House of Commons Hansard Debates for 11 Mar 1992

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Business of the House

3.30 pm

The Lord President of the Council and Leader of the House of Commons (Mr. John MacGregor) : With permission, Mr. Speaker, I shoullike to make a short business statement.

In the light of the announcement earlier today by my right hon. Friend the Prime Minister, the business for Friday 13 March and for Monday 16 March will be rearranged. In the meantime, I shall be tabling a motion later today which will be set down for the commencement of business tomorrow. This will enable the House to conclude the remainder of its business in an effective manner which I trust will be for the convenience of the whole House.

The main provisions of the motion will be to enable you, Mr. Speaker, to bring the debate on the Budget to a conclusion at 10 o'clock on Thursday night, to enable Government business to be taken on Friday and to enable the House to meet at 9.30 am on Monday 16 March for Government business.

Following discussions through the usual channels, I shall make a further statement tomorrow on the detailed arrangements for business for Friday and Monday next.

Dr. John Cunningham (Copeland) : Does not everything that the Leader of the House has just said flatly contradict the assurances that he gave my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) and the House last week? He said that we should wait and see--

Hon. Members : Hear, hear.

Mr. Speaker : Order. I ask the House to behave in an orderly manner.

Mr. Cunningham : Is it not also typical of this discredited Administration that, having wrecked the nation's economy, they cannot even conclude their parliamentary business without the imposition of more guillotines to bring matters to a conclusion in a shambles, just as they have made a shambles of the nation's affairs? May I make it clear to the Leader of the House that he and his colleagues should not assume that much of their outstanding business, which is controversial and which we oppose, will be nodded through on Friday? We shall go on exposing the inadequacies of the Government's legislation until we finally put their record and our alternative to the people, and we know what the outcome of that will be.

Mr. MacGregor rose--

Mr. Cunningham : I have not finished yet.

The most important issue today is not the statement by the Leader of the House but the speech of my right hon. and learned Friend the Member for Monklands, East (Mr. Smith), and the sooner we get on to that business the better.

Mr. MacGregor : The statement that I made about business last Thursday was exactly as the business for this week was at that point. I am making another statement today because of the decision by my right hon. Friend the Prime Minister this morning, with the consent of Her Majesty the Queen.

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The hon. Gentleman is absolutely wrong to suggest that we shall end this Parliament in a shambles. We shall be ending in an orderly and highly effective way, with a programme of Government business that is very much in the nation's interests and which, in a shortened Parliament, will be largely completed. That is a sign of a Government who know what they are doing and do it well.

It was entirely in character for the hon. Gentleman to suggest that, on Friday, he and his party will oppose a number of measures that are entirely in the nation's interests--I guess that they will be taken on Friday, but that will depend on discussions through the usual channels. The vast majority of higher education institutions want the Bill that we are currently taking through Parliament. The Education (Schools) Bill greatly increases the rights and choice of parents, which is what millions of parents around the country want. Above all, the Finance Bill contains a set of proposals that today's reactions clearly show are warmly welcomed by business, especially by small businesses. On Friday, the hon. Gentleman will be fighting vigorously the proposal to reduce the taxes of the lower- paid. That is in character for the Labour party, which is a high-spending, high-taxing Opposition, and will remain so.

Mr. James Wallace (Orkney and Shetland) : May I start on a constructive and conciliatory note by asking whether the Leader of the House intends to make provision for the Charities Bill, on which so much has been done in another place, to be enacted before the dissolution? Does not the Leader of the House agree that no business that he can announce tomorrow to foreshadow any measure taken before dissolution will do anything to take this country out of recession? The Liberal Democrats look forward to the Leader of the House announcing in the next Parliament measures to take this country out of recession and embarking on a programme of needed political reform.

Mr. MacGregor : On the latter point, it is clear that the British economy is now in a highly competitive position, as the Confederation of British Industry acknowledges. The CBI is making it clear that we are much better placed than we were at the beginning of the 1980s to meet international competition and, as the world recession clears, the British economy will receive greater benefit from that due to the policies pursued by the Government.

