Amendment of the Law

Debate between Neil Parish and Geoffrey Robinson

Thursday 20th March 2014 Commons Chamber

[Mr Robinson]

I will come to that in a moment, although the hon. Gentleman may have been here when I intervened on the Secretary of State on that precise point.

Let us examine the borrowing record, as borrowing should have been central to all this. Because we have been able to have more investment and more exports—capital investment and exports—we should have growth, which would reduce the borrowing. In fact, over the four-year period, with us now entering the five-year period, we are going to borrow nearly £200 billion—the figure is £190 billion—more than we projected. We were to reduce borrowing as a percentage of GDP, but even in the next two years—years 5 and 6—it is projected to go up as a percentage of GDP. As for balancing the budget, that has been pushed out by a further two years. This is not a plan that has succeeded; it is a plan that has failed in almost every respect.

There is one exception—the hon. Gentleman referred to it and I also challenged the Secretary of State precisely on it during his speech: the employment record, particularly in the private sector, is remarkably and surprisingly good. I do not want to get into how many jobs are part-time, zero-hours contracts and so on. The fact is that the labour market has shown itself to be much more retentive of labour and productive of labour than we expected. For anybody in this House or in the Government, or on any of the other projections indicated from any sector, the performance is quite encouraging, except in one crucial respect: it suggests that, given where output is relative to employment, we have suffered a dramatic loss—probably for the long term, for all we know—in the productive capacity of the economy and in the productivity of our labour force. Unless that can somehow be rebuilt—there is nothing at all in the Budget to address that point—we are in for a much longer and slower recovery than we could have achieved. That is a big disappointment. The Secretary of State analysed it willingly, but the Office for Budget Responsibility itself says, “There’s nothing here that’s going to make any difference to the forecast we made a year or so ago.”

In other words, we have done nothing and are proposing to do nothing, to address the central issue of the productive capacity of the economy, which would underpin, sustain and increase our recovery rather than hold it back. There is nothing in the Budget that will improve that. Of course there are a couple of measures that we welcome, including the increase in capital allowances. I never understood why they were cut in the first year. We viciously opposed it at the time. We also approve of the improvement in export financing. However, there again, the Chancellor and the Government have form on those issues. They introduced two similar export financing schemes, one of which was strangled at birth and the other helped just five firms. I hope the Government are serious this time. We do not want to see imaginative and quite substantial measures being choked off by the bureaucrats.

[Neil Parish]

The hon. Gentleman has been making many predictions. The shadow Chancellor said that our policies would mean 1 million fewer jobs, and yet we have created 1 million more jobs. Will he comment on that 2 million credibility gap?