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Budget Resolutions and the Economic Situation

March 24, 2011

Mr Mark Field (Cities of London and Westminster) (Con): Although the right hon. Gentleman is right to say that there was global downturn, and he also rightly points out that there had been continued growth between 2000 and 2007, in each and every one of those years a deficit was being run up. That is our point-an unsustainable deficit was run up in the good times, before the global crisis began.

Mr Field: My hon. Friend is absolutely right. “The Plan for Growth”, particularly in relation to the smallest start-up businesses and the idea of exempting them from much of new regulation and legislation or putting a moratorium on it, is a very positive way forward. I hope he will explore that a little further.

Mr Field: The hon. Gentleman makes great play of the idea of reduced living standards. That is not a phenomenon that has taken place only over the past nine months. Indeed, it was when the credit and debt bubble was built up for many years during the last Labour Administration that living standards for ordinary people began to be undermined. As for saying that we are all in this together, that is the very reason that the Chancellor has bravely decided, although it does not make a lot of economic sense, to keep the highest rate of tax at 50%. I fear, however, that he is doing grave damage in ensuring that some people who should be developing businesses here are leaving these shores, which is not in anyone’s interests, rich or poor.

Mr Field: Does my hon. Friend also accept that the brutal truth is that for many years we have collectively lived well beyond our means? Only our near-zero interest rates are disguising just how damaging that is.

Mr Field: Does my hon. Friend also recognise the massive distinction, in the context of forecasts on growth and throughout the economic sphere, between what happened before the election and what has happened since May 2010? In the past the Chancellor of the Exchequer made the forecasts in his own interests. We have instituted the independent Office for Budget Responsibility, and it is a sign of the robustness of its independence that it has issued the downgrades in the forecasts to reflect changing circumstances.