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Points of Order

3.31 pm

Mr. Brian Wilson (Cunninghame, North): On a point of order, Madam Speaker. I wonder whether you are aware of the announcement today of the loss of 2,500 jobs by Mercury Communications and also the decision to dismantle all 2,700 of its pay kiosks. That has enormous implications for the future of our communications industry, for employment and also for competition policy. Will the Government make a statement about the matter? I hope that the dismantling of the pay phones will be accompanied by as much ministerial hype as was their erection.

Madam Speaker: I have no responsibility for seeing that a statement is made about that matter. I can tell the hon. Gentleman that I have not received an application from any Minister to make such a statement today.

Mr. David Shaw (Dover): On a point of order, Madam Speaker. At the weekend there was a very serious announcement about the possible voting position in the House of Commons. That announcement resulted from the suspension of Nottingham's Labour party. Surely we should refer the matter to the Committee of Selection so that it can determine whether there are enough Labour Members from Nottingham in the Labour Whip, or whether there is a serious problem of a shortage of Labour Members.

Madam Speaker: I have heard some bogus points of order in my time, but that really takes the biscuit.

Mr. D. N. Campbell-Savours (Workington): On a point of order, Madam Speaker. You will have noted


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during Question Time an incident at the Dispatch Box when the Under-Secretary of State for Foreign and Commonwealth Affairs made what can only be described as an idiot of himself by holding up a handwritten sign showing misleading statistics on overseas development. Are you happy with such conduct at the Dispatch Box, Madam Speaker?

Madam Speaker: I am not happy with conduct whereby any Minister or any Member brings such diagrams or explanations into the Chamber. I believe that all Members of the House and particularly Ministers should be sufficiently articulate to express what they want to say without diagrams.

Sir David Steel (Tweeddale, Ettrick and Lauderdale): Further to that point of order, Madam Speaker. May I support what you say, but also say that Members and Ministers should be literate and numerate? The Minister managed to hold the idiot guide upside down, which made it even more confusing for those of us who were trying to follow what he was saying.

Madam Speaker: I am glad that I was not sitting opposite the Minister, so I did not have to read it upside down.

Mr. George Foulkes (Carrick, Cumnock and Doon Valley): On a point of order, Madam Speaker. With regard to the vote tomorrow on VAT on fuel, I have a list of 14 Conservative Members of Parliament who have said that they are against the increase in VAT on fuel. If they vote in favour of that increase in the Division tomorrow, how will we be able to find out whether they have been bribed or battered into submission?

Madam Speaker: That is too hypothetical for me to attempt to answer at this stage.


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Orders of the Day

WAYS AND MEANS

Order read for resuming debate on Question[29 November] .

AMENDMENT OF THE LAW

Motion made, and Question proposed ,

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, acquisition or importation;

(b) for refunding any amount of tax;

(c) for varying any rate at which that tax is at any time chargeable; or

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

Question again proposed.

Budget Resolutions and Economic Situation

Madam Speaker: Before I call the Minister, I have to announce that I have imposed a 10-minute limit on speeches between 6 and 8 o'clock this evening.

3.35 pm

The Secretary of State for National Heritage (Mr. Stephen Dorrell): Last Tuesday my right hon. and learned Friend the Chancellor of the Exchequer delivered a Budget that was good for Britain and good for the national heritage. I applaud it on both grounds. I should like to begin by examining its direct effect on the national heritage. I shall then examine its broader effect on the economy. The one cannot be entirely divorced from the other because it is important to see the heritage in its full economic perspective.

Let me begin by looking at the national heritage as a narrow aspect of our wider economy. Since my appointment as Heritage Secretary, I have sought to make two things clear about the way in which I intend to discharge my responsibilities. First, I want to see the national heritage sector for which I am responsible expand. It is a huge sector. It includes everything from ballet to boxing. I want to see all those different sectors grow and derive greater strength and possibilities of expansion by securing greater public support. That is true of the theatre sector, of our film studios, of sporting activity throughout the country, of art galleries and museums and of broadcasting companies; I believe that we have in Britain the opportunity to exploit the growth of broadcasting opportunities throughout the world.

