Conduct of the Right Hon. Member for Uxbridge and South Ruislip

Stewart Hosie Excerpts

Tuesday 30th November 2021 Commons Chamber

[Michael Ellis]

SNP Members are fair-weather friends to democracy, which, clearly, they support only when it goes their way.

[Stewart Hosie (Dundee East) (SNP)]

Will the Minister give way?

[Michael Ellis]

I will give way, but perhaps the right hon. Gentleman will say why the SNP did not choose to debate the vital topic of education in Scotland.

[Stewart Hosie]

The Minister is speaking dutifully and gushingly about the Prime Minister; he is painting a picture that nobody in the country recognises. For the sake of completeness, perhaps he will explain, if things are going so swimmingly, why Conservative Back Benchers have sent letters of no confidence to the 1922 committee?

[Michael Ellis]

The right hon. Member’s statement is obviously disproven by the fact that the Prime Minister won an 80-seat majority—the biggest Conservative Government majority since the early 1980s.

The fact of the matter is that the Prime Minister is taking care of the people’s priorities, not focusing on the polemics of the SNP. He is looking at what the people care about most—

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[Stewart Hosie (Dundee East) (SNP)]

It is a pleasure to follow the right hon. Member for West Suffolk (Matt Hancock). If he carries on reading out his briefing notes, he might get a job in the Government one day.

There is an old adage in politics: it is not enough simply to win a vote, one needs to win the argument, too. This Government are rather different, though. They will use their majority to win votes, although sometimes they try to avoid those votes, but they rarely put in the effort to win an argument, other than by blunt force and soundbite. This has led to a catalogue of nasty, unnecessary and deeply undesirable decisions. There has been a procession of decision making based on half-truth, anecdote and inaccuracy.

Take the Elections Bill, or more accurately the voter suppression Bill. Up to 3.5 million people may not have suitable identification, and the Government’s own pilots indicated that some 325,000 people could be denied a vote in a GB election. The Government have persuaded nobody of the Bill’s necessity, but they are bashing on regardless.

[Dr Caroline Johnson (Sleaford and North Hykeham) (Con)]

The right hon. Gentleman talks about the difference between winning an argument and winning a vote. Is the 2014 Scottish referendum not an example of the SNP winning neither? Despite that, the SNP continues to bash on regardless, as he says.

[Stewart Hosie]

We are here. We did not make a unilateral declaration of independence. We have not rushed into a second referendum. What we have done is win another mandate, and we will hold the referendum in line with the wishes of the people, because that is what democracy actually means.

The proposed changes to the Electoral Commission will give this Government unprecedented and unchecked power by allowing Ministers to set the commission’s agenda and purview, thereby enabling them to change which organisations and campaign activities are permitted a year before an election. That is Executive interference in the electoral process, about which we should be deeply concerned.

On a related topic, we have a boundary review that will reduce the number of MPs in Scotland and Wales and increase the number in England. If every single vote were cast the same way, it would not affect the SNP. The polls say we would still return 48 Members, but in England the Tories would go up and everyone else would go down. Looking at the failure to tackle dark money, the boundary changes, the evisceration of the Electoral Commission and the voter suppression Bill, it is no wonder that the public smell a rat.

Then there is cash for honours. When my hon. Friend the Member for Na h-Eileanan an Iar (Angus Brendan MacNeil) asked the Prime Minister whether such practices should end, he seemed to defend it. Rather bizarrely, he said:

“Until you get rid of the system by which the trades union barons”

whoever they are—

fund other parties, we have to…we have to go ahead.”

There is a world of difference between organisations coming together to campaign for things they believe in, and selling honours for cash, which is illegal. Of course, the Tories always defend their own, trying to get Owen Paterson off the hook and conflating his issue with a general change to the standards process. That was never going to wash.

[Drew Hendry]

My right hon. Friend is talking about illegality. We should never forget that it is this Prime Minister’s Government who introduced the phrase into the lexicon—into this House of Commons—that it is okay to break the law as long as it is in a “specific and limited” way.

[Stewart Hosie]

Limited and specific lawbreaking is still lawbreaking. I was also struck by the fact that the Government almost boasted about their intention to break international law, not by way of the “little Britlander” exceptionalism we are used to, but in a way that would have made the UK an international pariah.

