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Budget Resolutions and Economic Situation

Absolutely, and the argument that has been with us throughout this Parliament has been about how to ensure that we generate growth to pay down the debt. Part of the problem that the Government have at the moment is that the plan that they started out with did not achieve significant results—it is not the same plan as they are operating now, by the way, because it is running some four years late and is significantly different from the one set out in 2010—because we simply did not have the economic growth that people expected.

One of the most worrying points in the OBR’s report is that it expects our economy to be at full capacity in just four years’ time. Normally, when growth recovers after a recession, as it did in the ’80s and ’90s, it peaks at 3% or perhaps 4%, because spare capacity is being used up. The OBR says that there simply is not spare capacity in the economy at the moment. That should worry us, because if our economy is operating at capacity in four years’ time and inflationary pressures start kicking in, how on earth will we meet the future bills of a mature economy with an ageing society?

I understand that some Government Members are more ideological than others about public expenditure, and understandably, many of them expressed concern about the flooding in the west country earlier this year.