12. What assessment he has made of the effect on levels of employment of the implementation of the measures proposed in the June 2010 Budget. (7703)

The OBR has published its assessment of economic prospects, taking into account the measures in the Budget. It forecasts that employment will rise, reaching 30.1 million in 2015. Reducing the deficit will mitigate the risks to the recovery, create the conditions needed for growth and enable mortgage rates to be kept lower for longer. The Government are committed to supporting private sector job creation, cutting corporation tax and raising the employers’ national insurance threshold to support the economy.

I thank the Minister for his response, but as the local futures group says, Chesterfield will lose 1,374 public sector jobs—almost 3% of our entire employment base—by 2016. Given that manufacturing allowances are to be cut, which will make it more difficult for us to grow our way out of the economic difficulties, and given the VAT rise, which will make it difficult for the retail sector, is not the reality that, far from this Tory Budget being courageous, the ideology behind it is going to hit people with their jobs?

The hon. Gentleman forgets the measures in the Budget that will increase employment opportunities —the cut in national insurance contributions, the tax break for new businesses, which will benefit businesses in his constituency, and the reduction in red tape. All those measures are geared towards improving the prospects of private sector growth in our economy. We need the economy to be led by the private sector.

Given that sustainable employment can be supported only by dealing with the deficit, was the Minister grateful for the support of the shadow Chancellor, who said at lunchtime on the subject of raising VAT:

“I don’t have a philosophical problem with that”?

It is interesting to hear about views expressed after the election, which were kept silent before the election. We took the difficult decision in this Budget to lay the foundations for growth in the future and make sure that we pay the bills of the past. Sadly, that included the increase in VAT.

How does the Minister expect increases in VAT to help employment?

By tackling budget deficits, we will be in a better position to keep interest rates lower. Serious concerns were expressed before the Budget about the ability of the previous Government to tackle the deficit. The tough action we have taken has been welcomed across the world and by rating agencies. It lays the right foundation for future growth. This Government are prepared to take the difficult decisions that the hon. Gentleman’s Government ducked before the election.