Amendment of the Law

Debate between Tobias Ellwood and Emma Reynolds

Tuesday 29th March 2011 Commons Chamber

[Mr Ellwood]

I did not receive my invitation. Perhaps I shall find it in my office when I go back there.

The bottom line is that we inherited an economic nightmare—the worst of the messes in the G20. The gap between the richest and the poorest had grown since Labour came to office, and the size of government had bloomed. In the past decade, the civil service had grown by an additional 800,000 people. I have no idea what those people actually did, but they were in addition to those who were running the country a decade earlier. That is the bloated government that we need to try to get rid of. There was also a culture of encouraging people not to work. It was never easier than under Labour to do nothing and get paid for it. Those are the kinds of issues that we need to tackle.

The number of regulations introduced under Labour was astonishing. We are now faced with about 21,000 regulations, of which about 10,000 were created by the last Government. As I said earlier, Labour was planning huge cuts, had it won the election; it just did not say where they were going to be made. Had it won, it would have received a lot of the grief that we are receiving today, because it would have had to implement very much the same measures that we are implementing.

Looking back at the legacy that we left Labour, we can see that there was an unbroken period of growth from 1992 to 2008. We had growth up to the economic downturn in 2007. The deficit in 1997-98 was £15 billion. By 2007—before the economic downturn—it had already increased to £33 billion. We were not living within our means.

[Emma Reynolds]

I want to put the same question to the hon. Gentleman that I put to the Secretary of State. Up until 2008, his party backed our spending commitments, so is there not a little bit of revisionism on his side of the House?

[Mr Ellwood]

I was not in government then. The spending commitments that we backed did not take into account the state of the economy at the time. They were the plans for the future, but they did not take into account the money that had been spent.

The point that I was trying to make was that, from a deficit and a debt perspective, the previous Government wasted money during the boom years. They lived beyond their means, which placed us on the back foot when the economic downturn came. Again and again, we hear Labour say, “It isn’t our fault. It was an international issue. It was the Americans. It was Fannie Mae and Freddie Mac. It was the sub-prime market.” Well, that was possibly the case at the start, but in 2007, 2008 and even 2009, I could have gone to Bradford & Bingley and picked up a 125% mortgage. That was simply wrong. We were still not in control of the situation well after we knew that things were going down the pan.

The Opposition’s approach is now based on several themes. They tell us that, 12 months ago, unemployment was falling, growth was rising and inflation was low and stable. However, unemployment was higher when Labour left office than when it came in. In fact, that has happened every time Labour has been in office. No emergency measures had been put in place. Unemployment goes up in every recession; that is one of the impacts. It was wrong of the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) to suggest that if Labour were in power now, unemployment would continue to fall. That is completely incorrect. The Opposition also talk about growth, but it is actually continuing to rise. It rose by 1.3% last year, and the figure will be 1.7% this year. That is not what we expected, but the economy is still growing faster than the EU average. Of course, 2011 is going to be a year of pain. Urgent measures have been introduced, and the VAT rise will hit us.

I do not have time to go through all the other aspects of the situation, but I will end by saying that the Budget is all about continuing to bring spending under control. It is about gaining sustainable revenues from the banks and protecting the most vulnerable in our society. It is also about a shift from big government to small government, and about providing businesses with the tax breaks and incentives to expand, to compete in new markets and to tackle the expected rise in unemployment. History will show that we came close to the economic abyss, but that this Government took the tough decisions necessary to build a strong and stable economy.