House of Commons Hansard Debates for 19 Nov 1992

Madam Speaker : Order. I have dealt with the point of order. There is nothing further that we can do at this stage on the Floor of the House. I have given the hon. Gentleman some guidance, and I hope that he will follow it.

BILL PRESENTED

Social Security

Mr. Secretary Lilley, supported by Mr. Chancellor of the Exchequer, Mr. Secretary Heseltine, Mr. Secretary Hunt, Mr. Secretary Lang, Mrs. Secretary Shephard and Miss Ann Widdecombe, presented a Bill to amend sections 3 and 85 of the Social Security Act 1986, to provide for the making of certain payments into the National Insurance Fund, and for connected purposes : And the same was read the First time ; and ordered to be read a Second time tomorrow and to be printed. [Bill 88.]

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Orders of the Day

Autumn Statement

[Relevant documents : The Minutes of Evidence taken before the Treasury and Civil Service Committee on 16th and 17th November (House of Commons Papers Nos. 201-iii and-iv.]

Order read for resuming adjourned debate on amendment to Question [18 November] :

That this House approves the Autumn Statement presented by Mr. Chancellor of the Exchequer on 12th November ; welcomes the Government's continuing commitment to the firm control of public expenditure ; supports the new expenditure plans, which honour the Government's commitments and provide protection of capital spending ; applauds the specific measures the Government has taken to encourage confidence and foster recovery ; and congratulates the Government on achieving a substantial reduction in underlying inflation, which has laid the foundations for sustainable growth.-- [Mr. Lamont.] Which amendment was : to leave out from House' to the end of the Question and to add instead thereof :

regrets that the Autumn Statement confirms that the recession is continuing and that unemployment and bankruptcies will continue to rise ; regrets also that investment which has fallen substantially during the recession will fall again for 1992 and will at best, according to Government forecasts, rise by only one quarter of one per cent. during 1993 ; deplores the worsening balance of payments and the failure of the Government to recognise the need for a policy for manufacturing and for the regions ; demands an emergency employment programme to reduce unemployment and the fear of unemployment and additional investment measures to boost the construction industry and business as a whole ; and calls for a long-term industrial and training policy for Britain'.-- [Mr. Gordon Brown.]

Question again proposed, That the amendment be made.

Madam Speaker : I must announce to the House that, between 7 pm and 9 pm, there will be a limit on speeches of 10 minutes.

4.28 pm

The Chief Secretary to the Treasury (Mr. Michael Portillo) : May I first welcome to her new position the hon. Member for Peckham (Ms. Harman)? She is speaking for the first time today in her role as Chief Secretary-- [Hon. Members :-- "Shadow."]--shadow Chief Secretary. She brings with her the reputation she acquired, as health spokesman, of being a real big spender. Her translation to her present role where she is responsible for keeping tabs on the promises made by the Labour party is a case not so much of a poacher turning gamekeeper as of a fox being put in charge of a chicken coop--or a chicken co-op, as the hon. Lady would call it.

The achievement of last week's autumn statement is to create the conditions for a return of confidence and so to remove a barrier to growth in our economy. The announcements made by my right hon. Friend the Chancellor of the Exchequer provide the strongest reassurance that the Government will maintain the most rigorous control of public spending and have evolved a robust medium-term strategy for limiting its growth.

Equally, his statement provides well targeted encouragement to sectors of the economy badly hit by the recession. The statement demonstrates a finely judged balance between the toughness required at a time when

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national finances are under strain and a willingness to respond prudently to the needs of business at a time of prolonged recession. Despite all the huffing and puffing from the Opposition, the economic fundamentals today are promising. First, inflation has fallen from nearly 11 per cent. to under 4 per cent. Second, we now have the lowest interest rates in the European Community and the lowest seen here for 15 years. Thirdly, our exchange rate makes our products highly competitive, whether we are selling in overseas markets or in home markets against overseas products.

Dr. John Marek (Wrexham) : The right hon. Gentleman could also add that our share in world trade and manufactures has fallen from 6.7 per cent. in 1979 to 5.6 per cent. That might put his previous remarks into context.

