The Growth Plan

Baroness Hodge of Barking Excerpts

Friday 23rd September 2022 Commons Chamber

[Kwasi Kwarteng]

My hon. Friend will know that, through growth, we will get more tax receipts, which will actually reduce the net debt to GDP ratio over the medium term. That is 100% what we are focused on. He is right that in the past we have tended to reduce expenditure on capital projects. We must not do that in the future if we are to pursue our levelling-up goals.

[Dame Margaret Hodge (Barking) (Lab)]

We expect our Government to implement policy based on evidence. As a student of history, the Chancellor will be familiar with Anthony Barber’s disastrous economic experiment in the 1970s. It was the same thing: low tax, deregulation and a desperate quest for growth. All that did was lead to the Barber boom, followed by a big crash and a three-day working week—it turned to bust. The Chancellor is risking all our livelihoods, he is risking our economy and he is risking our public finances on the altar of a discredited ideology. A tsunami of tax cuts and giveaways to 80,000 Conservative members who voted the Prime Minister into office, with little for the 80% of Britons who are struggling and facing a tough winter ahead, is outrageous. According to Einstein, insanity is trying to do the same thing over and over and expecting different results. Can the Chancellor not see that his Budget is madness?

[Kwasi Kwarteng]

No, I think it is perfectly sane to want to grow the British economy by creating incentives. The Barber boom—the right hon. Lady is a student of history—was driven primarily by very loose monetary policy. It was essentially a demand pump-priming experiment. This is the opposite of that. What we are trying to do is create incentives and look at supply-side reform. It is a completely different model.