PMQs & Pre-Budget debate As-It-Happened

PMQs & Pre-Budget debate As-It-Happens

Wednesday, 26, Nov 2008 06:32

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This event is now over, but you can see how it happened below.

11:16 - About an hour to go until prime minister's questions kicks off. Everyone expects it to centre on the Pre-Budget Report, it having redrawn the context of Britain's economic existence and such. But with a three hour debate on the report half an hour afterwards, David Cameron may opt to take a different approach. He'll be hoping to get some shots in on target today. His speech removing Tory policy from Labour spending gave the party a decent amount of space to attack Monday's report but early indications are that it hasn’t done them much good. Today's YouGov/Telegraph poll – conducted after the Report was unveiled – showed only a four per cent lead, a serious drop since the summer. Yesterday, the academic British Election Study found most Britons refuse to blame Gordon Brown for the financial crisis.

11:51 - The chamber is beginning to fill up as MPs prepare for the weekly tussle. Questions about Wales are occupying the Commons.

12:01 - Peter Tapsell gets the first question, which is a treat for everyone involved. He speaks rather slowly, but builds up to a decent point: will the PM apologise for wrecking the British economy? MPs waste no time in getting rowdy in response to the first question. It looks like it's going to be another busy day at the office for ever-embattled speaker Michael Martin.

12:05 - David Cameron stands up. The first question is about the embarrassing VAT slip-up. Mr Brown seems diffident in response, but gets going once he moves on to explain the logic behind the cut to 15 per cent. "We looked at all options, we rejected the option of raising VAT, we decided we would lower it."

12:07 - Mr Cameron won't let go about the VAT embarrassment. He humiliates Stephen Timms and then goes further, alleging a "VAT bombshell" in the offing. That's probably putting it a bit far. But he asks whether there was a plan to push VAT beyond 17.5 per cent? The PM sticks to his line that the government considered all options. It's the best he can manage in the situation, but doesn't help his reputation for being a prime minister motivated primarily by party politics.

12:08 - As usual the Tories jump at the opportunity of some Commons theatre, cheering and hear-hearing as their leader reels through a list of his party's economic proposals. Only now does he get to the doubling of the national debt, the chief claim made by shadow chancellor George Osborne in response to Monday's Pre-Budget Report. Mr Brown is scathing: "His policy ends up doing absolutely nothing to help families and businesses now. We are not going to take the do-nothing road of the 80s and 90s."

12:11 - For his fourth question Mr Cameron returns to the national debt. Mr Brown points to national debt in countries abroad. His argument is that Britain is better prepared than many other economies, but it looks like question-dodging nonetheless. "I have talked to leaders in every part of the world," he declares. We're very impressed, Mr Brown, very impressed indeed.

12:12 - And now he's a clever quick question from the Tory leader, who says the 57 per cent public borrowing figure is the same as under Denis Healey. Mr Brown raises laughs from the government backbenches as he adopts the attitude of a despairing schoolteacher.

12:13 - It gets a laugh, but surely this is pushing Mr Cameron's luck? He says Mr Brown has given Britain "the difficulties of Italy and the accounting practices of Enron." Mr Cameron builds up to a crescendo of condemnation against "dead" New Labour. But the PM comes out fighting in response. He's essentially agreeing with Mr Cameron but attacks the Tory leader as "the do-nothing leader of a do-nothing party".

12:19 - Treasury committee chairman John McFall follows Mr Cameron immediately with a question about the government's lending for banks. Then Nick Clegg takes his turn with a small-print look at the Pre-Budget Report. His question is about Baby P and Mr Brown adopts a quiet, respectful tone. In response the Liberal Democrat leader dismisses his "bluster" and attacks the PM on tax loopholes. "He has toyed with the hopes of the British people. Why has he let them down?" Mr Brown gets more worked up now, insisting the government is providing real help for families. If he's like a schoolteacher with Mr Cameron, he's like an angry parent with Mr Clegg.

12:20 - Confusion over access to the serious case review relating to the Baby P case is next. Mr Brown says the children's secretary has allowed the opposition spokesman to read the confidential report.

12:21 - The PM announces he has agreed with international partners that the next meeting of the G20 will be held in London on April 2nd. "I've talked to the incoming US administration and president-elect Obama expects to come to Britain at that time."

12:22 - A classy response from the PM to a question about whether he can name any of the three countries in the world with a higher budget deficit than Britain. Mr Brown's one-word answer, "America", is greeted with gales of laughter in the chamber.

