Comprehensive Spending Review

Teresa Pearce Excerpts

Wednesday 20th October 2010 Commons Chamber

[Mr Osborne]

My hon. Friend is right. This country is spending £120 million a day on debt interest. So all the pet projects that Labour has suddenly discovered—[Interruption.] Well, the truth is that the previous Labour Government inherited a golden economic legacy from the Conservatives, but we have been left the worst economic inheritance that any peacetime Government in this country have ever faced. Unfortunately, we have to deal with it, but we are doing that as two parties working together to clean up the mess that one party created. The goal that I have in sight is a more prosperous, sustainable economy and a public finance situation that is deliverable and affordable for the people of Harlow.

[Teresa Pearce (Erith and Thamesmead) (Lab)]

The Chancellor has told us that we can expect 490,000 public sector jobs to go in the next five years, while PricewaterhouseCoopers has made an expert estimate that another 500,000 private sector jobs will go. How does putting out of work 1 million people, who will no longer pay tax and will add to the jobseeker’s allowance and housing benefit budgets, cut the deficit and add to growth?

[Mr Osborne]

I shall make a couple of observations. First, the independent Office for Budget Responsibility—the hon. Lady is, after all, quoting its forecast, so I presume that she would accept its whole forecast—has predicted that unemployment will fall and that more private sector jobs will be created. Secondly, she must accept—even the deficit deniers in the Labour party must accept it, and they admitted it during the general election—that there would have been a reduction in the public sector head count if there had been a Labour Government. I do not know whether the hon. Lady agrees with that—she can shake her head, nod or whatever—but that is the truth. We have had to make some decisions, but there is a high turnover in the public sector anyway, so we hope that much of this can be accommodated by posts not being filled. There will be redundancies—I think the Labour party has accepted that there would have been redundancies under its plan—but we are going to do everything we can to deal with that situation and help those people to find work. In the end, however, the current size of the budget deficit means that we have to deal with this situation, or many, many more jobs would be at risk. Let us remember that this Government came into office with unemployment rising, and that is what we have had to deal with.