Economic Affairs and Work and Pensions
Debate between Robert Halfon and Lord Darling of Roulanish(14 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Darling
No, I am not going to give way. I want to draw attention to one of the biggest problems that I see in the future. I know that Governments in countries right across the world have to get their borrowing down and reduce their deficits. However, I am particularly worried that, if we do not have some countervailing pressure to support growth and measures to get growth in our economy, we run the risk of having many years of it merely bumping along the bottom, sometimes growing and sometimes not. That will inevitably mean that we will have higher unemployment and that aspirations and sentiment will be affected.
I see that especially in the EU at the present time. The EUROSTAT figures published last Friday went almost unreported in this country, but what is worrying is that we see that Germany’s growth in the first quarter of this year was 0.2%. We see France’s at 0.1%. We see Greece not surprisingly, back in recession. We know that Spain has unemployment of more than 20%. I am glad that the Chancellor enjoys going to ECOFIN so much, and long may he enjoy that. I am fascinated that the Conservatives now find so much succour in Europe. All I can say to him is that I worry that rather too many finance Ministries, yes want to get their deficit down, but are not concentrating on the structural reforms that are necessary within the EU or on measures to achieve growth in the future. That is a real threat.
It worries me that the present Administration here in the United Kingdom also fall into that camp. It is interesting that in the past six months the Prime Minister has made only one speech on growth. It flickered into life in November just before the CBI conference last year. We do not hear what measures the Government intend to put in place to get the rebalancing of the economy that we want to see—measures to encourage private sector investment to come back. It is not coming back yet in sufficient volume to take the place of the public sector investment that the Chancellor wants to take away. We have to have a clear, strategic look at this to make sure that we can get growth in this country as well as in the EU, which after all is our major export market.
Mr Darling
When comparing the judgments that we make about what is necessary fiscally, I do not think that bringing on to the main balance sheet PFI, Network Rail and everything else particularly helps. However, if that is the course of action that he has managed to persuade the Chancellor to take, we will look with great interest at the Budget in a couple of weeks. I just do not think that it is a particularly accurate or informative way of looking at the accounts. I have said that before to the hon. Gentleman.
Robert Halfon
Before the last election, in an interview with the BBC, the right hon. Gentleman said that he believed that the cuts needed to be more savage than anything Mrs. Thatcher had done. Does he still hold to that view?
Mr Darling
I think that the word “savage” was used by the Deputy Prime Minister, of whom the hon. Gentleman now finds himself a great admirer. It was not a word that I used.
It is important in the task that confronts the whole country and the Government that we do not get ourselves into a situation of almost competitive austerity, in which Governments and countries become blind to the need to secure growth. There is a substantial risk, as I have said for a long time, that if the Government take action prematurely without considering its consequences as a whole, they will choke off the recovery. We have to get borrowing down, but we also have to get growth and recovery firmly established.