Amendment of the Law

Part of the debate – in the House of Commons at 7:54 pm on 28th April 2009.

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Photo of John Hayes John Hayes Shadow Minister (Education) 7:54 pm, 28th April 2009

While the hon. Gentleman is making a comparison with the approaches taken in different countries, he might consider the following point. There are two ways of approaching the crisis. The first is to inject a fiscal stimulus into the economy, as he put it. However, to make a difference of about 1 per cent. in unemployment, one needs to inject a stimulus of about £39 billion, according to most academic studies. Frankly, the Government simply do not have enough money to do that effectively. The Keynesian route, advocated by Mr. Meacher in a very eloquent speech, is simply not possible. The alternative route is retrenchment. The Government are not really going for that in a meaningful way. We are falling between two stools, which is likely to have a very limited effect.

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