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between 1990 and the end of 1995, the economy of Britain will grow at a slower rate than that of any other G7 country and at a slower rate than that of any other European Union country and that our economy will grow at less than half the average of those of OECD countries. That is why it is only in the make-believe world of Ministers that we are the envy of our competitors.

Ministers trumpet Britain's improved competitiveness, but the reality is that our trade deficit is the worst in the European Union and we are second from bottom in the OECD skills league table. That is the dream world in which Ministers are living--the dream world in which they can talk about tax cuts even as they impose the biggest tax rises in history and ordinary families face 10 more tax rises still to come. No wonder the Chancellor can detect no feel-good factor. People do not feel good about tax increases ; they feel betrayed. They do not feel good about their employment prospects ; they feel insecure. They do not feel good about economic recovery, because they do not believe it.

Moreover, people know that Britain's current economic weakness is reflected in a history of failures that stretches back to 1979 and embraces every aspect of economic performance. I am not talking the country down, but telling it straight. The Conservatives have failed on key tests set not by their opponents but by themselves.

Mr. Butterfill : If the hon. Lady does not believe the Government's statistics, she may believe those produced by the Library. Page 3 of the research paper that the Library produced for this debate shows the pattern for industrial production. Under the last Labour Government, industrial production fell rapidly between 1974 and 1976, and returned to its original level only in 1979 whereas, under this Government from 1980 to 1990, there was considerable recovery and we are now back to the record levels of 1990.

Ms Harman : The hon. Gentleman should look at what is happening in other countries. Manufacturing output in this country has grown by a mere 4 per cent. since 1979. Compare that with the record in America, where it has grown by 30 per cent. If the hon. Gentleman wants to take manufacturing output as an indicator, he should be extremely concerned about that fact.

The Conservatives have failed their own tests on borrowing, public spending and taxation. The story is one of ignominious retreat from their explicit promises.

Sir Peter Hordern (Horsham) : The hon. Lady specifically mentioned borrowing. Does she remember the great man, Dr. Johannes Witteveen, a director of the International Monetary Fund, who presided over the bailing out of the last Labour Government ? I cannot remember the name of the gentleman who presided over the bailing out of the previous Labour Government. However, no Conservative Government have ever borrowed as much, as a proportion of GDP, as the last two Labour Governments. Labour Members are concerned only with increasing Government spending, which must have the same result.

Hon. Members : Hear, hear.

Ms Harman : Ministers say "Hear, hear", but the right hon. Gentleman is absolutely wrong. This Government have borrowed record amounts. Back in 1988, when the Prime Minister was Chief Secretary, he promised a zero

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PSBR year on year. The people who promised to end borrowing altogether have now become the biggest Government borrowers in history and lamely propose that they may eliminate Government borrowing by the end of the century.

On public spending, which the right hon. Member for Horsham (Sir P. Hordern) also mentioned, the Government made two promises : to protect investment yet, at the same time, reduce overall public spending. But they have done neither. They have cut investment in the economy and public services, but failed to reduce overall spending. The Government's most notorious and humiliating failure of all is on tax. People now pay more tax than they did in 1979. The Conservatives said nothing equivocal on tax in the general election campaign. They specifically promised income tax cuts. Moreover, they promised them year on year. They ruled out a rise in national insurance and promised not to put VAT on fuel. As we know, all those specific promises have been cynically broken. Now, the best that they can do is offer us, as the Chancellor has today, their instinct to cut tax. They are like a football team that promises to bring home the world cup and, having been humiliated in the qualifying round, comes home and tells the public about its instinct for scoring goals.

The Government's failure on the economy lies at the heart of all their other failures. My hon. Friend the Member for Monklands, East (Mrs. Liddell) addressed that failure in her maiden speech. She showed the strength of character and determination that will clearly make her an asset to her constituents. She spoke of her deference in following in John Smith's footsteps, and I am sure that the whole House will agree that he would have been proud of her speech. For 15 years, the Tories have tried to present issues of spending, tax and borrowing in isolation from the state of the real economy, but the truth is that economic performance is crucial to performance on borrowing, on spending and on tax. That is why the Government have not succeeded, and will never succeed, even by their own standards. It is the Government's failure on the economy which has sent the public sector borrowing requirement soaring to record levels. Economic failure has meant that the cost of keeping people unemployed has trebled, and the Government have responded by cutting investment. Economic failure means that, with more people unemployed, everyone has to pay more tax.

