The Economy

Part of Council Tax Rebate – in the House of Commons at 4:17 pm on 31st March 2009.

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Photo of George Osborne George Osborne Shadow Chancellor of the Exchequer 4:17 pm, 31st March 2009

My hon. Friend is right. Not only Conservative Members have complained—if the Chancellor had attended some of our previous economic debates, he would have heard Labour Members complain regularly about the schemes not being operational. Last week, Mr. Robinson said that

"as far as industry is concerned, we just don't have those schemes working yet. And that's where we've got to put the pressure at the moment."

Hon. Members have an opportunity in this debate to put pressure on the Government to fulfil their promises. Getting credit flowing is crucial in a credit crunch. Agreement at the G20 is important, but in the end, confidence will not return and recovery will not come until we have a Government who understand that the debt-fuelled model of economic growth which they pursued for the past 10 years is fundamentally broken.

Our Prime Minister shows no sign of that understanding. He continues to assert that Britain is better placed than most economies to weather the storm. Yet, when he looks around the table of G20 leaders, he will see no one else with a budget deficit as large as Britain's, according to the IMF, and no one else who will have a longer and deeper recession than the United States, according to the OECD. He continues to argue that the recession is caused by a banking crisis that blew in from America on an otherwise sound economy. [Interruption.] Mr. Watts, who is the Government Whip, says he never said that. The problem is that the Prime Minister kept saying it from the Dispatch Box. That has been the Government's main economic argument—that we are suffering some banking crisis from America. The truth is that it is caused by 10 years of building an economy on debt and the Government are now reaping the consequences.

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