Source: House of Commons, Official Report, 30 March 2010
Mr. David Blunkett (Sheffield, Brightside) (Labour): I am grateful to the hon. Member for Twickenham (Vince Cable) for speaking just before me, because the first two speeches in the debate were an entertaining exchange between the right hon. and learned Member for Rushcliffe (Ken Clarke) and his former constituent, the Secretary of State (Ed Balls), but the reality that we face this evening is to speak on behalf of those who do not have a voice. I therefore immediately want to take up a point that was made by the Shadow Business Secretary about credit ratings in the bond market.
It goes without saying that, in a global economy, we are subject to those who make decisions through credit-rating organisations and the bond markets, and if we take no notice and are not cognisant of the consequences, we will be severely damaged. However, in a democracy we have a number of elements in addition to the rule of law and a free media. We have political, participative and representative democracy that gives a voice to those who have power, wealth and privilege in the economic democracy—in the marketplace.
This afternoon I have heard people blame this Government and our Prime Minister for a global meltdown—for what happened throughout the world—that was initiated not actually in the United States, but in the development of savings in China, because of the economic and social changes in that country. That led to the availability of credit and money in the United States, which inevitably led to the over-extension and meltdown. When I hear the Prime Minister blamed for that by a former Chancellor, I do not take it seriously. The right hon. and learned Member for Rushcliffe knows better than that. He knows perfectly well that this Government and country cannot be and are not responsible for what took place three years ago.
Some of those who were responsible for the meltdown were, incidentally, engaged with credit-rating agencies and the bond markets, and it is the cheek of the devil for those people, who have wealth, power and privilege internationally, to say that it was the fault of political democracy for not regulating them toughly enough-to turn the tables on the politicians who are saving our economy, our services, our jobs and the livelihoods of our people and our communities and to say that we are to blame for not stopping them from doing what they did in the first place. That is just nonsense.
Mr. Blunkett: The Opposition were the first to criticise us for being too tough on regulation. They preached year after year that this Government were too heavy-handed on regulation, and that business and finance wanted to be left alone. They preached what Margaret Thatcher preached, and now they intend to practise in the social arena what they preached in the economic arena-that Governments should get out of such business and leave private enterprise alone. They said that we would flourish if Governments did so, not that bankers if left alone would bring our country to its knees and then blame us for not intervening harshly enough to stop them from doing it. What nonsense is that?
Mr. Oliver Heald (Hertfordshire, North-East) (Conservative): Does the right hon. Gentleman not remember that in 1998, when the current Prime Minister introduced that financial system of regulation, my right hon. Friend the Member for Hitchin and Harpenden (Peter Lilley) said that it would lead to trouble? And lead to trouble it has.
Mr. Blunkett: Of course we introduced that system precisely because there was no financial regulation. We also made the Bank of England independent, so that it could make judgments and intervene independently-and of course the Opposition opposed that, too.
The contradictions abound. We know that it is necessary to take care and time to determine what needs to be done. We know it, because one year ago we anticipated that in 2014-15 debt would be £100 million more than we now expect it to be. Even three months ago we thought that growth was just 0.1 per cent., and it turns out that growth is 0.3 percentage points higher than that, based on the recently announced readjustment. Indeed, we know that the growth that can be achieved, the changes that can be ascertained and the way in which we need to proceed are a moveable feast.
Above all, we need to be clear about who carries the consequences for the decisions that we make. Of course, on the macro scale, we have to take into account the consequences of what is happening globally, but we, as political representatives and the only voice of most people in this country who do not have wealth and privilege, have to speak out about the consequences of too rapid a cutback, too rapid a disinvestment and too many cuts to front-line services.
I heard the Shadow Business Secretary say that his 1997 Budget was wonderful and that we stuck to it. Actually, we did not. I was the Shadow Education and Employment Secretary from 1994, and in market towns throughout Britain in 1995 and 1996 I spoke to parents, teachers and children whose schools were falling apart-whose roofs were leaking. Primary schools were reliant on outside toilets, the teaching profession had totally collapsed and there were four-day weeks. There was under-recruitment, so teachers with no training had to be placed in the classroom; there were no teaching assistants; books were being recycled; and parents were being asked to pay for them.
That was the reality, and in 1997 the July emergency Budget put £700 million more into the education service, and £1 billion of new deal money from the windfall levy, from which we also benefited in terms of the employment drive that got people back to work. We do not want to go back to the era that I have described: it would not be the shadow Chancellor; it would be more like John Osborne—look back in anger and see just what happened when the Conservatives put their friends before the electorate of the country's most disadvantaged constituencies, such as mine.
Mr. Binley: Will the right hon. Gentleman acknowledge that the school improvement programme, much of which we benefited from in Northampton, was a direct result of the private finance initiative, which the then Chancellor said was the only game in town?
Mr. Blunkett: It was not the only game in town, because, as I have just spelt out, we started in 1998 with £1 billion and the new deal for schools, which turned into Building Schools for the Future. That budget-just to get the figures right-was £600 million when I became Education and Employment Secretary; it is now £9 billion and is transforming the learning opportunities and environment of our children.
The argument has been made that we should immediately start to reduce spending. However, one thing that concerns me, to which the hon. Member for Twickenham referred, is that many agencies-next steps agencies, Departments, primary care trusts and strategic health authorities-are already starting to cut in anticipation of even deeper cuts, should a Conservative Government be elected. Paradoxically, that is reducing the speed of growth by cutting back on spending that would keep people in jobs.
Let us look at what happened in the past. We cannot live in it, and I shall not compare historical debt to the reduction in the structural debt, which in any case we intend to get down to 2.5 per cent. of GDP by 2014. However, let us presume that we are in 1951, and a Conservative Government have been elected not on an austerity programme, but on a programme of lifting rationing and bringing hope and aspiration to the 1950s. That is what they were elected on. They were elected on the back of the wartime lend-lease and debt, and the debt that Maynard Keynes negotiated in Washington in 1947, but they did not enter office promising that they would wipe out that massive, historic wartime and post-war debt by 1955, 1959 or 1964. In fact, it was paid off in 2002, and the Canadian bonds were paid off in 2007.
We need a voice of reality saying that we in the political arena must take cognisance of the international financial arena and speak on behalf of the people who have no other voice. The issue is about continuity of spending; about retaining people in jobs, paying tax and national insurance; and about reducing the anticipated welfare spend-on which Margaret Thatcher did spend while cutting front-line services in my city and those throughout the country. Some of us remember it; some of us dealt with it. As the leader of Sheffield city council for seven years in the 1980s, I lived with it day after day, and none of us should want to go back to that. We do not need to; we can plan sensibly; we can be rational; and, above all, we can act as a counterweight to the voices of those who will not feel the cuts-who will be immune to what happens in education, health, transport, the environment and housing, because they can buy their way out of cuts.
We speak on behalf of those who cannot do that, and that is why we should stick to our guns. We should be rational and thoughtful and careful. Above all, we should resist the siren voices of those who know what they are about, and who will vote in this election—they will vote for their own self-interest. That is not acceptable for Britain and it is not the future for our country.
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