I could add that this Government lost a key battle in the Tory covid cronyism row when the National Audit Office ordered them to name the VIP lane firms given public contracts. I could also talk about the disgraceful but, apparently, routine use of WhatsApp and Signal messaging systems, which have options to make messages disappear and which it appears have been used to avoid scrutiny of decisions made during the covid crisis. I could talk about the fact that the High Court granted a judicial review of the rules regarding the retention of records. But my favourite was when the Supreme Court ruled that the Prime Minister’s advice to the Queen that Parliament should be prorogued for five weeks at the height of the Brexit crisis was unlawful. Defeats in the courts, judicial reviews, trying to get Owen Paterson off the hook, cash for honours, voter suppression, weakening the Electoral Commission, ignoring dark money and unlawful prorogation—that is a pattern of self-serving, self-seeking behaviour, and an approach to governance that is grubby to say the least and smacks of dishonesty.

[Dawn Butler]

Will the right hon. Gentleman give way?

[Stewart Hosie]

No, I will not. The rot starts at the top. The fish rots from the head down—that is the Prime Minister. The buck should stop with him and the process to end this should end today with support for this motion.

Covid-19: Government Support

Stewart Hosie Excerpts

Wednesday 7th July 2021 Westminster Hall

[Stewart Hosie (Dundee East) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Mundell, and I congratulate my hon. Friend the Member for Midlothian (Owen Thompson) on securing this important debate.

I raise the issue of the covid recovery loan scheme, described on the Government’s own website as supporting “access to finance for UK businesses as they grow and recover from the disruption of the covid-19 pandemic”. It also describes how businesses can receive up to £10 million and is clear the Government are guaranteeing 80% of the finance to the lender. Not all lenders appear to be engaged in this scheme, and those who are have varying degrees of enthusiasm—but I set that aside for the moment.

The rules say that eligible businesses must be trading in the UK, would be viable were it not for the pandemic, have been adversely affected by covid, but are not in collective insolvency proceedings—and there is the rub. There was, quite rightly, a large degree of forbearance during the crisis from the public and private sectors but many creditors are now calling in debts that result from covid before debtor companies have returned to pre-crisis cashflow and profitability levels.

I know of many otherwise viable businesses, who in normal times could perfectly well service their debts, now finding themselves financially distressed as a result. They may fall foul of the recovery loan scheme criteria or lenders’ risk management practices if they are subject to a Scottish decree or an English county court judgment. In short, they are being punished for being adversely affected by covid—one of the criteria to get the money in the first place—and are unable to apply for funds because of how that impact is being felt. Decisions by the lenders and banks are more irrational precisely because the Government are guaranteeing 80% of the loan.

I hope the Government will put pressure on the lenders to take part in the scheme and persuade them to analyse the underlying viability of a business, rather than issuing a hard no simply because of a CCJ or a decree. It would be irrational if a business meets the criteria of being adversely affected by covid, but is denied access to the help it needs at precisely the time it needs it the most because the financial distress caused has resulted in a court order.

I will briefly raise another problem. I have been told by a business finance brokerage that of the 60 businesses he has supported to make full applications for the recovery loan scheme, only a single, solitary one has received the money, and that is deeply troubling.

Ministerial Code/Register of Ministers’ Interests

Stewart Hosie Excerpts

Tuesday 18th May 2021 Commons Chamber

[Penny Mordaunt]

My hon. Friend makes some very good points. He knows, because I have appeared before his Committee regarding this and other matters, that there have been delays to certain things, in part because of what the Government have had to deal with over the past 16 months, but those appointments are in train now. As he also knows from the evidence his Committee took, the register is due to be published very soon. I am sure that things will be on a much more stable footing as, hopefully, we come out of the pandemic.

[Stewart Hosie (Dundee East) (SNP)]

Annex B of the ministerial code says it is

“important that when a former Minister takes up a particular appointment or employment, there should be no cause for any suspicion of impropriety.”

Given that David Cameron worked as an adviser for Greensill Capital and is reported to have share options worth tens of millions of pounds, do the 57 messages to senior officials that we are aware of regarding Greensill Capital give any cause for suspicion of impropriety? Will that be investigated by the independent adviser? One of those messages to a senior civil servant said the decision

“seems bonkers. Am now calling CX,”—

the Chancellor of the Exchequer—

“Gove, everyone.”

