---

Budget Resolutions and Economic Situation

It is always a pleasure to follow the hon. Member for Peterborough (Mr Jackson), who has a particular perspective on things. I want to focus on two themes: jobs and justice. The overall state of the economy is as follows: the Budget deficit is £121 billion; interest rates are 0.5%; and the Bank of England has undertaken £325 billion in quantitative easing. Yet the economy is in a depressed state, with GDP below its peak and its potential. The worst consequence of that is that 2.67 million people are unemployed, including 1,000 young people in my constituency. What are the Government doing to tackle that? Given the fiscal squeeze on households, it is clear that what is needed is an increase in business investment and exports, but that is not what we are getting. According to the Office for Budget Responsibility forecasts, the increase in business investment has been pushed back from 2012 to 2013, and the unemployment peak has also been pushed back. In the north-east, the chamber of commerce says that investment is particularly weak. Shockingly, it has been negative since 2008, and the figure currently stands at minus 6.3. That means that, in contrast to what the hon. Member for Peterborough said, the capital stock is shrinking. Why is investment so low, given that The Daily Telegraph tells us that corporate balance sheets are ““brimming with cash”” and the Bank of England reports that dividends are at record levels? It is because there is a lack of confidence. Have the Government done anything to strengthen business confidence? What little growth that is forecast will be fuelled by consumer borrowing. Although Government Members inveigh against household indebtedness, over the forecast period, that is predicted to rise from £1.5 trillion to £2 trillion.