Nadhim Zahawi
Main Page: Nadhim Zahawi (Conservative - Stratford-on-Avon)Department Debates - View all Nadhim Zahawi's debates with the HM Treasury
(13 years, 5 months ago)
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Ed Balls
I will take as many interventions as hon. Members want me to, but I am going to establish my argument first. I think that the House knows that I enjoy interventions, and I will absolutely take them all—Members should not worry!
The Chancellor also ignored the fact that we were not in the euro, that our debt maturity was long—
Ed Balls
Whether or not the Chancellor comments, the fact remains that since the last OBR forecast, Britain’s growth forecasts have been downgraded by the International Monetary Fund, the OECD, the CBI, the British Chambers of Commerce and the National Institute of Economic and Social Research. Everybody else is downgrading growth forecasts; we will have to wait for the OBR finally to catch up.
Nadhim Zahawi
I thank the shadow Chancellor for finally giving way. I must push him a little bit harder. When did he discuss his VAT cut with the shadow Cabinet? Will he tell us that?
Ed Balls
That tells you, Mr Speaker, how on the defensive Conservative Members are about the economy. The shadow Cabinet decided—[Interruption.] Look, just shouting does not get people to listen; the hon. Member for Stratford-on-Avon (Nadhim Zahawi) has got to learn that. The shadow Cabinet decided that the Opposition would oppose the VAT rise. In January, the Leader of the Opposition said it should be reversed. Last week, two days before I made my speech, I discussed the matter in detail with the Leader of the Opposition—[Hon. Members: “Aah!”] What do they mean, “Aah”? I discussed it 48 hours previously with the Leader of the Opposition, who backed me 100%—in marked contrast to the Prime Minister’s inability to grasp the detail, to stick with a policy or, most importantly, to support his own Cabinet members.
Ed Balls
The irony of a Conservative MP opposing tax cuts in VAT for families while allowing a tax cut, compared with last year, for the banks, is almost overwhelming. As everyone who studies the figures and not the political spin knows, we went into the crisis with lower national debt than France, Germany, America and Japan. Every country had a rise in its deficit, so of course we did. The fact is, however, that our gilt yields were very low and falling month by month before the general election, even as the opinion polls narrowed—
Nadhim Zahawi
I can inform the Chancellor that, in the west midlands, unemployment has fallen by 28,000 this quarter. At the height of the previous Government’s economic drive, employment in the west midlands still shrank.
Mr Osborne
My hon. Friend makes two good points. First, there was a very welcome recent reduction in unemployment—the biggest fall for a decade. Secondly, he draws attention to one of the most staggering facts about the past decade: private sector employment in the west midlands fell in the decade leading up to the financial crisis. That shows how unbalanced the British economy became under the last Labour Government.
Mr Osborne
Will he answer my question? No? I am not taking an intervention. [Interruption.] The question we have here was put by John Hutton himself—
Nadhim Zahawi
On a point of order, Madam Deputy Speaker. Should not the hon. Member for Rhondda retract the disparaging remark he has just made about the Chancellor?
Madam Deputy Speaker (Dawn Primarolo)
Nothing has been said that is unparliamentary, but some of the behaviour in the Chamber could be a little better than it is currently. That is not a point of order for me, but a matter for each Member of the House.
Nadhim Zahawi
That goes to the heart of this debate—the credibility that the shadow Chancellor talks about. The public are deaf to the Opposition’s arguments because of their political opportunism and the cynical way in which they are dealing with the most important issue facing our nation.
Mr Osborne
My hon. Friend is absolutely right, and I am glad that I gave way to him so that he could make that important point.
Ms Angela Eagle (Wallasey) (Lab)
We have had an interesting debate. On this very day a year ago, the Chancellor came to the House to announce what he and his spin doctors from Tory central office characterised for reasons of base propaganda as his unavoidable Budget. In reality, they and he knew that it was nothing of the kind. He used such misleading language because he wanted to disguise the central feature of his purpose that day. His aim was to create the image of a Chancellor with little option, as he fought to defend the country from the attentions of the bond vigilantes, stalking the world’s treasuries, looking for countries to kill.
In fact, the reality was very different. The Chancellor deliberately talked up the dangers in the bond markets by irresponsibly claiming that Britain had been on the brink of bankruptcy. He knew then, and he knows now, that it was all overblown rhetoric designed to disguise the fact that his Budget was actually a political choice made by the Conservative-led Government and their Liberal Democrat human shield, and it was an extreme choice. At a time when the economic recovery had not been locked in, he made a political choice to embark on a programme of tax increases and spending cuts greater than any which had ever been tried in Britain’s peacetime history.
Ms Eagle
No, I will not give way.
The Chancellor’s choice to cut further and faster than was economically necessary ensured that the UK plan to deal with the deficit went from one that was in line with the plans of other G20 countries to one that was far more extreme than anything undertaken in any other advanced economy. In other words, it was a reckless and risky experiment with our economic future.