My right hon. Friend the Member for Chesterfield (Mr. Benn) asked exactly the right questions about tax. He said, "The question is, what is it for and who pays ?" The answers, under the present Government, are, "What is it for ? It is to pay the price of economic failure", and "Who pays ? Middle and lower income families." That record of failure obviously was not inevitable. It was not some unfortunate accident. It is the direct result, the product, of an economic dogma that simply has not worked--a dogma which says that the Government can play no positive role in the economy, and says that Britain can compete only as a low-wage, low-skill economy, with a weakened welfare state left to pick up the pieces.

That dogma stands condemned by the Tories' record of failure. It must be replaced by an approach that uses the power of Government to ensure investment for the future, which recognises that some markets need a regulatory framework that will foster economic success, and which has at its heart the commitment, which my hon. Friend the Member for Cambridge (Mrs. Campbell) mentioned, to a

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high-tech, high-investment, high-skill, high -wage economy to give people economic opportunity, and a welfare state that gives people pathways out of poverty.

Some Ministers, including the Chancellor of the Exchequer, are trying to shift their ground, but remember, his is a party which said that unemployment is a price worth paying, and believed that manufacturing did not matter. My right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) reminded the House, with the benefit of his experience, as he always does, that our economy has not prospered without a strong manufacturing base.

Have these Tories really changed ? The answer is of course no, because although their words are changing, their actions are not. My hon. Friend the Member for Darlington (Mr. Milburn) made it clear that the Government still believe that unemployment has nothing to do with them, and that their rhetoric on full employment is meaningless.

Mr. Forman : I am grateful to the hon. Lady for giving way ; she is very kind. Before she gets too carried away with Labour's prospect of spending its way out of recession, were it ever to be in government, does she recall the memorable words of Lord Callaghan, the last Labour Prime Minister--in perhaps every sense--who said to the Labour party conference in 1976 :

"I tell you in all candour, comrades, you cannot spend your way out of a recession" ?

He was referring to public spending.

Ms Harman : The Government have failed to cut public spending, although they have cut investment, because they are spending more on the consequences of their economic failure. The history of the Tories' economic policy is failure destined to repeat itself, first as the tragedy of two recessions, followed by the farce of a Government trumpeting their success as they create the conditions for yet more failure.

For the Government, recovery is simply the absence of recession, but recovery, if it is to be sustained, must be more than that. They have not conquered the economic problems that they have created. They have not ended the pattern of boom and bust that my hon. Friend the Member for Coventry, North-West (Mr. Robinson) so excellently described. This fragile recovery is nothing more than an interval between the first two Tory recessions and the one that is yet to come.

Just as the Chancellor is trying to change the mood music on economic policy, so he has tried to change it on social policy. While the Chief Secretary still says that Government action undermines individual responsibility, the Chancellor has started to speak about a strong welfare system.

The Chancellor has every reason to be embarrassed by the Government's record on social policy. [ Hon. Members-- : "Why" ?] Conservative Members should look at the Government's own figures, which show that since 1979 the income of the poorest one tenth of the population, in real terms, has actually fallen by 17 per cent. while that of the richest has increased by 62 per cent. That is the direct result of an economic strategy based fairly and squarely on high unemployment and low wages. It is the direct result of a tax policy based on tax loopholes for the super-rich and tax increases for low-paid and middle-income families. It is the direct result of a social policy based on cutting benefits.

Just as the Government's economic strategy remains unchanged so, too, their tax and social policies remain

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unchanged. It was the Chancellor who insisted on going ahead with VAT on fuel--and still, despite the outcry in the country and despite its obvious unfairness, he refuses to cancel the increase from 8 to 17.5 per cent. He still refuses to end the tax privileges for the rich, such as executive share option schemes that give the richest people thousands of pounds in untaxed income. Meanwhile, the Government's policy of punishing the poor remains unchanged, cutting invalidity benefit and unemployment benefit--and now housing benefit is also on the hit list.

