The Economy

Priti Patel Excerpts

Thursday 22nd March 2018 Commons Chamber

[Priti Patel (Witham) (Con)]

This should be a serious debate, given that future generations will look back at the economic situation over the past decade, and to the political leadership that we have all given, and ask this generation, “What did you do to secure our economic future?” I am therefore pleased to be able to contribute.

As my right hon. Friend the Chief Secretary to the Treasury said, 10 years ago this month, the last Labour Government introduced a Budget. The then Chancellor of the Exchequer, Alistair Darling, in his Budget speech in this Chamber, promised

“stability, now and in the future.”

He committed the then Government to

“maintain stability through the world economic slowdown.”

He proclaimed:

“Britain is better placed than other economies to withstand the slowdown in the global economy.”

He also forecast that

“the British economy will continue to grow throughout this year and beyond.”—[Official Report, 12 March 2008; Vol. 473, c. 285.]

That year’s Budget committed to £43 billion of borrowing. The then Chancellor forecast that that would fall to £38 billion in 2009-10 and then continue to fall to £23 billion in 2012-13. What followed was the deepest recession in modern history, which hit Britain harder than most. Of course, it led to a sharp increase in unemployment, destroying the life chances of a generation of young people. As we know, borrowing did not fall, but rose to record levels, going on to add over £150 billion a year to the national debt—and that was when the moderates were in charge of the Labour party.

Since 2010, the responses of the Labour party to our Budgets and fiscal statements have moved further and further towards the hard left. Over the past year, we have heard the Leader of the Opposition, the shadow Chancellor and other Members make reckless and irresponsible pledges and commitments. They fail to understand that the more we tax and borrow today—guess what?—the more that costs the country in the long term. Higher borrowing today means less money to invest in key frontline public services tomorrow. That approach to fiscal policy wiped more than 5% off the economy during the last downturn. The British public should be in no doubt of what that would mean for the long-term health of the economy, with more services starved of cash, and greater suffering when it comes to jobs, economic growth and prosperity.

This Government, through what was then our long-term economic plan, went out to reset the nation, and to support economic growth and investment. That growth and investment was possible, of course, as a result of very courageous decisions that led to unemployment falling, more young people in work than previously, and a record 32 million people in jobs. Growth has been steady and sustainable, and more businesses are being set up. Thanks to that economic plan, in my constituency there are 17% more enterprises than there were in 2010, and the claimant count is 70% lower than at its peak under Labour.

Let us not say that the job is done, however, because it is not. There is much more to do. The economic downturn created long-term damage to the public finances. It also led to something else that this generation of politicians must address: it damaged trust in politics. It threw open questions about the relationship between power and wealth throughout our society. There was a re-evaluation of the traditional economic models—monetary models, fiscal models and how we invest—but we have also seen quantitative easing, which has worked through the economy, making possible a new era of low borrowing costs and cheap debt, which has affected the burden of household debt.

We have a country with tensions between those who benefited from the boom years, whose assets have appreciated, and a generation under 40 who have effectively inherited a broken model of public finances and are now struggling for a secure prospect of owning assets and having a home of their own. That is why this Government need a radical economic vision—a challenge for us all—to really take the Conservative Government forward; to energise an economic revolution across our country that embraces freedom and opportunity; and to provide the next generation with the prospect of being able to provide for themselves, invest in housing, and hopefully raise a family as well—something which many of us have historically taken for granted, and which, of course, young generations want to do. They want to have the freedom to succeed. They want to have the economic freedoms that across the generations we have been able to take for granted.

People whom I meet day in, day out, tell me that they do not want a Government who tinker at the edges or the margins. They certainly do not want a Government who believe in the “nanny knows best” approach—centralisation and the command-and-control politics of the left. They want radical policies to tackle injustices in our country, to deal with the housing crisis, to promote genuine competition and choice in utilities, banking and other services, and also, importantly, to put families, consumers and entrepreneurs first. That means a coherent economic programme to tackle the underlying economic causes of the injustices that people feel today. It also means a more distinctive Conservative programme of economic reforms: opening up markets to new entrants; empowering consumers; setting free the power of technology and innovation; empowering local leaders across our communities; offering economic devolution across the country; accelerating housing and public transport investment; empowering and incentivising policies across the full spectrum of the public sector; and demonstrating leadership and reform alongside a skills revolution, a training revolution and education, supporting the practical impact of lifelong learning that future generations will experience.

My right hon. Friend the Chief Secretary spoke about the inspirational political leadership in the 1980s that adopted a bold policy of redistributing economic power and opportunity, and putting it in the hands of the people, when Britain became a share-owning and property-owning democracy. Of course, it was Margaret Thatcher who led that economic revolution. I pay tribute not just to the former Prime Minister, but to my right hon. Friend the Member for Wokingham (John Redwood), who was one of the economic advisers at the time, for putting power back in the hands of consumers and the public.

We must always be radical and reforming in government: shaking up the status quo and empowering consumers; unleashing the power of technology and innovation; and opening up markets here and around the world to new entrants, and a new cycle of growth and prosperity. Now, more than ever, for future generations, it must be our national mission to lead a new wave of economic reforms that ensures that we keep taxes low for families and businesses, provide more choice in public services, put pupils and patients at the heart of our education and health services, and back more reforms to skills and training to ensure that school leavers do not just have opportunities but become the market makers of the future. We must ensure that people can upskill and retrain in later life to enable them to adapt to a changing, vibrant economy.

We also need to continue our programme that empowers Mayors and local councils with more powers and freedoms to retain the proceeds of local economic growth. Our economic strategy must drive growth. Infrastructure bonds and other financial measures can be used to invest in infrastructure and regeneration throughout the country, and that programme grows the economy through investment in the country’s key strategic infrastructure, such as the great eastern main line, the west Anglia line, the A12 and the A120. We must ensure that we get Britain not just moving again, but accelerating in the 21st century.

We must be ambitious for British companies, both at home and abroad, and give dynamic innovators and wealth creators the freedom to succeed. Our economic freedoms matter, which is why this Government must continue to bang the drum for British businesses, of every shape and size, every minute of the day. British firms want to know that their Government are on their side no matter what, and that has to be at the heart of our economic strategy.

As well as focusing on our domestic reforms, in any debate about the economy we must look forward to our bright future as a free and independent nation when we leave the EU. Brexit should serve as a time of national renewal. We are seeing now more than ever—my right hon. Friend the Chancellor mentioned this in his statement last week—that this will be the start of the shaping of a new liberating chapter in our long history in which we will have many economic benefits. We will be a beacon for global free trade and pursue new trade and investment partnerships. My hon. Friend the Member for Clacton (Giles Watling) has already mentioned new partnerships with India, and I hope that you will appreciate, Madam Deputy Speaker, that where Essex leads, the rest of the country will follow.

By the middle of this century, the EU’s share of the global economy will fall below 10%. The old global economic order is being replaced by a new wave of economic powerhouses in Asia, Latin America and Africa. We are seeing change and we must ensure that we are at the front of the queue, leading that revolution of change, and that Britain is the first port of call for growing and newly emerging markets. As we reflect on the economy today, let us welcome not only the transformation, but the long-term economic stability that we have seen due to the macro and fiscal policies of this Government. I commend the Chancellor for his statement, but we must continue to be bold and ambitious for the future.