PARLIAMENTARY DEBATES - United Kingdom Parliament

67 Debate on the Address
9 MAY 2012
Debate on the Address
68
[Tony Baldry]
Indeed, over many years, this country built up massive
debts, which we have to pay off. Of course, it is much more
difficult to do that when so much of the rest of Europe
is in recession. As I suspect France will soon demonstrate,
trying to pile debt upon debt is what got Britain and
Europe into such difficulties in the first place. It did not
work for Britain over 13 years of a Labour Government
and would not work now. The eurozone’s troubles are
caused by too much debt, the burden of excessive public
spending and the burden of excessive public borrowing.
It is not surprising that Government are seeking the
approval of Parliament relating to the agreed financial
stability mechanism within the euro area.
It is no mean task recovering from the deepest recession
in living memory, accompanied as it was by a debt
crisis. Our banks had too much debt; our households
had too much debt; and the Government had too much
debt. As Sir Mervyn King, commenting on the performance
of the last Government, observed in “The Today Lecture”
that he gave last week while the House was in recess:
“Bailing out the banks came too late though to prevent the
financial crisis from spilling over into the world economy. The
realisation of the true state of the banking system led to a
collapse of confidence around the world...unemployment in Britain
rose by over a million....to many this will seem deeply unfair and
it is. I can understand why so many people are angry.”
One can speculate only that perhaps more than a million
people may have lost their jobs unnecessarily because
the previous Government failed to act on warnings
from the Bank of England.
Notwithstanding the challenge, Britain has so far
hung on to our triple-A credit rating. We have kept a lid
on borrowing costs and, compared with other countries
in the eurozone, many of which are in the process of
changing leaders or just starting to tackle their debts,
we are thriving.
John Cryer: I thank the hon. Gentleman—or is it
right hon. Gentleman? [Interruption.] Well, I am sure
he should be right hon., and I shall put down an
early-day motion tomorrow to achieve it! Returning to
the last election, is the hon. Gentleman aware that at
that time both unemployment and the deficit were
falling, yet they are both now rising? The Office for
Budget Responsibility predicts that the deficit is going
to be a lot higher at the end of this Parliament than was
predicted two years ago.
Tony Baldry: I think we need a bumper book of excuses
from the Labour party, explaining why it was not responsible
for getting us into the difficulties we face. Let us develop
a bumper book of excuses and put all these various
contributions into it, saying “Nothing to do with us, guv”!
That would be impressive. We must not be complacent.
The UK has to rebalance its economy. We need a bigger
private sector; we need more exports; and we need more
investment. In short, we need to do everything possible
to boost growth, competitiveness and jobs.
Geraint Davies: Does the hon. Gentleman accept that
the big debate is the balance between the need for
growth and the need for cuts to lower the deficit? Does
he accept that, as we entered 2010, two thirds of the
deficit was caused by the banks and the remaining third
by the then Labour Government—who had invested
more than they were earning, but who had done so with
good reason to project a positive growth trajectory? In
hindsight, does he accept that the balance between
growth and cuts is wrong, and that we should act on the
mandate in Europe and invest more in growth and less
in cuts?
Tony Baldry: Since the general election the Labour
party has engaged in a wonderful exercise in propounding
the motif that cuts are being made too far and too fast.
In his autobiography, the former Chancellor of the
Exchequer responsibly acknowledges the mistakes made
by the last Labour Government. Opposition Members,
however, have tried to develop a line that will enable
them simultaneously to go around the City of London
saying “We are being sensible and responsible about the
deficit and about the need to reduce public spending”
and, when campaigning, to present the impression privately,
on the doorstep of every household in the country, that,
given their own way, they would not reduce any individual
item of public expenditure. That is a circle that the
Opposition cannot square, and until they get real in
explaining to the country and the markets how they will
actually tackle the budget deficit, they will not be taken
seriously as an Opposition, let alone as a Government
in waiting.
We must never forget that the present Government
inherited a budget deficit of 11%—bigger than Greece’s,
bigger than Spain’s, and bigger than Portugal’s. We all
know that if we do not deal properly with our debts and
with the nation’s deficit it will be impossible to keep
interest rates low, and that, quite apart from the benefit
that low interest rates provide for businesses and those
paying mortgages, they offer us the best prospects of
getting out of our present difficult economic situation.
The Government and the Chancellor inherited a deeply
dysfunctional economy in which, all too often, the taxes
generated by the financial and property sectors in the
south paid for higher public spending in the north. As
Sir Mervyn King so tellingly testified in his speech last
week, it was an economy in which the City had been
poorly policed, and in which growth was too dependent
on debt. Making clear that we intended to have a
credible fiscal plan has helped us in Britain to maintain
our top international credit rating and has brought
interest rates to record lows, making family mortgages
and business loans cheaper. Sticking to the deficit plan
means that, having inherited a deficit larger than those
of Spain or Greece, we have interest rates similar to
those in Germany. Indeed, the IMF’s latest forecast for
the UK expects it to grow faster than France or Germany.
In considering where we are now, we should not forget
that the recent Budget cut taxes for 24 million working
people.
Chris Bryant: Will the hon. Gentleman give way?
Tony Baldry: I love the hon. Member for Rhondda
(Chris Bryant)! He left the Chamber for a considerable
period, has been back for two seconds, and now wants
to intervene. However, because he is very supportive on
Church matters, I am happy to give way to him.
Chris Bryant: So much excitement was being engendered
by the hon. Gentleman that I felt the need to return to
the Chamber. Then I started to listen, which is where