Global Economy

John Bercow Excerpts

Thursday 11th August 2011 Commons Chamber

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

The shocking and inexcusable events of recent days in our cities are today rightly the Government’s first and immediate priority. However, looking ahead, the global economic events of recent days are an equal and perhaps even graver threat to our stability and cohesion, putting small businesses, jobs and mortgages at risk throughout our country. It is therefore right that the Chancellor is today updating the House and the country on the parlous state of the global economy and, I am afraid to say, the parlous state of the British economy.

In the same spirit of bipartisan co-operation that we have just seen from the Prime Minister and the Leader of the Opposition, let me set out where Opposition Members agree with the Chancellor of the Exchequer as well as where we have grave concerns. First, the Chancellor is right: we made the right decision not to join the single currency in 2003. We agree with him that the crisis in the eurozone requires more decisive and radical action than we have seen so far. I welcome the fact that he is now, at last, involving himself in those discussions, and preparing contingency plans if British banks come under threat.

Tough fiscal decisions in Europe are vital, but is it not clear that the approach of European leaders so far—demanding ever more austerity from smaller countries—is not working because it does nothing to get those economies growing? Without that, countries find it harder and harder to convince the markets that they can repay their debts. Should not the Chancellor finally take a lead in brokering a plan in Europe for growth, alongside European-wide guarantees to reduce debt service costs, and stop the contagion?

I also agree with the Chancellor that months of political wrangling and uncertainty in the US about the pace of deficit reduction have depressed confidence and US growth. However, does the Chancellor agree with those wise heads who favour a balanced and sensible approach to deficit reduction, and fear that rapid US retrenchment could drive the world back into recession? Or does he agree with his friends—we know he has many in the Republican party and in the Tea party movement—who have urged deeper and faster cuts, and hailed the recent budget deal as delivering 98% of their demands? Is the Chancellor on the side of the Federal Reserve, former Treasury Secretaries and Nobel prize winners, or on that of, in the words of the Business Secretary, “right wing nutters”?

It is also right that G7 finance Ministers are finally discussing a co-ordinated response to a global crisis. However, listening to the Chancellor’s analysis, one would think that Britain was a bystander, watching public debt crises unfold in the eurozone and America that are best solved by individual countries taking their own actions to get debt down—on his analysis, the faster, the better. But the growth crisis is now global.

Does the Chancellor agree that the coming together of powerful negative forces in every continent, including in Britain—continued deleveraging by banks and the private sector, drastic tightening of consumer spending and fiscal retrenchment from Governments—now means that some commentators warn that the crisis could become as grave as that of the early 1930s, when Governments around the world ignored their collective responsibility to promote growth, ploughed on with austerity and retrenchment and ushered in a decade of depression, unemployment, protectionism and political instability? Here in Britain, families and businesses, deeply worried about their jobs and mortgages, will hear the Chancellor’s talk of safe havens and conclude that he is either deeply complacent or in complete denial about what is happening in our country.

Since the Chancellor’s economic policies have started to kick in, well before the latest bout of financial market instability, confidence has collapsed and our economy has flatlined for nine months, growing slower than that of the US and the eurozone. On the latest OBR figures, before growth forecasts—which the Chancellor today confirmed—were to be downgraded yet again, the borrowing forecast was £46 billion higher than the Chancellor planned.

We need a tough, medium-term plan to get our deficit down, but it is the Chancellor’s reckless—[Interruption.]

[Mr Speaker]

Order. The House must come to order. I repeat what I have said many times: if Members shout their heads off, then expect to be called, they are suffering from an element of self-delusion.

[Ed Balls]

The Chancellor’s reckless policies—too far, too fast—have ripped out the house’s foundation and left our economy deeply exposed to the brewing global hurricane. Yet, despite all the evidence and with our stock market falling 10% or more this week, the Chancellor still claims that his policies are working and that we are a safe haven. Despite the evidence of the past two years from credit default swaps and the fact that, in the past week, long-term interest rates have fallen in Britain and in the US, he still claims that falling UK long-term bond yields are a sign of enhanced credibility and not of stagnant growth in our economy. Does he not remember that the Japanese Ministry of Finance briefly took some comfort from low and falling bond yields in the early 1990s, at the beginning of a lost decade of no growth and stagnation? However many times he says that his plan is working, that does not make it true. However, many times he claims that he has restored confidence or delivered on deficit reduction, that does not make it true.

We know that the Chancellor has spent the past fortnight in Hollywood, but he cannot just write the script and watch it come to life. That is not how things work in the real world. If he will not take it from me, perhaps he should hear the words of Paul Krugman, the Nobel prize winner, who said:

“Britain’s experiment in austerity is going really, really badly. But the Chancellor of the Exchequer is finding solace in… fantasy… the wolf is at the door and Osborne thinks it’s the confidence fairy.”

