to be felt.”

What we have done in the Budget is take concrete action on fuel duty and on lifting the thresholds at which low earners pay tax. I shall dwell on that point a little—