Charter for Budget Responsibility

Debate between Caroline Lucas and George Osborne

Wednesday 14th October 2015 Commons Chamber

[Mr Osborne]

I will give way to the hon. Gentleman in a moment.

Of course, the problem with people who say that now is a good time to borrow is that they always say it is a good time to borrow: in bad times they say we should borrow because we cannot afford not to, and in good times they say we should borrow because we can afford it. According to them, there is never a right time to stop borrowing and start saving. That is precisely the thinking that got Britain into a mess eight years ago.

This budget charter provides the discipline we need along with the flexibility we might require. It says that debt as a share of GDP should be falling every year when the economy is growing normally, but when recessions come or economic growth is very weak and below 1% the rule is suspended and the automatic stabilisers kick in. Then the Chancellor of the day will come to Parliament and present a plan to return the public finances to health and Members will either support or reject that plan. That is simple, clear, accountable, strong and flexible. It is a commitment to sound money and stability—the bedrock of economic security for working people.

The third argument we have heard today is that we do not need fiscal rules at all and that they are meaningless. Again, I disagree. I believe that democratic Governments should set out their approach to public spending. It is the public’s money, after all, and we should be held to account by them. Successful countries do set out long-term objectives and hold their Government Departments to account, rather than lurch from one year to another.

Of course, rules are meaningless if people are their own judges of the rules they set—we know that from the golden rule the Labour party set when it was in office—but we have an independent Office for Budget Responsibility and it is the impartial judge of whether we deliver what we promise.

There is an argument that because we have the OBR it can come to its own conclusion about the soundness of our fiscal policy, but that is profoundly undemocratic. Public spending should be determined by this House of Commons. That is why we are having this debate and this vote tonight. Under our system, the rules are set democratically and are independently judged, and the people can hold us to account.

[Caroline Lucas (Brighton, Pavilion) (Green)]

This might be clever politics, but it is staggeringly bad economics. The Chancellor is incredibly irresponsible to imply that borrowing is always bad. If we borrow to invest, we increase jobs, stabilise the economy and increase tax revenues. That is good for the economy, not bad for it.

[Mr Osborne]

That is borrowing forever. There is never—[Interruption.] When would the hon. Lady stop borrowing and run a surplus? I am happy to give way to her as the representative from the Green party. When is the moment to stop borrowing and run a surplus?

[Caroline Lucas]

The moment to stop borrowing is when we can no longer afford to pay it back—[Laughter.] We can perfectly afford to pay back our investment, which is why economists are laughing at the Chancellor—[Interruption.]

[Caroline Lucas]

Thank you, Mr Speaker. If we are investing in jobs, that gets taxes going back into the Revenue, which is good for the economy. That is why economists are saying that the Chancellor’s silly trick is very bad economics, even if it is very clever politics to make all his friends laugh a lot. People across the country are not laughing, because he is increasing austerity and increasing the burden on the poorest.

[Mr Osborne]

Borrowing until it cannot be paid back leads to national bankruptcy. That might be a good pitch from the hon. Lady to be the next shadow Chancellor, but it is not how we should run this country’s economic policy.

Greece

Debate between Caroline Lucas and George Osborne

Monday 29th June 2015 Commons Chamber

[Mr Osborne]

As my hon. Friend well knows—the Prime Minister was explaining this at the Dispatch Box just an hour or so ago—one of the issues we are seeking to address in our renegotiation is Britain’s involvement in ever-closer union, which is not something that the British people are very comfortable with. I would make the broader observation, which relates both to the UK and to members of the eurozone, that we have to make the European continent, ourselves included, a competitive place to do business. We have to have businesses that can export around the world. We have to be able to make sure that jobs are being created in the European Union. A very important strand of what we are seeking to change in our relationship with the European Union is to make the EU more competitive for all its citizens, Greek as well as British.

[Caroline Lucas (Brighton, Pavilion) (Green)]

Since implementing austerity measures in return for loans has shrunk the Greek economy by a quarter and massively increased its debt-to-GDP ratio, as well as caused untold suffering, will the Chancellor consider increasing calls for the organisation of a European conference, similar to the London conference of 1953 for Germany, to agree a package of debt cancellation and restructuring, which is likely to be a far more effective way of addressing both the economic and the social crisis unfolding in Greece?

Oral Answers to Questions

Debate between Caroline Lucas and George Osborne

Wednesday 17th June 2015 Commons Chamber

[Mr Osborne]

My hon. Friend is right to draw attention to the success that Manchester University and Jodrell Bank have had in securing the international headquarters of the Square Kilometre Array experiment. I visited Jodrell Bank in the middle of the election campaign—I dropped in to congratulate them on the achievement, which was achieved during the purdah period but under instructions issued by the previous Government. It is the world’s largest science experiment. It is an incredible collaboration across nations, and I am extremely proud that its headquarters are in the northern powerhouse.

[Caroline Lucas (Brighton, Pavilion) (Green)]

Today sees a mass lobby here in Westminster of people who are demanding urgent action on climate change. Since coal is the most damaging of the fossil fuels, does the Chancellor agree that as well as phasing out coal, we in this House have a responsibility to divest our parliamentary pension fund from fossil fuels, as has been done in Norway very recently?

[Mr Osborne]

It is way above my pay grade to interfere with the parliamentary trustees of the pension fund here, and I leave the decisions on investments to them. I agree with the hon. Lady that the lobby of Parliament today is important and the Paris talks at the end of the year are a real opportunity to get a global commitment to binding standards and carbon targets. Britain will play its full part. What we want to achieve is dealing with those greenhouse gas emissions and meeting our international obligations on climate change, but doing so in the cheapest way possible for the consumers of electricity here in Britain.