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Amendment of the Law

Part of the debate – in the House of Commons at 1:41 pm on 24th March 2011.

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Photo of Edward Balls Edward Balls Shadow Chancellor of the Exchequer 1:41 pm, 24th March 2011

Because a year ago unemployment was falling, and now it is rising. [Interruption.] The Chancellor sits on the Front Bench and says, “This is so bad.” Does he mean growth being downgraded? Unemployment going up? I will take his intervention at any point he wants, but if he does not want to make interventions from the Dispatch Box, maybe he should not be doing it from a sedentary position. [Interruption.] If he wants to intervene, I will allow him. I have made my pledge.

None of what I am saying will come as any surprise to the Secretary of State for Business, Innovation and Skills. He warned of it a year ago. In fact, I remember standing with him on the green on Budget day a year ago, and he said:

“We must not cut Government spending too soon and risk plunging a fragile recovery back into recession. Cuts without economic growth will not deal with the deficit”.

Wise words, and how right he has proved to be. Even after the election, and even after his colleagues decided to bury their worries and go along with immediate spending cuts and a VAT rise, the Business Secretary was still warning of the risks to come. He said on “Newsnight” last May, after the general election, that the speed of the cuts had to be based on the condition of the economy. He said:

“These things will have to be judged at the time of the Budget, and of course I don’t present the Budget personally but I’ll make an input into it.”

He went on:

“Over the course of this Parliament judgments about the speed of cuts have got to take account of the changing conditions that are coming, and that is basic economic policy based on evidence, which is what I’m in favour of…We don’t know what the impact of these cuts will be on employment.”

Wise words again, and he was right. The cuts are too fast and too deep, confidence is tanking and unemployment is up. This Budget was the time to change course, before it was too late. Sadly, the Business Secretary has not been heard.