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Economic Growth

Vat – in the House of Commons at 2:30 pm on 6th September 2011.

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Photo of Mark Hoban Mark Hoban The Financial Secretary to the Treasury

Our economic policy objective is to achieve strong, sustainable and balanced growth, more evenly shared across the country and between industries. The independent Office for Budget Responsibility’s forecast, published at the Budget, takes full account of the policy measures announced in the spending review and in Budget 2011. The OBR forecast that the economy would grow throughout 2011, and in every year of the forecast. It will publish its updated forecast in the autumn.

Photo of Gareth Thomas Gareth Thomas Shadow Minister (Business, Innovation and Skills), Party Chair, Co-operative Party

As the level of economic growth over the past 12 months was lower in Britain than in the rest of the G7, is it not about time that the Minister had the courage to persuade his right hon. Friend the Chancellor to start work on a plan B?

Photo of Mark Hoban Mark Hoban The Financial Secretary to the Treasury

It has been very clear, listening to all the international commentators talking about what is happening in the UK economy, that their advice has been to stick to the course and stick to plan A. That is the action that this Government are committed to—[ Interruption. ] This is interesting. We have one plan; the previous Government seemed to have more plans than they knew what to do with, and that is why they lost their credibility.

Photo of Claire Perry Claire Perry Conservative, Devizes

What does the Minister think is more likely to encourage growth: cuts in corporation tax or the increases in national insurance that Labour was proposing?

Photo of Mark Hoban Mark Hoban The Financial Secretary to the Treasury

What we were able to do in our first Budget was to reduce corporation tax and set out a clear path to reduce it over the lifetime of this Parliament. We were also able to reverse Labour’s damaging jobs tax.

Photo of Geoffrey Robinson Geoffrey Robinson Labour, Coventry North West

Will the Minister draw to the attention of the Chancellor the fact that economic credibility affects all Treasury Ministers in due course, and that in his case it is affecting him rather earlier than he might have thought? Can he not see that, with a lack of growth, he will not hit his deficit reduction target? Without hitting that target, he will not realise his plan, and without his plan—which is already in shreds—he will lack credibility, too.

Photo of Mark Hoban Mark Hoban The Financial Secretary to the Treasury

I wonder whether the hon. Gentleman’s remarks about the loss of credibility for Treasury Ministers reflect his own experience.

Photo of Jake Berry Jake Berry Conservative, Rossendale and Darwen

Given how badly prepared the UK economy was for the financial crisis, does the Minister think that it was delusional to believe that its effects would be over in six months?

Photo of Mark Hoban Mark Hoban The Financial Secretary to the Treasury

The previous Prime Minister thought that what we now know to have been the longest and deepest recession since the war would be over in six months. That demonstrates the degree of delusion that existed under the previous regime. We are taking the tough and necessary decisions to tackle the legacy that we have been left by our predecessors.