I regard all those different sectors as important. They are important in themselves because they create job opportunities. They create growth within the wider economy. They are also important because they express our identity as a nation. They express our aspirations as a nation and they express our confidence in our future as a nation.


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I believe that the national heritage in all those different characteristics and forms should express a commitment that we should all feel in all parts of the country, to excellence, to seeing standards rise and to seeing our aspirations for the future fulfilled. That is why I disagree so fundamentally with the views attributed at the weekend to the hon. Member for Blackburn (Mr. Straw).

I have no disagreement with the hon. Member for Blackburn about the desirability of having a debate, if he wants to have one, on the future role of the royal family. Indeed, I am sure that all my hon. Friends would welcome such a debate with the hon. Member for Blackburn. I have no doubt that, in the court of public opinion, it is a debate that we shall win hands down.

However, I disagree profoundly with what Labour Members have said in the course of the debate. It is not only the hon. Member for Blackburn. The debate started in the summer with the hon. Member for Redcar (Ms Mowlam), who wanted to move the royal family out of its present palaces and put it in a designer palace designed, as she saw it, to represent her political viewpoint for the next century. At the time, the Labour leadership sought to distance itself from that idea and said that it was merely an aberration --something dreamt up in fevered imagination in the heat of the summer. It was something for which the wider party was not responsible. That defence was blown to smithereens at the weekend.

Mr. Andrew Miller (Ellesmere Port and Neston): Was that in the Budget?

Mr. Dorrell: No, that was not in the Budget and nor was any cash provided in the Budget--nor should there be--to build a new designer palace of the type that the hon. Member for Redcar envisaged. The budgetary implications of putting the royal family in a different sort of palace are not the least of the reasons why the House should reject that idea unanimously. It would seem to be an absurd use of resources. The Opposition Front Bench and the hon. Member for Redcar, however, support the use of resources for taking the royal family out of its traditional palaces and putting it in designer palaces.

Mr. Dennis Skinner (Bolsover): Will the Minister give way?

Mr. Dorrell: Gladly.

Mr. Skinner: Why does not the Minister understand that when hon. Members talk about the royal family and the future of the monarchy, they do so against a background of people talking about that subject outside this place? The truth is that the veneers of mystery that have been stripped away from the royal family were stripped away by its members. They became engaged in their self-destruction course. It is no wonder that people out there want to talk about their future and it is therefore likely that others will want to take part in the argument. People want to discuss the matter and there is probably a majority in favour of this monarch being the last. That is not because of the growth of republicanism per se--I wish


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it was--but because of the shenanigans that have been taking place in Buckingham palace which, incidentally, is a council house.

Mr. Dorrell: I started off by saying that I have no difficulties with having such a debate, and the hon. Gentleman has just illustrated why I am so keen to have one--

Madam Speaker: Order. I have great difficulty in having a debate on the matter as it is not at all relevant to the Budget. I hope that the Minister will now revert to his speech on the Budget.

Mr. Dorrell: As I was seeking to demonstrate, the Labour party argues that we should include in the Budget an expenditure line to provide a new people's palace for the royal family. [Hon. Members:-- "No."] Labour Members say no, but that is what the Opposition Front-Bench spokesman argued for in the summer, and the shadow Home Secretary reinforced that argument over the weekend, so I hope that Opposition Members will not try to distance themselves from their Front Bench.

The hon. Member for Islington, South and Finsbury (Mr. Smith) was in some difficulties with the subject on the radio this morning. He was put up to defend the views of the shadow Home Secretary, but he did not do so. He defended a different view--that the Opposition espouse the abolition of the royal prerogative. It was pretty unclear what he meant by that.

Conservative Members believe that the monarchy works well and that it is a vital part of our constitutional stability. We deplore Opposition attempts to distort economic priorities to change the monarchy in a way that they find politically correct. They are the high priests of political correctness and they want to impose that straitjacket on the royal family.

