G20 Summit

Stewart Hosie Excerpts

Monday 25th June 2012 Commons Chamber

[The Prime Minister]

My hon. Friend makes a very good point, but the point that I would make in response is that it is not for us to tell those countries what to do. If countries want to join a currency union, understand that to make that currency union work they have to give up all sorts of sovereignty and freely enter into that bargain, that is a matter for them and not a matter for us. It is for us to decide whether we want to do that, which we do not, and—and, frankly, it is all right to do this—to give advice about what would make a eurozone work better than it is working today.

[Stewart Hosie (Dundee East) (SNP)]

The communiqué reads:

“We are committed to adopting all necessary policy measures to strengthen demand, support global growth and restore confidence”

and

“enhance job creation”.

I welcome monetary activism as one of the tools to help achieve that, but can the Prime Minister explain to the House how his Government’s austerity programme will do anything other than weaken demand, weaken growth and suppress demand for labour?

[The Prime Minister]

I make this simple point to the hon. Gentleman: if we did not have a credible plan for dealing with our debts and our deficit, our interest rates would not be below 2%. It is worth remembering that when this Government took office, Spanish and British interest rates were at the same level. Our rates are now below 2%, which is helpful for growth, for business and for home owners, and the Spanish have interest rates close to 7%. That is the point. The idea that if a country spent more, borrowed more and added to its debts, it would stimulate its economy is probably wrong.