Mr. Portillo : During part of the 1980s there was a decline in our share of trade and manufactures, but that stabilised around the late 1980s and has stabilised further since. So I do not think that the hon. Gentleman's point is at all well made.

As long as we continue to keep inflation down, the competitive edge provided today by a floating pound will be of significant advantage to British business.

Mr. Robert Sheldon (Ashton-under-Lyne) : The right hon. Gentleman talks about keeping inflation down. I can understand that he has some hopes of keeping down the levels of pay in the public sector, although that is very difficult, but can he really now, after what has been said in the past week, still believe that it will be possible to keep pay in the private sector down to 1.5 per cent. ? Does he really believe that ?

Mr. Portillo : The right hon. Gentleman is confusing two things. I was talking about inflation, not about pay. A part of my speech which I shall come to later is about pay. But, do I believe that my right hon. Friend has set monetary conditions at the right level in order to maintain downward pressure on inflation and to achieve his target of between 1 and 4 per cent. inflation? Yes, indeed I do believe that.

As growth returns, we need to be sure that its fruits are not simply gobbled up by an uncontrolled expansion of the state. The Government's objective over the medium term is to reduce public spending as a proportion of national income, because in that way an increasing share of the proceeds of economic growth will remain with individuals : those who created it. It is the wealth creators who work and invest who should enjoy the lion's share of what is produced by their efforts.

If public spending were allowed to grow too fast, if would absorb all the benefits of growth, and the recovery would serve only to fatten the state. The burden of spending could eventually smother the private sector. We must therefore keep a careful eye on the proportion of national income that is absorbed by public spending. That ratio next year will stand at about 45 per cent. It has climbed so high because of a static, or even falling, gross domestic product and a continuing real rise in public spending, largely driven by the demands of the recession on the public purse.

Although the ratio is no higher than it was in the last recession, the state takes too much of our national income

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today. The ratio of spending to GDP must be reduced. That is a fundamental objective of this Government, and I reiterate it now unambiguously.

It can be done. We can reduce the ratio of spending to GDP and at the same time reduce Government borrowing, and we shall do both. I speak with confidence, because the Government have done it before. In the 1980s, the share of national output taken from wealth creators and spent by the state fell from a peak of 47 per cent. to under 40 per cent. At the same time, our fiscal position became so healthy that we were able to repay debt. Over the first three terms of this Conservativve Government, we cut the country's debt burden by the equivalent of £10 billion per year--the cost of 160 hospitals or 500 road bypasses or 5p off the standard rate of income tax.

I remind the House that those achievements took time. We had to maintain our resolve year after year. But our perseverance paid off. Restraint and fiscal prudence in the 1980s delivered a formidable hat trick--cuts in income tax, increased spending on priority programmes and reductions in the national debt.

Mr. Dafydd Wigley (Caernarfon) : Was not the reduction from 46 per cent. to 40 per cent. during the 1980s partly achieved by the privatisation of telecommunications and water? Did not the privatisation of water lead to charges to the charge payer being equally great, if not greater? Does the Chief Secretary agree that we are talking not about greater personal incomes but about a redesignation that suits his purposes?

Mr. Portillo : My figures exclude the effects of privatisation. We always publish the figures and establish the ratio on the only reasonable and fair basis on which to compare the figures from year to year, and that is excluding privatisation proceeds.

The privatisation of water was an important and helpful achievement. It has enabled the industry to embark upon a major 10-year £30 billion programme of investment in our infrastructure. I am only sorry that the Labour party believes that, when a privatised industry invests in the infrastructure, the correct knee-jerk response is to offer to tax it. That is disappointing.

The effects of recession have hit all countries and, like that of many other countries, the United Kingdom's borrowing is increasing. I want to make it clear that I do not welcome that. It is a direct consequence of the recession, however, and we cannot hide from it or from its consequences. As borrowing increases, so does the cost of servicing debt. If those extra costs in turn feed through to higher borrowing, eventually borrowing will spiral. If we listened to the Opposition, scrapped the ceilings on public expenditure and gave in to every demand and every interest group, we might be popular today but would certainly be bankrupt tomorrow.