Is that acceptable? Does that give cause for concern about impropriety and will that be investigated? When the Minister is on her feet, can she tell us what action, when the Chancellor of the Duchy of Lancaster got the call, did he take on behalf of his old boss?

[Penny Mordaunt]

As I said in my opening response to the right hon. Member for Ashton-under-Lyne (Angela Rayner), these issues are being looked at—there are reviews in train—and it would not be appropriate for me to comment on those until they have reported. However, I think all Members of this House will want things looked at. They will want to ensure that we get to the bottom of these issues, and I hope, too, that we will look at the wider issues around the Gupta Family Group and the role of the SNP in those matters.

Leaving the EU: Impact on the UK

Stewart Hosie Excerpts

Wednesday 17th March 2021 Commons Chamber

[Stewart Hosie (Dundee East) (SNP)]

It is a genuine privilege to follow the contribution from the hon. Member for Moray (Douglas Ross), because I believe that in the six minutes or so he spoke for he did not once mention Brexit, nor did he once recognise the difficulties caused by Brexit. We can conclude only that the Tories do not care about the damage that Brexit has caused.

Let me start by asking: what do we know about Brexit? It was ill conceived and poorly executed, it was an act of political panic and it has turned into an act of economic self-harm. It was driven by a sense of jingoistic exceptionalism that was never going to stand any scrutiny, and all the rhetoric of bright sunlit uplands has wilted under the reality of the problems—all foreseen—that have subsequently emerged.

It was reported in February that Scotland’s salmon farmers had incurred losses of £11 million as a direct result of Brexit—unmentioned by the hon. Member for Moray. On 12 March, it was reported that fish and shellfish exports were down 83%—unremarked by the hon. Member. On the same day, the Food and Drink Federation found that food and animal exports from the UK to the EU had fallen by 63% in January, which is clearly an important matter in the hon. Member’s constituency—unremarked in a debate about Brexit, but then we should not be surprised. The UK Fashion and Textile Association said that it is

“cheaper for retailers to write off the cost of the goods than dealing with it all, either abandoning or potentially burning them.”

Research from Make UK showed that 74% of the 200 major industrial firms it surveyed were facing delays with EU imports and exports, and 24 of the largest City of London firms have moved or plan to move assets worth an estimated £1.3 trillion out of the UK due to Brexit. That barely scrapes the surface of the problems.

It is not as if the Tories were not warned. Every pre-referendum economic forecast—certainly the serious ones—predicted a loss of GDP in the minus 2% to minus 7% range. The Treasury said that a free trade agreement could see a loss of GDP growth of around 6.2%, and that was not even the worst of its estimates at that time. In 2018, the cross-Whitehall analysis said that GDP could be 7.7% lower in 15 years under a smooth WTO mitigated arrangement. The one thing we can say about the deal we have with the European Union is that it certainly is not smooth—even the Chancellor of the Duchy of Lancaster has belatedly conceded that. Finally, the UK Government’s November 2018 long-term economic assessment suggested a GDP fall of 4.9% on a modelled FTA, which worsened to a 6.7% fall, with net zero inflows of European economic area workers, which, of course, for many Tory Brexiteers was all this was really ever about.

The question is, how do we proceed? We should back the motion because, self-evidently, we should regret the damage Brexit has done and that Brexit ever happened at all, but we need to move forward and work out how to improve this situation. Time is too limited for me to give any prognosis in the next 12 seconds, but in short, it is time for the Government to stop the pretence that we have an “excellent deal”, fully recognise the scale of the problems, show some humility and start to fix them.

Covid-19 Economic Support Package

Stewart Hosie Excerpts

Wednesday 14th October 2020 Commons Chamber

[David Linden]

Conservative Governments used to be really good on upholding the rule of law, and Conservative Governments used to be really good when it came to managing the economy, but we now have a Chancellor who appears to want the Scottish Government to set a completely blind Budget. For somebody who tries to advocate the idea of fiscal responsibility, that strikes me as rather bizarre.

People in Scotland are increasingly aware that the only way to move forward in terms of protecting our economy, managing our own finances and standing on our own two feet is with the powers of independence. With the United Kingdom Internal Market Bill destroying their hard-fought devolution, more and more Scots are supporting the SNP in calling for independence.

