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Economic Growth

Volume 513: debated on Tuesday 13 July 2010

5. What recent representations he has received on the proposals in the June 2010 Budget intended to increase economic growth; and if he will make a statement. (7696)

The Government have received representations on a range of proposals to increase economic growth. Indeed, the Budget is about growth. It is about underpinning private sector confidence and creating the space for business to grow, redressing the balance between the public and private sector. Crucial to promoting growth is cleaning up the public finances and the mess that the previous Government left. That is why the OECD document published today described the Budget as “courageous” and “appropriate”.

Given the difficulties with time lags, for example between decision making and outcomes, how will the Chief Secretary monitor the overall impact of the stimulus given to growth in the private sector and the necessary cuts in Government expenditure, to ensure that we have a sustainable recovery and not a double-dip recession?

The measures in the Budget are set out precisely to ensure a sustainable recovery through a number of measures, particularly in the tax sphere and, following the earlier questions on regional growth, to stimulate business. Of course, it is now for the independent Office for Budget Responsibility to produce independent forecasts of growth, and it will do so at the time of future fiscal events.

The Budget VAT rise in January will affect economic growth on the islands of Scotland. Surely we need a rural fuel derogation in place before the rise. After all, the rural fuel derogation was in the coalition document, but the VAT rise was not.

The hon. Gentleman is right, of course, that the rural fuel derogation is in the coalition agreement. The Chancellor restated our commitment to investigating the matter in the Budget statement, and I can assure the hon. Gentleman that we will be coming forward with an announcement in due course.

Businesses in rural areas will have the opportunity to benefit from the regional growth fund that we are establishing and which will help to support business growth in the regions of the country, particular those areas where dependence on public sector employment is greatest. Also, new businesses in rural areas will benefit from the cut we have announced in national insurance for new employees in new businesses.

Is the Chief Secretary aware that, as part of the growth drive, the Treasury has set up a spending challenge website asking for ideas and assistance for the future, and that it is currently featuring issues such as sterilising the poor; reopening the workhouses; asking single parents who cannot finance their children to terminate the pregnancy; benefit claimants to work in sweatshops; and immigrants to be moved out of cities? Is he happy that such racist and offensive drivel is being hosted by one of his websites, and will he give the House an undertaking that the site will be moderated and that this stuff will be removed immediately?

Order. I know that the right hon. Gentleman, in answering the question, will focus his remarks on the June 2010 Budget.

I am grateful for that, Mr Speaker.

Of course, I would not wish to promote such ideas, but I am surprised that the hon. Lady pours scorn on the consultation process we are undertaking. She will know that we have also set up such a process for public sector workers. We have had more than 66,000 ideas from people who work in the public sector and who are suggesting savings that they believe can be made in their own services. That is a valuable part of the spending review process. However, we have not had a single idea from the Labour party on how we can make the savings, let alone the apology warranted for the terrible mess it left the economy in.