National Debt Cap

Part of the debate – in the House of Commons at 5:28 pm on 12th July 2011.

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Photo of John Mann John Mann Labour, Bassetlaw 5:28 pm, 12th July 2011

Well, my right hon. Friend Mr Straw is one of the few who would be able to pray in aid the key point I am about to make about previous debates. I am sure Sajid Javid would love to pray in aid some of the past figures of the right, such as Margaret Thatcher, Ronald Reagan and Winston Churchill, but unfortunately for him there is only one politician whom he can pray in aid on the proposition of capping the national debt, and he is a Labour politician; or rather, he was a Labour politician but he switched sides. His son was once the MP for Bassetlaw, and his name was MacDonald: Ramsay MacDonald. At that time, a failure to understand basic economics led to the formation of a national Government and to John Maynard Keynes having to rescue those who were stuck in the failed logic of the gold standard and everything that emanated from that. A similar constraint on Government action was rejected between 1980 and 1984 by Ronald Reagan, who in fact did exactly the opposite. Such a constraint was also rejected by Margaret Thatcher between 1979 and the end of the 1980s. Although she did many things wrong, she did not accept this fundamental concept and she failed to shrink the state.

Such a constraint was also rejected by Winston Churchill, and that example is perhaps the most relevant. Can we imagine being sat here in 1939? Luckily, Keynes had by then won the argument against Ramsay MacDonald and the Labour traitors who formed the national Government on the flexibility of economic policy. Hitler was determined to invade this country, as well as the rest of Europe, and we were required to spend to defend ourselves. Can we imagine our being hamstrung by a requirement to change legislation to allow this country to spend money from the public purse in order, rightly, to defend ourselves? Now we see the shaking of heads by those on the Government Benches, because the argument has been lost—I will demonstrate precisely why they have lost the intellectual and economic argument.

In 1999, my right hon. Friend Mr Brown decided to pay off some of the national debt. Which bits of it was he paying off? He was paying off national debt from the Napoleonic wars, which went back nearly 200 years, to a time when, again, there was a national crisis and a wise Government determined that this country should spend to defend itself. So, we see the naivety of the would-be Reaganites and Thatcherites, who are, in fact, the MacDonaldites. They would restrict our ability to act at times of crisis on the economy, they would reject the wisdom of Keynes and they would opt purely for the logic that Milton Friedman adopted and tried out in 1973 in Chile—the people there were the only ones after Ramsay MacDonald to attempt this economic philosophy. That is what the motion proposes.

I have learned over the years in this place that it is sometimes best that these arguments are had and then left to rest, particularly as we reach the summer recess. This is such an unwise proposition that I shall resist even the temptation of allowing a vote on it and, thus, giving it credibility.

Question put and agreed to.

Ordered,

That Sajid Javid, Mr Frank Field, Mark Garnier, Matthew Hancock, Joseph Johnson, Mr David Laws, Andrea Leadsom, Jesse Norman, Claire Perry, Mr John Redwood, Mr David Ruffley and Nicholas Soames present the Bill.

Sajid Javid accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 20 January 2012 and to be printed (Bill 218).