The Chancellor finds the state of the British economy reassuring; we find it deeply worrying. He rejects our call for action now, including a temporary VAT cut, and vows to plough on regardless. We say that this approach is deeply incautious and reckless. The eurozone is in crisis. America is in political paralysis. The British economy is flatlining. Global markets are in turmoil. The world desperately needs strong and united leadership. Here in Britain, we need our Chancellor to get out of his complacent denial and get back to reality before it is too late.

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[Mr William Cash (Stone) (Con)]

The Chancellor will know that our trade balance between 2002 and 2009-10 with the other 26 member states has gone up from minus £14 billion to minus £53 billion in one year? Does he not agree that even Edward Heath would have repudiated and vetoed a fiscal union with a hard-core Europe with such an incredible trade deficit against us? The coalition agreement, according to the latest answer I got from the Prime Minister, determines our relationship with the European Union. Does the Chancellor disagree with the Deputy Prime Minister, because we must have radical renegotiation of the treaties and the repatriation of powers so that we can achieve growth for all our businesses?

[Mr Speaker]

I enjoy listening to the hon. Gentleman’s words so much that it is in my interest, Parliament’s interest and the national interest that they should be suitably rationed.

[Mr Osborne]

My hon. Friend and I will have to agree to disagree on this issue. The remorseless logic of monetary union leads towards fiscal union, and that was one of the reasons that I opposed joining the single currency. However, it is now in our interests to allow that to happen more in the eurozone, because it is in our absolute national economic interest that the eurozone is more stable. It is clear that that means that they need to have more fiscal powers to reduce instability. That means, of course, that Britain must fight hard to ensure that its interests are represented and that we are not part of this fiscal integration. Important decisions, such as on financial services, must continue to be taken at the level of 27. He talks about treaty changes and so on, but the prospect of a major treaty change to bring about eurozone fiscal integration is not imminent, although I imagine that there will be a lively debate if and when it comes about.

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[Several hon. Members]

rose—

[Mr Speaker]

Order. I appeal to colleagues to ask single, short supplementary questions without preamble, so that we can maximise the number of contributors.

[Kelvin Hopkins (Luton North) (Lab)]

The frightening instability of the world economy has arisen since, and as a result of, the abandoning of the post-war arrangements decided at Bretton Woods, and the liberalisation and globalisation of finance capital. Part of that arrangement was that each country had its own currency and managed its own economy within international rules. Would it not be sensible to move back in that direction by establishing national currencies within the eurozone and starting again where we left off?

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[Several hon. Members]

rose—

[Mr Speaker]

Order. I thank the Chancellor of the Exchequer and the 52 Back Benchers who have questioned him.

Summer Adjournment

John Bercow Excerpts

Tuesday 19th July 2011 Commons Chamber

[Mr William Cash (Stone) (Con)]

On a point of order, Mr Speaker. In the rather unusual circumstances of the debate tomorrow, we have not yet had notice of the motion or the terms of the debate. However, the 17 Select Committee Chairmen, plus the chairman of the parliamentary Labour party and the chairman of the 1922 committee, and representatives of the four leaders of the devolved Administrations, have all expressed their concerns about the terms of the inquiry. I simply ask you whether it will be possible for us to table a manuscript amendment tomorrow, in the event that the motion requires amendment to satisfy the terms of early-day motion 2088.

[Mr Speaker]

I thank the hon. Gentleman for his point of order. He is even further ahead of the game than usual. As he has acknowledged, there is, as yet, no formal recall tomorrow, as the Standing Order does not operate until this sitting is adjourned. I can assure him and the House, however, that shortly thereafter, I shall sign the necessary order. Only after that will we know the form of the motion for tomorrow. So his point is hypothetical at the moment, but I have noted his words, as I invariably do. I hope that that is helpful to the hon. Gentleman and to the House.

Finance (No. 3) Bill

John Bercow Excerpts

Tuesday 5th July 2011 Commons Chamber

[Chris Leslie (Nottingham East) (Lab/Co-op)]

I beg to move amendment 13, page 42, line 30, at end insert—

‘(2) The Chancellor of the Exchequer shall review the possibility of incorporating a bank payroll tax within the bank levy and publish a report, within six months of the passing of this Act, on how the additional revenue raised would be invested to create new jobs and tackle unemployment.’.

[Mr Speaker]

With this it will be convenient to discuss the following:

Amendment 31, page 42, line 30, at end insert—

‘(2) The Chancellor of the Exchequer shall review the possibility of incorporating a bank financial transaction tax within the bank levy, levied on trading in financial products including stocks, bonds, currencies, commodities, futures and options and publish a report within six months of the passing of this Act, on how the additional revenue raised would be invested to tackle unemployment and reduce poverty in the United Kingdom and to assist in tackling deprivation in the developing world.’.

Government amendments 32 to 50.