When I became Secretary of State for National Heritage, I said that I wanted a heritage and respect for our traditions that expressed this country's identity and its commitment to and confidence in its future. That is something to which I attach great importance.

Mr. Toby Jessel (Twickenham): On the budgetary aspects of royal palaces, as my right hon. Friend's Department is responsible for the maintenance of Hampton Court palace in my constituency, will he ensure that it goes from strength to strength? It is being improved, doing extremely well and attracting more visitors, and is a precious national asset. As it is not fully occupied, however, does not it make it all the more absurd for foolish Labour Members to suggest building any new royal palaces?

Mr. Dorrell: I agree with every word and can give my hon. Friend the assurance that he seeks. The Government will continue to provide the resources that are necessary to ensure that our monarchy and the palaces in which they live reflect the confidence that this country and its people have in their future and in their capacity to excel.

Mr. Derek Enright (Hemsworth): Will the Minister give way?

Mr. Dorrell: I shall make a little more progress.

When I became Heritage Secretary, I set out two objectives. The first was a heritage sector that expressed our commitment to excel and confidence in our future.


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The second was to make it clear that the growth of that sector should not, and could not, be solely or primarily a function of growing public expenditure programmes.

Culture, heritage and all the different activities for which my Department is responsible are not things that are done to people, or things from which the nation derives strength if they are the creation of an official committee divorced from its support within the community. Culture and heritage derive their strength and legitimacy from the direct support of individual citizens supporting those activities, and paying when they get there for the cultural excellence that they witness. Culture and heritage also derive strength from the support of the business community and the voluntary sector.

In short, culture and heritage draw support from a wide network of sources throughout the community, and it is right that the resources available to the national heritage in the broadest sense should be linked to the capacity of that sector to generate direct support in the community at large. That is why I unambiguously embrace the principle of plural funding; the principle that the sectors for which I am responsible should secure some revenue from the Exchequer certainly, but should also be encouraged to look for a wide range of cash support from a wide range of different sources throughout the community that they are there to serve.

Mr. Enright: Will the Secretary of State explain therefore why Heritage plc--the company run by his hon. Friend the Member for City of Chester (Mr. Brandreth)--received huge subventions from the Treasury when it went bust at a time when it was showing a royal fashion display?

Mr. Dorrell: That is an example, as my hon. Friend the Member for City of Chester (Mr. Brandreth) would be the first to say, of the dangers that the public sector gets into when it seeks to make judgments better made by the private sector. That is a view that my hon. Friend has himself put on record.

The key to the success of the Department of National Heritage is to recognise that public expenditure has an important role to play in the sectors for which it is responsible, but that the Department is about a lot more than simply disbursing public expenditure. The policy of the Department, and my objective as Secretary of State, is to create a framework that will allow the heritage sector in the broadest sense to grow in the way in which I have described, by drawing support directly from the community in its various forms. The Budget that we announced last week gives several examples of how I intend to carry that process forward. In the first place, my right hon. and learned Friend the Chancellor announced last week the extension of the reduction of pools betting duty, which is a means by which the public sector catalyses private sector support into the sports and arts sectors. Each £1 of tax revenue forgone has generated an extra £2 from the pools companies, so for every £1 of extra PSBR cost, £3 of benefit is going into the sports and arts sectors. The total value of that to those sectors last year was £68 million, but the public finance cost was little more than £20 million. That is one example of using the state as a catalyst to gather more support into the heritage sector.

Another example announced last week was the extra resources that I have provided for the different business sponsorship schemes that operate within the Department.


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I announced last week an increase of £750,000 in public funding to the business sponsorship incentive scheme, which generates support for the arts sector. Experience has shown that £1 of public money used in that way once again will generate £2 of private money from the business community, so £750,000 of public money should catalyse over £2 million into the arts sector.