At the heart of Tory economic policy has been the commitment to cut public spending and we heard much about that in the debate. In 1979, the Conservative manifesto asserted :

"The state takes too much of the nation's income : its share must be steadily reduced."

The Government have not done that. Public spending is 44 per cent. of gross domestic product now and it was 44 per cent. of GDP in 1979. It is no lower now than it was when the Tories took office in 1979. That is not because they have been investing in a stronger economy ; it is not because they have been modernising the health service or giving us a state-of-the-art transportation system--far from it. The Tories are not spending less as a percentage of GDP, but what they have done is to change the composition of public spending. More is being spent on the costs of economic failure and less on investing for economic opportunity and success. They pay out income support for the growing number of single parents instead of ensuring the provision of nursery places so that they can go out to work. They pay out unemployment benefit to the unemployed instead of ensuring investment in skills to help them to get a job.

In the face of the Government's inability successfully to manage the economy, Tory public spending, instead of being a springboard for economic success, has become increasingly a palliative for economic failure. It is not that this Tory Government have been short of public money to spend. They have had £118 billion of North sea oil receipts and they have squandered it. They have had £69 billion of privatisation receipts and they have squandered it.

Mr. Butterfill : Will the hon. Lady give way ?

Ms Harman : I have already given way to the hon. Gentleman once and I will not do so again.

The Government have lacked not public money, but an understanding of how to use it in the public interest. People are paying tax increases not to invest in success in the future but to pay the price of the Government's past failure. The truth is that the Tories are no more the party of low public spending than they are the party of low tax. Everywhere they turn, they are confronted with the consequences of their failure and their inability to deal with that.

At this time of crisis for them, the message goes forth from Tory central office, "Fellow Conservatives. Ask not what can you do for your country. Ask who in the country you can blame." So they target the victims of their policies. Unemployment, homelessness and poverty, which the Government created, are the fault of the unemployed, the homeless and the poor. Insidiously, they invite the voters, the general public, to blame those groups, to divert anger away from the Government.

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The Chief Secretary, however, goes one step further. He does not simply blame the victims for the public dissatisfaction with the Government. He goes beyond the middlemen. He blames the voters themselves. As he put it in a recent interview, the reason why the Tories now trail Labour on tax among the electorate is because "their judgment has become clouded".

Britain is plagued by a muddled electorate--it is their confusion which is responsible for the Government's unpopularity. At this point, I know that some of my hon. Friends will suggest that the confusion lies not with the electorate but in the Chief Secretary's own head. Undaunted, however, he comes back with more revealing insights. The voters, he says, are flawed in other ways, too. They are not merely confused. They have also become cynical. According to the Chief Secretary's preachings, voters no longer

"respect those who lead and manage them."

Then, last month, from his speech in Spain, we learned that the voices in his head told him that he must speak out again, this time about a great threat to democracy. Apparently--I shall translate, because by this time he was speaking in tongues

"Voters feel they own their government, and since they feel they own it, they believe it should do what they want."

In common with the people who walk up and down Oxford street with sandwich boards on their backs proclaiming, "The end is nigh" or that "Protein is the root of all evil" the Chief Secretary believes, I am sure, that the world will one day wake up to his perspective. But perhaps it is not fair to single out the Chief Secretary, because there are other forms of delusion equally worthy of our attention. Everyone knows, for example, about the worrying influence of computer games and the consequent blurring of fantasy and reality. But an even more ominous phenomenon is emerging-- virtual reality headsets. One just puts one on and enters a fantasy world where one can make anything happen.

So now we know why Ministers are so removed from the real world. They sit around the Cabinet table every Thursday morning, and when talk of traffic cones and service station toilets fails to distract them from the mountains of problems that are too painful to be faced, they get out their headsets and enter a world of their own creation. They press their control pads and the unemployed are made to disappear. At the touch of a button, our ailing economy rematerialises--this time as the envy of the world. With a deft swivel of their joy sticks, the law of gravity is reversed and taxes appear to be falling, even as they are soaring upwards.