[Chris Leslie]

We now come to our general debate on taxation in respect of the Finance Bill. Clearly, one of the major omissions from the Bill is a repeat of the bank payroll levy or bonus tax that the previous Labour Administration implemented in 2009. It is not only a matter of fairness that bankers should pay some of their substantial bonuses to support people far less fortunate than them and to rebuild public trust; it makes economic sense too. I hope that our amendment 13 will persuade the Government of the merits of a review of how the bank bonus arrangement could be incorporated into the bank levy. A fair tax on bank bonuses would help to get people off the dole and into work, and it is the best way to get the deficit down and stop Britain’s talent going to waste.

Youth unemployment rose sharply in the recession, as we know, but a year ago it was starting to fall steadily thanks in part to the youth jobs programme and the future jobs fund advocated by the previous Administration. One of the first things that the current Chancellor of the Exchequer did was to scrap that successful programme. Before the election the leader of the Liberal Democrats, now the Deputy Prime Minister, said:

“Parents used to worry about whether their children could get onto the housing ladder, now the concern has spread to whether they can even get a job…We must provide a lifeboat to this lost generation.”

Well, he and the Prime Minister have sunk that lifeboat.

In the 1980s, youth unemployment continued to rise for four years after the recession was over, and whole communities were scarred as a result. Many of the effects can still be seen and felt in places across the country. That is why we believe we need to act urgently to prevent disastrous mistakes from being repeated. There are now 31,000 more young people unemployed than there were last summer, and one in five 16 to 24-year-olds is now out of work. Although there has been a welcome fall in unemployment in the past two months, the claimant count is still rising, vacancies are down and job creation has slowed in the six months since the spending review. Unemployment is set to be 200,000 higher over the coming years than was expected just a few months ago, and the Office for Budget Responsibility keeps revising the figure upwards, just as it keeps revising the growth figures downwards.

We believe that a repeat of the bank bonus tax could be used to create more than 100,000 jobs, build 25,000 affordable homes, rescue construction apprenticeships and of course boost investment in businesses. Putting young people on the dole is not just a waste of talent but a waste of money, and failing to get Britain back to work fast enough is helping to push the benefits bill and welfare costs up by more than £12 billion, or more than £500 a household. It is not rocket science—more young people out of work means more money spent on benefits and less money coming in through tax receipts to pay down the deficit.

Considering how the future jobs fund and the bank bonus levy worked, we believe that sufficient revenue could be raised to invest the money in creating 90,000 good jobs to get young people into work and ensure that we do not make the mistakes of the past. It could also be used to build 25,000 homes to support people as they get back to work. Our plan could generate more than 20,000 jobs in that sector and save several times more jobs in the supply chain and as many as 1,500 construction apprenticeships. That would leave sufficient resources to boost the regional growth fund by £200 million, to support companies that want to start projects that will create more jobs, meaning more help for small businesses in regions up and down our country.

Our amendment is pretty straightforward and, I hope, fairly unobjectionable. It asks the Chancellor of the Exchequer to review the possibility of incorporating a bank payroll tax within the bank levy, and to publish within six months of the passing of the Finance Bill a report on how the additional revenue would be used.

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[Jonathan Edwards]

I will not take up much of hon. Members’ time this evening. I regret to inform the Treasury that we will vote against the Government. Leaving aside our concerns about the speed and depth of the cuts, our main concern as a party is obviously the effect of the Budget on Wales. Given the economic headwinds that Wales faces, the Treasury might be interested to know that all four parties in the National Assembly, including the Conservative party and the Liberal Democrats, have today signed a joint declaration calling for an immediate reform of the Barnett formula, borrowing powers for the Welsh Government, including the ability to raise capital funds via bonds, and fiscal responsibility in respect of taxation powers. Although 5 July is not usually a historic day, I would say it is today because all the Unionist parties have adopted Plaid Cymru’s economic policies. I understand that the Treasury Minister will meet the First Minister on Monday and I hope he will embrace this fresh mandate from the people of Wales.

Question put, That the Bill be now read the Third time.

The House proceeded to a Division.

[Mr Speaker]

I ask the Serjeant at Arms to investigate the delay in the No Lobby.

Finance Bill

John Bercow Excerpts

Tuesday 28th June 2011 Commons Chamber

[Mr Leigh]

I will not be shouted down by the hon. Gentleman. He was not here for most of the debate anyway.

We made that pledge, and we should now respect it. I was hoping to be able to say that the new clause was defective, and that we would be quite happy to withdraw it and to redraft it to enable civil partnerships to be recognised. We would be quite happy if the Minister then said that it could be introduced during the course of this Parliament. However, he has not said that. I am afraid that he has not answered the points that we have put to him. We had an hour’s speech by the hon. Member for North Durham (Mr Jones), most of which did not address what we are trying to say. I want to end by saying that none of us is trying to penalise two-earner families or single parents. We are simply trying to remove the severe penalty that this country imposes on one-earner families. The United Kingdom is completely out of step with most of the world in that regard. Nothing in our proposal is radical; it is sensible and it is right, and I think that we should now have a Division on it.