We must avoid the prospect of more and more Government money going to debt repayment rather than to refurbishing schools, building new roads and improving the health service. As the economy recovers, borrowing must be brought down towards balance. That makes it essential to control what the Government spend. Accordingly, this year, we introduced a new system for the control of public spending. Before any Government can decide how much they will spend, it is essential that they should have a clear idea of what the country can afford. The rate of growth in public

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spending must be kept below the trend rate of growth of the economy. The Government have simply done what any family or business does every day--decided what they can afford and then decided how to spend it. If we had taken the Labour party's advice, we should have done the exact reverse--added up everything on which we would like to spend and then claimed that that was what we could afford. Labour plans its spending bottom up--an unedifying posture. The current round has been conducted on a strictly top-down basis, which is the only sensible approach.

In setting the annual ceilings for public spending, we have made allowances for the effects of the economic cycle, but without loosening our grip on total Government expenditure over time. It would be wrong to rein back on social security spending directly related to the recession and wrong to squeeze other programmes to find the necessary money to pay for it.

That does not mean, however, that the recession is an excuse for public spending to be let rip. We must not allow the temporary and unavoidable increase in spending to be absorbed into a permanent increase. If we do, spending will ratchet ever upwards. The new control total that we have introduced seeks to distinguish clearly between spending related to the recession and other spending. As we emerge from recession we shall ensure that, when the cost of unemployment declines, other programmes do not grow and take up the slack.

That strategy was endorsed by the Cabinet in July. We set ourselves the remit to stick to our cash plans on the old planning total for 1993-94, but to achieve growth in the new control total across the next three years of no more than 1 per cent. per year in real terms.

That was a challenging target. It meant reducing by half the average rate of growth in the non-cycical part of public spending compared with recent years. We have now set plans that fully meet the remit. The planned growth rate in the new control total for the next three years averages just under 1 per cent. : 2 per cent. in 1993-94, but to 1 per cent. in the next two years.

A top-down approach implies the need to address priorities very clearly and resolutely. My erstwhile boss, and now noble Friend, Lord Lawson was apt to quote Mendes France's dictum that to govern is to choose. Lord Lawson was apt to quote it in French. However, as foreign languages are rightly frowned on in this Chamber, I shall say it in English. Foreign languages are frowned on except gobbledegook talked on the Benches opposite.

To govern is indeed to choose. One might go further and say that to be in opposition is to avoid choice ; to call for everything and have to pay for nothing. Labour has called for lower borrowing, more spending, lower interest rates and, recently, even no tax increases. The Opposition Front- Bench team do not confine themselves to speaking gobbledegook : they employ it in their accounting methods. The House may remember that yesterday we heard the hon. Member for Dunfermline, East (Mr. Brown) give his analysis of car tax ; the clear voice of a new school of economics. After a week in which he could study all our press releases, all the tables, all the figures, red books, blue books, brown books and grey books, planning totals, new control totals and the total of those totals, the hon. Gentleman came up with one calculation. He divided the cost of abolishing car tax by the estimate of extra car sales next year. Wow! The computers laboured at Walworth road and brought forth

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a mouse--a Brown mouse. What a gift for "Spitting Image" : the "Alas, Smith and Brown" school of economics at work.

The essence of good government is to choose, and we have ensured that money is spent on priorities. Under the new system, final decisions rest with the Cabinet. Decision-making has become collective. Together, we took the view that we were honour-bound to stick to our manifesto commitments. We have done so. We chose to direct our spending plans to support industry, to educate the rising generation and to ensure adequate protection for the needy. Again, we have done so.

We have kept our election pledges on child benefit and all the benefits which we promised to uprate in line with inflation. We shall deliver the 153,000 homes that we promised would be provided through the Housing Corporation. We are expanding the city challenge programme, and will set up the Urban Regeneration Agency. We shall keep our promise to spend more in real terms on health.

Mr. Clive Soley (Hammersmith) : In about three or four weeks, it will be a year since the Chancellor of the Exchequer promised that he would introduce a mortgage rescue programme which would rescue 40,000 people. So far, it has rescued about 100. When will the other 39,900 be rescued? Will it be in the next three or four weeks? That is all the Chancellor has before his promise runs out.

