It is an honour to participate in this important debate. It is the usual debate that we have following the Queen's Speech, but we are certainly in unusual times. The content of the speech and the ideas and the vision displayed by the Government are under scrutiny and are all the more relevant as the scale of the recession becomes apparent.
Of course, this is the second opportunity that the Government have had to lay out their store following the pre-Budget statement, which was a chance to map the course that would be taken to weather the unsettled phase of this economic cycle. It has now become apparent that this is less about economic cycles and more about political cycles. As the dust settles, we see that Labour has provided £20 billion of savings but £40 billion of taxes. The cut in VAT is being seen and treated as a gimmick and there is no common sense in increasing taxes through national insurance at the very time when businesses want a reduction in taxes.
Rumour has it that the Chancellor will be back at the Dispatch Box in the not too distant future with another idea and will probably have to borrow more money, too. He will no doubt repeat the claim that the whole crisis started in the United States with the sub-prime market, but it was this Government who stripped the Bank of England of its historic ability to ensure that banking credit was kept within reasonable limits, this Government who allowed banks to offer massive loans and mortgages to those who could not afford them, and, of course, this Government who spent so much that they have no other choice than to borrow more money now. The result is an unsustainable debt-fuelled boom, followed by one of the biggest busts in history. I understand that the UK is now forecast to have the worst recession of all the G8 countries.
I mentioned in an intervention the other claim that the Prime Minister is keen to put forward, which is that other countries are copying the approach of weathering the recession with recapitalisation of the banks. That part is true, but whereas the £37 billion of taxpayers' money that the Government have lent to the banks has been lent at an annual coupon of 12 per cent., that figure was about 5 per cent. in Germany or the United States. At the same time, the Government are asking banks not only to hand those loans on to small businesses but to sort out their own debts. They cannot do both, and that is why the money is stuck and why it is not getting down to the small businesses.
We have touched a lot on employment, so it would be good to take stock after the monologue we heard from the Secretary of State. We would be forgiven for thinking that things were going well, but 5 million people are still on work benefits. Unemployment is rising and is at its highest for 11 years.
The debate stood adjourned (
Motion made, and Question put forthwith (
That at this day's sitting, proceedings on the Queen's Speech (Motion for an Address) may be proceeded with, though opposed, until 11 o'clock.— ( Ian Lucas.)
Question agreed to.
Debate accordingly resumed.
Question again proposed
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