Question put, That the clause be read a Second time.

The House proceeded to a Division.

[Mr Speaker]

Order. Open the doors for a further minute, owing to the extreme congestion in one Division Lobby.

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[Mr Bone]

On a point of order, Mr. Speaker. A very unusual thing just occurred during the Division. I was one of the tellers. The doors were locked at the appropriate time, then unbelievably, they were unlocked again. Given the closeness of the result, do you think that the vote should be taken again?

[Mr Speaker]

I see no reason for it to be taken again, but I am strikingly impressed by the fact that, although it is three minutes past 11 o’clock, the sense of humour for which the hon. Member for Wellingborough (Mr Bone) is renowned throughout the House has not deserted him. However, it is only fair to say that the Chair has discretion to allow the vote to continue for slightly longer in particular circumstances. A very large number of Members were seeking to get through one Lobby so I extended the time. I think we will leave it there, and I am grateful to the hon. Gentleman for the manner in which he has raised his point of order.

New Clause 6

Rate of value added tax

‘(1) In section 2(1) of the Value Added Tax Act 1994 (rate of VAT), for “20 per cent” substitute “17.5 per cent”.

(2) In section 21(4) of that Act (restriction on value of imported goods), for “25 per cent” substitute “28.58 per cent”.

(3) The amendment made by subsections (1) and (2) has effect in relation to any supply made on or after 30 August 2011 and any acquisition or importation taking place on or after that date.’.—(Jonathan Edwards.)

Brought up, and read the First time.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

I beg to move, That the clause be read a Second time.

[Mr Speaker]

With this it will be convenient to discuss the following:

New clause 9—Value Added Tax (Change of Rate) Order 2011—

‘(1) The Chancellor of the Exchequer shall make an order under the powers conferred by sections 2(2) and 21(7) of the Value Added Tax Act 1994 that in section 2(1) of the Value Added Tax Act 1994 (rate of VAT), the rate of tax charged by virtue of that section shall be decreased by 12.5 per cent.

(2) In section 21(4) (value of imported goods) of the Value Added Tax Act 1994 for “25” substitute “28.58”.

(3) This Order shall be known as The Value Added Tax (Change of Rate) Order 2011 and shall come into force on 30 August 2011.’.

New clause 10—VAT—

‘The Treasury shall, within three months of the passing of this Act, report to Parliament its assessment of the impact of the rate of VAT on UK economic growth.’.

[Jonathan Edwards]

Diolch yn fawr, Mr Speaker. I had an hour-long speech prepared for this debate, but as it is going well past my bedtime, I will try to keep my remarks as short as possible.

I move this new clause with a sense of déjà vu, as only last July I closed a Finance Bill debate on an amendment tabled by my hon. Friend the Member for Dundee East (Stewart Hosie) that aimed to overturn the decision in the emergency Budget to raise VAT to 20% from January this year. Many of the arguments I made then remain relevant, but I will resist the temptation to air the same speech twice. Interestingly, that debate [Interruption]—

The Economy

John Bercow Excerpts

Wednesday 22nd June 2011 Commons Chamber

[Mr Speaker]

I should notify the House that, as a consequence of the fact that no fewer than 38 right hon. and hon. Members have applied to speak in the debate, I have imposed an eight-minute limit on Back-Bench contributions. There is no time limit on speeches from the Front Benches, but it would be appreciated by the House if Front Benchers would tailor their contributions accordingly. I inform the House that I have selected the amendment tabled in the name of the Prime Minister.

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[Ed Balls]

No; perhaps I need to say this to the hon. Gentleman again. I will take his intervention after I have established my argument.

The Chancellor ignored the fact that we were not in the euro, and that—[Interruption.]

[Mr Speaker]

Order. I know that I have done this many times before, but I appeal to right hon. and hon. Members to have some regard to the way in which our proceedings are viewed by the people whose support we were seeking only 13 months ago. I do not care whether this sort of behaviour was traditionally thought to be a good thing; it is not, and if people behave like this and expect to be called, they will be disappointed.

[Ed Balls]

Thank you, Mr Speaker.

In the Budget debate, I took 16 interventions from Members on the Government side of the House. I will take interventions, but not from people who shout and are aggressive while I am still establishing my argument. Let me establish my argument; then I will take interventions. I will start with the hon. Member for Sevenoaks (Michael Fallon) in just a moment.