12:24 - Nicholas Soames fights his way through the heckles to get in a question about defence budgets. Mr Brown says he won't let defence spending slip by 20 per cent as it did under the Tories.

12:25 - A question about the Democratic Republic of Congo asks about the 3,000 extra troops approved at the UN security council. Mr Brown, in full statesman mode, says a political solution ultimately offers the only end to the conflict.

12:27 - Sacked low-level minister Joan Ryan stands up to press the PM about cuts to railway station facilities. Mr Brown ignores the low rumbles as MPs note the tension between the two as he gives a standard response.

12:28 - Incredibly, a Tory backbencher stands up to ask why Mr Brown continues to use ex-Fed Reserve chairman Alan Greenspan as an advisor. The PM discusses positive proposals made by Mr Greenspan. "What he's said is something we've taken note of," he says.

12:29 - And now Mr Brown is again pressed on the national debt doubling. "The reason the Conservatives are pressing us on this question is they do not want us to invest now. They are simply confirming they are a do-nothing party with a do-nothing leader and a do-nothing policy."

12:30 - Why has the pound lost a quarter of its value against the dollar in July? It's a simple question which Mr Brown brushes away by playing the patriot card in response, saying it is "un-British" to talk the pound down.

12:33 - That's the end of this week's PMQs – but not the end of this week's As-It-Happens. After a statement on finance for English local authorities by John Healey we'll be returning to the Commons for the three-hour debate on the Pre-Budget Report. MPs have nipped outside the chamber for a quick break but they'll be back soon – and so will we.

12:42 - It looks like the PBR report won't be getting underway until 13:30 GMT, meaning there's time for a more extended lunch than we had initially thought. Good news, food fans.

13:02 - Treasury officials have just confirmed Alistair Darling will definately attend the debate. There was some concern Labour could ignore the event, leaving a bunch of Tories to sit in the House complaining. Such a tactic would almost certainly have backfired, making the government appear uncaring. We should be in for a thorough three hours of debate here. Grab some food. Be back in half an hour.

13:28 - And we're off, a little earlier than expected. George Osborne gets up to gleefully point out the discrepancy between treasury optimism about the economy and that of independent analysts.

13:30 - The House is pretty full - about two-thirds capacity. The big players are all there. Osborne, Nick Clegg, Vince Cable, Alistair Darling. Osborne seems to be having the time of his life in there. He says he'll stop taking interventions for a few minutes, while he talks, saying "I'll take some interventions later if they come up with some better ones." Basically, George has called a party and now he's hosting it. He really does seem genuinely happy. It clashes a bit with the words coming from his mouth, which is about the doom of Britain. All of a sudden he gives way, for no particular reason, leading the House to burst into nasty laughter.

13:33 - Osborne now makes way again, leading someone to shout: "What about me?" Osborne tells us the national debt will be the highest on record. We know that. He says the government inherited a golden legacy in 1997, and will now proceed to leave a 'basket case' for the next administration. OK, that's actually pretty accurate, although it doesn't necessarily mean its all the government's fault. There is such a thing as external circumstance.

13:36 - The government is peddling "ridiculous fantasy figures," Osborne says. Nicholas Soames, who has more jowls than any other man alive, gets up to offer Osborne some support. Osborne's line of argument doesn't have much structure to it. It's a scattergun approach, highlighting every conceivable deficiency in government strategy.

13:38 - Rob Marris, Labour MP for Wolverhampton, sums up the Tory argument: that it's all Brown's fault. What exactly would the Conservatives do? he asks. Osborne says: "It will be the next Conservative government that fixes" what this government has done. That's not an answer. That's rhetoric, and not particularly effective rhetoric. The speaker calls for calm - MPs are absurdly boisterous - and mentions that members of the public may be listening to seriously find out what politicians intend to do about the crisis. God help them if they have. So far, we have only angry political abuse and bullying laughter.

13:41 - David Blunkett, former home secretary, gets up. Does Osborne really believe changes in the UK are responsible for events in America and Asia? "Has he completely lost his marbles?" Osborne replies with this phrase, which you may have heard before: "The government didn't fix the roof when the sun was shining." He then goes on to cast aspersions on Blunkett's reasons for standing up, saying he is trying to edge his way back into the Cabinet after having to resign twice.

