Economic and Fiscal Outlook

Ruth George Excerpts

Monday 30th April 2018 Commons Chamber

[Elizabeth Truss]

My hon. Friend is right. We are switching spending from current spending to investment, and that is why we have a 40-year high in our infrastructure investment. He is absolutely right that any spending increases the national debt. Because of the actions of the previous Labour Government, who spent 45% of GDP in the public sector and built up a huge debt, it is our responsibility to bring the debt down and make sure that the country gets back in balance.

[Ruth George (High Peak) (Lab)]

Bearing that strategy in mind, how does the Minister explain the fact that the debt has risen from 73% of GDP in 2010 to nearly 90% now, so it is higher than both France’s and Germany’s? Our debt was below those countries’ at the end of a Labour Government who had invested in public services, bailed out the banks and saved people’s savings.

[Elizabeth Truss]

I find it absolutely astonishing that the hon. Lady would say that, given that her party is planning to spend half a trillion pounds, increasing our debt. She has obviously not read the speeches of the shadow Chancellor and the shadow Chief Secretary. The 20% increase in debt that Labour is proposing would make us much more vulnerable to external shocks. The fact is that we have spent the past eight years repairing the damage done to the economy by profligate spending by Labour Members who did not fix the roof while the sun was shining.

[Elizabeth Truss]

I thank my hon. Friend for making that point. Labour Members seem to believe that by spending more money and borrowing more, we can reduce debt. That simply does not add up. Under Labour’s plans, we would be vulnerable to an external crisis, as we were when it was last in office in 2009. The Labour party seems to welcome that prospect. The shadow Chancellor said that the 2008 economic crash was a “capitalist crisis” for which he had been waiting for a generation. We have a Labour party that is actively planning a run on the banks if it gets into office.

[Ruth George]

Will the right hon. Lady give way?

[Elizabeth Truss]

I have already given way to the hon. Lady.

Ten years ago, under Labour, we were in the grip of a financial crisis and scared for the future. It was a period of profligacy, when Labour was spending money we did not have. The state was 45% of GDP, and we saw the longest increase in debt since the Napoleonic wars. It crowded out the private sector, and youth unemployment was on the rise.

We have worked away at the deficit, replenished the public purse and got people back into work, and all while maintaining Britain’s world-class public services. This report shows our sound public finances and our growing economy. [Interruption.] It is a shame that those on the shadow Front Bench seek to talk down our excellent public services. What this debate shows us is that it is vital we stick to the course.