Economic Growth

Geraint Davies Excerpts

Wednesday 15th May 2013 Commons Chamber

[Ed Balls]

We are not against the idea of referendums. We proposed the first referendum, in the 1970s. If there were a change in the balance of power in the treaties, we would support a referendum, but it would be wrong to do so now.

[Geraint Davies (Swansea West) (Lab/Co-op)]

Will my right hon. Friend give way?

[Ed Balls]

I will take one more intervention.

[Geraint Davies]

As my right hon. Friend knows, today’s figures show that unemployment has risen again. He also knows that the EU provides 50% of our trade. In the event of our securing a free trade agreement between the EU and the United States, alongside bilateral trading agreements between the EU and other countries such as China, what does he think the impact of withdrawal from the EU would be on growth, jobs and trade?

[Ed Balls]

In 1983, our party supported the idea of withdrawal from the European Community, as it was at the time, but the Conservative party and the Confederation of British Industry agreed that it would cost 2.5 million jobs. Our trade share with Europe has deepened since then, and our labour market is bigger. I think that upwards of 3 million to 3.5 million jobs would be lost now, because we would be turning our face away from those big markets around the world.

--- Later in debate ---

[Mr Osborne]

Let us look at what the Governor of the Bank of England said in his press conference this morning:

“there is a welcome change in the economic outlook…But this is no time to be complacent—we must press on to ensure a recovery”.

Yes, there was also the disappointing news that unemployment had gone up, but we also saw that the claimant count and youth unemployment had come down, and the monthly unemployment data were a lot more encouraging than the three-month survey. That is the reality of the current data.

[Geraint Davies]

Does the Chancellor agree that the key problem is that the debt:GDP ratio will rise from 55% in 2010 to 85% by 2015? The answer to that problem is not just to cut the debt, but to increase GDP. Under Labour, GDP went up by 40% between 1997 and 2008, and the Chancellor inherited a growing economy which is now flatlining because of his policies.

[Mr Osborne]

We inherited an 11.5% budget deficit that was adding to our national debt every year, and what the hon. Gentleman and the shadow Chancellor want to do is add further to borrowing. The shadow Chancellor was asked time and again what the cost of the proposals in the amendment the Opposition are asking the House to vote on tonight would be. He would not give that figure, but I will give it for him: it is a £28 billion amendment that would add to borrowing. He comes up with the ludicrous argument that by borrowing more, we can borrow less. That is why he is making so little progress with his economic argument.

--- Later in debate ---

[Danny Alexander]

I have to say to the hon. Lady that I think the fact that we inherited a welfare system where for too many people it did not pay to work is one of the greatest scandals of Labour’s time in government, so I make no apology whatever for reforming the welfare system and putting in place a universal credit where everybody on benefits knows they would be better off in work. That is the right thing for the country, and I am happy to support it.

The measures in the Queen’s Speech will also help all those workers who want to get on and plan for their futures. Our changes to the single-tier pension will provide millions of people—particularly women with broken work records, the low paid and the self-employed—with a firm foundation to support their saving for retirement. The single tier will be implemented from April 2016, and I am sure Members will join me in congratulating the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb), on his excellent work in bringing this policy forward to this stage.

The Queen’s Speech recognises that if we want our economy to succeed in the 21st century, we need to make significant changes to our business environment. We will not succeed in the 21st century if our businesses are slowed down by regulation, which is why we are taking steps through the deregulation Bill to remove excessive red tape from small businesses and to repeal legislation that no longer serves a practical use.

[Geraint Davies]

Will the right hon. Gentleman give way?

[Danny Alexander]

I want to make some progress, as I have a few further things to say.

We will not succeed in the 21st century if our businesses are slowed down by an outdated infrastructure. That is why we are increasing capital investment plans by £3 billion a year from 2015-16, meaning public investment will be higher on average over this Parliament than it was under our predecessors. That investment will help to improve our digital networks and our road and rail networks. We want to connect our biggest cities in a manner fit for modern business needs, and our investment in High Speed 2 will be a crucial investment for British jobs and prosperity. The hon. Member for North East Derbyshire (Natascha Engel) spoke against HS2 partly on the basis that there had been a decline in wedding bookings at an important venue in her constituency. I hope very much the progress of the equal marriage Bill will help raise demand at that venue.

In a debate focused on jobs and growth, a lot of Members have talked about the subject of Europe, and I have to say that I do not think contemplating British exit from the EU is helpful in supporting jobs and growth in this country. So I would like to remind the House of some of the economic opportunities that we gain from our membership of the European Union. Our EU membership supports UK jobs, prosperity and growth through increased trade, both inside the single market and outside, through free trade agreements. One in 10 jobs in this country—3.5 million jobs—are linked to that trade with the European Union. If we want to win the global race, we need to be part of a strong team.