An Ipsos MORI poll revealed yesterday that 65% of people in Scotland think Britain is heading in the “wrong direction” compared with just 12% who think Britain is heading in the “right direction”. If we want to continue looking at polling, and I know the UK Government are doing quite a lot of polling on this issue at the moment—they are being a bit coy about releasing it—Ipsos MORI released a poll today showing that 58% of Scots now support Scottish independence.

I suggest to the Chancellor of the Exchequer that that backs up the point that people in Scotland can see this UK Government are not doing enough, and therefore they want to see these powers being transferred to Scotland so we can take our own decisions on these issues.

[Stewart Hosie (Dundee East) (SNP)]

Does my hon. Friend not think the Chancellor’s intervention was rather peculiar? The Chancellor is, of course, absolutely right that the Scottish Government can set a Budget, notwithstanding that it would be blind, but, depending on the Chancellor’s decisions, it may lead to subsequent in-year cuts or in-year changes. I am sure this Chancellor would not tolerate it if someone else was setting part of his Budget.

[David Linden]

I thank my hon. Friend for putting that on the record.

I do not want to detain the House too much. In conclusion, SNP MPs have stood up in this Chamber and made calls for the UK Government to do the right thing and support the public through the second wave of covid-19 cases. What they have put on the table so far does not go far enough, and that is why we will vote for the motion before the House tonight. I am grateful for the House’s forbearance.

The Economy

Stewart Hosie Excerpts

Monday 27th April 2020 Commons Chamber

[Rishi Sunak]

This is why it is so vital that we get the timing absolutely right. We are not there yet, as the Prime Minister said. We have made good progress but we are all concerned about the risk of a second peak, which is why we must meet the five tests that the First Secretary of State set out a little while ago so that we can restore our economy gradually but with confidence.

[Stewart Hosie (Dundee East) (SNP) [V]]

I agree with the Chancellor that covid-19 is causing significant local and global economic problems, and I am sure he would agree with me that trade will be a vital ingredient in recovery. Is it not the case that—he should take this on board very seriously—notwithstanding the need to ensure security of supply for things such as medicine and medical equipment, he and the Government should resist any move or any siren voices that would push the UK towards general protectionism in trade?

[Rishi Sunak]

The Prime Minister has been completely clear in his commitment to free trade; it is an important part of what we believe. It is also right, especially during this time, that we can ensure the security of supply that the hon. Gentleman mentioned. That is what the Government are doing, but it requires working with our international partners as well as focusing on domestic sourcing. We can continue to do both things, especially to ensure that our workers get all the equipment and supplies that they need at this time.

HMRC Impact Analysis: Customs

Stewart Hosie Excerpts

Tuesday 8th October 2019 Commons Chamber

[Stewart Hosie (Dundee East) (SNP)]

I think the Minister is in denial. The cost is £15 billion—£7.5 billion from UK to EU trade, and a comparable amount from EU to UK trade, which will no doubt be paid by consumers and businesses here. This denial runs to the heart of this whole problem. The Prime Minister said that leaving the EU would save £1 billion a month. That clearly only adds up if we ignore and deny any costs such as the £15 billion that we are talking about today. But it is worse than that. This figure is an annual recurring cost, so how will it be mitigated?

The figures exclude additional one-off costs. How will they be mitigated and have they even been assessed? They ignore the new VAT rules on parcels that are damaging to small businesses. How will that be mitigated and has it actually been assessed? The £15 billion also excludes the serious damage done to exports of low-margin items where this cost burden may be significant. Has that been assessed? Finally, the figures ignore the multiple damages done to businesses that ship part-finished goods back and forward across borders many times, which multiplies the administrative burden. Has that been assessed? How many business will be damaged and what mitigation is being put in place?

[Jesse Norman]

As the House will know, a lot of mitigations have already been passed through statutory instruments, including instruments in relation to stream- lining customs import processes and procedures, special procedures for other areas, and deferment of import duty and VAT. Only yesterday, we passed a statutory instrument on safety and security declarations on our imports.

Mitigation very much depends on the shape of any deal. As the House will appreciate, the figures we are discussing today pertain to a worst-case scenario of a no-deal impact. There are many other areas in which the EU has already indicated that it is happy to give mitigations—for example, in relation to some of our haulage processes and people travelling by air into the European Union.

High Speed 2

Stewart Hosie Excerpts

Wednesday 10th July 2019 Westminster Hall

[Stewart Hosie (in the Chair)]

Before I call the right hon. Member for South Northamptonshire (Andrea Leadsom) to move her motion, eight Members have notified me that they intend to speak, and I suspect many more may wish to intervene. We only have an hour. I do not want to limit the key points that anyone wishes to make, but if we can have a little brevity, it would be greatly appreciated.