But the problem for Ministers is that no one else lives in virtual reality. Everyone else lives in the real world : the world of falling living standards, economic failure, social division and rising taxes. [Interruption.] I see that a Conservative Member has such a headset on even now. People bitterly resent a Government who say that everything is fine when, clearly, it is not.

This summer economic debate comes at the end of an historic parliamentary Session. The Government have been exposed on their tax record, exposed for their deceit on tax, exposed for their unfairness on tax and exposed as the perpetrators of the biggest tax rise in history. The Tory's last remaining electoral weapon--the myth of low tax--

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has been taken from them. They failed on economic policy and social policy. Despite their pretence that everything is fine, they know that they have failed.

That is why some of them are tentatively moving on to Labour's ground. [Hon. Members :-- "No."] Yes, they are : all this talk about full employment--not in here, but out there--and about community. But Labour's language will not work for the Tories. Bear that in mind. It will not work because people who are worried about unemployment will not look to the party that has created mass unemployment. People who care about modernising the welfare state will not look to a party that has undermined it. People who want a strong economy will not look to a party that has weakened it.

People have made it clear in local council elections and European elections that they no longer trust the Tories. There has been an historic shift in the allegiance of the British people. They are now ready to entrust their future to Labour.

9.35 pm

The Chief Secretary to the Treasury (Mr. Michael Portillo) : My right hon. Friend the Member for Worthing (Sir Terence Higgins) and the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) complained that there were too few opportunities to discuss the economy. During the course of the afternoon we have heard a series of interesting speeches on the economy from my right hon. and hon. Friends and, indeed, from some Opposition Members.

Unfortunately, we did not hear any explanation from the Labour Front-Bench spokesmen of what the Labour party's economic policies might be. For the hon. Member for Peckham (Ms Harman), in the dying moments of her speech just before it fizzled out, to talk about the Conservatives wanting to move on to Labour's ground, when it was perfectly clear from the whole debate that there was no ground to move on to, really took the biscuit.

I pay tribute to one speech from the Labour side. The hon. Member for Monklands, East (Mrs. Liddell) made her maiden speech. It was a speech full of personal modesty. The House will have appreciated the tribute that she paid to her predecessor, John Smith. It was a speech of substantial eloquence and she showed her keenness to serve her constituents. I wish her well with her parliamentary career. The hon. Member for Monklands, East paid a great deal of attention to the need to create jobs in her constituency. She put particular emphasis on the need for small businesses to develop in her constituency and to do well. I would say to her that for that to be the case, there has to be confidence, and confidence is what the Government have been restoring by their economic policies. I want to make a speech to close the debate which is about principles, specific policies, achievements and a programme to make sure that our economy is strong and that there can be confidence in that economy. I shall contrast our approach at every step with the lack of policy from the Labour party.

I wish to detail the steps that my right hon. and learned Friend the Chancellor and I have worked at to restore confidence in British economic management. We have done it under the headings of monetary policy, public spending and fiscal policy. I want to talk about all three.

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Mr. Butterfill : Will my right hon. Friend confirm that one of the things that the hon. Member for Peckham (Ms Harman) said was factually incorrect according to the information from the Library ? She said that the Organisation for Economic Co-operation and Development forecasters had said that our growth would be lower than that of other countries. The Library research paper shows on page 19 that our growth will be higher than almost any other OECD country in terms of GDP for both the present year and 1995. Can my right hon. Friend confirm that that is correct ?

Mr. Portillo : My hon. Friend is right. The prospects are that we shall have the highest growth rate of any major European Union country this year and next.

Mr. Allan Rogers (Rhondda) : Will the right hon. Gentleman give way ?

Mr. Portillo : No. I want to get on.

The reason why we have a monetary policy is that we believe that the basis of economic confidence and stability must be low and sustained low inflation. We believe that it is essential for social cohesion that there should be low inflation. That is why we have set specific targets which say that the underlying rate of inflation will be kept between 1 and 4 per cent. and that we will be in the lower half of that range at the end of this Parliament.