Mr. Portillo : The building societies--rather effectively--committed their resources to slowing down the rate of repossessions. I should have thought that the hon. Gentleman would welcome that instead of carping about it.

Mr. David Shaw (Dover) : I was most interested in my right hon. Friend's comments about the ability of the Opposition to add up. I was one of those who, as reported in column 313 of yesterday's Hansard, was extremely disturbed about it. Does my right hon. Friend have enough information from the Opposition to cost their programme and determine what level of tax and what level of borrowing they would preside over, and even to determine whether the City of London could even finance that level of borrowing? Or is it a massive Labour cover-up?

Mr. Portillo : My hon. Friend will realise that those are questions for the hon. Member for Peckham, whom I described earlier as the Chief Secretary but who is in fact the shadow Chief Secretary. It is her responsibility to add up the promises that Labour makes and make sure that they can be delivered. Undoubtedly the hon. Lady will use her speech to enlighten the House.

The hon. Member for Dunfermline, East was pressed on his spending plans at a press conference on 9 November. He said that his proposals would increase public spending. Naturally, he was asked what was the figure involved. The hon. Gentleman said straightforwardly : "I am not prepared to put a figure on it."

Thank goodness that the hon. Gentleman is now reinforced by the hon. Member for Peckham, who will undoubtedly ensure that a figure is put on it.

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In our manifesto, we pledged to spend £6,300 million over three years on roads. We shall do that, but the money will now buy more roads than when it was promised. We shall build the Jubilee line extension, as we promised, provided that the agreement with the private sector can be signed.

Capital spending in the health service will reach record levels. Local authority spending of receipts will boost capital programmes on houses and schools. Our policy priorities will enable 25 per cent. more youngsters to have places in further education in the next three years, and enable more of our school leavers to join youth training. The present record level of students in higher education will be sustained. We shall reach the target set out in our manifesto of one in three entering higher education by the year 2000.

The hon. Member for Peckham issued a press release before the autumn statement listing all the promises that she thought we would break. We broke none of them. I hope that she will use her speech today to offer an apology, and possibly a word of congratulation. The decision that we took to protect capital spending stands in sharp contrast to the approach of some previous Governments. In the late 1970s, the Labour party was in power. It became temporarily converted to the need to control public spending. The House may remember that that was under the skilled tutelage, not to say psychotherapy, of Dr. Witteveen of the International Monetary Fund. After a few sessions on his couch, Labour's knee-jerk reaction was to cut capital spending. Hospitals were cut by 29 per cent. Roads were cut by a staggering 33 per cent. Water investment was also slashed by a third. Labour's axe was swung with gusto, and its aim was unerring : always the capital project, the easiest target in the short term but the most damaging in the long term. The cuts were undiscriminating, unthinking and unwise.

The Labour party did not care. Well, one person cared. The junior Minister for Education, the hon. Member for Eccles (Miss Lestor), cared, and she resigned. But some had fewer scruples. Into her place stepped the hon. Member for Derby, South (Mrs. Beckett), to implement the cuts of her Government.

Mr. David Shaw : Where is she now ?

Mr. Portillo : She sits opposite me.

An important decision that we took in the autumn statement was to limit for one year pay settlements in the public sector to a maximum of 1 per cent. This is not an incomes policy. It is a decision by a major employer--the Government--to control its costs. At about £80 billion a year, the public sector wage bill accounts for more than one third of Government current spending.

Since we are preserving capital spending and maintaining support to people out of work, it is essential to seek pay restraint from people in work. However much Opposition Members would like to protect capital spending, they cannot afford to agree, because they cannot afford to disagree with the National Union of Public Employees and the Confederation of Health Service Employees.

Our approach to public sector pay has received widespread support. People know that it is reasonable for the Government to ask their employees to show restraint when many people in the private sector have no choice but to be restrained.

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For a good number of people in the private sector, the recession has already brought about low pay, no pay rises, or loss of jobs. By contrast, during the past two years only about 2 per cent. of the jobs lost have been in the public sector. In each of the past three years, average earnings for public sector workers have risen faster than for those in the private sector.

