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Amendment of the Law

Part of the debate – in the House of Commons at 5:47 pm on 23rd March 2011.

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Photo of Kevan Jones Kevan Jones Shadow Minister (Defence) 5:47 pm, 23rd March 2011

I was going to say that it was a pleasure to follow Mr Jackson, but we have heard a succession of speeches from Government Members that were not only economically illiterate, but stuck to the rhetoric pumped out during the general election. They seem unable to get away from that rhetoric even when the reality of what this country is facing hits them. We heard a rant from Mr Amess and, frankly, a very strange speech from Joseph Johnson, who clearly had read something about the gilt market but did not quite understand how it works.

I congratulate my hon. Friend Dan Jarvis on an excellent maiden speech. I think he will be a great asset to the House. He is a man of great courage in both his private and personal life and in the service of this country. I look forward to many more contributions of the standard he gave today.

I would like to focus on two issues: the lack of a policy for growth in the Budget and how that will not affect positively the economy of the north-east of England. Growth figures for the last quarter of 2010 show that the economy contracted by 0.6%, as was mentioned by my hon. Friend Rachel Reeves. The Government blamed snow for that, but she eloquently pointed out some great examples of economies that grew despite having weather that was far worse than it was in this country.

On top of that, last week we saw a 17-year high in unemployment, set against a continuing fall in house prices and an increase in inflation to 4.4%. It would not take an astrologer, as was mentioned earlier, or a genius to work out that the OBR was going to have to downgrade its growth forecast today. Initially, it said that growth would be 2.6%; then, that it would be 2.1%; and today, that it will be 1.7%. The lack of growth is the main risk to our economy, and let us be honest, the Budget was spun so much that we could have read or predicted most of it before the Chancellor even stood up at the Dispatch Box today to announce it.

The Government also say that the key thing they have to do is to reduce borrowing, but borrowing is now going up, so even by their standards the economic pill is clearly not working. What is happening now is both risky and dangerous to the UK economy, and, although history cannot be repeated precisely, we need to look back, because one of the key lessons we have learned from the 1920s and ’30s is that recovery from large financial crises is delicate, slow and stuttering. Now, as a precise result of this Government’s policies since May, growth is down and unemployment, borrowing and inflation are up.