I agree that all charities would like to see the Charities Bill on the statute book. I hope that we can attain that goal, but that will depend on discussions through the usual channels.

Several Hon. Members rose --

Mr. Speaker : Order. This is a very narrow statement. The Leader of the House has announced that he will be making a fuller business statement tomorrow. In equity, I shall call two Back Benchers, one from each side, and we shall then move on to the Budget debate. As there is great pressure on business today, I shall have to impose a limit on speeches.

Mr. Ian Bruce (South Dorset) : A very large number of Conservative prospective parliamentary candidates will want to know on which day they will be reporting for duty after the election. Will the Leader of the House tell us?

Mr. MacGregor : Monday 27 April.

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Mr. Dave Nellist (Coventry, South-East) : In warmly welcoming the right hon. Gentleman's statement as a sign of the approaching general election, may I say that it would be entirely inappropriate, in the discussions that he has through the usual channels or elsewhere, to urge the Government to use the mandate of 1987 in the entirely different political circumstances of 1992 to push through under the guillotine the measures on education and asylum, or the economic ones contained in the shortened Finance Bill? He should put those policies to the people of this country, not ram them through on Friday and Monday.

Mr. MacGregor : The hon. Gentleman had better await my statement tomorrow, following discussions through the usual channels.

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Orders of the Day

WAYS AND MEANS

Order read for resuming adjourned debate on Question [10 March],

AMENDMENT OF THE LAW

That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance ; but this Resolution does not extend to the making of any amendment with respect to value added tax so as to provide--

(a) for zero-rating or exempting any supply ;

(b) for refunding any amount of tax ;

(d) for relief other than relief applying to goods of whatever description or services of whatever description.-- [Mr. Norman Lamont.]

Question again proposed.

Budget Resolutions and Economic Situation

[Relevant document : European Community Document No. 10212/91 and COR2, the Commission's Annual Economic Report 1991-92.]

3.39 pm

Mr. John Smith (Monklands, East) rose --

Several Hon. Members rose --

Hon. Members : Goodbye!

Mr. Speaker : Order. This takes time out of the speech by the Opposition Front-Bench spokesman.

Mr. Smith : The most notable omission from yesterday's Budget was that there was not a word of apology--

Mr. Speaker : Order. I am sorry to interrupt the right hon. and learned Gentleman, but I was taken aback by all this noise. In view of the large number of right hon. and hon. Members who want to participate today, I propose to put a precautionary 10-minute limit on speeches between 7 pm and 9 pm, but I hope that it will not be necessary if Members called to speak before then are brief.

Mr. Smith : The most notable omission from yesterday's Budget was that not a word of apology was uttered by the Chancellor in this Government, a Government who have caused the longest recession since the war. There was not a word of apology to the 1 million people who have lost their jobs since March 1990 ; not a word of apology to the 47,800 businesses which failed last year ; not a hint of contrition for the families who lived in the 75,500 homes that were repossessed last year.

Nineteen ninety-one was the year in which the economy shrank by 2.5 per cent. ; it was the worst calendar year of recession since the 1930s. Last night, in his Budget broadcast, the Chancellor described 1991 as a year of achievement. Some achievement--record-breaking levels, certainly, but record-breaking levels of business failures, of house repossessions, of homelessness and of economic decline. If that is a year of achievement, what on earth would the Chancellor describe as a year of failure?

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Not only is there no apology from the Chancellor or the Prime Minister--[ Hon. Members :-- "Where are they?"] I confess that I am slightly surprised that the Chancellor is not here to take part in this debate--

Mr. Phillip Oppenheim (Amber Valley) : Get on with it.

Mr. Smith : I am quite prepared to get on with it ; the Chancellor might have done us the courtesy of attending the debate to hear what I have to get on with. Perhaps the hon. Gentleman will go and see him and ask him if he will trot along.