Exactly the same principle works behind the sportsmatch scheme, which has secured an extra £400,000 of funding. Exactly the same principle will also work in the new business sponsorship incentive scheme that I have announced for the heritage sector. Once again, the public sector--in the form of the Department of National Heritage--is using public money to catalyse private support for a growing heritage sector. All that is in addition to the direct expenditure increases that I announced last week of £5 million for the Arts Council and £1.6 million for English Heritage. Those are all important policy developments. It is important that we are increasing money for the Arts Council and English Heritage and using public money to encourage those sectors to generate a broader base of public support throughout the community.

However, those policy commitments are dwarfed by the two key priorities that the Department of National Heritage has been following up in the past few months. The first is our commitment successfully to bring on stream the national lottery, an imaginative initiative that is the personal responsibility and success of my right hon. Friend the Prime Minister. The national lottery fills gaps in traditional funding arrangements for the heritage sector. It is important because it is a new source of funds for the sector on a scale that could not have been envisaged from any other source under a Government of any other complexion.

Mrs. Jacqui Lait (Hastings and Rye): I share many of my right hon. Friend's thoughts about the success of the national lottery. However, my constituents in Rye and surrounding villages do not have the same feelings about it because they still cannot buy tickets. Will my right hon. Friend put further pressure on the national lottery to cover the whole country as soon as possible?

Mr. Dorrell: I assure my hon. Friend that Camelot is committed to covering the whole country as quickly as possible. It has made a commitment to expand the total number of outlets to 40,000. My hon. Friend will agree that it is a considerable achievement for a business that did not exist more than some six months ago to have opened on the first day of trading with more than 10,000 outlets, and now to be adding outlets to its chain at a rate of 1,000 a month. I shall ensure that my hon. Friend's concern is brought to the attention of Camelot and I hope that the 1,000 outlets to be opened in the near future will include outlets in her constituency. My hon. Friend's concern to ensure that her constituents participate in the lottery serves to underline the lottery's success in generating public support and enthusiasm and in generating a substantial increase in


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funds available for sport, heritage, the arts community and arts buildings, the Millennium Commission and the charity sector.

Mr. Miller: Does the Minister now agree that the prediction made by some hon. Members, particularly those from the north-west, that the introduction of the national lottery could result in a loss of pools jobs, has proven to be the case? What is the estimated cost of the loss of those jobs as a result of the added burden on social security payments?

Mr. Dorrell: I do not accept the direct cause and effect described by the hon. Gentleman. A product that is typically sold in a supermarket or newsagent is more likely to be in direct competition with the purchase of cigarettes or confectionary than with money spent on football pools or charities, which is the other sector that has alleged a direct competitive effect.

Dame Elaine Kellett-Bowman (Lancaster): Does my right hon. Friend accept that many shopkeepers and post offices in the north-west are delighted at the increase in revenue, which has enabled them either to maintain their staff or to increase it?

Mr. Dorrell: My hon. Friend makes an important point in her own way. [Interruption.] I entirely agree with it. I simply did not want to bore the House by repeating less well the important point that my hon. Friend made.

I said that there were two key priorities. The national lottery is one; the other, as the House may be aware, is the responsibility that lies at the heart of the DNH to develop the tourism sector. I make no apology for stressing the importance of tourism in the discharge of DNH responsibilities. The reason why I place so much stress on it is twofold. First, it is an important economic sector in its own right, which has been growing fast and has, in the process, created more than 30 per cent. more jobs than existed in the sector 10 years ago. It now accounts for 5 per cent. of gross domestic product and employs 1.5 million of our fellow countrymen. It is, by any definition, a key British industry. That is the first reason why I attach so much importance to it. The second reason is that it is a growing sector, which attracts support specifically into the national heritage sector.

Why do tourists come to this country? What do tourists do when they stay in this country? Overwhelmingly, when one asks them, the answer is given that they come and stay here in large part because they want to participate in, and derive benefit from, our heritage sector. Therefore, growing tourism not only creates jobs in the economy at large, but creates the opportunity for expansion, specifically in the heritage sector. It is, in a direct sense, an investment in the audience for our national heritage.

