Budget Resolutions and Economic Situation

Debate between Vince Cable and Brooks Newmark

Thursday 21st March 2013 Commons Chamber

[Vince Cable]

We seem to have forgotten, but I think Philip Snowden was the first Labour Chancellor—[Interruption.] Indeed, there have been many others.

[Mr Brooks Newmark (Braintree) (Con)]

My right hon. Friend mentioned a study by the Institute for Fiscal Studies, but the IFS also noted that under the shadow Chancellor’s plan B, the extra cost of borrowing would be another £200 billion. That surely cannot be good for UK plc.

[Vince Cable]

The hon. Gentleman has obviously found another version of plan B that I did not discover in my search, but I am sure he is right.

Let us consider what has caused this slow-down, which the shadow Chancellor blames on Government policy. The OBR was clear and explicit and stated that the downward revision in our forecast for 2012 is largely accounted for by a reduction in the contribution of net trade. We are operating in a difficult international context—particularly in the eurozone, which accounts for half our exports—and that largely explains the slow-down that has occurred, and the consequential impact on Government debt and borrowing.

We are giving overriding priority to developing British trade in those markets that have been neglected for many years. Over the past two years, led by the Prime Minister, I and other Ministers have gone back time and again to people in the big emerging economies to promote exports and inward investment. That is why our exports to Brazil and India have increased by more than half, and by approximately 100% to China and 130% to Russia. That diversification of our export base is fundamental to getting us out of this crisis. That is what we are doing, and we are succeeding.