Mr. Clive Betts (Sheffield, Attercliffe) : Does the Chief Secretary accept that his proposals, together with the Prime Minister's comments about pay in the private sector, amount to a Government incomes policy? Was that part of the Conservative party's election manifesto?

Mr. Portillo : The hon. Gentleman may not have been listening carefully. I began this passage by saying that it was not an incomes policy, but an employer's attitude to the amount of money to be paid to the people who work for him, and I am now explaining that. I am happy to repeat to the hon. Gentleman that it is not an incomes policy.

My remarks about average public sector earnings during the past three years are true, not merely for doctors and teachers, but also for nurses, national health service ancillary workers, civil service clerical staff and local authority workers. Opposition Members should ask their constituents who work in the private sector what they think about automatic public sector pay rises, whatever the conditions in which we find ourselves. The state simply cannot make awards well above inflation, year in and year out, no matter what the state of the economy.

To return to the remarks of the hon. Member for Attercliffe, the Government should not and will not dictate what settlement levels are right for private sector businesses. It is up to each employer to decide what he or she can afford to pay. Everyone knows that, in general, the lower the growth in wage costs, the better the United Kingdom's competitive position will be.

The director-general of the Confederation of British Industry has said that, and has reminded us that previous experience is instructive. Often, Britain has had a competitive edge and has let the advantage slip because of higher real wage costs. It would be sad if history were to repeat itself and if the gains in competitiveness which flow from a lower exchange rate were to be frittered away in higher costs.

Growth in earnings is lower than for a generation. Even so, our unit labour costs are rising faster than in some of the countries with which we compete. During the past 10 years, we have come a long way, but more progress may be required if the United Kingdom is to succeed in the world of the 1990s.

People in prominent public sector positions should exercise restraint and set an example, especially hon. and right hon. Members. We cannot, as so many hon. Members have done, call for the protection of capital spending and the preservation of benefits unless we are willing to share in the sacrifice. The Government will therefore recommend to the House a resolution prescribing a nil pay increase for Members of Parliament from January, and I hope that there will be support for that proposition from both sides of the House.

Mr. Nicholas Winterton (Macclesfield) : While wishing entirely to support and endorse what my right hon. Friend has said--it will be a sacrifice for many hon. Members to do that, but that is the example we have to set--what

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approaches has he made to the relatively newly privatised utilities whose chairmen and chief executives have increased their salaries by 100, 200 or even 300 per cent? Are they going to make a sacrifice?

Mr. Portillo : Although the levels of private sector pay should not be dictated by the Government, people in that sector have important responsibilities, and set examples. When I heard the message from the CBI conference that Members of Parliament should reduce their pay, I thought that a similar message might have been sent in the opposite direction, by some hon. Members to some of the people gathered at that conference.

The state of the Labour party worries me. In the run-up to the election, its members showed signs of beginning to understand free market economics. They talked about free markets, incentives and profits, but since then they have had a relapse. Yesterday, the hon. Member for Dunfermline, East was again attacking the failure of free markets, sounding a little like a recording which might have been made in Poland in the late 1970s. Apparently, he seriously believes that a Government can spend their way out of recession--but they cannot.

The hon. Member made a famous remark at a press conference about the state being an engine of growth in the economy. Sometimes, I look across the Chamber and think that I see three great engines of growth--the hon. Member for Dunfermline, East, the hon. Member for Peckham and the Leader of the Opposition. Three great engines of growth stoking up public spending-- Gordon, the big blue engine, Harrietta, the pink railway carriage, and John, their fat controller, all huffing, puffing and shunting about, raising clouds of steam. The time has come to blow the whistle on all three.

Our new system of controlling public spending has forced us to distinguish between long-term and short-term objectives--between what is most important and what is less pressing. The discipline of working within fixed totals has obliged the Government to confront every increasing demand-led pressure. Every pound spent on one priority is a pound which is not available for another. We approach those decisions with determination and clarity.

