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The Economy

My hon. Friend is right. Are the Conservatives in favour of boosting demand to give real help now, just when it is needed, at the beginning of a recession? No, they are not. They are alone in the world in proposing huge spending cuts. They would repeat the mistakes of the past. They would take us back to the 1930s by weakening demand just when it needs to be strengthened. They have proposed to cut £5 billion from current spending plans by April this year. That is two weeks from now. Two days ago, the Leader of the Opposition was saying that Labour’s determination to support demand and protect real people from the effects of the downturn was unaffordable. He said, "Does that mean some areas will be cut? Yes it does." The Tories also opposed the £20 billion injection of demand into the economy that we announced at the pre-Budget report. That means that based on the policies that they have announced—we have heard precious little of most of them—they would take £25 billion of spending out of our economy just as the recession is at its worst. They would let this recession take its course, whereas with real help now we have ensured that 12 million pensioners have received a £60 extra payment since January to support them at this difficult time—the Tories, however, are opposed to it. In April, all 22 million basic rate taxpayers will get a £145 tax cut. That is real help now, but the Tories are opposed to it. They make the completely unfounded assertion in the motion that the temporary cut in VAT has not worked. Evidence from the independent ONS shows that the tax cut has been reflected in price reductions in 70 per cent. of cases—[Interruption.] Mr. Andrew Robathan (Blaby) (Con) claimed to move the closure (Standing Order No. 36). Question put forthwith, That the Question be now put. Question agreed to. Question put accordingly (Standing Order No. 31(2)), That the original words stand part of the Question. The House divided: Ayes 217, Noes 283.