Charter for Budget Responsibility — House of Commons, 2015-01-13
Topic: Macroeconomics
Daniel Grian Alexander (Liberal Democrats, Centre to centre-left): Each Government have to account for their own economic policy in their own way. I am proud that we have put in place a plan that has got the deficit down by half and, more importantly, got us the best economic growth in the European Union and the strongest record of job creation—Opposition parties are notoriously silent about that Let us put this matter into some sort of context. While we have been busy cutting the deficit, the shadow Chancellor and the Leader of the Opposition have spent their time marching their troops up and down the hill of deficit denial. If their votes today are to have any credibility, they will have to march them down that hill again. We have still not heard one word of acknowledgement for their role in the crash of 2008, let alone a word of apology By the end of this Parliament the Government will have halved the deficit as a percentage of GDP. That has meant facing up to reality and taking difficult decisions. This has been a process during which Labour voted against every measure that we have had to introduce to rescue the economy. There have been scores of votes on deficit reduction and, you guessed it, the Opposition voted against every one. So I say this to Labour: "Supporting this motion does not restore your credibility on the deficit. You have said your aim is to push out the time scale as far as possible. You are perfectly happy to borrow tens of billions of pounds more. That will mean more debt, more interest payments and the pain of rebalancing the books dragging on for years to come." Numerous contributions have been made to this debate, and I thank those who have spoken from the Conservative and Liberal Democrat Benches. We heard a wise contribution from the right hon. and learned Member for Rushcliffe (Mr Clarke), and excellent contributions from my hon. Friend the Member for Redcar (Ian Swales) and from the hon. Members for Hexham (Guy Opperman) and for Ipswich (Ben Gummer), in particular However, some Conservative Members have criticised me in this debate for the views I have taken on Conservative plans beyond 2017-18—the shadow Chief Secretary asked me about this, too. Let me send a note of warning to some of my Conservative colleagues. We formed the coalition to tackle the deficit in a timely manner. That is why we agree that the structural deficit must be eliminated by the end of 2017-18 and debt must fall as a share of GDP. Hitting that 2017-18 target will require further consolidation to the tune of some £30 billion, and to say that we can reach that figure by spending reductions alone, with some £12 billion coming from cuts to welfare, would be grossly unfair. It would hurt millions of families who are trying hard to make a success of their lives. Tax on the wealthy should and must play a significant part in how we finish the job in the next Parliament. But our real concern, and where we differ, is on what happens after that mandate is met. As a country we should not be wedded to austerity for austerity’s sake. People in this country supported our coalition approach because it has been necessary and successful in turning the economy around, but they will not support an ideological drive for an ever smaller state.