The Chancellor insisted, despite the fact that we were not in the euro, that our debt maturity was long and that our long-term gilt yields were historically low and had started to fall well before the election. He made the economically illiterate and preposterous claim that, like Greece, Britain was on the brink of bankruptcy. Having already abolished the child trust fund and the future jobs fund, he announced in the Budget immediate plans to take billions more out of the economy through a combination of deep spending cuts and tax rises. That included an increase in VAT to 20% and a cut in tax credits for thousands of families. It also included cuts to housing benefit, pensions and disability benefits. The Chancellor boasted in that speech that the Budget was progressive, not regressive, and that it would be an extra £40 billion fiscal hit in this Parliament. Labour Members warned him of the dangers, but the Chancellor said it would work. Let me cite what he said a year ago:

“These forecasts demonstrate that a credible plan to cut our budget deficit goes hand in hand with a steady and sustained economic recovery, with low inflation and falling unemployment.”—[Official Report, 22 June 2010; Vol. 512, c. 168.]

Things did not turn out that way last year.

Since the Prime Minister foolishly said in October that the economy was out of the danger zone, we have had the biggest fall in consumer confidence for 20 years; our economy has flatlined and not grown at all since the autumn; inflation is now higher than in every country except for Estonia and Turkey; the Institute for Fiscal Studies has declared the Chancellor’s Budget to be regressive, not progressive; and child poverty is expected to rise this year, next year and the year after, with women hit harder than men and families with children hit hardest of all. I have to say that this anniversary—unlike your anniversary, Mr Speaker—is not one worthy of celebration. It is certainly not an anniversary worthy of a 40th birthday party bash at Dorneywood. I do not know whether you were invited to the party at the weekend, Mr Speaker. I was not, which might be because I am not a Knight of the Garter.

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[Ed Balls]

rose—

[Mr Speaker]

Order. I am glad that the exchanges so far have been good-natured, but may I remind colleagues of the merits of brief interventions? A lot of Members want to make speeches, and I want to help them to do so.

[Ed Balls]

I think the question that people will be asking in the hon. Gentleman’s local newspaper is this: why does he oppose a tax cut that would provide £450 for every family this year, and would boost failing confidence?

The hon. Member for West Suffolk does not seem to have turned up. It is so disappointing that he is not here, as he was last time, because I had a very good contribution for him.

Let me now set aside the Chancellor’s wild and nonsensical political attempts to draw parallels between Britain and Greece, and make a serious point about what is happening in Greece and how it affects the United Kingdom. The issue now is not whether Britain does or does not contribute to a further EU financial package for Greece. Like the Chancellor—I think—I believe that that would be the wrong thing for our country to do. It seems to me that we have reached a point at which talk of more temporary liquidity austerity packages, and further tough talking, is no longer working.

EU Finance Ministers must face the fact that Greece needs economic growth to succeed. Otherwise, it will be stuck in a debt trap. It is now very hard to see how Greece can stay in the single currency without a change of strategy on fiscal austerity and a substantial restructuring. The fact is, however, that it is precisely because the UK is outside the eurozone—and thank goodness we are; I will take an intervention on that if any Member wishes to intervene—and because our banks are less exposed to Greek debts than those in Germany and France that Britain should be an honest broker in these discussions. We are in a position to present an objective argument for immediate and co-ordinated action to restore jobs and growth and start reducing the debt, along with a sustainable, long-term plan for its reduction. However, we can do that without being accused by the people of Greece that we are merely looking after our own interests.

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[Ms Eagle]

No, I am not giving way, especially not to the hon. Gentleman, who has not even deigned to be present in the House until now. [Interruption.]

[Mr Speaker]

Order. Government Back Benchers must not engage in rhetorical stalking. The hon. Lady has made it clear that she is not giving way, so the position is clear.

[Ms Eagle]

The Chancellor’s choice meant that only Ireland and Iceland have been expected to deliver more austerity measures. The result has been that only Greece, Ireland and Denmark have grown less fast than the UK has managed in the past year. Back then, in what he so theatrically described as his emergency Budget, the Chancellor stood at the Dispatch Box and told us that

“we are all in this together”.—[Official Report, 22 June 2010; Vol. 512, c. 167.]

Well, we do not hear that phrase cross his lips quite so often these days. True, that ludicrous claim was blown apart the day after the Budget by the Institute for Fiscal Studies, but a year on, even the Chancellor seems to have given up on it. Perhaps it has been consigned to the dustbin of history, along with his pre-election pledge to ensure that no one working for a nationalised bank would take home a bonus of more than £2,000. Perhaps it has joined the Government’s promise that there would be no top-down reorganisation of the NHS.

The Chancellor also promised fairness, but a year ago today, he delivered a budget that hits women and children first and hardest, and he was cheered to the rafters by both Government parties in scenes of sadistic jubilation at the cuts that I, for one, and many of our constituents will remember for many years to come.

