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Economic Affairs and Work and Pensions

Unemployment is rising. We have the highest youth unemployment in Europe. We have the highest proportion of children growing up in workless households of every country on the European continent—that is not a record of which I would be particularly proud if I were a Labour MP. We are going to introduce a comprehensive work programme, and reform welfare to create genuine incentives to make work pay. One of the issues that came up time and again in the general election—for me at least, and perhaps for other Members—was the frustration felt by working people on low incomes who go out to work every single day and find that their next-door neighbour has been sitting on out-of-work benefits for years. That is going to be part of the reform that we introduce in our welfare Bill. I was discussing the Budget, which needs to address the immediate debt situation that the country faces. However, it will also begin the long-term task of moving an economy based on debt—too much consumer debt, too much banking debt, too much Government debt—to an economy in which we save, invest and export in future. If anyone needs to be reminded why the immediate debt situation we have inherited is so serious, I suggest that they read the report on the UK produced by one of the world's three credit-rating agencies today, which warns of""a rise in public debt... faster than any other AAA rated sovereign"" country, and points to""the largest cyclically-adjusted budget deficit in Europe"." The rating agency says that the previous Government's plans to reduce the deficit are "distinctly weak" and lack "credibility". It says that we are the only European economy set to run a budget deficit above 3% in five years' time. That is all at a time when, as it points out, the fiscal crisis in Greece and other eurozone countries has caused a major shift in investors' attitude to sovereign risk.