The Economy and Living Standards

Debate between Toby Perkins and Ed Balls

Thursday 12th June 2014 Commons Chamber

[Ed Balls]

In 2010, the Chancellor said that, by now, the economy would have grown by 12%. It has actually grown by half that amount. That is why the deficit has not come down and why people are worse off. The Chancellor would have been well advised to take the sound advice in 2010 and not choke off the economic recovery. He should take the sound advice of the IMF now and look at ways to improve housing supply and to tackle the woeful productivity performance over which he is presiding.

[Toby Perkins (Chesterfield) (Lab)]

The Chancellor acts as though he is the only person who has delivered growth, but we already had growth when he came to power. When there was light at the end of the tunnel, he spent two and a half years building more tunnel. Finally, now that we have growth—after everyone else—he says, “Haven’t I done well?”.

[Ed Balls]

My hon. Friend’s description of the historical record since 2010 is correct. However, the real issue is why we still have such low investment and why living standards are still falling. The jobs that we are creating are not delivering rising living standards for working people. We have only to look at the election results from a few weeks ago to see the potential challenge to Britain’s place in the world if we do not understand those forces.

The Economy

Debate between Toby Perkins and Ed Balls

Wednesday 22nd June 2011 Commons Chamber

[Ed Balls]

I am not giving way to the hon. Gentleman again now; I might do later.

The reason why the VAT cut is needed now is that things are getting worse, not better. In recent weeks, we have seen manufacturing output and job vacancies falling and the biggest fall in retail sales for more than a year. The Chancellor likes to boast that a net 370,00 jobs have been created in the last 12 months; what he does not like saying is that 70% of those extra jobs were created in the six months before the spending review and only 29% in the six months after it. That is why his Budget forecasts of a year ago have gone so badly awry.

The Office for Budget Responsibility forecasts for growth have been downgraded three times. Unemployment is now forecast to be 200,000 higher, while inflation is forecasted to be well above target this year and next year. The result of this stalled recovery, higher unemployment and higher inflation is that the Government are now forecast to borrow a further £46 billion more than was forecast in last year’s spending review. Public borrowing in the first two months of this year is higher than it was in the first two months of last year.

[Toby Perkins (Chesterfield) (Lab)]

The Chancellor said yesterday that he does not want to comment regularly on the OBR’s updates. Given that it is downgrading its forecasts every time he opens his mouth, it is hardly surprising.

[Ed Balls]

Whether or not the Chancellor comments, the fact remains that since the last OBR forecast, Britain’s growth forecasts have been downgraded by the International Monetary Fund, the OECD, the CBI, the British Chambers of Commerce and the National Institute of Economic and Social Research. Everybody else is downgrading growth forecasts; we will have to wait for the OBR finally to catch up.