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Our deficit is the worst of any major country. As I pointed out earlier in an intervention, the overall amount of debt in countries such as Italy and Japan is higher, but they have the saving grace of having a significant savings market. This country does not have such a market, due to the appalling decline in our savings ratio over the past 10 to 12 years. This is also where the public finances link in to our consumer debt problems. The crucial point is that if we divide the percentage of GDP that each country's outstanding debt represents by its domestic savings ratio, we find that we are actually in a far worse position than other countries-possibly even than Japan.
We are already highly dependent on foreign demand, which means that we have to keep an eye on our currency strength as well as on our international credit rating. There has been a great deal of talk in recent months of credit rating downgrades and the possibility of gilt buyers' strikes. Neither of those risks should be underestimated, but another risk is that uncontrolled borrowing will lead to higher interest rates, both for the Government and for the wider economy, almost regardless of what happens to our credit rating. The market could make borrowing much more expensive than should ordinarily be the case, and the Government could end up paying large premiums for their borrowings. So whether long-term Government borrowing rates are at 4 per cent., 6 per cent. or 8 per cent. will make a huge difference to the public finances and to how much we can spend on our cherished public services.
My hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) called for clarity and honesty from the Government, as did the Chairman of the Treasury Select Committee, the right hon. Member for West Dunbartonshire (John McFall). The biggest failure of this Government is their failure to be honest with the public, or even with themselves. Everyone knows that the deficit will require cuts to public spending, but still the Government will not reveal their plans for departmental spending.
This fraudulent approach was displayed in all its glory by the Chief Secretary to the Treasury on Monday night in his appearance on "Newsnight". With incredulity pushed to the limit, Jeremy Paxman asked him:
"Do you mean to say that a government which only two or three years ago was giving us public spending forecasts for the next three years will go into this election unable to tell us what will happen over the next eleven months?"
What was the clear, honest answer from the right hon. Gentleman?
"No, because the comprehensive spending review is about three years; that's starting in about eighteen months time."
Having digested that, Paxman tried again:
"So, we are going to have a budget, are we, that is not going to tell us what's going to happen to departmental spending?"
This time, there was an admission from the right hon. Gentleman:
"I think that is possible."
What a shoddy excuse for a Government!
In conclusion, the facts are these. In 1997, Labour inherited an economy in very good shape, characterised by low national debt, flexible labour markets and strong private pensions. All three of those areas have been gravely degraded.
I end with this thought. When it comes to spending and the deficit, the Government are behaving like a set of habitual drinkers, gathered around a table in a dingy pub as chucking-out time approaches. Everyone else in town, even those in the pub, can see that it is time for them to be slung out, but they are discussing going for one last binge. The way to avoid the hangover, they say, is to carry on drinking to the end. The worst offender is the boss himself, sat there with his two mates. Suddenly, the slightly more responsible Chancellor, who is actually the designated driver, weakly suggests that it might be time to stop. Heated discussion ensues: the Chancellor suggests that it is time for the boss to give up entirely, but suddenly, the boss's best mate of all returns from the bar clutching two bottles of whisky. Last orders are approaching for these people. The binge needs to end, the Government need to sober up and the whole country can see that it is time urgently to change course.
5.51 pm
The Financial Secretary to the Treasury (Mr. Stephen Timms): We have had a good debate. My right hon. Friend the Chancellor delivered the 2009 pre-Budget report after a very difficult period for the world economy. As we see signs of recovery, new confidence has been achieved through co-ordinated action by Governments and central banks around the world, co-ordinated successfully through the UK presidency of the G20. Britain's Prime Minister deserves enormous credit for that achievement.
What we can now do is compare the effect on jobs and families of the recessions of the 1980s and '90s-home-grown problems those, as my hon. Friend the Member for Newcastle-under-Lyme (Paul Farrelly) pointed out, not worldwide ones-with the recession that we have just been through. Those comparisons are made in the Treasury Select Committee report before us and they were also made by a number of contributors to the debate, including my right hon. Friend the Member for Holborn and St. Pancras (Frank Dobson), who rightly set out in sombre terms the consequences of some of the policies urged by Conservative party supporters.
In the 1990s, home repossessions reached 75,000 a year. The Council of Mortgage Lenders forecast 75,000 repossessions again in 2009. A few weeks ago, it cut that estimate by more than a third because the policy of protecting home owners through the recession has worked. The alternative policy urged upon us-of letting the recession take its course-would have led to far more repossessions, such as we saw in the 1990s.
In both the 1980s and 1990s recessions, the number claiming unemployment benefit reached 3 million. Many of us remember all too well the damage to our communities that resulted. We heard about that in the excellent speeches by my hon. Friends the Members for Halton (Derek Twigg) and for Sedgefield (Phil Wilson). Today, the number is just over half that-less than 1.7 million. In the most recent figures, it went down. The increase in unemployment has been half of what was forecast. Our policies of supporting the economy and supporting jobs have been working.