[Andrea Leadsom (South Northamptonshire) (Con)]

I beg to move,

That this House has considered the business case for High Speed 2.

It is a pleasure to serve under your chairmanship, Mr Hosie, in my first debate as a Back Bencher in more than five years. I am delighted to have this opportunity to discuss one of the biggest concerns for many of my constituents, and to outline why I believe that the business case for High Speed 2 must be urgently reviewed by the Government.

I first became aware of HS2 when it was proposed in 2009 by the then Labour Government. Investment in infrastructure, creating jobs and growth, improving travel times between our major cities, and closing the north-south divide were all put forward as reasons in favour of the UK’s second high-speed train line. However, those supposed benefits unravelled one by one, and it quickly became apparent that HS2 is not the right infrastructure project, will not improve point-to-point travel times, and will not close the north-south divide. It will create jobs, yes, but at an eye-wateringly expensive rate, far beyond what we might expect from a similar project.

Those of us who expressed concerns about HS2 even while it was still in consultation were dismissed by others as nimbys and told that we were flat wrong about the wider benefits that HS2 would bring to the north. I was then and continue to be willing to be proved wrong, but with the delay to the notice to proceed, growing concerns about the project’s spiralling costs, ongoing engineering and design difficulties and, even now, the rumours that the line past Birmingham might never be built, it is high time for the project to be thoroughly reviewed to ensure that it will actually deliver for taxpayers.

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[Several hon. Members rose—]

[Stewart Hosie (in the Chair)]

Order. I intend to start the summings-up at around 10 past, so the time for each speaker is obvious, if all three want to speak.

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[Liam Byrne]

I am all for that, so long as it does not introduce a moment of delay in driving this forward. Frankly, our economy cannot have any further delay.

I treasure a project that puts the west midlands at the centre of this economy. I particularly treasure the speed, which will result in a journey time of something like 65 minutes from Birmingham International to Canary Wharf, the most important business site in the country, via the connection at Old Oak Common.

The right hon. Member for South Northamptonshire advanced the traditional bang-for-buck argument, which is that if we got rid of HS2, there would be plenty of bucks left for other kinds of projects. I have to say that that is not fiscal realpolitik at all. The fiscal realpolitik will mean that money currently earmarked for HS2 will be quickly absorbed into other projects, and Opposition Members will be forgiven for worrying that it will disappear into the £10 billion-a-year tax cut proposed by the right hon. Member for Uxbridge and South Ruislip (Boris Johnson).

The right hon. Member for South Northamptonshire was right to demand choices, but the choices that she proposes are wrong. The real strategic transport choice that this country must confront is not between HS2 and other rail network lines, but between planes and trains. We should drive ahead with HS2 and cancel the ludicrous decision to build a third runway at Heathrow airport for £14 billion. We could use half that money to build a high-speed loop and take passengers from Heathrow to Birmingham, where there is already untapped capacity for 17 million passenger movements a year.

Around the world, a trillion-dollar high-speed rail revolution is under way, and we are being left behind. It is time that this country got on with it.

[Stewart Hosie (in the Chair)]

I call Victoria Prentis. Please be brief. Then I will call the Front-Bench spokespeople.

Clydesdale Bank and SMEs

Stewart Hosie Excerpts

Tuesday 19th March 2019 Commons Chamber

[Stewart Hosie (Dundee East) (SNP)]

Given the personal cost of this—destroyed businesses, personal bankruptcy, mental health pressures, suicide and now a hunger strike—many of these people will not have the ability or the stomach for a historical review. Moving forward, may I tell the Minister that there is little confidence, including from the Treasury Committee, that the FOS has the ability, capacity or expertise to do the work it has been asked to do? I hope the Minister will listen—I am sure he will—to those in all parts of this House who are saying there is now an unanswerable argument for an independent financial services tribunal.

[John Glen]

I thank the hon. Gentleman for his question, and I have responded to I think nine debates in this Chamber and in Westminster Hall on this matter. I am very aware of the pitch and the breadth of concern that exists on this matter and the urgency in getting some outcomes that actually deliver for our constituents, and I will continue to work towards that aim.