An increasing proportion of our national wealth is taken by demand-led programmes : pensions, social security benefits and legal aid are just three. Every developed country is facing the need to support an aging population at a time when there is no increase in the size of the working population.

We shall need coolly to assess the impact on other programmes if those costs are allowed to continue to rise faster than economic growth. For the longer term, we need to consider the balance between provision by the state and by the individual. The Government have provided incentives for people to make provision themselves for retirement, beyond what is offered through state schemes, by building up their entitlements in personal and occupational pension schemes. We face an evolving world in which, while the cold war is over, the country needs to face up to new challenges. My right hon. and learned Friend the Secretary of State for Defence is implementing, "Options for Change" and we shall continue to ensure that resources available for defence match the changing requirements placed on our armed forces.

Also, we must recognise Government's responsibility to ensure continuing improvements in our transport

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infrastructure. We have decided that the task is too great and important for the Government alone. The Chancellor has invited the private sector to play a larger role in meeting the transport needs of a competitive economy through his proposals to encourage private finance, and many of my hon. Friends welcomed that yesterday. Other services which have traditionally been provided by the state need not be state monopolies. We have embarked on a policy of involving the private sector, whenever it is cost-effective to do so, in the supply of services, from social housing to prison management. The autumn statement takes that further. Our proposals on leasing should bring a welcome injection of new provision and new management to essential services.

My right hon. Friend's autumn statement demonstrates the Government's clear -sighted approach, not just to the problems of this recession nor just to the year ahead--nor even just to the three years covered by our plans--but to our determination to address the fundamental challenges facing many Governments, and to bring fresh thinking to that task.

The Government have faced up to hard choices and made tough decisions. For that reason, the autumn statement has been well received in the House and widely welcomed in the country. In the Lobby tonight, my right hon. Friend and the Government will deservedly be supported with enthusiasm.

5 pm

Ms. Harriet Harman (Peckham) : It is extraordinary that, on a day when another 10,000 redundancies have been announced, the Chief Secretary opened the debate without a reference to unemployment. The Royal Bank of Scotland has announced that 1,000 jobs will go in each of the next three years, Blue Circle Cement is to axe 550 jobs, about one fifth of its work force, excavator maker JCB is to cut 80 jobs, and I understand that within the last few minutes it has been announced that about 5,000 workers are to be made redundant by British Rail.

In other words, we have today witnessed jobs disappearing in manufacturing, services, construction and energy in every region of the nation. Although the Chief Secretary found time to make quite a good joke about Thomas the Tank Engine, he did not find time to recognise just what is going on in Britain today.

We have seen in recent weeks some signs that the Government recognise that they have gone wrong. They must know that they have a problem on their hands. The trouble is that they cannot distinguish between the PR exercise that they think is necessary to create the good news story for the newspapers and the real programme for recovery that is necessary for the recession. So they make promises in which they do not believe and continue to say, as the Chief Secretary said today, that the ending of the recession can be left to the market. At the same time, they criticise those who call for Government action.

The autumn statement is a mix of measures in which the Government do not believe and which, even on their predictions, do not add up to achieving recovery. It will not bring an end to the relentless increase in

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unemployment, and today we have seen not only job losses rise but manufacturing output figures revealing a further fall.

Last month, the Prime Minister appeared live on our television screens, on ITN and on BBC News, and said, more in the way of a cry for help than a Prime Ministerial broadcast :

"We are looking for a strategy that will deliver recovery, that will deliver growth, that will deliver jobs."

It is clear from the autumn statement that the Government are still looking.

Under pressure, the Chancellor has admitted the error of his ways, but, through lack of conviction, he has failed to apply the remedies that are needed. So instead of a housing policy to build, repair and modernise homes, we have the purchase--perhaps the nationalisation--of 20,000 empty properties. Instead of an industry policy, £400 is taken off the price of a new car. Instead of the release of the accumulated receipts of council house sales, we have the future release of receipts, if only councils can dump their houses and assets on to an already stagnant market. Worst of all, instead of an employment programme and policy, unemployment is left rising.

The Government have begun to admit their failures, but have failed to provide the solutions.