Let me say to Conservative Members that the right hon. Member for Hitchin and Harpenden (Mr. Lilley), in an interesting speech, really let the cat out of the bag. The policies urged upon us by the Conservative Front-Bench
team are exactly the policies applied by the Tory Government in the 1980s. The difference between us is whether those policies were successful or not. The right hon. Member for Hitchin and Harpenden clearly takes the view that that was a successful experience of management of the economy, but I have to tell him that that is not the country's view. As my hon. Friends have said, the realities of that experience should be taken to heart by Conservative Members.
We have not seen in this recession the big increases in long-term unemployment that were so damaging in the 1980s and 1990s, or the big rise in the number receiving sickness benefits, which was in some ways the worst aspect of the 1980s recession, when jobcentres were incentivised to move people from unemployment benefit on to sickness benefit. Quite a lot of those people who went on to sickness benefit in the 1980s never worked again. We are still paying the price for the way in which that recession was managed by the Tory Government. As we have heard, businesses are failing at about half the rate that we saw in the earlier recessions. To put it bluntly, Labour policies have worked a great deal better than Tory policies did.
The pre-Budget report, however, did not look back; it looked forward. Big challenges remain in the world economy, and our challenge now is to secure the recovery. That is why, in the pre-Budget report, my right hon. Friend the Chancellor decided to continue support for the economy now, which is what we should be doing. My hon. Friend the Member for Glasgow, North-East (Mr. Bain) was right to underline that point. We must continue to invest in services on which people rely, and in industries that will support our future.
The pre-Budget report also spelt out our commitment to halving the deficit over four years. The shadow Chief Secretary, the hon. Member for Runnymede and Weybridge (Mr. Hammond), appeared to edge towards agreeing that that was the right period in which to tackle the task-which would constitute a striking U-turn, given all the U-turns, forwards and then backwards, that the Conservatives have performed this week. The Conservatives have demanded greater detail from the Government, but we still have not heard their target for the deficit.
The hon. Member for Twickenham (Dr. Cable) made a characteristically thoughtful speech. He was right to spell out the dangers of precipitate spending cuts, and I welcomed his assessment of the PBR stance, which I think he described as reasonable. He asked whether the bank bonus tax should be made permanent. My answer is no, it should not. It is a one-off measure. For the long
term, we shall have the Financial Services Bill and the G20 rules on bankers' remuneration.
The Chairman of the Select Committee, my right hon. Friend the Member for West Dunbartonshire (John McFall), spoke of the importance of keeping an eye on the problem of child poverty. We announced in the PBR that households receiving full tax credits and with incomes up to around £16,000 a year would qualify for free school meals for children of primary school age. That will boost the incentive for parents to obtain work and will reduce child poverty. The Select Committee was right to underline the continuing importance of our goals in that regard.
As my right hon. Friend the Chancellor has observed on numerous occasions, support in the downturn goes hand in hand with steps to rebuild our fiscal strength once recovery is firmly established. The right hon. Member for Hitchin and Harpenden suggested that the pre-Budget report had not had much to say about that. He was entirely wrong. Across the world, countries are borrowing more. Stabilising the banking system and supporting the economy impose costs, although those costs will be much lower in the long run than they would be if we decided to let the recession run its course. Now, support during the downturn needs to be followed by steps to restore the public finances once recovery is established.
We have set out clear goals for the consolidation. We have specified in the pre-Budget report how much we expect to spend in each year up to 2014-15 and how much we expect to receive in tax payments in each of those years, given the tax measures that we have announced and published. As a result, the deficit will fall to 5.5 per cent. of GDP by the end of that period, less than half the current level. Given further consolidation thereafter, debt as a share of GDP is projected to fall in 2015-16. To secure consolidation, the pre-Budget report announces tax rises for those with the greatest ability to pay, while ensuring that those on the lowest incomes will be protected.
The pre-Budget report was right to support the economy in the way that it did and we were right to support the economy during the downturn, but now, as the economy starts to emerge from the crisis, we must not think that the job is finished. We have a great deal more to do over the next few years. The pre-Budget report set out actions to secure the recovery, to restore the public finances as we must, and to build our future. I commend it to the House.
That this House has considered the matter of the Pre-Budget Report.
Umbilical Cord Blood
Motion made, and Question proposed, That this House do now adjourn. -(Lyn Brown.)