Balanced Budget Rule

Stewart Hosie Excerpts

Wednesday 23rd January 2019 Westminster Hall

[Stewart Hosie (Dundee East) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Stringer, and to take part in this debate. I congratulate the hon. Member for North East Derbyshire (Lee Rowley) on securing this debate, not least because we all want the debt, deficit and borrowing to come down to sustainable levels—there is no disagreement about that objective. At the end of his speech, he spoke about flexibility and not harking back to the debates of 10 years ago. We supported the New Zealand model that allows for maximum flexibility for a shock, while trying to reduce the debt and deficit, and we still think it has considerable merit.

While not wishing to be at all partisan, I must take issue with the hon. Gentleman in one regard, which is that one generation’s spending paid for by the next is not a characteristic of much of our investment. Roads, rails, bridges, water, sewerage, long-term health improvement, education and even paying the state pension to those who have already contributed are intergenerational investments, and I would not characterise them as being a burden on, rather than an investment for, the next generation. The hon. Gentleman and the hon. Member for Cheltenham (Alex Chalk) spoke about morality, but there is nothing inherently immoral about borrowing if it is to fund that intergenerational investment.

I wish, rhetorically, to ask a series of questions. How do we do this? How do we run a balanced budget? What would the mechanism be? It strikes me that there are three ways that one could begin to do it. First, we could set hard targets, but if the downturn comes unexpectedly, if the revenue yield is lower than anticipated or if the money runs out, there are a number of options. We could simply stop spending, leaving a half-built bridge, road or railway, with unpaid pensions and cuts to welfare, but that would be socially, economically and politically undesirable. We could ignore the failure and carry on spending, or we could have a hybrid rule akin to the welfare cap, and the poor Minister would have to report to Parliament on why they going to make were cuts or ignore the rule and keep on spending.

In any event, there are likely to be in-year budget changes. In-year budget cuts in Westminster had an immediate impact and drove a coach and horses through the already set, voted on and agreed Scottish Parliament budget. If that is multiplied across the Welsh Assembly, Northern Ireland, and every local authority and other public body, an in-year change has a sudden and profound cascading effect on every recipient of public cash in the country—again, that is politically, economically and socially damaging.

As we have seen, the setting of a hard budget creates a perverse disincentive to hoard cash. No politician has not struggled to get cash from one public body or another in June, July, August or September, but then found a huge splurge of cash towards the end of the financial year. I bet my bottom dollar that if money is spent in that way it results in—how can I put this gently?—not quite optimum value for money.

To get round that, we currently budget against future forecasts, but if GDP is lower—for whatever reason—or if the tax yield is lower, or if the public finances and fiscal numbers are not what they might be, we are left again with a number of options. We can stop spending, which is bad. We can have in-year changes, which are undesirable. We can also allow automatic stabilisers to take their course. That normally happens for a good reason, but the budget rule is then breached. We could introduce a corollary to the Bank of England failing to meet the inflation target, with some kind of letter or report to the House of Commons. If that happened too often, it would become rather meaningless; even worse, it could become a fiscal event in its own right. Watch how the markets would respond to that, rather than a sensible automatic implementation of the automatic stabilisers.

To avoid such difficulties—as the hon. Member for North East Derbyshire said, we have seen this in the past—we can have a balanced budget over the economic cycle. I am long enough in the tooth to remember my friends in the British Labour party changing the start and end dates of the economic cycle to make the numbers fit. It was not very credible, so I would rule that out, however superficially appealing.

All those mechanisms—all of them—depend on accurate forecasts. If there is optimism bias, our fiscal numbers and tax yield will be lower than anticipated on day one. We have seen, year after year, and even with substantial depreciation of sterling, that the contribution of trade to GDP growth was far lower than expected, or even zero or negative.

Secondly, it requires those doing the forecast to have comprehensive access to all of the information. The Office for Budget Responsibility has told us that it did not have access to some Government policy changes before it produced its report in advance of the Budget, and even the most recent Red Books make precisely no consideration of the impact of Brexit on the fiscal numbers —zero—or of the impact of a reduction in immigration, which could have a profound impact on GDP growth and tax yield.

We then have the issue of having to identify in advance—although it is impossible to do so, particularly in the case of certain sorts of external shocks—the precise implications for the fiscal numbers and revenue yield of both cyclical and structural flaws in the economy.