Mrs. Judith Chaplin (Newbury) : The Labour party fought the last election on a programme of large tax increases. If, heaven forfend, Labour had won, would that programme have been implemented?

Ms. Harman : We did not fight the last election on a policy of increasing taxes. The Tories fought the election on misrepresenting our tax policies. Since the election, many people have lost their jobs, cannot pay taxes and are having to draw unemployment benefit.

Mr. Graham Riddick (Colne Valley) : During that election the Labour party argued strongly and consistently that the upper earnings limit for national insurance was wrong and should be abolished. Does the hon. Lady still hold to that view ?

Ms. Harman : Our policies were fair. In the current situation, we have set out how we would bring about recovery. To bring an end to the recession, we have suggested how our programme could be paid for. It is significant that Conservative Members can talk only about the programme of the Labour party prior to the last election, but have nothing to say about their autumn statement and the effects that might have.

Mr. Michael Ancram (Devizes) rose --

Ms. Harman : I will give way once more, especially to the hon. Gentleman, who spoke yesterday.

Mr. Ancram : In fact, I am hoping to speak later in the debate. In view of her remarks, will the hon. Lady put a figure on what Labour's programme would cost, the hon. Member for Dunfermline, East (Mr. Brown) having refused to answer that question ?

Ms. Harman : We have set out what we believe needs to be done to bring an end to rising unemployment. We have said that the public sector must play an important part and that public spending will need to be increased. We have explained how our measures would be achieved. We have said, for example, that we do not believe it right to lift

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stamp duty on share dealing or that the recently privatised utilities should sit on billions of pounds in the bank when that money could otherwise be available for investment.

We have set out clearly our programme of what needs to be done and how it would be financed-- [Interruption.] I am asked to give the figures. The Government throw out figures which, even on the day they are printed, prove to be wrong.

Mr. Bernard Jenkin (Colchester, North) rose --

Ms. Harman : I hope that the hon. Gentleman will forgive me for not giving way. I must make progress.

The Government have begun to talk about growth, but there is no real expectation of growth. They have begun to talk about investment, but they have no strategy for it. They have also begun to talk about fairness, but they take money out of nurses' pay packets to make cuts in the national health service budget.

Many people believe strongly that the Government have simply stood by while the menaces of unemployment and recession have stalked us and engulfed every region of the country. People appreciate that there are worldwide economic problems, but they also know that our recession started earliest and is lasting longest.

Even against the background of worldwide economic problems, between 1990 and 1993, Japan's manufacturing output will have risen by 1 per cent. Manufacturing output will have risen in Canada by 2 per cent. ; in Italy, by 2 per cent. ; in France, 5 per cent. ; in America , nearly 6 per cent. ; and in Germany, 8 per cent. But manufacturing output in Britain will have shrunk by 5 per cent. The same story applies to business investment, total investment and the national income.

People hold the Government responsible for the way in which they have managed the economy, which has left us with soaring unemployment and public borrowing, with imports overtaking exports and with imports still rising, and with a stagnating housing market as we are about to enter our third winter of recession.

There is a strong feeling throughout the nation that the Government must act positively. They must provide a recovery programme that will lift the fear of unemployment, stimulate the housing market, provide stability and confidence for industry and provide incentives for investment. The recession has cost the nation dear. This year, we have spent £1.5 billion more on unemployment benefit because of it. It has also cost the Treasury in lost receipts. This year, Treasury receipts were £5 billion less than last year because of the recession.

Despite the upbeat talk, the autumn statement is not a recovery package. Without investment and growth, we shall not see an end to the relentless increase in unemployment. The fear of unemployment and high personal indebtedness hang over the economy. I was struck by the fact that, when the Chancellor spoke on the economy at the Tory party conference, the only time that he mentioned debt was when he mentioned his personal debt to the Prime Minister for keeping him in his job.

The personal sector's financial liabilities have increased from £204 billion in 1985 to £470 billion in the first quarter of 1992. The ratio of personal sector debt to personal incomes has risen from 86 per cent. in 1985 to 115 per cent. in 1991. Against that background, the Government will not end the recession simply by waiting for people to go out shopping. People are burdened by personal debts.

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