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9.17 pm
Mr. Alistair Darling (Edinburgh, Central): I shall not follow the hon. Member for Colchester, North (Mr. Jenkin) too far. Although he missed the debate, he said how terrible it was. He did an injustice to hon. Members on both sides of the House. Relatively few spoke, but their speeches were quite interesting. This has been the most interesting economic debate we have had for some time, perhaps because hon. Members have had to talk about wider matters than the Finance Bill, which can be dry stuff.
At least the hon. Member for Colchester, North was better than the nationalists, of whom there was neither sight nor sound during the entire debate. That is surprising, because it might have been thought that the conduct of economic policy would be of interest to them.
The Chief Secretary has made something of a tradition of opening all economic debates with some knockabout stuff. He now seems to be introducing a tradition of making unfounded allegations against my hon. Friend the Member for Bristol, South (Ms Primarolo), from which he then departs under cross-examination.
Not surprisingly, the Chief Secretary attacked high taxation, high borrowing and high spending, as well he might. The Government have imposed high taxation because of economic failure. They have imposed 21 tax increases--the equivalent of 7p in the pound in income tax--and record levels of borrowing because of economic failure. The Treasury Committee report, published today, drew attention to the fact that the Government's targets for the public sector borrowing requirement are slipping yet again.
The Government are also a Government of high spending. The hon. Member for Colchester, North was critical of that. The share of spending has not changed very much in the past 16 years. When Conservative Members ask us what is the right spending figure, they might reflect on that fact.
Of course the amount of money that a Government spend is important, and public spending must be kept under tight control, but equally important is what the money is spent on. As many hon. Members have said, Singapore and the far east appear to be the places to be for hon. Members on both sides of the House. What is interesting about the Asian economies is their high level of intensive investment and specific investment in education as opposed to high levels of spending caused by the dead weight of unemployment, which is so damaging socially and economically.
The Chief Secretary lauded the Government's success, but he might have referred more to the Treasury Committee's report. I have already mentioned that that Select Committee, which is Tory controlled after all, was critical about the fact that the Government's target on PSBR appears to slip each and every year. We are now told that the PSBR is not forecast to go into surplus until 2000. I suspect that, next year, the figure will be revised again.
Many of us remember Lord Lawson's speech when he was Chancellor of the Exchequer in 1988. He told us that the economy was in excellent shape and that we were on the verge of going into a new economic era, in which the country would enjoy unparalleled success. Today, all those years later, after the deepest recession since the second world war, we are still being told that the Government's conduct of economic policy is such that we are on the verge of the breakthrough that has eluded the country for many, many years.
As my hon. Friend the Member for Edinburgh, Leith (Mr. Chisholm) said, doubts have been expressed about the growth rate that the Chancellor has claimed; he has set an ambitious growth rate that many commentators do not agree with him about.
No doubt the Chief Secretary had a hand in drafting the advertisement which appeared in The Mail on Sunday and, perhaps, other newspapers on the last day of last year which was signed by the Prime Minister himself. It asked:
The right hon. Gentleman might have added which country has had some of the highest mortgage rates for many of the 16 years in which the Conservatives have held office. The hon. Member for Newark (Mr. Alexander) asked what our constituents would have thought if we had told them that they would be paying low mortgage rates just now, but he might also ask himself what his constituents would have said had he told them in 1992 that, rather than tax cuts year on year, tax rises would be imposed the like of which have never been seen in peacetime Britain.
The advertisement also posed the question:
That ignores the fact that one in five non-pensioner households now has someone who is not working. That is something that we should all reflect on, given the damage it is doing to our country's fabric economically and socially.
The advertisement also boasted about the country having the longest period of low inflation, but we have also had high inflation at times during the past 16 years. It said that the Government had invested more in pensions. It is funny that it did not mention the mis-selling of pensions that was exposed two years ago. Many people were led to believe that the very act of going private and opting out would be enriching. We know that many people lost money as a result. The Government must bear some responsibility for that because they created the climate in which that mis-selling was made possible.
The Chief Secretary attacked us, as he is quite entitled to do, and I am happy to deal with those attacks. He might like to reflect on the fact that, in the late 1970s, Lord Howe, who was then shadow Chancellor of the Exchequer, said only two things: that the then Government taxed too much and borrowed too much. The Chief Secretary might like reflect on the fact that, a generation later, the present Conservative Government are taxing too much and borrowing too much, because, after 16 years of economic failure, we are in the same position as we were in the late 1970s. The country is subject to high levels of taxation, and the Government have piled on taxes year on year since the election in 1992. They are spending broadly the same amount as was spent in 1979. When Conservative Members ask us for the right spending figures, they should look at their own record because that is what the voters will do at the next election.
