The Economy

Seema Malhotra Excerpts

Thursday 4th June 2015 Commons Chamber

[Chris Leslie]

Of course individual choices have to be made, but it would be better if they were made on the basis of need and evidence, not simply on whether the hon. Gentleman has the ear of a particular Minister at a particular point in time. That is the old way to plan infrastructure, and he knows in his heart that we should reform it.

The choices that the Chancellor makes in the emergency Budget in July will be crucial for productivity and therefore crucial to the health of the economy and public finances. I want to know whether the Chancellor will set out a sensible approach to deficit reduction by prioritising the areas of public spending that raise productivity. Why do we not ask the OBR to report on how the options for the spending review might impact on productivity and living standards and to set out the impact of the different choices that the Chancellor could make? He will have our support if he wants it to do that work. As the OECD suggested yesterday, the uneven profile of his planned fiscal pathway poses real risks, and higher productivity would give greater scope to protect working families, while still balancing the books. So these are the choices that he must confront. Is he still planning to double the pace of cuts, regardless of the impact on productivity, or is he now planning to moderate that pathway? The Chancellor has wiggle room here, even within his own fiscal rules.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

I thank my hon. Friend for giving way. He is making an excellent speech. I want to follow up on a point made by my hon. Friend the Member for Huddersfield (Mr Sheerman). According to the CMI report, leadership and management are a key issue for this country, and we have seen nothing in government strategy on that issue. How much does my hon. Friend think that that should also be part of our review of why we have such problems with productivity in this country?

[Chris Leslie]

This is at the heart of the Chancellor’s policy choices. Is he looking not just at how much but how spending is taking place? He can choose to ensure that where spending has to be prioritised decisions lean towards supporting growth and productivity and the skills that will in turn get us into that more virtuous cycle.