Mr. Jacques Arnold (Gravesham): Does my right hon. Friend agree that one of the reasons why tourists come to the United Kingdom from overseas is to see our royal family, its palaces and all the pageantry for which it is well known? Would not the Labour party policy on the royal family, if carried through, damage that tourist trade? [Interruption.]

Mr. Dorrell: My hon. Friend has hit the nail on the head, and he is absolutely right. If I may pick up the point that predictably came from the Labour Benches, that is not to present the royal family as a tourist attraction. The


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royal family has an importance in our national life that goes far beyond that, but my hon. Friend is right to say that, if the pageantry were scaled down, as the hon. Member for Blackburn argues that it should be, among the first things to be hit would be our tourist earnings--never mind our self-respect and our respect for our past.

Therefore, the Budget is important because it advances the interests of the tourist industry alongside the rest of the economy. It advances them specifically and it advances them because tourism is a key part of our wider economy.

Let me discuss the specific aspect first. Last week, I was able to announce a new initiative to promote tourism in London. We shall provide £4 million of public money during the next two years, to be matched, once again, by £4 million originating from the private sector. That money will be used to develop a tourist promotion initiative centred around London as a key destination, to compete with cities elsewhere in Europe and the world.

It is one of the facts of our national tourist life at the moment that London's share of the big city tourist market is declining. I want that decline to be reversed, partly because that is important to London, where it will create jobs, and partly because extra visitors to London will create an audience from which, in turn, the rest of the country can recruit tourists. London will benefit, and the rest of the country will benefit as London is turned into a gateway through which more tourism enters the rest of the United Kingdom. Tourism is best promoted by regarding it in the context of the wider economy. The Budget should be welcomed as the right way forward for the whole economy for three key reasons. The first is the continued drive, which the Budget represents, in the direction of more flexible markets, and of ensuring that the responsibility for creating growth, for creating jobs and for improving living standards in the British economy rests firmly with the people best able to discharge that responsibility--the managers of British business. There is no better illustration of that principle in practice than the package that my right hon. and learned Friend the Chancellor announced on work incentives. That was an imaginative package, which will create jobs throughout the economy, improve living standards and demonstrate in practice the capacity and the commitment of the Government to continue the decline in unemployment which our policies have put in train, and which is jeopardised by the stance of the Labour party.

Let us look at the elements of that package. We are committed to reducing the cost of recruiting unskilled workers. That comes next April when, as my right hon. and learned Friend the Chancellor announced, there will be a reduction in employers' national insurance contributions--substantial assistance targeted at that part of the labour market where recruitment prospects are most difficult. That is the first element.

The second element is an incentive that my right hon. and learned Friend the Chancellor plans for employers to take on people who have been unemployed for a long period. I believe that the holiday on national insurance contributions for people who have been unemployed for more than two years is an imaginative step forward in generating movement in the part of the labour market that we all know is the most difficult to target, and for which it is most difficult to create jobs.


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Thirdly, my right hon. and learned Friend rightly emphasised the need to ease the transfer from benefit to work, announcing important steps to speed payment and ease the move from family credit, housing benefit and council tax benefit. That is not the kind of headline-grabbing, multi-billion-pound scheme that commends itself to the Labour party, but it is a practical scheme that will address the real concerns of people who are considering moving from benefit into work: it deals with their practical problems in a practical way, and is therefore very welcome.

The new scheme announced by my right hon. Friend the Secretary of State for Social Security, allowing people to build up credits to create bonuses for themselves when they move from part-time to full-time work, is another example of an accurately targeted measure that will have a practical effect, encouraging people off benefit and into full-time work. It is a real measure targeted on a real problem, rather than a headline measure that looks good in the shop window and uses a lot of taxpayers' money, but delivers no serious policy gain. The purpose of the package announced by my right hon. Friend last week is to reduce the costs of unemployment and to ease the path of the unemployed back into work. It contrasts starkly with the stance of the Labour party, which is committed to a minimum wage-- committed to not reducing but increasing the cost of employment. How can Labour Members believe that we can increase the prospect of employment and the number of jobs in the economy by raising the cost of employing people? That is a "cause and effect" that defies every law of economics that I have ever read.

