Section 5 of the European Communities (Amendment) Act 1993

Debate between Kelvin Hopkins and David Nuttall

Monday 22nd April 2013 Commons Chamber

[Kelvin Hopkins]

I shall certainly look it up.

Ministers go on and on about the importance of exports to the rest of the European Union—our Ministers did too—but they rarely talk about imports. We have a gigantic trade deficit, which is getting worse and worse every year. Even between January and February, the goods deficit with the EU rose from £4.8 billion to £5.1 billion. It now looks as though the trade deficit this year may be £60 billion. That is enormous; it is more than £1 billion a week. We are buying £1 billion more goods from the EU every week than the EU buys from us. That is not a sensible way to run an economy.

[Mr Nuttall]

Does that statistic not put the lie to all the people who claim that 3 million jobs would be lost if we left the EU?

[Kelvin Hopkins]

Indeed. If we just maintained balance, we would gain a million jobs overnight. If we go back to the Bretton Woods arrangements following 1944, Keynes was concerned about trade imbalances and he wanted arrangements to be put in place across the world that would avoid big deficits and big surpluses. Also, he wanted to require those with big surpluses to appreciate their currencies, as Germany should have done a long time ago. We are just going through the motions of arrangements made years ago which no longer have any serious meaning.

Germany is now in trouble. It has faced a savage reduction of 17% in car production in the space of one month. It is in difficulty and will have to look to itself to solve that problem. George Soros has suggested that one of the ways out of all the present problems is for Germany to leave the euro and to recreate the deutschmark, which would naturally appreciate. All the countries now tied into the euro would then have difficulty. Denmark, for example, would want to devalue straight afterwards. Others are now talking about what George Soros said. There are people in Germany who want to leave the euro.

There was an extremely interesting article in The Guardian this morning, suggesting that the only way out of this is for all the countries of the European Union to recreate their own currencies and to find appropriate parities for those currencies. If a country has its own currency, it can borrow and it can print money. It may be forced into a devaluation but it manages its own economy nationally and it can adjust the shock absorbers of separate currency, which are vital. The example used is Japan, which has had serious problems but is managing its economy internally.

I draw Members’ attention to the one country that has come out of the current crisis rather better than all the others—that is, America. It is surprising, but American growth is at 2%, whereas ours is well below 1%. Although America still has serious difficulties and serious unemployment, it is doing better than Europe because it is pursuing growth policies, which necessarily mean more borrowing.

I know that hon. Members on the Government Benches are horrified at the thought of more borrowing, but I urge them to read the great book by John Kenneth Galbraith, “The World Economy since the Wars”, where he pointed out that during wars—classically, the second world war—America borrowed vast sums from its own citizens. They finished up with lots of war bonds which they cashed in, and the American economy started off as the strongest economy in the world, stronger than it has ever been because of the massive investment in manufacturing that took place during the war. Its debt was based on borrowing, which was paid back over time, as the American economy grew, with full employment.

I could go on, but I will not. Debating the motion every year is a nonsense. We ought to be looking at more sensible ways of running our economies.

Section 5 of the European Communities (Amendment) Act 1993

Debate between Kelvin Hopkins and David Nuttall

Tuesday 24th April 2012 Commons Chamber

[Kelvin Hopkins (Luton North) (Lab)]

Let me say first that the Minister is heroic to take this brief, which is—to understate the matter—a difficult one. I do not envy him his job of having to try to sell it.

There are two good reasons for not sending the Budget report to the European Union. One reason, on which the Opposition agree, is that it is not a good Budget. The other reason, on which many of us on both sides of the House agree, is this: why should we send our Budget report to the European Union? If the EU wanted a copy, it could buy a copy. It is not a problem.

[Mr Nuttall]

The EU could just look it up for free on the internet.

[Kelvin Hopkins]

I am not as skilled as the hon. Gentleman in using the internet. Old-fashioned though it may be, I go to shops and buy books, I am afraid.

As for the Budget, the reality is that it will not solve our economic problems. Our problems are not really about the deficit; they are to do with unemployment. Looking back, another time when we had an enormous public debt and enormous deficits was the second world war, after which the then Labour Government ran a full-employment economy, which was the way they overcame our problems. If our Budget was directed towards creating employment, we too would solve many of our problems. The important thing is to generate directly in labour-intensive areas, which are not expensive. We are talking about relatively low-paid workers in the public services or the construction sector—labour-intensive sectors with low import content, which are just the sort of sectors where we want to be generating. However, public services and construction are the very sectors we are cutting.

If we had a massive Government-driven house building programme, along with the creation of more public service jobs, we would bring down unemployment and people would be paying taxes rather than living on benefits, and over time the deficit would solve itself. That is what the Labour Government did after 1945. We were living in Keynesian times then, and I think that Keynes was absolutely right. I like to think that if he were here now, he would be saying what I am saying, albeit possibly in a more sophisticated way.

Section 5 of the European Communities (Amendment) Act 1993

Debate between Kelvin Hopkins and David Nuttall

Wednesday 27th April 2011 Commons Chamber

[Mr Nuttall]

My hon. Friend is absolutely right. As everyone knows, printing money invariably leads to inflation. I am sure that that would be the case if we continued to print money today.

I want to address the issue of our dealings with Europe, but first let us consider our net borrowing figures. According to forecasts from the House of Commons Library produced just a few days ago—on 21 April—even if we take into account all the measures that the Treasury are taking, we will borrow £122 billion in the current financial year and £101 billion next year. We are not paying back our debts; we are simply reducing the scale of the debt.

[Kelvin Hopkins]

I could raise a number of issues, but one in particular is that the Treasury is now predicting that the deficit at the end of this Parliament will be £11 billion higher than it thought a few months ago, simply because it expects the economy to grow less.