Budget Resolutions and Economic Situation

Debate between Vince Cable and Penny Mordaunt

Thursday 21st March 2013 Commons Chamber

[Vince Cable]

The Opposition Front Bench is getting a little silly. Let us leave it to the consultation and see what comes out. I am sure that those imaginary horrors will not be realised.

The second criticism from the Opposition was about the level of borrowing. I was not clear whether the shadow Chancellor regards high levels of borrowing as a good or bad thing—a rather basic question. Is the Labour party in favour of more borrowing, or less? The Institute for Fiscal Studies made a thorough comparison between what is likely to happen under the Government’s fiscal plans and what would have happened under the so-called Darling plan. It was a bit perfunctory, but it gave us a framework and concluded that in 2016-17 the level of borrowing under the Labour trajectory would have been £76 billion, but £24 billion under the coalition’s policy. That is after the revisions that have taken place.

As someone brought up in the Keynesian tradition, I think it rather creditable that the Chancellor has responded to a slow-down in the economy by allowing counter-cyclical stabilisers to apply. I am amazed that those on the Opposition Front Bench find that a source of criticism, when it is good, common-sense, practical economics.

[Penny Mordaunt]

The shadow Chancellor’s speech not only did a grave disservice to the Chancellor, but to Philip Snowden. I declare an interest as my late mother was Jennifer Snowden so I am related to the first Labour Chancellor of the Exchequer. As a consequence I have his biography which states:

“He was raised in an atmosphere which regarded borrowing as an evil and free trade as an essential ingredient of prosperity.”

Does the Business Secretary think that I should loan my copy to Opposition Members?

[Vince Cable]

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