One year on, the Chancellor’s Budget of extreme austerity is inflicting nothing but pain and hardship on the British people. One year on, people are suffering the biggest squeeze in their living standards for more than 80 years. Food prices are up, petrol prices are up, energy prices are up, transport prices are up—

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[The Economic Secretary to the Treasury (Justine Greening)]

This has been an important and excellent debate, with good contributions from both sides of the House. The best Opposition contributions were made by newly elected Labour Members, and I have no doubt that they will look back on this period as the dark days of deficit denial by the Labour party. [Interruption.]

Throughout this important debate, the Opposition failed to mention, let alone welcome, that in the last year exports are up, industrial production is up, manufacturing is up, investment is up, employment is up, unemployment is down and, most importantly—[Interruption.]

[Mr Speaker]

Order. The Minister must be heard by the Opposition, and also, one would hope, with some respect by her own side.

[Justine Greening]

Most importantly of all, the private sector has created half a million jobs, and I would have hoped that the whole House could have agreed that that is good news for the country, as my hon. Friends the Members for Witham (Priti Patel) and for Thurrock (Jackie Doyle-Price) said. We must not talk down the economy, but the Opposition have persistently done so.

As the International Monetary Fund has said,

“repair of the UK economy is underway.”

Of course that is a difficult task, and of course recovery will be choppy, but that is because our predecessors left us with an unprecedented and unenviable challenge, as was eloquently pointed out by my hon. Friends the Members for Dover (Charlie Elphicke), for Gloucester (Richard Graham) and for Elmet and Rothwell (Alec Shelbrooke). They understand the problem the country faces, and their constituents knew that, which is why they chose a different and a better Government.

Many people in our country will be incredulous that the Opposition have had the gall to come here today and lecture MPs about economic credibility, because the shadow Chancellor and the Labour party have absolutely none. Their legacy to the British people was higher unemployment, a broken economy and enormous debt. The shadow Chancellor said a lot, but there was one word missing from his speech that people would have liked to have heard: sorry. There was no apology for the disastrous mess his party left on leaving office, and no acceptance of responsibility for its actions. The shadow Chancellor is still in denial about there even being a structural deficit—if he wants to confirm that he does think there is a structural deficit, he can intervene on me now.

If the shadow Chancellor had spent less time when he was a Minister plotting with his political master, he might have done a more effective job. He was the architect of the tripartite banking regulatory scheme that failed so badly. He was the City Minister when the City went off the rails. He was the economic adviser to the former Chancellor and Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), when he ran up a structural deficit that the OECD described as a snowballing of debt.

Many people in our country would not put the shadow Chancellor in charge of their household finances, let alone the nation’s finances, yet he called for a debate on the economy today. We might have expected him to have something meaningful to say, therefore, but he did not. There were no plans to tackle the deficit at all; not a word on how to rebalance the economy and replace some of the 1 million manufacturing jobs that were lost between 1997 and 2007; nothing on financial services reform; and hardly any mention of his party’s VAT proposal. That seems to have fallen apart within days. Members on the Government Benches talked more about that than Labour Back Benchers. When the VAT rise went through last year, what did the Opposition do? They abstained. They did not stand up and say that it was wrong. A few months later, however, they decided that there should be a VAT reduction on fuel, and now, even before the Finance Bill has completed its passage, they want a VAT reduction on everything. This is policy made on the hoof.

Today’s motion refers to halving the deficit, but we have heard not a word from the shadow Chancellor on how he would do that or on their spending plans. The bottom line is that those plans do not exist. He is trapped by misguided, discredited and irrelevant policy, and yet he still runs with it. He used to be a bruiser, but now he is a kitten. He is Macavity’s kitten trapped in his own ball of policy wool which he has woven around himself, churning out the same old lines that will take neither his party nor the country forward.

We heard many contributions from Labour Members, but I must say that they were let down by their Front Benchers, who clearly have no economic alternative. All they have is pointless opposition. We heard a lot of amnesia from them on employment. Let us remember that they left unemployment higher, just as every Labour Government before them did. Presumably they will say that that was the result of the recession. Presumably they think it is a coincidence that every Labour Government leave Britain’s economy in crisis. The amnesia goes deeper. We heard amnesia on social housing. Somehow they think that they created lots of social housing.

Oral Answers to Questions

John Bercow Excerpts

Tuesday 21st June 2011 Commons Chamber

[Mr Osborne]

rose—

[Mr Speaker]

Order. All with specific reference to the level of debt as a proportion of GDP.

[Mr Osborne]

I see that the shadow Chancellor is following his former master’s habit of straying from the direct area of his brief, but there we go. Let me deal directly with Libya. What I told the House at the time was that the cost estimated at the time by the Ministry of Defence was in the tens of millions of pounds, and the Ministry of Defence is planning to provide an update to the House on the full costs, I think within the next week.

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[Mr Osborne]

rose—

[Mr Speaker]

Order. There is no requirement or need for the Chancellor to comment on Opposition policy. I would have thought that we had grasped that point by now.