That is why we have laid out the other factors that we shall bear in mind in judging whether monetary conditions are right or whether they need to be tightened or loosened. We have referred to asset prices, to monitoring the money supply and exchange rate, and to watching a range of other factors to identify inflationary pressures. We want to make it clear that interest rates in this country will be set according to economic conditions in this country and not according to economic conditions in other countries. We want to make it clear that interest rates will be set in this country for economic reasons and not for political reasons.

That is why we have embarked on making our monetary policy ever more transparent, publishing the monthly monetary report, setting up the independent panel of forecasters, publishing the minutes of meetings between my right hon. and learned Friend the Chancellor of the Exchequer and the Governor of the Bank of England when they discuss monetary policy. That is why the OECD has paid tribute to the steps that we have taken to establish that monetary policy framework and has described the publication of the minutes as a significant step forward.

That is why my hon. Friends the Members for Canterbury (Mr. Brazier) and for Croydon, South (Mr. Ottaway) made such a point of referring to the importance of low inflation.

Mr. Rogers : Will the Minister give way ?

Mr. Portillo : No, I am sorry, but the hon. Gentleman has not been here for the debate.

The second heading under which I want to deal with our policies for creating confidence is public spending. We believe that the Government's control of their spending is critical to confidence in that Government. One cannot have confidence in a Government unless they are able to control their spending.

Conservative Members believe strongly that the Government and the state are there to serve the individual and that it should not be the other way around. That is why we believe that a Government who are spending 45 per

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cent. of gross domestic product need to reduce that proportion progressively year by year. We believe that the citizen is the customer of the Government and that he must be given good services and good value for money. We recognise that taxpayers, whose money the Labour party would spend with such alacrity, are not well off and may be much less well off than the people to whom the money is being given, which has been removed from taxpayers.

We believe that controlling public spending is vital for the competitiveness of this country. Although the Government are spending about 45 per cent. of our national income, the Governments of the great competitors--the United States of America and Japan--are spending no more than about a third of their national incomes. That is why we have embarked on a process for the complete control of public spending. That is why, despite the comments by my hon. Friend the Member for Bridlington (Mr. Townend), I believe that we have achieved considerable successes.

In the Budget, my right hon. and learned Friend the Chancellor was able to announce that the plans for this year had been reduced by £3.5 billion. That came on top of the reduction in the previous autumn statement and it means that the plans for this year are £8.25 billion below the level at which they were set in the 1991 public expenditure survey. We have taken £15 billion off the plans for the three years of the public expenditure survey.

I have set out the Government's belief in low inflation. I have set out our monetary targets. I have set out our inflation targets. I have set out achievements in public spending. I would like to know from the Labour party whether it believes that inflation should be higher. Does it believe that the monetary targets are wrong ? Does it believe that we are following the wrong inflation indicators ? Does it believe that publication of the minutes of meetings between the Governor of the Bank of England and my right hon. and learned Friend the Chancellor should not be published ? Does it believe that public spending is too high ? Does it believe that it is too low ? Will the Labour party please tell us what its principles are ?

I can tell the House specifically what our principles, our goals and our achievements are. That is why I say to my hon. Friends who are concerned about the level of public spending that they should remember that we are planning for a rate of growth of only 0.25 per cent. per year in real terms for the three years of the public expenditure survey.

We have been able to find, however, more money for health, more money for education and more money for pensioners. That is because the Government have, as my hon. Friends, including my hon. Friend the Member for Milton Keynes, South-West (Mr. Legg) have been urging us to do, controlled the growth of the social security budget and turned our attention in particular to social security fraud. It is because we have reformed the social security system to ensure that it is better targeted, because we have put great emphasis on increased efficiency in public services and because we have tightly controlled our own costs in government that we shall reduce the proportion of national income taken by the Government to 42.5 per cent.

Mr. David Shaw (Dover) rose

Mr. Portillo : My hon. Friend has not been here, but I shall give way to him.

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Mr. Shaw : I am grateful to my right hon. Friend for giving way. Does he agree that public expenditure control is paramount and that when decisions are taken in government, such as to remove the Royal Marines school of music from Deal, a proper investment appraisal should always be undertaken first ? Does he agree ?

