Fiscal Responsibility Bill

Part of the debate – in the House of Commons at 8:31 pm on 5th January 2010.

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Photo of Katy Clark Katy Clark Labour, North Ayrshire and Arran 8:31 pm, 5th January 2010

Each situation needs to be looked at on its merits. With the banking sector, there was no alternative, because if the banks had collapsed, the economic situation would have been much worse, given that the economy depends on them. I would have welcomed greater support from the Government for the manufacturing sector, and I will support any such provision in the times to come. The retail sector is in a slightly different situation. There is a long-term argument for retaining a steel industry and other parts of the manufacturing sector, because we will rely on them in years to come. Once we lose those sectors, they will be very difficult to recreate. Those of us from the north and Scotland-the more industrialised areas-know of the proud industrial traditions of this country. We were at the forefront of manufacturing and development, but that is no longer the case in many sectors of the economy.

Mr. Redwood talked about substantial reductions in public sector jobs. If we are to follow the advice of all the Front-Bench teams, especially of the official Opposition, we will see substantial cuts in public sector employment, which will have massive economic implications, especially in those parts of the country that are more heavily reliant on public sector jobs. As has been pointed out, if jobs are lost in the private sector, tax revenue is lost and we no longer have the benefit of the production by that individual. But the same is true in the public sector. There is a huge cost to the state in the loss of employment in the public sector and, at a time when we have to be alert to the risk of growing unemployment, any solution that involves cuts in public sector jobs is a very short-term approach.

In recent months we have had much debate about the possibility of a double-dip recession, and that is a genuine risk. It is difficult to predict when we can start to consider how to reduce the deficit, and that is one reason why I feel it would not be helpful for any Government to have the restraints in the Bill placed on them. No Government, of any political persuasion, would have been able to predict some of the economic experiences that we have had in the past three years. As a Labour MP, I do not want to see my Government constrained in that way. I want Ministers to be able to respond to events, use their judgment and do everything that they can to protect the British economy and the British people. Therefore, as a matter of principle, I am not convinced that a Bill is the most helpful approach.

However, the real reason why I feel unable to support public spending cuts of this nature is the types of cuts that they will likely mean to some essential services. I have voted against various Government proposals that have amounted to substantial public expenditure, including Trident replacement and the identity cards scheme, and I believe that there will be a range of other Government initiatives, such as the NHS computerisation programmes, that perhaps we should look at as well.

I am not saying that there are not areas of public spending that very legitimately we need to look at. Of course, we are currently embroiled in overseas armed conflict. I have never voted in the House on those issues because there have not been any votes since I was elected in 2005, but before I became an elected representative in this place I marched against those conflicts. We need to have a serious discussion about our society's priorities and values. My concern about the Bill is that yet again the poor will pay the price when those who have the power and run the show make mistakes. Bizarrely, over the past one and a half to two years, the debate has gone from being about the mistakes made by those running the banks to how we can most effectively and severely cut public spending, and of course it will be my constituents and those of every Member in this House who will pay the price.

I understand the reasons for the Government's stance. However, over the coming months we must be extremely careful in our approach towards the public sector, particularly education, health and the other essential public services on which the most vulnerable in society rely. Many of those services have been fought for by individuals and communities generation after generation, and if we start down the path of closing community halls, libraries and other services, they will not come back easily. I would like injected into this debate a discussion about not just cuts, but our society's values, and we need to say very clearly that it is not those at the bottom of the heap who have got us into this mess. As we move forward, we must also say that it is our role as elected representatives to ensure that they are not the people who pay the price.

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