5.59 pm
Mr. David Burrowes (Enfield, Southgate) (Con): It is a great pleasure to have secured this Adjournment debate. I think that I was the first Member to raise the issue of umbilical cord blood as a private Member's Bill, and subsequently I raised it with other hon. Members during the passage of the Human Fertilisation and Embryology Act 2008. Courtesy no doubt of Google word searches, my interest has led to a number of academics contacting me about their research into cord blood. I imagine that this debate will keep me at the top of the umbilical cord blood search page. However, my concern is to increase the understanding and application of cord blood.
After I first raised the issue, several hon. Members spoke to me of their previous ignorance of umbilical cord blood. It is an ignorance that I shared, despite being a parent of six children and living close to one of the NHS hospitals that collects umbilical cord blood.
Like the majority of parents in Britain, my wife and I thought that the umbilical cord once clamped was simply a waste product. We were totally unaware of the potential benefits of donating our children's umbilical cord blood. My understanding has grown over the years, aided by some excellent individuals in the charitable, private and public sectors who are passionate about cord blood. I pay tribute and thank the Anthony Nolan Trust and UK cord blood working group for their work and assistance and for rubbing off some of their passion on me. What inspires me to keep flying the flag for umbilical cord blood is meeting those children who are alive because of cord blood. This is a subject that can be literally a matter of life and death.
Patients in the UK requiring a bone marrow donor currently have a one in four chance of survival. Only 50 per cent. of those looking for a donor will find one, and of those only 50 per cent. will survive. For those who find a bone marrow donor, many get their donor too late in their disease for the treatment to achieve success and that contributes to the 50 per cent. failure rate. Greater provision of cord blood could help those patients to get treatment faster and improve their chances of survival. For those who currently have no bone marrow donor, a larger provision of cord blood would give many of them a potentially life-saving option.
Despite an increase in the awareness of those reading or listening to this debate, I feel that a short explanation of umbilical cord blood is in order. The baby's blood which is left behind in the umbilical cord contains many different types of cells. Some of these cells are stem cells, which have been shown to have a number of medical applications. Over the past 20 years, collected cord blood has been used for transplantation in the same way as bone marrow. It has been used to treat patients suffering from diseases such as leukaemia, sickle-cell diseases, immune deficiencies and others. Currently, there are over 85 treatments based on cord blood and there are more clinical trials in the pipeline.
Researchers believe that cord blood has the potential to treat many more diseases, once adult stem cells are properly understood. There have been trials that show
that cord blood may be helpful in treating brain injuries in children. It is also being developed for other possible treatments such as diabetes, liver therapy, multiple sclerosis, testicular cancer and to regenerate damaged heart cells. The medical and financial value of cord blood should not be underestimated. Early indications from research conducted in the UK suggests that many of the patients currently receiving enzyme treatments at a cost of well over £100,000 per annum to the taxpayer, could find a cure through a cord blood transplant.
Cord blood is particularly valuable in the treatment of leukaemia. It can be used as an alternative to bone marrow transplants. Collection of umbilical cord blood is a far less invasive procedure than extracting bone marrow. Units can be collected, frozen and then stored for years. That leads to fewer complications and makes transplants more readily available than bone marrow. Most importantly, it is easier to find matching stem cells from cord blood than from bone marrow. A properly developed infrastructure for the collection and storage of cord blood will do much to alleviate the severe shortage of life-saving stem cells needed for transplantation and to facilitate research.
Cord blood is a natural, safe, ethical and sustainable resource. It offers many advantages over using traditional bone marrow transplants from adult donors and would offer researchers an alternative to using embryonic stem cells.
The previous time cord blood was debated in the House was during the passage of the HFE Act in the context of allowing so-called saviour siblings. I took part in the debate, and an irony was revealed in it: the contrast between the Government stretching ethical boundaries to accommodate so-called saviour siblings, but restricting the natural, safe, ethical and sustainable life-saving resource of cord blood, with 99.5 per cent. of umbilical cords thrown away.
However, it is important to be charitable, and over the years there has been success and progress in the field of cord blood. The NHS was one of the first bodies to recognise the potential importance of cord blood, and some of the most important breakthroughs were made here in Britain. The NHS cord blood bank was established in 1996, and at the time it was one of only a handful in the world. Last year, the fifth umbilical cord blood collection facility, at St George's hospital in Tooting, was opened. The NHS CBB has moved into a state-of-the-art facility in Filton, which provides greater capacity and the flexibility to meet future clinical standards. I have visited one of the collection hospitals at Barnet, near my constituency, and I was impressed by the professional service, with all donations collected ex utero in a separate room so that the focus remains upon the care of the mother and baby.
As of October 2009, the NHS CBB had banked approximately 14,000 donations and provided 279 units of cord blood to British patients, with 34 per cent. coming from black and minority ethnic communities. Given that there is only a 30 to 40 per cent. chance of a BME patient finding a matched unrelated donor, it is right that there is a focus on increasing cord collection within these communities.
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