Budget Resolutions and Economic Situation

Chuka Umunna Excerpts

Thursday 21st March 2013 Commons Chamber

[Vince Cable]

I think the shadow Chancellor is digging himself into a certain amount of trouble. He refers to a document as fact, but it is actually a consultation document. Rather more sensibly, the shadow Business Secretary yesterday applauded the new housing initiatives. We will proceed with the consultation, and if the shadow Chancellor has any technical criticisms of the tenure arrangements, he can make them in the consultation process and we will listen constructively.

[Mr Chuka Umunna (Streatham) (Lab)]

With the greatest respect to the Business Secretary, he mentioned what I said yesterday, but I said that not knowing that people who want second homes can take advantage of the scheme. He did not know that either.

[Vince Cable]

The Opposition Front Bench is getting a little silly. Let us leave it to the consultation and see what comes out. I am sure that those imaginary horrors will not be realised.

The second criticism from the Opposition was about the level of borrowing. I was not clear whether the shadow Chancellor regards high levels of borrowing as a good or bad thing—a rather basic question. Is the Labour party in favour of more borrowing, or less? The Institute for Fiscal Studies made a thorough comparison between what is likely to happen under the Government’s fiscal plans and what would have happened under the so-called Darling plan. It was a bit perfunctory, but it gave us a framework and concluded that in 2016-17 the level of borrowing under the Labour trajectory would have been £76 billion, but £24 billion under the coalition’s policy. That is after the revisions that have taken place.

As someone brought up in the Keynesian tradition, I think it rather creditable that the Chancellor has responded to a slow-down in the economy by allowing counter-cyclical stabilisers to apply. I am amazed that those on the Opposition Front Bench find that a source of criticism, when it is good, common-sense, practical economics.

--- Later in debate ---

[Vince Cable]

Job creation in the north-east is growing more rapidly than it is in many other parts of the country. It is precisely because the north-east has a higher share of exports in its regional gross domestic product than any other region that it is benefiting from the shift that is now taking place to manufacturing.

[Mr Umunna]

The Secretary of State says that the Government have made a mistake with their capital spending cuts and that they are reversing them— presumably, he refers to the extra £3 billion. However, why are he and his colleagues reversing the mistake only from 2015, when the economy needs the support now?

[Vince Cable]

I answered the hon. Gentleman’s point in Business, Innovation and Skills questions. Some of the increases in capital spending have already taken place. There was a significant increase in the capital outlay on universities, which my colleague the Minister for Universities and Science is seeing through at the moment in the establishment of R and D centres. After the fiasco of further education college building under the previous Government, the current Government are, in a systematic way, restoring the infrastructure of the FE sector.