Mr. Portillo : Of course a proper appraisal should be made. If my hon. Friend has any point to pursue about that, he should do so with my right hon. and learned Friend the Secretary of State for Defence.

Mr. George Howarth (Knowsley, North) : Will the right hon. Gentleman give way ?

Mr. Portillo : No ; the hon. Gentleman has not been here.

Ms Harman : Before the right hon. Gentleman leaves the point about public spending, will he explain why in 1979 public spending as a percentage of GDP was 44 per cent. and yet, after 15 years of Tory government, it is still 44 per cent. of GDP ? Can he explain that to his colleagues ?

Mr. Portillo : The hon. Lady should be ashamed to remind the House that she offered us 44 per cent. as a proportion of national income at a time when the economy was in recovery, at the end of a boom period. We are at 44 per cent. following a recession. The average figure under the Labour party was 46.5 per cent. During the 1980s, when we had a period of strong recovery for a number of years, we got it down to 38 per cent. Would the hon. Lady now like to commit herself to getting it down to 38 per cent., or to any figure at all ? Is she saying that 44 per cent. is too high, or that, as it was the figure under Labour, it is the figure that she supports ? I am prepared to tell her that I think that the figure is too high, and we are determined to reduce it. What is her policy, please ?

Ms Harman : Too much public expenditure in this country goes on mopping up the consequences of this Government's economic failure. We see spending on unemployment, on poverty--on income support--and on housing benefit because of their failures on economic policy and their failure in housing policy. We see investment being cut. Is that the pattern of public spending that the right hon. Gentleman expects us to applaud as a success ? I think not.

Mr. Portillo : If the hon. Lady believes that unemployment is too high and if, as I understand it, she is saying that she would cut unemployment and that that would solve all her problems, why is it that a country like France, which has a minimum wage--the policy that she advocates--has a rate of unemployment higher than Britain's ? Why is it that Sweden, which spends 72 per cent. of national income through government--a country that follows the policies advocated by the right hon. Member for Chesterfield (Mr. Benn)-- has a high rate of unemployment ? Why is it that Spain, which has a socialist government, has a rate of unemployment of 25 per cent. and a rate of youth unemployment of 40 per cent. ? I will tell her why. It is because Spain has had 10 years of socialist government, and the only reason why there is any hope for the people of Spain is that the leader of the Spanish Opposition is charismatic, is 41 years old, was born in 1953 and is a Conservative.

I now want to deal with fiscal policy. We believe in controlling the rate of Government borrowing because we

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are aware that the borrowing that we pass on from this Parliament is a burden that must be paid for by our children. That could lead to permanently higher rates of taxation or fewer choices for our people. We have taken decisive action--more decisive action than, I believe, any other Government, to control our rate of public borrowing. As a consequence, the PSBR as a proportion of our national income will reduce from 7.25 per cent. last year to 5.25 per cent. this year and to 4 per cent. next year.

Most importantly, the ratio of the debt that we have accumulated over the years to our GDP will not pass 50 per cent. whereas in Greece it is now 104 per cent., in Italy it is 116 per cent. and in Belgium it is 145 per cent. The only EC country which has a lower ratio of debt to GDP than we have is Luxembourg. That point may be of interest to my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) who was interested in the appointment of Mr. Santer. All the policies that I have described, policies which are backed by principles and which are very clear, have been endorsed recently by the Organisation for Economic Co-operation and Development. In its voluminous report, one policy after another followed by this Conservative Government has been vindicated, upheld, praised and underpinned by the OECD.

We remember perfectly well that, under the Labour Government, the British economy was run by the International Monetary Fund. Under this Conservative Government, the economy and its economic management are praised by the OECD. That is the difference between the two. We now have the fastest rise in retail sales of any major European Union country. We have the fastest rate of growth of GDP of any major European Union country. We have the fastest growth in industrial production of any major European Union country.

In the European Union this year, only in this country is unemployment falling. Inflation is below the European Union average. Interest rates are among the lowest in the European Union. Manufacturing output is up 3.2 per cent. this year, car production is up 3 per cent. and export volumes are up 9 per cent.