The minimum wage, however, is not the only job-destroying policy to which Labour Members are committed. They are also committed, through the social chapter, to the labour market practices that have been so successful elsewhere in Europe--in France, which has an unemployment rate of 12.7 per cent.; in Italy, which has an unemployment rate of more than 10 per cent.; and in Spain, whose unemployment rate is over 24 per cent. Our unemployment rate is less than 9 per cent., and falling.

My right hon. and learned Friend's Budget demonstrates that the Conservative Government will return people to work, because they pursue accurately targeted policies that will deliver such a result rather than slogans that impede it--which is the commitment of the Labour party.

Mr. David Shaw (Dover): Will my right hon. Friend confirm that the Budget allows his Department enough money to provide a plaque for the London Oratory school in west London, featuring the names of sons of famous parents? Will the plaque also have enough room to include the statements that those parents made about education policy?

Mr. Dorrell: That is an interesting idea, but I think that the school's capacity to recruit pupils from wherever it pleases is more important than my hon. Friend implies. I do not want that aspect to be confined to a plaque; let me encourage my hon. Friend to draw the attention of a wider national audience to the school, its success in recruiting pupils and the arguments advanced to explain that success. We shall then be able to ask the Leader of the Opposition why his party wants to deny other parents the right to choose that he has exercised.


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I said that there were three key reasons for my view that the Budget is a success. I have mentioned one--

Mr. Graham Allen (Nottingham, North): Why does not the Minister defend his Department's record?

Mr. Dorrell: I am not ashamed of my Department; I am demonstrating how it takes its place in the national economy. I have shown how it will generate extra support for a growing national heritage sector in the context of a growing economy. I shall now deal with the other two reasons why the Budget will deliver a growing economy.

The second reason is that the Budget maintains an uncompromising commitment to the three key principles of public finance to which the Government are committed. The first is that today's public services must be paid for by today's taxpayers.

We all know that borrowing fluctuates according to the economic cycle and that it rose during the recession. The Government absolutely accept the priority that stares us in the face, which is to ensure that the borrowing total is reduced as the economy pulls out of recession. The Red Book shows how that borrowing is being reduced, and shows the stark contrast between our record in office and that of Labour. During five years of Labour in office, the PSBR as a percentage of gross domestic product was 7 per cent. Under this Government, it is 2 per cent. and the Red Book shows how it is to be eliminated before the end of the decade.

A Conservative Government will not mortgage future tax revenues to pay for an unrealistically large public expenditure programme today. That is the first principle of public finance.

Mr. Peter L. Pike (Burnley): Is not it true that the public sector borrowing requirement has been reduced every year since 1979 by means of the sale of nationalised industries, and that that is shown in the accounts? What will the Government do when there are no more public assets to sell?

Mr. Dorrell: Public spending plans and PSBR plans are set out in the Red Book. Privatisation proceeds are a small element of that in the later years. The Government are committed to reducing public borrowing, because to fail to do that would be to mortgage the nation's future to try to sustain insupportable public expenditure today.

Mr. Chris Smith (Islington, South and Finsbury): Why are the Government the first in history who have borrowed to fund revenue expenditure?

Mr. Dorrell: I will not accept any lectures on borrowing from a party which, during five years in office, delivered an average PSBR of 7 per cent. of national income. That was the rate at the bottom of the recession under this Government, and we accepted that it was too high. Presumably the Labour Government did not because they did not reduce it. We plan to eliminate it over the rest of this decade. Our second principle on public finances is that not only are we determined that today's public services should be paid for by today's taxpayers, but that we should return to our tax-cutting agenda. In one of the interesting debates this year, it emerged that there are apparently some


