Simon Hoare
Main Page: Simon Hoare (Conservative - North Dorset)Department Debates - View all Simon Hoare's debates with the HM Treasury
Charter for Budget Responsibility
Simon Hoare Excerpts(8 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
John Mann (Bassetlaw) (Lab)
There is a saying in literature that normal is as narrow as the street that you live in. The Chancellor lives in a little gated community—a cul-de-sac with perhaps a problem neighbour next door. The constraint on his economic plans is the backdrop to the decision tonight on whether to have this charter. Yet he cannot cite anyone supporting the charter other than those who are sitting behind him. Our friends in the CBI are not supporting his charter. The City of London is not supporting his charter. The Governor of the Bank of England was not prepared, in the Treasury Committee, to support his charter. Indeed, all the economic experts who came before the Treasury Committee when we looked at this in some depth in July did not at any stage choose to support his charter.
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.
Mike Wood
I am not sure that even needs dignifying with a response. We fought the election on having a balanced budget by 2019-20, as announced in the Budget, and a system with a fiscal mandate that puts us in line with many of the most successful economies around the world.