Budget Resolutions — House of Commons, 2018-10-30
Topic: Macroeconomics
Neil John O'Brien (Conservative, Centre-right): The new T-levels will fix a problem that has been known about for 100 years and give us a more technical system that will be more like the German one and will be the envy of the world I welcome the £20 billion for the NHS—a staggering £400 million extra a week—and the fact that we have a vigorous new Health Secretary who is bringing new technology into the NHS in order that it will no longer be the place with the most fax machines and pagers in the world. If you really love something, you want it to be the best it can be and you make it the best it can be I welcome the fact that crime is down since 2010 and that we protected police spending in real terms in the 2015 spending review, and I welcome the £200 million a year extra in the Budget to counter serious youth violence and the money for counter-terrorism, but I hope that those are a down payment on a strong settlement for law and order in the spending review. I have been unhappy with the lenient sentences people have received in recent cases, such as the motorcyclist who repeatedly kicked a police officer in the head but was spared jail—that was a mistake; an unprovoked assault and wounding in Market Harborough that did not lead to imprisonment. Assaults on prison officers in HMP Gartree were not even prosecuted. We should be jailing more people for longer, and if we need to find additional resource to do it, it will be money well spent In the battle to get our terrible deficit under control, a corner has been turned. In the 2010 spending review, annual average real growth in departmental spending was minus 3%; in 2015, it was minus 1.3%; and from next year, it will be plus 1.2%—a clear difference in direction. Some people now argue that, if we exclude everything that is going up, such as health, defence and aid, other things are going down. I have two things to say about that. First, yes, absolutely the NHS has been prioritised—because it is the people’s priority. Secondly, the Chancellor has sensibly left himself some headroom. With national debt as a percentage of GDP now forecast to fall by 11 percentage points over the forecast period, compared to 7.5 percentage points before, we now have some headroom Only through a thorough spending review can we find out how much money we need on top of more efficiency. Once that review is complete, if the Chancellor feels he needs to use some of that headroom to invest in strong public services, he will have my full support, but while such a balanced approach has my support, the country is in no position to go on a massive spending spree. To use a diet metaphor, we have been through a difficult diet to stop the country having a heart attack and we have got the weight off, and some people say that we should get back on the burgers and the cream buns. No, we need to stay fit for the long haul and have a strong economy. That is what we will do Now that the partisan part of this debate is over and the real cognoscenti are here, let me finish with a couple of points we do not talk about enough in these debates. Labour sometimes says that this is an ideological choice and that we did not need to reduce spending. Why then did Labour’s last Budget propose to reduce total managed expenditure from 48% of GDP to 42% of GDP? We in practice reduced it to 41% of GDP, but the idea that the difference between 42% and 41% is the difference between a massive ideological crusade and sensible socialist cuts is ridiculous. We should be clear in the House that the differences are not so great as they are sometimes made out Secondly, we must be careful about promising people a huge spending splurge. We are an ageing society, and the OBR’s fiscal sustainability report forecasts that, in the absence of no policy changes, debt-to-GDP will start to rise because we are all living longer and using the NHS more, and that this will take debt to more than 250% of GDP in the second half of the century. Let us not promise people things we cannot deliver Thirdly, let us not be complacent about managing our debt. Sometimes people say, "Oh well, after the second world war we had huge debts that were 250% of GDP and that was fine." I say to them that we used to have 25% inflation in this country, which cut through our debts pretty quickly, we did not have index-linked debt and we did not have an independent central bank. We must recognise in this House that if we run up big debts, it will be much more difficult than it ever was before to get them down. We must have a prudent approach To conclude, if Members on either side of the House say that we should use some of the headroom that we have earned to invest in strong public services, I agree with them. However, if Members want to pretend that there was an easy alternative to what has been done over the past eight years, that is just not the case. If they want to pretend that we can use magic money tree-ism to fund everything we want and not worry about the deficit ever again, that is just not true. The most sensible Opposition Members know that, and if the Opposition ever find themselves in government they will experience it. I plead for an honest debate in this House. We have to have a balanced approach and we must not promise people things that simply cannot be delivered.