13:43 - We're onto VAT. His argument is it's an inefficient use of taxpayer's money, when prices are falling anyway. He quotes experts and even Nicolas Sarkozy, the French president. Retailers also don't like it, because they have to re-price everything, apparently. And Osborne moves on to the permanent VAT rises which Osborne says are up and coming. Will Darling say what Brown didn't during PMQs? Why did the minister sign off on the document mistakenly put on the internet?

13:48 - Osborne says again that anyone earning over £19,000 will be paying more tax. The government should establish a state institution to underwrite credit. Businesses want credit and credit insurance. Apparently, this would mean more borrowing. This is supported by all major business organisations, which isn't surprising. Osborne's making quite a lot out of this policy. "The government didn't want this debate because they didn't want the truth," Osborne ends. "Their scorched earth policy is leading this country to ruin. They have run out of money and the sooner they run out of office the better."

13:53 - Darling gets up, and says he welcomes the chance to debate the issues. Gabbles of laughter. Darling suggests he wished it was longer so he could teach Osborne some economics. An MP seizes on that to say Darling has made " a very kind offer" and would the speaker allow the debate to run on? The speaker replies: "This is a three-hour debate. End of story."

13:54 - Darling's performance is assured. He has really grown over the last few months, most noticeably since that Armageddon interview he gave to the Guardian which almost cost him his job, before promptly turning into a piece of high prophecy. Or maybe it's us that's changed, and dull or grey characteristics are now calming and reassuring. He talks about the VAT document. When he saw it was on the document, "I asked what had happened", he says. Laughs. Apparently the financial secretary had not signed that document. Apparently someone in the Treasury had typed his name next to it. He "didn't know about" it, and hadn't authorised it. The House goes into uproar. "The shadow chancellor asked for an explanation, and that's it." It sounds like the kind of incompetence I can believe in, frankly.

14:04 - John Redwood, who has taken an emphatically right-wing view to the crisis on his blog (very good blog, by the way, whatever your persuasion), asks whether the chancellor wants to reappraise the bank recapitalisation plans since they don't seem to be working. A Labour MP, with a very different accent to Redwood's, implies the Tories are heartless men who don't really care about unemployment. You occasionally feel like your watching old Labour and the old Tories. Whatever else, though, Labour appears more united and less angry. Darling says he's about to mention Europe, "which often distresses the gentlemen opposite". He says the EU Commission has called for similar things to that which the British government is doing. That won't convince any Eurosceptics.

14:08 - Back to how Darling looks. It could be the context that makes him looks assured. But it might also be Osborne. It's always fun to watch Osborne in the House, and only a fool would doubt his skills, but Darling's older, mature, moderate manner contrasts sharply with Osborne's occasionally red-faced, angry shouts across the floor. It summarises the current position of both parties. On that note, Darling is asked if he would resign if his prescriptions fail. He doesn't answer, which says a lot.

14:11 - A Labour MP says the Tory argument is based on credit insurance. Is the chancellor aware of any other Tory policies to counter recession. "No, I'm not," Darling responds. He then goes on to argue that monetary action isn't enough to answer our problems - almost everyone accepts that now, barring a couple of psychotic right-wingers. "It's important the government does more," Darling says.

14:20 - A question on Northern Rock from Osborne gets Darling calling him a "bit rich", given the Tories didn't support nationalisation. Actually, that's a bit rich. Just because the Tories didn't support nationalisation doesn't mean they don't get to ask questions about it. Darling goes on to spirits - he cancelled a planned rise on whisky this morning. He's planning to reduce spirits duty, which was badly hit on Monday. The industry needed him to do that. He's reacted swiftly and competently.

14:29 - Vince Cable gets up to talk, and makes all his party happy. They have disturbing amounts of faith in him. They're right to - he's very capable. But faith is always an unsettling thing in politics. It's like the character in a war movie who loves playing piano - you just know he's going to have his hands blown off. Cable casts serious doubt on the Treasury's "optimistic" predictions for growth. He points out only investment banks have similar predictions, and we all know how much we should trust those guys.

14:40 - The government thinks the Report is redistributive, Cable continues. He doubts that. The income tax proposal will raise no revenue, he says, and "we know this because the government kept on telling us when we had a similar policy". He's referring to the old Lib Dem policy of charging 50 per cent tax on incomes over £100,000. A Labour MP gets up to make a point, and mentions that Cable is making a good speech. He is. Convincing and authoritative, he is far better at taking on Darling than Osborne is.

