Pensions Bill [Lords]

Steve Baker Excerpts

Tuesday 18th October 2011 Commons Chamber

[Steve Baker (Wycombe) (Con)]

The right hon. Member for East Ham (Stephen Timms) set out his misgivings about the Bill. I share some of his trepidation about the effects on the group of women that we have discussed, but I shall be supporting the Government because I disagree with the hon. Members for Edinburgh East (Sheila Gilmore) and for Hampstead and Kilburn (Glenda Jackson), who sought to set out our financial position and compare our debt to that after the second world war. I wish that our financial context was as simple as just the size of the national debt. I have the figures and charts on my iPad: shortly after the second world war the Government were running a surplus—the second largest run since the second world war. It was beaten only in 1970. I would make another point about how the welfare state was founded.

[Sheila Gilmore]

In terms of annual expenditure, I do not disagree with that, but the surplus was so high partly because personal taxation levels were considerably higher than they are today.

[Steve Baker]

I am grateful for the hon. Lady’s point, because she seems to have pre-empted me—as I rewind on my iPad back to the chart showing taxation. [Interruption.] Between 1940 and 1950 the total level of taxation taken out of the economy rose from about 12% to 40% and it has stayed at about 40% since 1970. The context therefore is very different. The Government can only fund themselves through taxation, borrowing and currency debasement. If I wind forward and have a look at the charts on currency debasement, I can tell her that we have been furiously debasing the currency since 1971, which is the reason for the current mess we are in.

I also point out to the hon. Lady that the Bank for International Settlements has provided a number of charts setting out the debt projections for most of the western world, all of which look catastrophic. For example, in the United Kingdom—[Interruption.] Aren’t iPads useful! The BIS tells us that on the trajectory we inherited from Labour, our national debt would have reached 500% of gross domestic product by 2040. By then our debt interest payments would have been one quarter—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I am sure that the hon. Gentleman is using his iPad very well, but I hope that he will come to Third Reading, which he should be mentioning.

[Steve Baker]

The financial context now is quite different from that in previous years. If the Government were not to address the pensions crisis within a realistic financial context, we would have a financial catastrophe. We would find ourselves, by 2040, attempting to spend one quarter of GDP on debt interest. It would be catastrophic—and much as my heart goes out to those ladies who I wish were not being affected by the Bill, because of the financial position in which we find ourselves I shall, of course, support the Government.