Indeed, it was the Chancellor who told us in this House at Treasury questions :

"Rising unemployment and the recession have been the price that we have had to pay to get inflation down. That price is well worth paying."--[ Official Report, 16 May 1991 ; Vol. 191, c. 413.] It was the Prime Minister who told us when he was Chancellor : "If it isn't hurting, it isn't working." We see on the Government Front Bench for a few days more some of the guilty men who told us first that there would be no recession, then that there would be a soft landing for the British economy and that the recession would be shallow and short-lived, that recovery was around the corner, that the green shoots of recovery were sprouting, that the housing and construction industry would exhibit the first signs of the vague stirrings of the recovery, and that all we needed to do was to wait in patient expectation for Conservative economic policies to bring a triumphant end to the dark days of decline. I note that the Chancellor is so worried about justifying all that that he did not bother to turn up in the House this afternoon.

It has been the hallmark of Majorism to promise that good times are just around the corner. Unfortunately, we never seem to turn the corner. The technique is deployed again in the economic forecast in the Budget. The economy is in a much worse condition than was predicted in the autumn statement only a few months ago. Last November, the Chancellor told us that growth in 1992 would be 2.25 per cent. Yesterday, he had to scale that down to just 1 per cent. Manufacturing output was forecast last November to grow by as much as 3.25 per cent. this year. Yesterday, he revealed that it is expected to grow by just 0.5 per cent. Investment, forecast to grow by 1.25 per cent., is now expected to decline again this year and, alarmingly, the balance of payments is forecast to deteriorate sharply once again to a £9 billion deficit in 1993. Of course, borrowing has doubled from £14 billion to £28 billion. Clearly, we are heading for yet another year of what the Conservatives choose to call achievement.

As the Chancellor told us yesterday :

"unemployment is likely to go on rising for some time."--[ Official Report, 10 March 1992 ; Vol. 205, c. 747.]

What is perhaps even more revealing is that that prediction of rising unemployment was made on the explicit assumption that growth will resume in the course of the year. So much for the Budget for jobs forecast by the Secretary of State for Employment. But perhaps we should not pay too much attention to him because, like the Secretary of State for Trade and Industry-- [Interruption.]

Mr. Speaker : Order. There is no need for this.

Mr. Smith : I am glad to see the Chancellor of the Exchequer. Perhaps I should start at the beginning again.

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[Interruption.] I can understand why Conservative Members do not want to hear it twice. They do not want the double whammy of the Conservative party's measures. It was too painful even for the Chancellor to listen to, so he lurked outside until he thought that I was about to come to another part of my speech, and then he sneaked in.

I was referring to the Secretary of State for Employment, who promised a Budget for jobs, and I was observing that we should not worry too much about him, because, like some others, he is not in the election A team. But we had a glimpse of how the A team deals with the problem of Conservative economic failure in the interview given last Sunday by that tyro of the casual knockabout, the Secretary of State for Education and Science. He was asked by Mr. Walden last Sunday what he would say to a viewer--

Mr. Robert G. Hughes (Harrow, West) : Does not the right hon. and learned Gentleman mean the hon. Member for Livingston (Mr. Cook) being roasted?

Mr. Smith : The other one.

The Secretary of State for Education and Science was asked what he would say to a viewer who blamed the Conservatives for hundreds of thousands of people having lost their jobs, for 100,000 people having lost their homes, and for some having lost both. The Secretary of State replied :

"It's been a bad recession through which most people actually have not suffered any of the consequences you have described." What country is that member of the A team living in? It is simply not good enough to dismiss the unemployed and those who have lost their homes as a minority of the population. [Interruption.] I see that there are some who agree with the Secretary of State.

Mr. Ian Bruce (South Dorset) : The right hon. and learned Gentleman is right to point out that we all have to be concerned about unemployment, but, as he is talking about loss of jobs and unemployment, and so that we can consider the figures that he will be coming up with in a week's time, will he tell the House today what the pledge of a half median wage amounts to? Is it £4 per hour now, rather than the £3.40 that it was two years ago?

Mr. Smith : The hon. Gentleman should read the newspapers. It is £3.40 per hour. That is the figure that the Labour party is committed to.

