House of Commons Hansard Debates for 27 Nov 1996 (pt 37)

Mr. MacShane: That was last week's pledge.

Mr. Waldegrave: That may well be so, but I just want to find out whether it is still this week's pledge. It is only £750 million--very little between friends. I presume that the right hon. Gentleman would put up taxes to pay for it, but he has not yet had the courage to tell us whether that is so. Is it an aspiration or a pledge? Perhaps he would like to intervene. It was very nice to cheer up the audience of the CBI, but is it a pledge? Is it an aspiration? Will it be paid for out of growth? Will it be paid for out of savings, or what?

Mr. Gordon Brown: As the right hon. Gentleman is quoting from my speech, will he just read the section to the House?

Mr. Waldegrave: I have the whole speech here, but I know exactly what the next sub-paragraph says. It says that the right hon. Gentleman will come along and say whether all this can be afforded in due course. That is the skill of the operation. He goes to a great audience, makes the centrepiece of his speech that he thinks that capital allowance should be cut, which, of course, is what they have all been lobbying for, so they all go away saying, "He's a very fine fellow, he's going to cut capital

27 Nov 1996 : Column 387

allowances." There is a bit that he goes rather swiftly over, like the hon. Member for Cunninghame, North, which says, "We'll look into it later and see whether we can afford it." All around the country, the special interest lobbies are dealt with in that way. I do not believe that that is a sensible way to proceed.

Mr. Brown: Will the right hon. Gentleman read what I said to the CBI? He has made a strong allegation. Will he read what I said? Then having done so, will he explain the status of the Prime Minister's proposal to abolish inheritance tax and capital gains tax? Is that an aspiration?

Mr. Waldegrave: It seems to have about the same status as the right hon. Gentleman's aspiration--it happens to be half as expensive--to have a 10p tax band. That is not a competition in which he would involve himself. I suspect, however, that after looking at a Conservative party that cuts taxes and delivers over time a lower share of GDP, as taken by the Government, people will believe us about aspirations on tax cutting more than they will the Labour party, because the right hon. Gentleman's party has aspirations that start with about £30 billion on spending before it talks about taxes at all. I have read the speech with attention.

Let me say why it is right to press Labour on this point, and I cannot use better words than the leader writer in today's Evening Standard:

"Today, we see a Tory government struggling with immense difficulty to contain public spending without increasing taxation, while giving extra funds to the public services the public cares passionately about--health and education. How on earth is Labour, with its far more ambitious ideas about spending our money, going to do any better? It is simply not good enough, to suggest that it can all be financed by soaking the privatised utilities in a windfall tax. Not only is such a measure dubious in principle, it will hardly suffice to fund the petty cash, once the bills start to come in for devolution, ambitious new health and education plans, and all the many and various forms of political correctness that will sweep the land under a Labour government. Mr. Clarke may have provided little new cheer to voters in his Budget yesterday, but he deserves full credit for refusing to give false comfort. The onus now lies upon Labour and Mr. Gordon Brown, to confront our grave fears that under Labour, those in work will not only get precious little comfort, but a wagonload of new financial burdens as well."

I cannot say that any comfort was offered today. We heard nothing from the right hon. Gentleman to answer these fundamental points. We heard nothing about his view on the Budget judgment. We heard nothing except hints that Labour would abstain on all the crucial issues. We heard no vision of an alternative economy. In that same CBI speech, there was a very telling paragraph in which he said:

"We should not be taken in by deregulation dogma."

That is the division between us. There we have it. My right hon. and learned Friend the Chancellor believes in a free market liberal approach to the economy. To the right hon. Member for Dunfermline, East, that is deregulation dogma.

Although they are sometimes compared, the fact is that there is a fundamental difference between my right hon. and learned Friend and the right hon. Gentleman. My right hon. and learned Friend is jovial on the surface, but his record shows him to be seriously committed to the long-term future of the economy of this country. The right

27 Nov 1996 : Column 388

hon. Gentleman is gloomy and responsible on the surface, but underneath he is consistently frivolous, as he was again today when asked the big questions about the management of the economy, his spending plans and his tax plans. That is why the House should back my right hon. and learned Friend's Budget and dismiss Labour's carping. That is why the British people should thank my right hon. and learned Friend for a Budget that builds a secure and stable future for our country.