Mr. Forman:
The hon. Gentleman seeks to direct some ridicule at my noble Friend Lord Howe for the brevity of his comment about the then Labour Government, but does the hon. Gentleman realise that that statement had a clarity and a lack of ambiguity that are worlds away from the Opposition Front-Bench team, which cannot and will not say anything?
Mr. Darling:
I am bound to admit that the themes are short. What I am saying is that, after 16 years, if Lord Howe were sitting on this side of the Chamber, he might just as well be saying the same things. People will judge the Government on their record and not on what they said then or what they are saying now.
There have been a number of common themes. One was on the need to simplify tax legislation. Again, I think that that will be an annual event. My right hon. Friend the Member for Llanelli (Mr. Davies) made that point. This,
I suppose, is the first Finance Bill that is part of the private finance initiative. There are some privatised clauses in it, although I have not been able to spot all of them yet. I look forward to the annual report that we shall receive on how to simplify the tax system, which is the result of the amendment moved by the hon. Member for Beaconsfield (Mr. Smith) last year.
The second common theme, which arose time and again and struck Labour Members, was the Conservative party's internal divisions, which are now spilling out on to the Floor of the House. The Chief Secretary to the Treasury said that there were no internal divisions and that the Tory party was united, but, in the first speech from the Back Benches, his former Cabinet colleague, the right hon. Member for Wirral, West (M. Hunt), said unashamedly that he was a one-nation Conservative. He nailed his colours to the mast, as did the right hon. Member for Worthing (Sir T. Higgins) and the hon. Member for Stamford and Spalding (Mr. Davies).
The news clearly got out because, by the end of the debate, the right-wing had fought back, as we heard from the hon. Member for Colchester, North. The internal divisions were there for all to see.
Mr. Jenkin:
Will the hon. Gentleman give way?
The right hon. Member for Wirral, West has a difficulty. He quoted Disraeli's "Sybil" and believes that he is a one-nation Conservative--and I think that we are all aware of his record--but he has now left Government. The hon. Member for Stamford and Spalding--and I hope that I do not offend him--will probably not be included in the Government, at least in this generation, and the right hon. Member for Worthing is, I think, leaving the House. The new, dominant generation of the Conservative party is unashamedly Thatcherite. It is not a one-nation party.
Conservative Members must square what they say about one-nation Conservatism with the fact nearly every one of them voted for the poll tax, for example. If ever there was an example of a divisive policy that was at odds with the tradition of one-nation policy, that is it.
My right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), who made, as ever, a thoughtful speech said that one-nation politics should be the politics of all parties that have an interest in governing this country because it is obvious to anyone who cares to see that one cannot win an election or govern the country without occupying the centre ground. That is one of the Conservative party's problems because it knows that it has moved to the right. It has had defections and it has difficulties and divisions that we all saw tonight. Nothing that Conservative Members say will get away from that. As I said, within even an hour or two, the right-wing were fighting back. Clearly, news travels fast in this place.
The third strand to this debate is the attack on our policy and, in particular, on the concept of stakeholding. Again, there were divisions in the Conservative party. Some Conservative Members said that they did not know what stakeholding was, but, just in case there was any doubt about it, they attacked it. Following the tendency and the example set by the Deputy Prime Minister in his almost daily broadcast to the nation and the Conservative party chairman in his ever more ridiculous claims about our party, others say that they do not know what the policy is, so they fantasise about what it might be and try to reinvent
all the straw men that they have enjoyed shooting down for all these years. The hon. Member for Carshalton and Wallington (Mr. Forman) followed that line, I think inadvertently, because normally his speeches are intelligent and have some basis in fact--but not tonight.
Stakeholding--the concept of individuals having a stake in their country--is surely a matter of common sense. The object is to establish a Government who will enable every individual to have a stake in their country, to succeed and to better themselves and their families. It is no wonder that Conservative Members do not understand what stakeholding is all about: over the past 16 years, their policies have been based on division, prejudice and scapegoating. The whole concept of people having a stake in their country so that they feel motivated and have an incentive to work together for a common purpose is something with which Conservative Members cannot come to terms.
We make it clear in our amendment that investment is the key to this country's future. We shall not get the investment that we need unless we can promote quality and unless we can compete on excellence. We are already doing that in many places, but we need to do it far more. Conservative and Opposition Members have made the point that this country has to deal with a damaging legacy--the damage done to our economic capacity, especially in the 1980s. Unless we expand and enhance the quality of our economic capacity, we shall not be able to compete in the global economy.
"Which country . . . has the lowest mortgage rate for 30 years"?
"Which country . . . has the lowest unemployment of any major European country"?
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