Jobs and Growth

Nadhim Zahawi Excerpts

Wednesday 12th October 2011 Commons Chamber

[Ed Balls]

I am not sure about 1830, but if the hon. Gentleman was in the House in 1930—he might have been—he will know the dangers of very low bond yields accompanied by rising national debt, rising unemployment and economies locked in stagnation. I do not know whether he was around at the time, but some forefathers and foremothers certainly were. Let me quote the director of the National Institute of Economic and Social Research, the think-tank of the year, who said:

“The reason people are marking down the gilt yields is because they think that the economy is weak.”

That is the truth.

Let me make a prediction. I do not expect the Chancellor to announce a change of course today, but will we hear him repeat his boast made this time last year that the British economy’s recovery is on track? I doubt it. Will he repeat the Prime Minister’s deeply complacent boast that Britain is out of the danger zone? I doubt that, too. Will he describe Britain as a safe haven that is immune from the global storm? Will he repeat his naive forecast that cutting public jobs will boost private confidence and create more private jobs? Even this Chancellor cannot fly in the face of the facts. Employment has fallen in the past 12 months. On the day when unemployment has risen again, will he give any indication that he understands at all how hard things are for families up and down the country? Is he so out of touch that he really believes that a £1.40 a week council tax freeze can compensate for a £9 a week rise in VAT?

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

On unemployment in manufacturing, why does the shadow Chancellor think that manufacturing was 21% of GDP in 1997 and 12% when Labour left office?

[Ed Balls]

Well, unemployment has fallen as a percentage—[Interruption.] As I said, that whipping operation knows no bounds. I was hoping that the hon. Gentleman was going to repeat what the hon. Member for West Suffolk (Matthew Hancock) said earlier this year. He said that

“manufacturing is expanding under this Government”.—[Official Report, 23 March 2011; Vol. 525, c. 1024.]

The trouble is that manufacturing output has fallen in every one of the past three—[Interruption.] I am going to agree with the hon. Member for Stratford-on-Avon (Nadhim Zahawi), who wrote on his blog that

“deficit reduction alone isn’t enough. If we are to smooth the waters of this choppy recovery we need to ensure that we also support sustainable growth in the private sector.”

Where is that growth? Will the Chancellor repeat his claim that—

--- Later in debate ---

[Mr Osborne]

The policies that we have set out deliver the low interest rates that are essential for economic growth.

[Nadhim Zahawi]

The shadow Chancellor has quoted the IMF. Why does the Chancellor think that the Labour party voted against our subscription to the IMF? Why did the Labour Government not put their best people to work to deal with the deficit and the debt, but instead hire 17 people and spend £4.8 million on the euro preparation unit?

[Mr Osborne]

My hon. Friend reminds me that one of the first things I did in the Treasury was shut down the euro preparation unit. More importantly—