Economic Affairs and Work and Pensions

Debate between Rachel Reeves and Lord Darling of Roulanish

Tuesday 8th June 2010 Commons Chamber

[Mr Darling]

No, I do not agree with that. I think the hon. Gentleman will find that an awful lot of things that went wrong in 2007 were a result of what went wrong in the banking system, not just here but in other parts of the world as well.

[Rachel Reeves (Leeds West) (Lab)]

Does the shadow Chancellor agree with this statement by the Governor of the Bank of England:

“I don’t think you can compare the UK with Greece. There are big differences”?

I suggest that not the least of the differences between our countries is that our debt-to-GDP ratio is about half that of Greece.

[Mr Darling]

The Governor was making a very fair point, as he does on many occasions. It is interesting that even in the past couple of days Government members—the Prime Minister yesterday, and one or two of his ministerial colleagues—are rowing back from direct comparisons with Greece because that may have been very convenient to them in opposition, but it might not be such a good idea now that they hold office.

Our economy is experiencing growth at present, and that is because of the action we took over the past couple of years. I do not intend, as the Chancellor said, to fight the last general election again or to go through everything that happened over the last two or three years—that is, perhaps, for another occasion—but I do say this about the action we took. The fiscal stimulus we put in place—the VAT reduction; the decision to bring forward capital spending; the measures we took to protect people’s jobs and ensure that if people were out of work for a short period we could get them back into work as quickly as possible; the time to pay scheme, which is still helping hundreds of thousands of businesses throughout the country; the car scrappage scheme; and the action we took internationally—have all come together to make sure we came through this recession. Interestingly, although the predominant position of the financial services industry in this country meant that it took us longer to come through into recovery than it took some other countries, Britain has had two quarters of growth whereas other countries, particularly those in continental Europe, have seen their growth slip back and, in some cases, they have slipped into recession. What that tells me is that had the previous Government not taken the action that they did over the past couple of years we would not now be in a position to say, “Yes, our economy is growing.” Equally, our action has meant that although our borrowing is still very high and needs to come down, it is coming down faster than many people believed, even a few months ago.