Budget Resolutions and Economic Situation

Debate between Lord Tyrie and Kevin Brennan

Tuesday 22nd June 2010 Commons Chamber

[Mr Tyrie]

In my new job, I am doing my best to avoid putting things in such trenchant terms, but I feel that not enough has been accepted by the Labour party about the scale of the mismanagement on the economy—requiring us to do something about it now.

This was an astonishing and phenomenal Budget—a tour de force. It really was a further addition to the early economic radicalism of the coalition Government. We have already had announcements about a complete overhaul of financial regulation and an innovative body, the Office for Budget Responsibility, has been created. We have also had announcements about vigorous action being taken on the deficit as well as major proposals for tax and benefit reform. The first of these measures is needed, among other things, to change the culture. The politics of plenty have to give way to the politics of thrift in Whitehall. That, above all, is why it is right for the Government to make the £6 billion-worth of cuts.

On the second of the measures that I have just mentioned, we must have tax reform and simplification if we are to have any chance of improving Britain’s long-run growth rate, which has been imperilled by immense complexity in the tax system.

[Kevin Brennan (Cardiff West) (Lab)]

On taxation, when the Prime Minister said on 1 April, when he was the Leader of the Opposition:

“Our plans don’t involve an increase in VAT”,

did the hon. Gentleman believe him?

[Mr Tyrie]

As I recall, all three parties talked about having no plans to increase VAT, and it would not have surprised me a scrap, had the positions been reversed, if we had had an increase in VAT. How would Labour have filled the £45 billion deficit? We have not heard a word on that. That brings me to a point that I had decided, on the grounds of non-partisanship, not to make, but that I now think needs to be made. It was irresponsible and damaging to British democracy not to have had a spending review on which to judge the decisions to be taken. In my current job, if I were to find the coalition Government as evasive as that, I would do everything in my power to call them to account and to make sure that they told us the facts.