[Kerry McCarthy (Bristol East) (Lab)]

In reaction to this year’s Budget, the Institute for Fiscal Studies said that, if the Chancellor is to meet his borrowing targets, he will be

“now even more dependent on a bounce back in the rate of economic growth from 2013”.

Borrowing has already been £1.5 billion higher in the first two months of this financial year than it was in the same period last year, as the Chancellor’s tax rises and spending cuts kick in. If growth outturns fail to meet the forecasts, will the Government change their plans on borrowing?

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[Nadhim Zahawi (Stratford-on-Avon) (Con)]

We are already spending £120 million a day on debt interest. What figure does the Minister think would be reached if we had not increased VAT?

[Mr Speaker]

Order. We should be focusing on inflation. I call the Minister to answer, very briefly.

[Mr Gauke]

I shall try to focus on inflation, Mr Speaker, but I think that it is important to the economy all round, in terms of inflation and of other factors, for us to maintain credibility. That is something that the Government have and the Opposition, I am afraid, do not.

--- Later in debate ---

[Mr Hoban]

rose—

[Mr Speaker]

Order. The hon. Gentleman refers to letters but the question is about the rate of job creation in the private sector; I think the hon. Gentleman meant to say that.

[Mr Hoban]

Indeed. If the hon. Gentleman will let me have details, I will look into the matter for him.

[Mr Donohoe]

On a point of order, Mr Speaker. In view of the unsatisfactory nature of the reply I have just received, I will seek a debate on the Adjournment.

[Mr Speaker]

I am extremely grateful. Under the procedures of the House, as colleagues are aware, we must proceed to the next question.

[Andrew Gwynne (Denton and Reddish) (Lab)]

14. What assessment he has made of the progressive effects of the measures in the June 2010 Budget which have been implemented to date.

--- Later in debate ---

[The Economic Secretary to the Treasury (Justine Greening)]

rose—[Interruption.]

[Mr Speaker]

Order. Mr Ruane, I want to hear the Minister’s answer.

[Justine Greening]

The right hon. Gentleman’s hearing must be suffering, because he obviously did not hear my earlier answer to the hon. Member for Denton and Reddish (Andrew Gwynne).

Scotland Bill

John Bercow Excerpts

Tuesday 21st June 2011 Commons Chamber

[Dr Whiteford]

The hon. Gentleman and I sat through some very long evidence sessions with any number of erudite professors of economics, none of whom seemed to agree with each other, but who nevertheless managed to find agreement on some pretty simple principles in respect of corporation tax, one of which was that if we lower it too far we will harm revenue, and if we raise it too high we will harm growth. Those very learned people disagreed because there are so many contingencies and uncertainties at any given point in time, and because the interlinking of the economies of various parts of not just the UK, but the European Union and beyond nowadays, makes it very difficult to pin matters down with any certainty, and therefore they become highly theoretical. Does the hon. Gentleman agree that—

[Mr Speaker]

Order. That is a very long intervention, but I feel sure that the hon. Lady is nearing her final sentence.

[Dr Whiteford]

Does the hon. Gentleman agree that the way to secure the Scottish economy is to create jobs?

--- Later in debate ---

[Pete Wishart]

I am not going to give way to the hon. Gentleman. As he is standing right next to me, I do not know why he cannot hear me.

[Mr Speaker]

Order. The hon. Member for Paisley and Renfrewshire North (Jim Sheridan) must resume his seat.

[Pete Wishart]

Thank you, Mr Speaker. It takes a long time for Members to understand that I am not going to give way.

Once the Bill has completed its passage in the House of Lords it will return to the Scottish Parliament, and a further legislative consent motion will be required because of the many amendments passed by the House of Commons. I know that colleagues in all parties in the Scottish Parliament will want to look closely at a number of those amendments, and I know that the Secretary of State and the House will respect the views of the Scottish Parliament. I know they will accept that the Scottish Government have a massive mandate.

Many Members have talked about this being part of the devolution story, and it is. This is the second major Bill on devolution to have come before the House. The devolution story will continue to unfold, and we will continue to go down that road, but a new story is now also starting to emerge. It is about a new journey that Scotland is about to embark upon, because at some point over the next few years we will have a proper referendum on the future of Scotland—a proper, constitutional referendum that will be about independence, and I am absolutely sure that the Scottish people will make the right choice and that Scotland will once again join the nations of the world.

[Several hon. Members]

rose—

[Mr Speaker]

Order. In calling Mr Iain Stewart, I ask him to consider the merits of allowing a couple of minutes for the Chairman of the Select Committee, but it is up to him.

--- Later in debate ---

[Stewart Hosie]

On a point of order, Mr Speaker.

[Mr Speaker]

I hope it is a point of order.

[Stewart Hosie]

The use of this neo-fascist description is absurd, offensive and wrong in every single regard. What powers, Sir, do you have to ensure that this nonsense is not said or repeated?

