Mr Speaker,Today- after two and a half years- we can see, and people can feel in the country, the true scale of this Government’s economic failure.
Our economy this year is contracting.
The Chancellor has confirmed Government borrowing is revised up this, next year and every year.
And it is people already struggling to make ends meet- middle and lower income families and pensioners who are paying the price.
While millionaires get a tax cut – a £3 billion welfare handout to the people who need it least, Mr Speaker.
Let me spell out the full facts for the House, Mr Speaker.
In June 2010, the Office for Budget Responsibility forecast our economy would grow by 2.8 per cent this year.
In March of this year, they said there would still be growth, but they revised it down to just 0.8%.
Today we learn that the Chancellor of the Exchequer has not even managed that.
Growth has not been downgraded yet again but he has confirmed, following the double – dip recession that our economy is now forecast to actually contract this year by 0.1 per cent.
Let me remind the House what the Chancellor promised over two years ago, in the June Budget of 2010.
“We have provided the foundations for economic recovery in all parts of our nation.”
“We have set the course for a balanced budget and failing national debt by the end of this Parliament.”
“The richest paying the most and the vulnerable protected.”
That was the promise, Mr Speaker.
But far from securing the recovery, our economy has flat-lined since the Spending Review in 2010.
Over the last two years the Chancellor was expecting 4.5% growth.
He has actually grown by just 0.6 per cent, compared to:
3.6% in Germany; and
4.1 % in America.
Falling behind in the global race, Mr Speaker.
And what we learn today is that growth has been downgraded this year , next year , the year after, the year after and the year after that too, Mr Speaker.
The longest double dip recession since the Second World War now follow by the slowest recovery in the last hundred years.
And the result of this stagnation- rising long – term unemployment, long term damage to our economy, falling behind now as other countries move ahead – is that the Chancellor’s fiscal strategy has been competed derailed.
The defining purpose of the Government, the comerstone of the coalition, the one test they set themselves – to balance the books and get the debt failing by 2015 – is now in tatters.
What we have learned today is that Government borrowing has been revised up this year, next year and the year after that.
We now know that , compared to the Chancellor’s forecast two years ago , borrowing is now forecast is be well above the £150 billion of extra borrowing that he was forecasting in March.
The Chancellor has confirmed that the Prime Minister’s pledge to balance the books in 2015 is not met in 2015, it is not met in 2015 and it is not met in 2017 either.
They should listen to this
The fact is there is more borrowing this year, next year and the year after, Mr Speaker
Now I have to say, we will look in detail when we get the figures, because it was very disappointing.
That the Chancellor failed to give us the cash figures adjusted for borrowing this year, next year and the year after.
The unusual thing is that just a few weeks ago the independent forecasters were saying that borrowing would be £6bn higher.
We will examine the details of those figures to see whether there has been any dodgy dealing, Mr Speaker.
We will find out in the coming hours.
I don’t know, because I have not seen the figures.
What I do know is that the OBR now shows more borrowing and higher deficits means higher national debt, Mr Speaker/
The Prime Minister should listen to this, it might be rather shocking to find out, national debt is going to be higher at the end of this Parliament that the level inherited.
It is going to be higher at the end of this Parliament than forecast in the plans he inherited; and no longer falling as a percentage of GDP, it is rising in 2014 -15 and it is rising again in 2015- 16 too, breaking the fiscal rule for falling debt upon which this Chancellor said his entire credibility depended.
In last year’s Budget, the Chancellor said:
“Our deficit reduction plan is on course. We will not waiver for it.”
On course? Not wavering?
He’s not wavering, he’s drowning.
And now Mr Speaker, the Chancellor is now trying to claim his failure on growth and his failure on borrowing and the debt- breaking his own fiscal rules – he is trying to claim is not his fault.
That no- one could have foreseen it.
What nonsense, Mr Speaker.
He was warned that a tough medium term plan to cut the deficit – tax rises, spending cuts, pay restraint, that every country had to put in place – could only work if the Government first put in place a plan for jobs and growth.He was warned that it was a huge gamble to go too far, too fast and rely on exports to bail him out.
He was warned there was a hurricane brewing in the Eurozone, and that it was not the time to rip out the foundations of the house here in Britain.
Once again the Chancellor is trying to blame high oil prices and the Eurozone crisis for negative growth this year, but it affected all countries, Mr Speaker.
Growth down, borrowing up, debt up. They don’t like it Mr Speaker, do they? They don’t like it at all.
Once again the Chancellor is trying to blame high oil prices and the Eurozone crisis, so let me ask him why over the last two years has Britain grown by just one tenth of the average growth rate of the G20 countries?
And why has growth here in Britain been even slower than in the Eurozone, Mr Speaker?
Mr Speaker, it is not the rest of the world’s fault, it is his policies which have failed.
He claimed that rising VAT, alongside accelerated spending cuts, would boost confidence, secure recovery and get the deficit down.
But they depressed confidence, choked off our recovery and borrowing has been revised up.
Let me ask the Chancellor:
Whatever happened to his ‘Treasury View’, his theory of ‘expansionary fiscal contraction’?
‘Expansionary fiscal contraction’?
It is the economy which has contracted, and the borrowing and debt which has expanded, Mr Speaker, that is the truth.
And I have to say, when now the latest figures show business confidence falling, when the world economy is slowing, when the Eurozone is in such chronic difficulty, when on current plans the Chancellor’s fiscal straitjacket is set to tighten further next year, it is simply reckless and deeply irresponsible of this Chancellor to plough on with a fiscal plan we all know is failing on the terms he set.
That’s the truth
And what a wasted opportunity this statement was today.
