by Paul Goodman
No great surpise there, of course. But three speeches from the Conservative backbenches yesterday evening give the flavour of the first day's debate. First, Andrew Tyrie (Chichester), the Chairman of the Treasury Select Committtee, choosing at the end of his speech to back the budget to throw his weight behind the Chancellor's approach –
"I know that this is not something on which agreement will be reached across the House and that it is the very stuff of party politics, but I hope that Members sitting on the other side of the House will permit me to end with a personal view. Even if there were no deficit, we should still reduce public spending because at close to 50% of gross domestic product it is too high. It reduces choice and freedom for millions of individuals, and it burdens enterprises with unacceptable levels of taxation. During the 13 years of the previous Government, public spending averaged about 40% of GDP. I support this Government's plans to reduce it to that level again."
Next, John Redwood (Wokingham) supporting the budget but suggesting the kind of pro-growth measures which he regularly floats on his blog –
"The outcome of the Budget will depend on two important considerations: whether we can put enough measures in place along the lines that the Chancellor has laid out for promoting growth; and whether there is a happy and sensible resolution to the banking problems as they affect SMEs and the wider public in Britain. There has been much discussion of the big banks, the investment banks and all those sorts of issues, but we now need to laser in on how the banks serve local communities and the SME sector. We need a more pro-competitive answer. I have some thoughts on how we could do that, but will not detain the House with them because today is not the day for that. However, without such measures the Budget will find it difficult to deliver the very large figures for increased revenue on which the whole plan rests."
Third, Stewart Jackson (Peterborough) illustrating, in an exchange with Rachel Reeves, the degree to which Tory speakers placed the blame for the defict where it belongs.
What choice do we have? Labour's poisonous legacy and debt millstone left us with simply no alternative. In 2010-11, we had to borrow about £140 billion-perhaps around £10 billion less than expected. Only Ireland has a bigger cyclically adjusted deficit. Labour ran a structural deficit some seven years before the banking crisis in 2007-08, and we entered the financial crisis with the largest structural deficit in the G7. The national debt doubled between 1997 and 2010. In May last year, we were at significant risk of a downgrading in our international credit rating, with a catastrophic impact on public services, business and consumer confidence, a long period of stagflation, and a contraction in the economy.
Rachel Reeves: I want to enlighten the hon. Gentleman with two facts. First, in 1996, just before the Labour Government came into power, there was a structural budget deficit of 4%, whereas it was 2.5% in 2007. Secondly, he compares the UK economy to that of Greece, but does he recognise the figures that show that although bond yields in Greece increased from 7% to 12% between January and May 2010, in the UK, before the Conservatives came to power, they were falling?
Mr Jackson: The hon. Lady will know that the markets have recognised that the fiscal consolidation that the Government had to put in place as part of a policy of growth in the private sector and consolidation in the public sector has resulted in a lessening of the pressures in the gilt markets, with gilt yields down to 3.53% since May last year, and every 1% is £1 billion of interest payment. Of course, that is change in the pocket to Labour Members; we are spending £120 million on debt every day.