I say to the hon. Member for North East Derbyshire that we all want to see the debt come down, the deficit come down and borrowing come down—all of us want to see that. However, in addition we all want to maintain investment and to ensure that we do not punish those with least, who are dependent on public expenditure.

I also say to the hon. Gentleman, keep pushing. Let us see if we can get an answer from the Minister, and let us see if a flash of inspiration comes over all our heads at some point. If he can identify solutions to those problems—the optimism bias, the lack of information from the forecasters or to the forecasters, and information in advance about the precise impact of both a cyclical and a structural change to the economy—I suspect that I will be the first one to put him up for a Nobel prize for economics. However, in the absence of answers to those questions, I suspect that this issue will remain something that we will have to work at and something that is unlikely to be implemented, or at least implemented quickly.

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[Stewart Hosie]

Is the irony not that that model would look like Greece? It is running a current account surplus, but the pain of a decade of even more brutal austerity than was faced here will be felt for generations to come. That would be success according to the hon. Member for North East Derbyshire (Lee Rowley).

[Peter Dowd]

The hon. Gentleman is spot on. I do not want to misquote the Secretary of State for Transport, but when East Coast went bottoms up he said that that just proved that the market works. That is the sort of economic approach that the Tories take to our country.

Let me go through the three criteria one by one. We are a party that, first, takes seriously the mantle of being guardians of a sustainable economy. We fully costed our election promises in our grey book, “Funding Britain’s Future”. The Conservative party, by contrast, gave no costings whatever in its manifesto. As the shadow Chancellor said, the only numbers in the Conservative party manifesto were the page numbers.

Meanwhile, Carl Emmerson of the Institute for Fiscal Studies said in his election briefing that Labour’s

“forward-looking target for current budget has much to commend it”.

The IFS also estimated that we would have met our deficit target with £21 billion to spare, and that we would meet our debt target.

Secondly, we recognise that Government spending is not something to be scared of, or to have a phobia about, and that some economic metrics do not fully capture the benefits of the gradual build-up of public assets, as the hon. Member for Dundee East mentioned. That is why we distinguish between day-to-day spend and investment in our fiscal credibility rule, because investment is a different kind of Government activity that contributes to a stock of public assets, providing benefits over time. A country is not a house, or an individual who has a lifetime; it goes on, as we know, for a long time. Comparing us to a household might be a soundbite, but it is economic fantasy.

[Peter Dowd]

I am not here to explain what sister parties anywhere do. I could quote sister parties for the Tories all over the place. The hon. Gentleman should be careful what he is wishing for when he starts to make those sorts of comparisons.

The Conservatives have been unable to appreciate this point in their words and in their actions: the Government’s fiscal target of cutting borrowing to less than 2% of GDP by 2021 does not exclude investment, or distinguish between spending and investment. In so doing, the Government overlook, and undervalue, the special character of investment. They do that time after time.

Their austerity programme, the mythical end date of which was in 2018—previously, it was before that—was more a signal of the Government’s failure than of any actual shift in approach. It has done lasting damage to our economy and society, and has left us with rough sleeping up by 169% since 2010, stagnant wage growth—the worst since Napoleonic times—and few examples of public infrastructure being patiently built up and supported.

The third aspect is flexibility when thinking about sound economic policy. The Tories’ austerity programme arises from, as the hon. Member for North East Derbyshire has reaffirmed today, a rigid ideological belief—not always reflected in practice, I have to say—that a smaller state is always better, notwithstanding good evidence of the state’s entrepreneurial capacity and the human costs of austerity. Such rigidity in approach is something that we have avoided in our fiscal credibility rule.

The zero bound knockout that we proposed, which would allow the Bank of England to change course in times of impending crisis when interest rates can do only so much, shows our willingness to adjust economic policy frameworks in the light of circumstances. Any sensible Government would do that—not bind themselves into a failed ideology and process. That knockout is informed by lessons learned after the global financial crisis—lessons that the Conservative party seems incapable of learning—when it became clear that continual cutting of interest rates was having little impact on spending habits and aggregate demand.

More was needed from fiscal policy, and that zero bound knockout—the fourth element of the fiscal credibility rule—acknowledges that that will sometimes be the case. Professor Simon Wren-Lewis writes that if that part of the rule

“had been in operation in 2010, we would have seen further stimulus in this and perhaps subsequent years, leading to a much quicker recovery from the GFC.”

