Oral Answers to Questions

Edward Miliband Excerpts

Wednesday 7th December 2011 Commons Chamber

[The Prime Minister]

I can guarantee to my hon. Friend that that is exactly what I will do. The British national interest means absolutely that we need to help resolve this crisis in the eurozone. It is freezing the British economy, just as it is freezing economies right across Europe. Resolving this crisis is about jobs, growth, business and investment right here in the UK. At the same time we must seek safeguards for Britain. That is the right thing to do. I can absolutely guarantee that as long as I am here there is absolutely no prospect of us joining the euro—something on which the Leader of the Opposition takes a different view.

[Edward Miliband (Doncaster North) (Lab)]

Six weeks ago the Prime Minister said that

“the idea of some limited treaty change in the future might give us”

the opportunity

“to repatriate powers back to Britain”.

At the European summit, what powers will he be arguing to repatriate?

[The Prime Minister]

As I explained, at the summit—[Interruption.] Let me explain—[Interruption.]

[The Prime Minister]

As I explained, we will have the key aim of helping to resolve the eurozone crisis, and we believe that means European eurozone countries coming together and doing more things together. If they choose to do that through a treaty at 27 in which we are involved, we will insist on some safeguards for Britain—and, yes, that means making sure we are stronger and better able to do things in the UK to protect our own national interests. Obviously, the more countries in the eurozone ask for, the more we will ask for in return, but we will judge that on the basis of what matters most to Britain.

[Edward Miliband]

The more the Prime Minister talked, the more confusing his position became, quite frankly. Let me remind him that on the eve of the biggest post-war rebellion against a Prime Minister on Europe, he was telling his Back Benchers that the opportunity of treaty change would mean in the future the repatriation of powers. That was his position six weeks ago. Today he writes a 1,000-word article in The Times, but there is not one mention of the phrase “repatriation of powers”. Why does the Prime Minister think it is in the national interest to tell his Back Benchers one thing to quell a rebellion on Europe, and to tell his European partners another thing?

[The Prime Minister]

I do not resile from a single word that I said in that debate. Let me tell the right hon. Gentleman what we want to do, specifically and particularly in the area of financial services, in which this country has a massive national interest. Let me remind him that it represents 10% of GDP, 3% of our trade surplus, and 7% of UK employment. I want to ensure that we have more power and control here in the UK to determine these matters, in complete contrast to the Labour Government, who gave away power after power. They gave up our power and they made us join the bail-out fund; we have had to get out of the bail-out fund. They gave up our rebate and received nothing in return; we managed to freeze the European budget. There is one party—one Government—that defends Britain’s interest, and another that always surrenders it.

[Edward Miliband]

I think the short answer is— [Interruption.]

[Mr Speaker]

Order. Let me say to the usual, predictable noisy tendency what I said to those on the other side a moment ago. People must be heard, and that is what will happen, however long it takes.

[Edward Miliband]

I think the short answer is that six weeks ago the Prime Minister was promising his Back Benchers a handbagging for Europe, but now he is reduced to hand wringing. That is the reality of this Prime Minister. The problem for Britain is that at the most important European summit for a generation, which matters hugely to families and businesses up and down the country, he is simply left on the sidelines. Is not the truth that we have a Prime Minister who is caught between his promises in opposition and the reality of government? That is why Britain is losing out in Europe.

[The Prime Minister]

I am afraid that even the best-scripted joke about handbags will not save the right hon. Gentleman’s leadership. He talks about being isolated. Let me explain to him where we would be if we adopted Labour’s policies. If we adopted your spending and your deficit policies, and if we were in the euro, I would not be going to Brussels to fight for Britain; I would be going to Brussels to get a bail-out. By implementing the proposals that it is advancing, Labour would put Britain in such a bad position that the tax changes would be written not by the shadow Chancellor, but by the German Chancellor.