6.26 pm

Mr. Jim Cunningham (Coventry, South-East): The Chief Secretary to the Treasury has confirmed that this is a Budget of myths and illusions, which he and the Chancellor are trying to peddle and con the British people into believing. We heard the Government's myths surrounding the latest electioneering gimmick--the myth that our economic problems cannot be blamed on the Government's so-called policies and, once again, the myth that they are a Government of low taxation.

What we hear less often are the hard facts about this year's Budget. This is just another example of the problems that our economy faces. The Budget does nothing to help people caught in the benefit trap. It does nothing to help our pensioners. The people of Coventry, like many others in Britain, have seen at first hand the effects of previous Budgets.

Having listened to the debate that has taken place not only in the House but throughout Britain, I believe that the Budget offers no solutions to tackle the old problems of this old Government. Britain is ninth out of 15 in the European prosperity league. We have fallen from 13th to 18th in the world prosperity league. Our share of world trade is less than that of France, Germany, Italy, Japan and the United States. We are now near the bottom of the European inflation league, in ninth place. In the world education league, Britain has slid to 42nd, just six places off the bottom.

The people of Coventry have suffered much at the hands of the Government, whose record in Europe is second only to the rest of Europe. In the past four years, the number of hospitals in Coventry has been halved, from four to two. Indeed, the long-term future of one of the remaining hospitals, the Coventry and Warwickshire, remains in doubt, because the Secretary of State for Health refuses to tell the House whether the additional money that he secured from his Cabinet colleagues will be spent on patient care or, as is customary with this Government, on red tape and administration.

The Government's flagship policy, the jobseeker's allowance, has gone the way of every other flagship policy that they have produced, such as the exchange rate mechanism and VAT on domestic fuel; it has run aground on misadministration and poor planning. Indeed, the parallels between the jobseeker's allowance and the Department of Social Security's other recent economy drive in the form of the Child Support Agency are becoming apparent.

Both the allowance and the agency were introduced in an effort to convince the electorate that the Secretary of State had some idea of how to reduce his Department's budget. Both policies have failed to deal with the underlying problem in the system, which is that people are being caught in the benefit trap. Both policies have become a shambles, leading to more bureaucracy, not less as had been promised.

27 Nov 1996 : Column 389

Only last week, the Department of Social Security was forced to apologise to one of my constituents. My constituent, who has had three heart attacks and is a chronic asthmatic, was told by the Department that he was fit for work. Since then, however, following pressure from people in Coventry, including me, the Department has had a rethink or, in the Government's language, it has done a U-turn.

As a result of their economic follies following the 1992 general election, the Government have been forced to break their election promises to those who have given the most to our country--pensioners. The Government's desperation to save money to enable them to finance tax cuts has resulted in hardship for millions of pensioners. Among those who have been singled out are war widows, who have given so much to our country during a century of strife so that we may enjoy the life that we have today. They have been singled out by a heartless Government because they are now vulnerable.

Labour is determined to help all pensioners who have suffered. My party has already proposed a far-reaching package of measures that is designed to give them back a decent standard of living. We will cut VAT on fuel. We will ensure that the universal state pension--which the Tories want to means-test--is secure. The pension will remain the foundation of security for retirement. We will end the scandal of long-term care for the elderly, which leads to 40,000 pensioners having to sell their homes each year.

In contrast to the Budget that we heard yesterday, the Labour party has offered a comprehensive and practical set of measures to help the people of Coventry and the nation as a whole. Under the Tories, we have suffered the two worst recessions since the war. Stability is essential to sustain economic growth. Our priority is a stable, low-inflation economy and an end to the boom-bust policies that have so damaged it.

Since the Government were elected, Britain has had the lowest level of investment of any of the 24 OECD countries. We need to invest in our future, but the Government have failed to encourage or support investment. The Labour party's proposals to bring together public and private finance to invest in major infrastructure projects has been greeted with widespread support from the business community.

Government policies have led to one in six people being dependent on benefits. Youth unemployment now costs my constituency over £7 million every year. We must break the cycle of economic inactivity by providing education and training opportunities for all, not only the lucky few. Labour's proposals offer these opportunities. Yesterday's Budget only confirmed the fear of many of my constituents that the Government are complacent about education, about the drop in spending of over £70 million and about the drop-out rates among students. Most damning of all, they are complacent about the fact that more than 30 per cent. of primary school pupils are in classes of over 30 children.