Can the Chancellor confirm that the independent OBR looked at the measures he has announced today and their verdict: growth revised down this year, next year and the year after, Mr Speaker?
Let me congratulate the Chancellor for taking our advice, and stopping January's fuel duty rise, even though they all voted against it just a month ago. They all voted against it.
And we welcome the u-turns on flood defences, on regional pay bargaining in the NHS, the u-turn on capital allowances
After churches, charities, pasties, skips, fuel and caravans, I think it is catching on Mr Speaker, this u-turning, but whatever happened to the plans for the Business Investment Bank?
And as for yesterday’s announcement on infrastructure spending the extra money for schools is just a fraction of the cuts and the cancellation of Building Schools for the Future.
And we have been here before, a year ago the Prime Minister boasted about their national infrastructure plan 12 months on not a single road scheme has even started, Mr Speaker.
Why can’t he see he won’t get the deficit down without a plan for jobs and growth?
Why is he not using the 4G money to get 100,000 new homes built?
Why is he not doing a national insurance holiday for small firms?
Why not a temporary tax cut for families? Even the London Mayor is supporting that Mr Speaker.
Why is he not repeating the bank bonus tax?
The Chancellor says he cannot do any of this, because it would lead to higher borrowing, Mr Speaker.
Even his political attacks are backfiring.
Because this Chancellor’s failed plan has given us more welfare spending, it has given us higher borrowing and higher debt too. That is the reality.
Mr Speaker, the truth is he has failed on growth and the deficit.
And what is his answer: more of the same.
Let me remind the Chancellor what he told the House in the Budget in 2011:
“We have already asked the British people for what is needed, and we do not need to ask for more.”
But eighteen months later, the Chancellor is now coming back for more.
And who does he think should now pay?
Not the 8,000 millionaires are set to get over £100,000 each in April.
I have to say to the Liberal Democrats, whatever happened to the Mansion tax?
And don’t they realise that even with these changes in the personal allowance, the other things they have supported means that the average family with children on £20,000 is worse off, Mr Speaker.
And that is before the VAT rise.
The Chancellor claims his decision today to restrict pension tax relief will make the tax system fairer at the top.
Can he confirm that the £1 billion he is raising is less than the £1.6 billion that he gave back in pension tax relief in June 2010?
And it is just a fraction of the top rate tax cut.
A £3 billion top rate tax cut, while at the same time the Chancellor is cutting tax credits for working families, cutting child benefit for middle-income parents, raising taxes on pensioners and cutting benefits for the unemployed.
Mr Speaker, we do need to reform and modernise our welfare state and reduce its cost.
Those who can work should work - no ifs or buts.
We support a benefits cap, done fairly, with a higher cap in London.
But let us be clear.
The Chancellor claimed he would cut the welfare bill.
But higher inflation and long-term unemployment means the benefits bill is forecast to be billions higher in this Parliament than the Chancellor boasted.
Let me help him, Mr Speaker: ‘welfare to work’ – the clue is in the name.
You can’t have a successful welfare to work programme without work.
And we know that the Work Programme has just totally failed, with only two people in a hundred actually going into permanent jobs.
We should be requiring every young and long-term unemployed person to take a job, and making sure there is one there.
But let me ask the Chancellor about a nurse, one of the thousands cut from the NHS in the last two years, now struggling to find a new job.
For that nurse, he has announced today he is cutting her Jobseekers’ Allowance for the next three years.
How can that be fair when he is cutting the top rate of tax?
How can that be fair Mr Speaker, when someone earning £228,000 a year will get a top rate tax cut of £75 a week in April which is more than the £71 a week the nurse gets to live on in JSA,?
And I have to say, what we have learned today, he is not just hitting those looking for work; the majority of people who lose from his cuts to tax credits are people in work – millions of families striving to do the right thing, Mr Speaker.
What kind of government believes low-paid working people work harder by cutting their tax credits, but you only make millionaires work harder by cutting their taxes Mr Speaker?
I’ll tell you, certainly not a One Nation government, Mr Speaker.
You know, they must really believe that if you cut taxes at the top, the wealth will trickle down.
Let me remind the House what the Chancellor said to the Conservative party conference in October 2009:
"We could not even think of abolishing the 50p rate on the rich while at the same time I am asking many of our public sector workers to accept a pay freeze to protect their jobs.
The Chancellor’s words, he said:
“I think we can all agree that would be grossly unfair."
What has changed?
Nothing has changed.
It was all a con.
And the mask has slipped.
And we now know this Chancellor can’t say 'we're all in this together' without a smirk across his face.
They wanted to us to think they were compassionate Conservatives.
Now we find out they are the same old Conservatives.
And may I say Mr Speaker, what a pity not to see the honourable member for Mid-Bedfordshire in her place.
Back from the jungle.
She may not have succeeded in talking for the nation on many things, but she did speak for the nation when she called the Prime Minister and the Chancellor:
Two ‘arrogant posh boys’ who ‘don't know the price of milk’
Mr Speaker, no wonder the Prime Minister keeps on losing his temper, because his worst nightmare is coming true.
Not snakes and spiders in the jungle, but their fiscal rule broken, their economic credibility in tatters, exposed now as incompetent and unfair.
Yes, Mr Speaker, he's the Chancellor, can't someone get him out of here?
Borrowing revised up.
The fiscal rules broken.
On every target they set themselves:
Failing, failing and failing.
Cutting the NHS and not the deficit
Over £212bn more borrowing than they promised two years ago.
Cutting taxes for the rich, while struggling families and pensioners pay the price.
Unfair, incompetent and completely out of touch.