The Secretary of State for Education and Science said that most people had not suffered the consequences of the recession, and that basically that was all right. The depressing facts are that, in 22 months, 1 million people have lost their jobs ; if we take 1990 and 1991 together, almost 130,000 homes were repossessed ; and in 1991 alone, 275,000 households were six months or more in arrears with mortgage payments.

The latest study by the Policy Studies Institute, published only last week- -the most detailed study yet undertaken of the problem of debt--showed that 2.5 million households in Britain are struggling with a combination of household debt and unpaid consumer credit. I can tell the Conservative party that there is no way in which it will be able to ignore these facts, or to minimise their significance, in the course of the forthcoming election.

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Mr. Patrick Nicholls (Teignbridge) : Will the right hon. and learned Gentleman give way?

Mr. Speaker : Order. Interventions will take a great deal of time out of the subsequent debate.

Mr. Smith : The hon. Member for Teignbridge (Mr. Nicholls) has provided me with such useful interventions in the past that I think that I ought to give way to him again.

Mr. Nicholls : The right hon. and learned Gentleman said yesterday that now was not the right time to reduce taxes on the lower paid. When does he think is the right time to do that?

Mr. Smith : What I said, was absolutely clear about and will repeat today is that I think it wrong in our economic position to borrow for tax cuts for anyone. I think that, when the country can afford such a reform of the tax system, it ought to be introduced.

The Chancellor of the Exchequer (Mr. Norman Lamont) : If the right hon. and learned Gentleman thinks that it is wrong to borrow for tax cuts, why was it right for the Government of which he was a member to do so in 1978? The public sector borrowing requirement was high then, too.

Mr. Smith : We did not borrow on the eve of an election in 1979, as the right hon. Gentleman knows very well. [Interruption.]

Mr. Speaker : Order. There is great pressure from Back-Benchers to be called today, and this kind of thing takes a great deal of time.

Mr. Smith : I should like to know whether the Chancellor stands by what he said on 28 November last year. Then, he said :

"He asked how we are going to pay for the borrowing. We shall pay for the borrowing by borrowing--that is the normal way in which one pays for it."-- [ Official Report, 28 November 1991 ; Vol. 199, c. 1062.]

If the right hon. Gentleman disagrees with that, or wishes to explain his statement, I shall be happy to give way to him. [ Hon. Members :-- "Answer"] I fear that the Chancellor does not have a typed response to that question. There it stands, unamended : Conservative economic policy-- borrowing should be paid for by more borrowing. The other device that will be used by the A team--and by all the other apologists for this discredited and incompetent Government--is that, even if things are bad, it is not the Government's fault ; it is the fault of the nasty foreigners from whom we contracted the infection of recession. That comes in two forms. First, we got the recession from abroad, and nothing much could have been done about it ; secondly, other people's recessions are worse than ours, and for that we should be grateful to our Government.

The Secretary of State for Education and Science was running the Saatchi- approved line in the Walden interview. He said :

"it's not been a catastrophic recession of the kind that we had in the past or even the Americans are suffering now."

Let us look at the facts. In 1991, the United States economy declined by 0.5 per cent. In Britain, the figure was 2.5 per cent.

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However, facts do not deter a member of the A team. The Secretary of State went on to make the following international comparison--again, I quote from his interview--

"I mean, the Germans and Japanese looking at Britain under the Conservatives must say, boy they've got good, actually being able to get themselves into a steady competitive state, when they faced difficulties, certainly in the States, they'd like to have a government which was so competent in actually restoring good conditions for economic recovery."

I must say, I have not met a single Japanese--I doubt whether any other Member of Parliament has either--whom I have heard say, "Boy, they've got good," let alone express any wish to emulate Britain's economic condition.

The Chancellor himself, in a bid to retain his uncertain position in the A team, tried the same trick in his Budget broadcast last night. He displayed a graph which tried to show that, of all countries, Japan was suffering more in terms of industrial decline than Britain. I have to tell the Chancellor that my considered view is that that was an error of judgment, scarcely forgiveable in a member of the A team. In the past three years, Japan's investment has risen by 41 per cent., whereas Britain's is down by 4.2 per cent. Over the past three years, Japan's GDP has risen by 15.5 per cent., while Britain's grew by only 1.1 per cent. That is a background against which it is imagined that the Japanese whisper to each other, "Boy, in Britain they've got good."

