Clarke won’t rule out risk of recession
RECESSION is “not impossible” in the next few years, former chancellor Ken Clarke has warned.
The veteran Tory MP made his comments during a Commons debate to discuss the Budget, when Chancellor Philip Hammond told MPs austerity was ending.
Mr Clarke welcomed a “courageous” Budget but urged caution due to the “uncertainties of Brexit”.
He said: “We’re all being sustained by an American boom, which might be quite short-lived – these fiscally induced booms usually are.
“Recession is not impossible in the next two or three years.
“We have to make sure, first, that we avoid it, but second, that we’re prepared for the warning signals when they come.”
The former chancellor also suggested that Mr Hammond had missed a trick by not taking the opportunity to raise taxes to be put towards the NHS.
“The public were braced to pay something towards it,” he said. “The first reaction is somebody else, some other taxpayer, should pay.
“But I think we could have given ourselves more firepower and maintained our direction on debt by raising some taxes towards it.”
Tax was also the focus of shadow communities secretary Andrew Gwynne, after shadow chancellor John McDonnell caused controversy by saying he would not reverse Tory tax cuts for the middle classes.
Mr Gwynne attacked a “budget of failure and broken promises” which did not end austerity, and said the way to do that was to tax the richest 5%.
He said: “We are not opposed to any modest benefit, however modest that may be, for lower- and middle-income earners.
“But obviously putting more money into the pockets of higher earners is wrong, which is why the next Labour government will only increase taxes on the very wealthiest.
“That’s people with incomes in the top 5% and the corporations who have had a tax cut under the Tories.”
However, Housing Secretary James Brokenshire said austerity was coming to an end and that the policy had been necessary due to a recession he claimed was caused by Labour.
“We have come a long way since the dark days of Labour’s great recession,” he said. “With this Budget, we are seeing the hard work of the British people in overcoming this paying off and paving the way for a better future.
“A future in which, as the next chapter of our island’s story unfolds, we’re free to chart our own destiny.
“A future in which we’re delivering on the things that matter most: more homes, world-class public services, help for the most vulnerable, hope for our high streets. A future which isn’t for the few, isn’t for the many, but is for everyone.”