Charter for Budget Responsibility — House of Commons, 2015-01-13
Topic: Macroeconomics
Benedict Gummer (Conservative, Centre-right): I am absolutely delighted that this motion is being put before the House today, not just for the reasons I will come to about the direction of Government policy, but because since I came to this place I have advocated stronger fiscal rules such as those which this charter seeks to introduce. This is part of a direction of travel that I hope will find us in a position whereby we can introduce proper legislation on fiscal rules in much the same way as the Swedish did some 15 years ago The hon. Member for Dundee East (Stewart Hosie), who is no longer in his seat, made a good analysis of the problems with fiscal rules, and I completely concur. If they are not drawn up properly, they can cause more problems than they help solve, not least because they allow some parties and politicians to pretend that they are doing things that are prudent when in fact they are not doing so. However, in a few circumstances they have been successful. The important thing about the rules that are being developed by the Treasury, the Chief Secretary and the Chancellor is that they are building a consistent basis on which we can create a decent fiscal framework for the future The history of fiscal rules in this country is not good. That is because of the mendacity of the golden rules dreamt up by the former Prime Minister and Chancellor, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), and by his adviser at the time, now the shadow Chancellor. Those rules were mendacious because they pretended to the British public that prudence was being pursued, when in fact it was not. The right hon. Member for Kirkcaldy and Cowdenbeath spoke all the time of current budget balances, yet from 2002 onwards, as my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) pointed out so eloquently, a large and increasing deficit was being built up. What is so troubling about this debate is that it has proved that the right hon. Gentleman’s adviser at the time is now planning to do precisely the same thing again—to imagine a trend rate that is informed by his own desires and not by actuality, and informed by a mode of economics that suggests that if one somehow creates different living standards through the force of Government, one can create the economic weather that one wishes to see. That argument is pursued only in Venezuela and nowhere else in any developed country. It fails because it goes against all the economic laws that have been found to be consistent through this crisis and which proved the previous economic policy so very wrong This debate is so important—fiscal rules matter, even if they are not perfect—because it forces us to have this discussion. Here I differ, which I rarely do, from my hon. Friend the Member for Bury St Edmunds (Mr Ruffley). He is a kind and generous soul, but on this I am not. I am afraid that the Opposition are introducing us not to some different policy agenda, but to a fraud. I do not think that they have any intention of consolidating the fiscal situation of this nation if they come to power. They are not promising to introduce a real surplus by the end of the next Parliament; they speak only of the current budget, and that is why we failed so magnificently last time. We were left high and dry when the water went out, leaving us in a position where we had no ability to fight the greatest threat to our economy since the second world war This is an important day, because it reaffirms the Government’s commitment to securing the future of the economy for our communities and our nations and because it exposes the fraud being put to the British people by the Opposition in advance of the next election. We can see today that the British people have a clear choice between chaos and competence. I am glad that it is such a clear choice that even the Opposition in their heart of hearts know they have to vote with the Government and with competence.