--- Later in debate ---

[The Prime Minister]

My hon. Friend is entirely right. I understand why leading members of the eurozone, such as the Germans, want tougher fiscal rules on budget deficits for eurozone members, but it is right to point out that the heart of the crisis was caused by current account deficits in some countries and large current account surpluses in others. Unless we solve the competitiveness problem at the heart of the euro crisis, the crisis will keep recurring. Our argument throughout has been that not only do we need tough rules on budget deficits and to see euro institutions, including the European Central Bank, acting in concert and acting strongly, but that we need to resolve the competitiveness problem at the heart of the single currency to deal with the crisis. I shall continue to make those points on Thursday and Friday.

[Edward Miliband]

Will the Prime Minister confirm that according to the Institute for Fiscal Studies, next year the poorest third of families will lose three times as much as the richest third, as a result of his economic policy?

[The Prime Minister]

No, the right hon. Gentleman’s figures are wrong. If we take all the things that the Government have done—that is the right way to measure this—we find that the top 10% will see losses nearly 10 times greater than the bottom 10% will. I believe that that is fair. One point that has not been properly understood, but which is important, is that the richest 10% in our country will experience the biggest reduction in income, not only in cash terms but proportionately. So we are being fair. It is incredibly difficult to deal with the debts and the deficit that he and his party left behind, but we are determined to do it fairly.

[Edward Miliband]

The Prime Minister is simply wrong again. The figures are there, and the poorest third are losing far more than the richest third. He used to say, “I’m not going to balance the budget on the backs of the poor.” [Hon. Members: “He’s not!”] No, that is right: he is not balancing the budget—there is £158 billion more of borrowing—but he is hitting the poor. To give him credit, though, there is one group for which he is easing the pain; this has not got the publicity that it deserves. He is delaying for one year the tax on private jets, at the same time as hitting the poorest families in this country. Will he confirm that a working mother earning £300 a week is seeing rising VAT, her tax credits cut, child benefit frozen and her maternity grant cut?

[The Prime Minister]

The right hon. Gentleman had 13 years in which to tax private jets—and now former Labour leaders are jetting around in them! In two years we will have taxed them. He quotes the Institute for Fiscal Studies. Let me remind him of what it said about Labour’s plans. It said that Labour’s policies would lead to

“even higher debt levels over this Parliament”—[Interruption.]

Labour Members do not like to hear their own policies being taken apart. [Interruption.] Calm down. [Interruption.]

[The Prime Minister]

Let me just explain what the IFS said. It said that the right hon. Gentleman’s plans implied

“even higher debt levels over this Parliament than those we will in fact see.”

That is the truth of it. If we want the stimulus we are giving the economy through low interest rates, we have to stick to the plans we have set out. There is not a party in Europe, apart from the Moldovan communists, that backs his plans.

[Edward Miliband]

Now I have heard everything. The Prime Minister is talking about a stimulus, but he does not understand: he is cutting too far and too fast. That is why we have problems in our economy. Of course he does not want to tell us what the IFS says about his plans; he is the Prime Minister, after all. It says:

“New tax and benefit measures are, on average, a takeaway from lower-income families with children”.

The figures speak for themselves. His changes are hitting women twice as hard as men. Is not the truth that he is the first Prime Minister in modern times to say, “It’s the women and children first”?

[The Prime Minister]

The right hon. Gentleman’s soundbites get weaker and weaker as his leadership gets weaker and weaker; that is the truth of it. If we look at what we have done in lifting 1.1 million people out of tax, it is mostly women who benefit. If we look at the increase in the pension—£5.35 starting next April—that will benefit mostly women. If we consider the issue of public sector pensions, we are helping the lowest-paid in the public sector, and that will help women. Yes, we are giving the economy a stimulus by keeping our interest rates low. We have interest rates at 2%, while they are at 5% in Italy, 5% in Spain and 30% in Greece. If we followed his advice we would have interest rates rocketing, businesses going bust and more people out of work. That is what Labour offers, and that is why it will never be trusted on our economy again.