Youth Unemployment and Bank Bonuses

Robert Flello Excerpts

Monday 23rd January 2012 Commons Chamber

[Danny Alexander]

I can confirm that according to the latest forecast, there will be significantly increased borrowing compared with the previous one. The hon. Lady should have explained in her opening speech that her policies involve substantial further increases in borrowing, which would destroy this country’s economic credibility and the hard-won low interest rates that we have achieved.

As a result of our action, we have record low bond yields that feed through to record low interest rates, which benefit households paying mortgages and businesses refinancing loans right across the country. Whereas our bond yields are just 2.1%, those of Spain have risen to 5.5%, those of Italy remain over 6%, and those of Greece have climbed to a staggering 34%. Even a 1% rise in our market interest rates would force taxpayers to find an extra £21 billion in debt interest payments. A 1% rise in effective mortgage rates would result in an extra £10 billion for mortgage payments.

The Opposition have had 18 months to come to terms with the mess they created, but they still do not get it. It has taken them 18 months to move from the wrong place to all over the place. The Leader of the Opposition called the pay freeze an

“ideological attack on the public sector”,

but he now accepts it. The shadow Chief Secretary to the Treasury called the uprating of pensions with the consumer prices index an “ideologically driven move”, but it is a move that the Opposition have now accepted for their party’s own pension scheme. So let us be clear—financial discipline is not ideological; it is a necessary condition for effective government. In the past 10 days, members of the Labour shadow Cabinet have succeeded in proving that they cannot even convince themselves of the credibility of their economic policy.

[Robert Flello (Stoke-on-Trent South) (Lab)]

Will the right hon. Gentleman explain his idea of economic stability to my constituents? In my constituency the long-term youth unemployment rate has risen by 162% in the past year. Will he explain how his stability will affect the people of Stoke-on-Trent who are losing jobs hand over fist because of his policies?

[Danny Alexander]

If the hon. Gentleman looks around Europe at the countries that have failed to tackle their deficits, he will see much more serious economic problems—problems of the kind that we would have here if we followed Labour’s policies. He should start by apologising for the mess that his party made of the economy.