I can tell the hon. Member for Peckham (Ms Harman) that there is no fantasy in all that. They are solid achievements brought about by sound economic policies. They are solid achievements which could be brought about only by a Government who have principles and the courage to stick to those principles and the policies that are derived from those principles.

We have established the stable economic conditions and the conditions of low inflation that enable unemployment to be reduced and employment to be increased. Over the years, we have shown the courage to tackle the vested interests, including the trade unions, in order to create flexible labour markets.

Against what the hon. Member for Dunfermline, East (Mr. Brown) said, the winter labour force survey shows that there are 150,000 more jobs in the United Kingdom than there were a year ago and that the number of people in employment is rising. He knows perfectly well that the proportion of our working age population in work is now the highest of any major European Union country. Those are facts to which the hon. Members for Dunfermline, East and for Peckham should pay tribute. If they cannot do that, at least they should say what their policies are.

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My hon. Friend the Member for Sevenoaks (Mr. Wolfson) described the speech of the hon. Member for Dunfermline, East as disappointing. I believe that it was closer to being disgraceful. I read in The Daily Telegraph this morning a comment of Mrs. Blair. She was paying tribute to her husband, the hon. Member for Sedgefield (Mr. Blair) and, in paying tribute to her husband, she said that he was able to cook, change nappies and discuss economic policy over the telephone with the hon. Member for Dunfermline, East all at the same time. Having listened to the hon. Member for Dunfermline, East today, and on the principle that it is garbage in, garbage out, it seems to me that the cooking, the nappies and the economic policy somehow were confused during the course of the hon. Gentleman's speech. His speech today was characterised by a refusal to answer questions and by a reversion to platitudes. I put it to the hon. Gentleman that it is not fair and it is not honest with the people of this country to try to fool them about serious matters such as unemployment and economic recovery.

The new leader of the Labour party would be proud of the hon. Member for Dunfermline, East. His speech today was vacuous and fatuous. It was airy- headed, it was full of guff, and it was full of blah. Labour Members are about to elect a leader of the Labour party whose very name is a combination of blah and of air. It was a disingenuous, deceitful and dishonest speech. It was half-thought out, half-baked and less than half true. All the way through the hon. Gentleman's speech there was the hint of a planned economy re-emerging.

The electorate know that the only way that more jobs will be created is by having stable economic conditions and low inflation. That is what we have created. The people of this country know that the only way in which more jobs will be created is the way that has been followed around the world.

Over the past 10 years, 1.5 billion people have gone from dictatorship to democracy. All around the world, people see the strong connection between political freedom and economic freedom. All countries that have recently achieved political freedom are now following a policy of flexible labour markets, low tariffs, deregulation, privatisation and competition--all the policies which are espoused by the Government. It cannot be that only in Britain and only in Europe should those policies be tossed aside. The Government will follow those policies and carry them to fruition.

The leadership contest in the Labour party has been characterised by sound bites and hooey, signifying nothing. The Labour party contest has been a no -score game which has had to be settled on penalties. The hon. Member for Kingston upon Hull, East (Mr. Prescott) and the right hon. Member for Derby, South (Mrs. Beckett) have had to pay the penalty. The hon. Member for Kingston upon Hull, East once admitted that the social chapter would destroy jobs. He has paid the penalty for having sometimes been right, and the right hon. Member for Derby, South has paid the penalty for having sometimes been left.

As always, when games are settled by penalties, people are left feeling that they have been cheated, and the people who have been cheated in this instance are the British public. The British public want to hear from the Labour party a serious exposition of an alternative economic policy. [Interruption.] Labour Members have had all afternoon to do that, but they have put forward not one

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serious idea. [Interruption.] I tell Labour Members frankly that they will not be able to go from now until the general election without answering the serious questions that arise. [Interruption.]

Sir Cranley Onslow (Woking) : On a point of order, Madam Speaker.

Mr. Portillo : Labour Members will not be able to reply to every question by referring to

Madam Speaker : Order. I have a point of order.

Sir Cranley Onslow : You must be aware, Madam Speaker, that it has become extremely difficult for right hon. and hon. Members to hear the debate because of the noise that is coming from the Opposition. Will you persuade the House to be quieter ?

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