14:43 - Cable basically wants the government to take a more hands-on role in the banks it has taken over. Darling says people are being put on the board. Cable seems to admit he got the policy wrong. But he ends with this: the country has gone from hope to anger and despair over the crisis. "Unless we get a better response from both the main parties" that despair will continue, he warns.

14:46 - Ruth Kelly gets up to speak. We're on the backbenchers now, who are being given a maximum of ten minutes each. I haven't seen her since that Labour party resignation malarkey. She's still wearing her coat. When her hair covers her face, she looks slightly like an Arctic Monkey.

14:57 - Now the big three (Darling, Osborne, Cable) have finished their pitches, the chamber is becoming increasingly empty. It's also worth mentioning that Kelly, never the most inspirational of speakers, despite the fascinating quality of her voice, is being very dreary indeed. Summary of her thoughts so far: Economy bad. Tories bad. Government good. Banks should lend. But to perk us all up, Kenneth Clarke, former Tory chancellor, gets up to speak. The beast is in the House.

14:59 - The UK is facing the worst downturn in 80 years. It's more vulnerable than most developed countries. Clarke reminds the House of the struggles he faced during recessions while he was in power. "I'm not going to dilate on my own Budget of 1993," he promises, before giving a fairly flattering description of it. He's never been the most modest of men, but then politicians rarely are, and he did have a good record in office. He gives way a couple of times, rather grudgingly, and then refuses. He's clearly going to make the most of his ten minutes.

15:03 - Of course we all agree with using monetary policy, Clarke continues. He also mentions that he thinks the Bank of England has conducted itself rather well, implying the Financial Services Authority and the Treasury are to blame. He accepts fiscal stimulus has to be looked at. The circumstances of the recession "justify a bit of risk". He goes on to express considerable doubt about the government approach. Now he's on the contradictions in Vince Cable's statements, calling his tax proposals "marginally stimulating". Never say that to your wife.

15:10 - He concludes by saying: "The gap is the condition of the bank. Democratic politicians will spend the next two years berating bankers." But we need to find out why recapitalisation isn't working. "The shape of the package needs to be fixed." The tone and content of the debate is vastly improved since the big boys sat down. This is now an economics debate, rather than a party political strop.

15:27 - Former Tory minister Peter Lilley is on his feet, explaining in his careful way why Labour has utterly wrecked the economy. He's frustrated by the lack of link between the government's measures and the underlying problems the British economy faces.

15:40 - It's always good to see Nigel Griffiths agreeing with the government. The Trident resignee (that's probably not a word) is challenged for economic optimism by Clarke, who says "no living person outside the government" believes the Treasury's figures. Griffiths points out UK's GDP was the poorest of all the G7 in 1997. "Now, of course, GDP per head is the second highest." Both sides seem vindicated by that remark's blithe positivism.

15:48 - Griffiths wraps up by pointing to the good times seen in the last decade under Labour. He says the Tory proposals to do nothing is "not an option". He's dismissed as having given a speech of "political irrelevance" by Michael Jack, who criticises the wait until the end of next March for an assessment of Britain's toxic debt. "Clear it up we have to," he says in full Yoda mode.

16:07 - We're into the final half-hour of this monster debate and Labour MP Andrew Miller is now stating his case. He argues it is vital the chancellor and prime minister continue to back up their ideas on the world stage. He subsequently gets into trouble for refusing to give way as he attacks the 'pontificating' opposition.

16:12 - Shadow chief secretary to the Treasury Philip Hammond begins his assault on the government. The same line of attack is maintained: the government is looking forward to a rapid return to growth "on the basis of no evidence whatsoever". This is the fundamental question of credibility which, one senses, will decide the next election. Mr Hammond doesn't miss a trick, claiming it's the next election which is motivating policy in No 11.

16:19 - Eyebrows raised in the Commons as Hammond reaches his rhetorical climax. "Like a junkie reaching for his last fix" is how he describes the government, telling ministers: "You cannot borrow your way out of debt." Yvette Cooper, Darling's right-hand woman, says the debate has proved worthy despite "bombast" early on from the opposition.

16:27 - Clarke stands up yet again, questioning the government's motivations in putting forward economic forecasts. Cooper is not listening to the former chancellor, telling him he is talking "nonsense". In an impassioned tone she rattles through the public spending commitments which are now under threat from Tory spending cuts. And that's the end of the debate: time to vote.