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Budget Resolutions and Economic Situation

The hon. Member for Tyne Bridge (Mr. Clelland) has just made an eloquent plea on behalf of the north-east. I agree about the importance of people entering this place with experience of real life and real jobs; whatever that experience may be, it is important that this place is not just filled up with professional politicians. However, I want to take him up on one point—that the deficit built up over the recession. It did not: three quarters of it is entirely discretionary and entirely the result of Government spending decisions from about 2002 to 2008, when public spending ran out of control. According to the Treasury's own figures, which rely on pretty optimistic growth assumptions, the structural part of the deficit was 9 per cent. last year and 8 per cent. this year, and it will decline to 6 per cent., 4.5 per cent., 3.5 per cent. and 3 per cent. over the next five years. In five years' time, if the growth assumptions in the Treasury's forecast are right, and if it is right about what the structural part of the deficit is—the error on that could be in both directions—we will be running a deficit of £50 billion a year. That is entirely discretionary. This is money that our children are going to have to pay back. We are borrowing £3,000 a year for every man, woman and child in the country. By the end of the forecasting period in the Red Book, we are talking about a debt of £1.4 trillion. The interest on that alone will cost every man, woman and child in the country £1,100 a year. The idea that deficit financing is a responsible thing to do is simply wrong: it is stealing from the next generation. In a recession, one expects there to be a budget deficit as a result of natural stabilisers. Taxes fall and benefits for people who are unemployed rise. However, that is only about a third of the deficit—the other two thirds is entirely discretionary. I am afraid that I am one of those people who think it needs to be eliminated an awful lot faster than the Government plan. Holding spending still will not be enough. Even if we had growth of 2.5 per cent. a year, the process would take nine to 10 years.