The Economy

Part of Council Tax Rebate – in the House of Commons at 9:31 pm on 31st March 2009.

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Photo of Philip Hammond Philip Hammond Shadow Chief Secretary to the Treasury 9:31 pm, 31st March 2009

Oh, dear, Mr. Deputy Speaker; I was going to say that I was glad that Mr. Flello got in to make the important point about the rise of right-wing parties on the back of this economic recession in Stoke-on-Trent—a very important issue that concerns all of us in the House—but unfortunately he rather spoiled it towards the end.

I am delighted to have the opportunity to wind up what has been an interesting and wide-ranging debate on the most immediately important issue facing Britain today. I am sorry that the Financial Secretary did not get to hear the opening speeches and I am sorry that the Chancellor is not here to hear the closing speeches. I understand that they are both heavily engaged with G20 duties, which, no doubt, could not have been anticipated when the Government set the date for this debate 36 hours before the G20 conference.

We wish the G20 well, despite what some Labour Members have said, even if, as the shadow Chancellor has pointed out, some of the Prime Minister's pre-positioning looks somewhat inept and designed with the domestic political scene in mind. An effective agreement to support trade and reject protectionism would indeed be a prize worth taking away from the summit.

I concur with the comments made by Mr. Meacher that it is a shame that the anger and fear that many of our constituents feel as they face the fall-out of the recession cannot be represented by Members here tonight in the Division Lobbies. It is typical of this Government that we have now gone all bar a day of the first quarter of the first full year of recession without a debate on the economy in Government time, and when we do get one it is on a non-substantive motion without a vote at the end of the debate. They do not want to vote and they do not want to debate.

When we do debate the economy, my right hon. and hon. Friends one after another expose the Government's share of responsibility for the mess the world is in, their culpability for failing to prepare Britain for the challenges it now faces and the ineffectiveness of their response to those challenges. Of course we have heard from the Chancellor—I am glad he has made it back from his important meeting—and I am sure we will hear from the Financial Secretary in a moment excerpts from what might be called the authorised version of events: the "Brown as innocent bystander" version. In this fairytale, there is a land in which boom and bust has been abolished. Economic growth was strong, unemployment low, credit was cheap and plentiful; and all this was due to the genius of a great economist who had managed that nation's finances for many years.

As my hon. Friend Mr. Tyrie said, the citizens of that land were encouraged to follow the example of their Government, to borrow because they could afford to do so, and they were discouraged from saving. What is the point of saving when boom and bust have been abolished? Predictably, asset values boomed and the wise leader of that happy nation spent his time explaining to all his neighbours what idiots they were for not following that brilliant economic model. Then, we are told, that happy scene was rudely invaded by the credit crunch, which is an alien creature, blown in on the wind from America, the product of very bad practices by dodgy American banks.

I am glad the Chancellor is present, because I would like to tell him that everybody on the Conservative Benches has understood from the beginning, and everybody in the country understands now, that Britain's failures are part of the cause of the global problem—not its only cause, of course, but part of the cause—and Britain's problems must be solved by addressing those failures in the management and governance of our economy.

As my right hon. Friend Mr. Lilley reminded us, if we do not understand the cause of our problems, we cannot avoid them in the future. Of course, collaborating with other major economies is sensible, and avoiding the slide into protectionism is essential, but the crisis that we face will not be resolved by a clampdown on tax havens and tax evaders, however desirable that may be. Notwithstanding the rather predictable suggestion from Frank Dobson that tax havens, greedy bankers and speculators are entirely responsible for our problems, there are no such easy scapegoats that avoid the need to address the fundamental imbalances and the excessive leverage that now have to be corrected in the British economy.

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