Mr. Oppenheim rose --

Mr. Smith : I shall give way to the hon. Gentleman, but I must make it clear that I was not issuing an invitation to him : I am just giving way.

Mr. Oppenheim : The right hon. and learned Gentleman, rightly, mentioned the need to boost investment. He will know that investment and saving rates are closely linked. How will his policy of clobbering savers with higher taxes boost investment?

Mr. Smith : Our proposals are designed to create fair treatment between those who receive unearned and those receiving earned income, and that is what they will achieve.

Against the background of such depressing economic failure, the Budget was a missed opportunity. There was nothing in the Budget for investment, nothing for jobs, training or skills development, nothing for the construction industry and nothing for sustained recovery from recession. Once again, the Chancellor rejected the plea for increased capital allowances for investment in manufacturing. Once again, he failed to restore the tragic cuts in the training budget. He failed once again to realise the seriousness of rising unemployment, and he took no action to permit the release of local authority capital receipts to help fund much- needed house building and modernisation programmes.

Why do the Government not comprehend the plain common sense of enabling unemployed building workers to earn a living by providing houses for families who lack them, thereby helping to regenerate confidence and growth in the construction industry, which, on present trends, sees no prospect of recovery in the whole of 1992? From the vantage point of prudent financial management, why do the Government not realise that it costs the Exchequer £8,000 a year in benefits and forgone taxation for every person who becomes unemployed?

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We needed a Budget for investment and recovery and for industry and employment. Instead, we got a Budget the only purpose of which was to seek to rescue the Conservative party from its imminent election defeat.

Mr. Roger King (Birmingham, Northfield) : Would the right hon. and learned Gentleman care to cast his mind back to early January, when he and the shadow spokesman on trade and industry came to Longbridge in my constituency to visit the Rover car factory as part of a "buy British" campaign? Does he recollect standing on the shop floor of Rover and being asked whether Labour would reduce the special car tax? He replied, "No, we would not reduce the special car tax." That was a clear indicaation that Labour would not back the British car industry. Has he changed his mind?

Mr. Smith : The question I was asked in Birmingham was whether I would abolish the special car tax-- [interruption.]

Mr. Roger King rose --

Mr. Speaker : Order. The right hon. and learned Gentleman has given way once.

Mr. King : On a point of order, Mr. Speaker.

Mr. Speaker : Nothing out of order has occurred.

Mr. King : The right hon. and learned Gentleman cannot get away with a reply like that. He had every opportunity to say that he would reduce the tax, but he said that there would be no reduction at all.

Mr. Speaker : I am not responsible for the replies.

Mr. Smith : I bear the hon. Gentleman no ill will, because his remaining period in this House is very short. In the few days that remain, I should not want to fall out too sharply with him. But he is simply wrong. We made it clear that we could not afford to abolish the car tax--and nor have the Government done so : they have reduced it. Let me make it clear that our car industry is in such a dire state as a result of the Conservative party's policies that it needs the relief that has been given on this occasion. [Interruption.] Hon. Members can shout if they like, but we shall press on with the debate.

As is now being increasingly realised, the public will not be fooled by the Chancellor's Budget. The Government are borrowing money that they do not have to buy votes that they do not deserve. In the context of the doubling of the Government's financial deficit, voters ask, "How can it make sense to borrow money for tax cuts?" They do so particularly because they have repeatedly been told by the Conservative party under its former leader, as well as, from time to time, its present head, that borrowing now means higher taxes later. If I may say so, the co-ordination and management of the Government's presentation of their Budget, particularly through the Tory tabloids, have not reached their usual skill. Those who opened the Daily Mail today and turned to the political column would read the ex- editor of New Statesman and Society, Mr. Paul Johnson, who wrote :

"Now Major's on the road to victory"--

[ Hon. Members :-- "Hear, hear."] Let me repeat what he said : "Now Major's on the road to victory".

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