Charter for Budget Responsibility

Maria Caulfield Excerpts

Wednesday 14th October 2015 Commons Chamber

[John McDonnell]

I could not have said it better myself. Can we move on?

The Chancellor may not appreciate these economic points, but I believe many of his advisers do. That is why there is a sizeable get-out clause for the charter rules not to apply outside normal times when there is a significant negative shock to the UK economy. Not only are the social consequences of this programme devastating, but the scale of the cuts we are witnessing represents a false economy. They jeopardise the long-term economic prosperity of our country. It is a false economy to cut adult social care when the burden is shifted on to hospitals and accident and emergency departments. It is a false economy to pursue an ideological sell-off of council housing eventually to put up the rents and eventually increase housing benefit. It is a false economy, ironically, that when this Government came to office there were 70,000 people at HMRC and within the next year that is planned to fall to 52,000—a cut of more than 25% in the number of tax-collecting staff, when HMRC says that tax evasion is as high as £10 billion a year. But the worst—

[Maria Caulfield (Lewes) (Con)]

Will the hon. Gentleman give way?

[John McDonnell]

If the hon. Lady does not mind, I have taken a large number of interventions. The debate is time-limited. If she has any points that she would like to raise with me, I am happy to meet her separately or write to her. [Interruption.] I am doing my best to be nice. It is the new politics of the Labour party.

The worst false economy is the failure to invest. This will be a direct result of Government policy embedded in this charter, with its limits on all public sector borrowing. Economists from across the spectrum have written and commented on the need for investment for the future. The World Economic Forum ranks the UK 10th for the quality of our infrastructure, behind Germany, France, the Netherlands and Spain. This Chancellor’s strategy has given us investment as a share of GDP lower than all the other G7 countries, falling even further behind the G7 average in recent years.

That is why business leaders, trade unions and a host of others are calling for investment. It is incomprehensible for the Chancellor to rule out the Government playing a role in building our future. For him to constrain himself from doing so in the future, no matter what the business case for a project, has no basis in economic theory or experience.

We also face an uncertain medium-term future for the global economy. In recent weeks there has been mounting evidence of a decline in global demand, particularly in the emerging markets.

--- Later in debate ---

[Maria Caulfield (Lewes) (Con)]

I shall be supporting the charter this evening and I urge colleagues on all sides of the House who want a long-term fiscally responsible country to do the same. My reasons for doing so are that we have just come through a period of record peacetime deficit left to us by the previous Labour Government, while we have had to clear up their legacy of rising unemployment, rising taxation and unsustainable public spending. It has been this Government, first in coalition and now as a Conservative majority Government, who have had to clear up the mess. It is therefore our duty to put in place this charter, so that no other Government have to face a similar situation again, with a post-it note left for Ministers saying there is no money left.

Like many households up and down the country who have tried to put money aside for a rainy day, the Government, with this charter, are trying to do just that. By spending less than the taxation we collect and reaching a point of surplus, we too will have money left for a rainy day, so that if we, as a country, ever face a global recession or another period of economic slowdown, we will have the money left to pay for vital public services. To households up and down this country who manage their own bills in this way, this makes perfect sense: to ensure first and foremost that you do not spend more than you earn, and, where possible, you save where you can.

If this set of economics makes perfect sense to the ordinary man and woman in the street, why are the deficit deniers on the Opposition Benches so confused? The Labour party is too weak to take the difficult decisions needed to cut the deficit, and by voting against this charter Labour Members are proving again that the deficit would go up if they were in government, with more borrowing, more taxation and more debt. The great British public did not trust or vote for Labour in May, and if Labour Members vote against this charter tonight, they are never likely to vote for them again.