[Mr Speaker]

My powers do not extend to the refutation of nonsense.

[Mr Davidson]

Is it not neo-fascist to attempt to shout down speakers with whom one disagrees? We have had robust debate in the House on several occasions, but it has frequently been the case in my constituency, after I won it from the nationalists, that they have attempted to shout me down.

--- Later in debate ---

Bill read the Third time and passed.

[Mr Speaker]

We are about to come to the Adjournment and I appeal to right hon. and hon. Members who are leaving the Chamber to do so quickly and quietly to afford a fair hearing to Mr David Amess.

Eurozone (Contingency Plans)

John Bercow Excerpts

Monday 20th June 2011 Commons Chamber

[Mr Speaker]

Order. May I remind remaining contributors that this is not a general debate on the British Government’s domestic economic policy?

[Mr Philip Hollobone (Kettering) (Con)]

Does the Minister believe that the eurozone will remain intact with all its present members?

Oral Answers to Questions

John Bercow Excerpts

Tuesday 10th May 2011 Commons Chamber

[Ms Angela Eagle (Wallasey) (Lab)]

I would like to thank you, Mr Speaker, and the Chancellor for your tributes to David Cairns, our colleague, and to add our tributes from the Opposition side of the House. David was one of those very rare people who caused a change in the law in order for him to be able to take his seat in this place, and when he arrived his presence was not a disappointment to anyone. He was a great colleague and friend, and our hearts go out to his family and friends. We would like to add our deepest condolences at the shocking news of his untimely and very early death today.

Before the last election, both parties now in government pledged no rise in VAT, but with inflation running at double the Bank of England target, people are facing the biggest and longest squeeze in their living standards for 80 years. How does the Chancellor think that increasing VAT by 2.5% has helped them to cope with this issue?

[Mr Speaker]

Order. Whatever may be said about the question, I am sure that the Chancellor will focus on the monetary policy framework. That is what he can be relied upon to do.

[Mr Osborne]

Actually, monetary policy is the thing that I am not directly in charge of, but the point I would make is that the VAT rise is part of a credible fiscal policy. The person who was Chancellor of the Exchequer before me has made it pretty clear in interviews since the election that he, too, was considering a VAT rise, and he would probably have gone ahead with one if Labour had been re-elected.

--- Later in debate ---

[Claire Perry (Devizes) (Con)]

May I return to the topic of VAT on fuel? I have just come from a business session in my constituency of Devizes, where I know that despite the decrease, high fuel prices continue to be a real drag on growth for small businesses across the economy. I have a letter from the EU commissioner saying that the recent motion we debated—that a derogation should be made specifically for motoring fuel—is almost certainly illegal and definitely unworkable under EU legislation. May I ask Ministers what proposals we can suggest to help motorists in the real world now that the Labour party’s suggestion has been revealed as yet another—

[Mr Speaker]

We are grateful to the hon. Lady.

[Mr Gauke]

It is striking that the first line of Labour’s blank sheet of paper on the economy is a proposal that we now know does not work, is illegal, would not help and would leave tax on fuel just as high as it was—whereas we are cutting fuel duty.

--- Later in debate ---

[Mr Osborne]

The answer is that we have not had discussions about a second Greek bail-out and we have not been asked to make a contribution. The question for Greece is whether it lives up to the commitments that it has entered into. There is currently an International Monetary Fund, European Commission and European Central Bank team in Athens assessing Greece’s progress against the plan that it committed to, and we should await the results of that assessment.

[Mr Speaker]

Jonathan Reynolds is not here, so I call Stephen Timms.

--- Later in debate ---

[Several hon. Members]

rose—

[Mr Speaker]

Order. We must move on.

Amendment of the Law

John Bercow Excerpts

Monday 28th March 2011 Commons Chamber

[Sheila Gilmore]

No, I will not.

The private and public sectors are constantly interrelated, because public sector stimulus has kept the economy going since the recession began.

History has been rewritten, and I find it deeply perplexing and upsetting that the Liberals have been prepared to be complicit in that. I am not surprised that the hon. Member for Colchester (Bob Russell) took us along the byways of Colchester becoming a city, because it was a diversionary tactic. He did not want to talk about his party’s real economic policy. It reminded me of when I was working from home—suddenly, cleaning the kitchen became quite attractive because I could not settle down to do the work that required a bit more effort. That is what is happening with a party that went into the election telling people that it would be downright dangerous to cut public spending too quickly. That is not just some sort of Labour notion, as the Conservatives seem to think. It was the policy of two of the parties that went into the election and that, together, won a majority of public support. It is not true that the public supported the financial disaster that the Conservatives are now wishing on us.

I said in a previous finance debate that the proof would be in the outcomes and that if the Conservative party was right and economic growth was driven by their policies, I would concede that, but so far we are seeing nothing of the sort. Our position would not be too far, too fast—

[Mr Speaker]

Order.