Wren-Lewis describes that part of the rule—the part that allows a reversion to expansionary fiscal policy in times of crisis—as the part that makes the rule

“unique, and brings it up to date with current macroeconomic thinking.”

[Stewart Hosie]

Is it not part of the problem, although we are moving slightly away from a balanced budget, that there has not been a comparable fiscal response to the substantial monetary response that we have seen over the last decade?

[Peter Dowd]

That is a perfectly reasonable comment. Time and again the Conservative Governments whom we have had to endure—I choose to use the word “endure”—over the last nine years have failed to take a wider view on policy-making in the country. Petty in-fighting over Brexit has put us on a precipitous, catastrophic no-deal path. They failed, through austerity, to see, and to care about, how an ideological commitment to cutting apart Government would have ripple effects across the country on rough sleeping, indebtedness, demand and productivity, which is virtually the worst in Europe under this Government.

Our fiscal credibility rule, and economic policy in general, takes a wider view, which is important. We understand how fiscal and monetary policy have to interrelate for the economy to function well in different times, and we understand how principles of economic management such as our fiscal credibility rule have to fit into a broader vision of an economy that serves society, and not just those with the strongest voices.

--- Later in debate ---

[Robert Jenrick]

As we have already heard today, a great deal of progress has been made in that respect. Of course there is more to do, but we have to recognise the considerable progress that we have made. In 2010, as my hon. Friend the Member for North East Derbyshire said, we inherited a very severe situation: debt had nearly doubled in two years and was snowballing, while the deficit soared to a near record level—the highest in 50 years. Of course the financial crisis had contributed to that, but so had poor management of the public finances in the years leading up to it. We have made progress, and we are nearing a turning point in the public finances. Debt has begun its first sustained fall in a generation and the deficit has been reduced by four fifths—from 9.9% of GDP to 2% at the end of 2017-18. That is an important step forward, but there is a great deal more to do.

[Stewart Hosie]

Does the Minister not accept that his party has any responsibility for slowing down the recovery? Does he not recognise that in 2010 the UK was one of only two countries—the other was Argentina—to completely end the fiscal stimulus, weakening the recovery and ensuring that the downturn lasted far longer than it ought to have?

[Robert Jenrick]

No, I do not accept that for one minute. It is exactly as a result of this Government’s fiscal responsibility in that period that the public finances have now improved, credibility has been restored in the market and business has continued to invest. For those reasons and others, we now have continued record levels of employment, record low levels of unemployment and an economy that remains remarkably resilient. Let us not forget that public spending is £200 billion higher today than it was in the last year of the last Labour Government.

We are not complacent about the debt or the deficit. The fiscal outlook may be brighter, but the need for fiscal discipline continues, as my hon. Friend the Member for North East Derbyshire made very clear. The debt is still more than 80% of GDP, which is equivalent to approximately £65,000 per household, and we want to reduce that figure, for a number of reasons. We are concerned to ensure that if there is a future economic shock, the economy is resilient, and we want to improve fiscal sustainability. In the most recent Budget, the Chancellor set aside £15 billion of headroom for economic shock, out of concern for any further uncertainty that might arise as a result of Brexit.

There is a broader point, however: servicing debt is costly. If our spending on debt interest were a Ministry, it would be the third largest, after health and education. Our spending merely on servicing our debt is equivalent to what we spend on the police and the armed forces. As my hon. Friend made clear, that has an opportunity cost, because that spending has no economic or social value and reduces our ability to spend on our priorities and keep personal and corporate taxes as competitive as possible. The debt burden of interest is merely being passed to future generations.

The foundations of the Government’s approach are our fiscal rules: first, to reduce the cyclically adjusted deficit to below 2% by 2020-21, and secondly to have debt fall as a percentage of GDP in the same year. Sticking to those rules will guide the UK towards a balanced budget by the middle of the next decade. The OBR’s economic and fiscal outlook, which was published in October and was quoted from earlier, shows that the Government are forecast to have met both our near-term fiscal targets in 2017-18, three years earlier than predicted. Sensibly, given uncertainties in the fiscal outlook, the Chancellor took the view that we should retain the £15 billion of headroom against the fiscal mandate in the target year and £73 billion against the target of getting debt to fall. The forecast also shows that borrowing will fall to 0.8% of GDP by 2023-24, its lowest level since 2001.