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latter-day Opposition converts on that subject. The House would do well to remember where we have come from in terms of cutting taxes. In 1979 when the Government took office, the top rate of income tax on savings was 98 per cent., and on earnings the top rate was 83 per cent. We have more than halved both those figures to 40 per cent. The Opposition say that they are interested in investment, but there was scant evidence of that during their period in office. In 1979, corporation tax was 52 per cent. We have cut it to 33 per cent. Our record speaks for itself. We are committed to delivering reduced tax rates. Needless to say, we gladly accept Opposition pressure to improve even more on our record as a tax-cutting party. That brings me neatly to the third element of public finance policy. The Opposition like to push us towards being even more ambitious in reducing tax. A commitment to reducing tax and to responsible borrowing policies requires discipline on public expenditure. It requires Ministers to face up to choices about which public expenditure programmes are important and which can be afforded. That is why in the previous Budget the Chancellor announced total public expenditure reductions over the plan then in prospect of £15 billion, and why my right hon. Friend the Chief Secretary is to be applauded for securing a further reduction on top of that £15 billion of £28 billion. That public expenditure has been avoided because he encouraged the Government to make the choices that were necessary to avoid it. That is set out in the document.

The contrast between this Government's record and that of the Labour party when it was in office could not be more stark. Public expenditure, as a share of national income, averaged 46.5 per cent. during Labour's years in office. Under this Government, even in the depths of recession, it peaked at 44.5 per cent. The Labour party dresses itself in the clothes of a tax- cutting or tax-limiting party, but it has a huge burden of history and a huge credibility gap to overcome. Until the Opposition can demonstrate that they will deliver disciplined public expenditure, choices between priorities and a limit on the total, nobody will believe that they can succeed in limiting the tax burden.

That brings me to the most important reason why the Budget is good for Britain and therefore for the national heritage as part of Britain. It reaffirms this Government's commitment to sound money. That is good news for households, for savers, for wage earners, for businesses and for all of us. The fact that inflation is now under better control than it has been for 30 years is not an arcane statistic of interest to some economics professor and calculated on some abstruse formula; it goes to the heart of why the economic outlook for Britain is better than it has been since the 1960s. In Britain today, shoppers know that they do not have to accept price rises. They have not been educated to accept price rises week by week, month by month. They know that they can choose. That is why we hear a great deal about retail competition--stories that I warmly welcome. Secondly, and perhaps even more important, savers know that their capital will retain its value in Tory Britain. Inflation under the Labour party was a pernicious tax on the unsophisticated for the benefit of the sophisticated. The fixed-interest saver lost out while the wide boys gained. It was Robin Hood in reverse. This


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Government have re-established a commitment to sound money--no more back-door taxes on the unsophisticated, organised by the wide boys on the Labour Benches.

Thirdly, wage earners know that in Tory Britain pay increases must be earned; they must be paid for by productivity. I remember putting that proposition on a radio programme about 12 months ago. I had considerable correspondence asking when it would end. It is not going to end because the proposition that pay increases must be paid for by productivity is no more than the truth. It is fair and right. Fourthly, businesses know that they now have a stable background against which to plan their affairs. [Interruption.] We hear a great deal about short-termism--the tendency of British business to plan for short-term horizons. A major cause of that over the past 30 years has been the exaggerated boom-bust cycle, which resulted from our incapacity to deliver proper, sound money and proper inflation control. Businesses need stability so that they can plan their affairs for proper long-term horizons. The Government and the Budget give that commitment.

The message of the Budget is that the outlook for Britain is better than it has been for 30 years-- [Interruption.]

Madam Speaker: Order. I am becoming exasperated by the comments from sedentary positions. Such constant barracking does not improve the quality of debate in the Chamber.

Mr. Dorrell: At last, Britain has a Government who have secured honest money. It has a Government who have put their own finances in order. The public have the assurance that public expenditure will be restrained in order to allow the tax burden to fall. Britain has a Government who have committed themselves to ensuring that business will be allowed to deliver growth and improving living standards. The results are there for all to see. Manufacturing output has risen by 5 per cent. a year; and growth by 4 per cent. a year; and unemployment has fallen by 350,000 in the past 12 months. Living standards have improved also for the family on average earnings--£80 a week higher in today's money than in 1979.

That is the shape of Tory Britain, and this Government and this Budget will safeguard that shape for the future.

4.14 pm


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