Helen Goodman
Main Page: Helen Goodman (Labour - Bishop Auckland)Department Debates - View all Helen Goodman's debates with the HM Treasury
Charter for Budget Responsibility
Helen Goodman Excerpts(8 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Osborne
We have not deserted the people of Redcar. We have provided £80 million of support to local people affected by the closure of that steel plant. That steel plant tragically closed under the previous Labour Government and there was nothing like that support for the workers then. We stand behind the workers of Redcar and we stand behind the workers in every steel plant to see what we can do, but I can tell the hon. Gentleman this: we will not have steel plants or any other plants open in this country if we do not have economic stability in Great Britain.
That point brings me to the final and perhaps most dangerous objection to this charter rule, which is when people say that Britain does not have to go to the bother of saving money and trying to pay for things but can instruct the Bank of England to print the money and use it to finance Government spending directly. The leader of the Labour party calls it
“quantitative easing for people instead of banks”—
that is an accurate quote from his leadership campaign. It sounds seductive, but it is actually called monetary financing. It might be a novel argument in this House of Commons and in the British political debate, but that is because no one has seriously proposed that approach in our country in recent decades. It is a very old argument.
Mr Speaker
Order. The hon. Lady is pressing the point. The Chancellor is not giving way at this stage.
Helen Goodman (Bishop Auckland) (Lab)
I am pleased to follow the hon. Member for Boston and Skegness (Matt Warman). He has clearly not read the columns of his former colleague Martin Wolf, who agrees with the arguments made by Labour Members. If anybody wanted to know whether this was a political gimmick, they only needed to look at the 90 minutes provided on the Order Paper for this debate—a pitiful 90 minutes to discuss something that is meant to be an important economic policy.
As my hon. Friend the Member for Bassetlaw (John Mann) said, we took evidence on this—
Helen Goodman
No, I will show the hon. Gentleman the same courtesy the Chancellor showed me.
We took evidence on this matter in the Treasury Committee in July. We found nobody who was prepared to endorse the Chancellor’s proposals. Even the Governor of the Bank of England, when pressed by the Chair of the Select Committee, said that he was
“declining to opine on specific legislation”.
He stated that
“the UK Government have had the announced intention in Budgets in place for a sustained fiscal consolidation. That is one of the headwinds against the economy”.
It was not just left-wing economists who criticised the Chancellor. The head of the Thatcherite Institute of Economic Affairs, Professor Philip Booth, said that the fact that
“these very damaging things have been done to child tax credit systems…is my biggest concern.”
He continued:
“I think in the handbook of possible fiscal rules the Government is choosing a very, very, very bad one.”
One of the most pernicious things about the rule that the Chancellor has chosen is that it treats capital and current spending the same. He is ignoring the fact that investing in housing, science, broadband, transport and the university system is a way of strengthening economic productivity and increasing growth in the British economy. Nobody thinks that it is right to max out the credit card to pay the weekly grocery bill—of course not—but families up and down this country take out mortgages to buy their homes. There is a precise parallel here.
Opposition Members are not deficit deniers. We want to bring down the debt-to-GDP ratio, as the shadow Chancellor said. In that task, the Chancellor has failed spectacularly. The debt has gone up by £500 billion under his stewardship. To get the debt-to-GDP ratio down, we must do two things. We must run the public finances in a sensible way. That means making sensible savings, for example by tackling fraud in the housing benefit system and not going ahead with the ludicrous cuts to inheritance tax, which will benefit the richest in our country. At the same time, we must get sustainable growth into the economy. That means investment.
Several hon. Members rose—