Previous SectionIndexHome Page

Maria Eagle (Liverpool, Garston) rose--

Mr. Maude: I have already given way several times, so I shall continue for a while. Day after day, jobs are lost, investments are cancelled and businesses are going bust.

Several hon. Members rose--

Mr. Maude: So many hon. Members are cheerfully trying to take part that it is hard to choose among them. Today, the CBI survey shows that business failures are up nearly 10 per cent.

Mr. Gordon Prentice (Pendle) rose--

Mr. Maude: The hon. Gentleman should listen to these figures, as he might want to talk about the effect on his constituency. I am talking about business failures the length and breadth of the country. Small business failures are up nearly 25 per cent., and that is from new Labour, which claims to be the party of new business. However, for those small businesses, which have failed because of the Government's policies, the party is over now.

Will the Chief Secretary tell us today whether he still stands by the growth forecast set out in the Red Book? Does he still believe the figures that he and the Chancellor put in it? Will he guarantee that Britain will not go into recession during this Parliament? More and more commentators are asking not whether we shall have a hard landing but when. Let us hear now what the Chief Secretary has to say about that.

What did the Government say about savings? Oh yes, they said that one of their tax principles would be to promote savings and investment. They have made a difference, and for the many, not the few, they have made the situation much worse. In the Red Book, the Chancellor predicted that the savings ratio would fall to 9 per cent. during this Parliament. He must be feeling pleased with

29 Jun 1998 : Column 25

himself as he has nearly got there already. The figures show that the ratio was already down from 10.1 to 9.1 per cent., just in the first quarter of this year. Is that what the right hon. Gentleman meant by an early pledge? To cut savings by 10 per cent. at the point in the cycle when the Chancellor should be encouraging saving took some doing. In case the Government have forgotten, yes, we told the right hon. Gentleman so.

Surely the Chancellor should have been able to work out that, if one raises a £5 billion-a-year tax on pensions and follows it with an attack on tax-exempt special savings accounts and personal equity plans, it will tend to discourage people from saving.

In case the Chief Secretary still clings to the old Labour belief that it is greedy and selfish to save for one's own and one's family's future, does not he understand the relationship between saving and investment? Even the current Treasury Ministers could not exclude entirely from the Red Book--it was tucked away in an appendix on page 94--the tell-tale number that shows growth of private investment falling in each of the years ahead.

Before the general election, investment-led growth was one of Labour's mantras, but investment and growth are both slowing down; it is all coming apart. That is not surprising, when one remembers what the Government have done to taxes. They said that they would not put them up at all--no ifs, buts or caveats--but they forgot to add--[Interruption.] Labour Members might want to listen to this, because their constituents will hold them to account. The Government forgot to add to their pledge, "unless you have a pension, a car or savings; and unless you are married, have a house or own your own business". It is not surprising that the average family is £1,000 a year worse off since May last year.

Not everyone, however, is average. We all remember the Chancellor's famous photo-opportunity at the children's party on the eve of the Budget. He may not realise it, but at children's parties these days everyone has to have something to take away: it is the party-bag culture.

Mr. Gardiner: On a point of order, Madam Speaker. Is it in order for the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) to wake up the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg)?

Madam Speaker: I did not hear anyone snoring.

Mr. Maude: That famous party was held at the house of Mr. Gavyn Davies, one of the partners at Goldman Sachs. He is a lucky chap and did very well in the party-bag handout: a change in capital gains tax will leave him £16 million better off. What about the small business man and the farmer? There was no special treatment for them. They were clobbered by the Finance Bill. What was that phrase about help for the many, not the few?

Mr. Ivor Caplin (Hove): Will the right hon. Gentleman outline why members of his party appear to have voted in Committee on the Finance Bill for about £6 billion in tax increases, which would be about 3p on income tax?

Mr. Maude: I make no apology for the Conservative party voting against tax increases, and I am grateful to

29 Jun 1998 : Column 26

the hon. Gentleman for pointing out the central difference between the Labour and Conservative parties: we believe in low taxes, Labour in high.

Mr. Caplin: Will the right hon. Gentleman give way?

Mr. Maude: If the hon. Gentleman wants to point out something else to his disadvantage, I am glad to hear from him.

Mr. Caplin: I am not surprised that the right hon. Gentleman tried to misinterpret what I said; he has done it before and no doubt he will try to do it again. I said that his party had voted for tax increases amounting to 3p in the pound--and he knows it.

Mr. Maude: The hon. Gentleman is totally wrong. The fact is that the Government have repeatedly increased taxes since the general election, in complete breach of their clear pledge not to do so.

We heard all the tough talk about spending, but that is all that it is: talk. We now know from the summer spending statement that the Chancellor never meant it. One does not need to rely on a hostile commentator to make the point. On the Chancellor's own figures, spending is due to increase by 2.75 per cent. a year for the rest of this Parliament, and by more than 3 per cent. if we count back in the numbers that the Government have fiddled out.

Last week, Mr. Irwin Stelzer, Mr. Murdoch's economic guru, wrote:

No doubt that is why the Chancellor has been summoned halfway across the globe next week to account for himself--another unbreakable appointment--when he addresses the Murdoch empire in, appropriately enough, Sun valley.

For all the brave talk of reducing debt, what do we find? Even on the Chancellor's own most lavish spending option, the Red Book in March showed a debt repayment. In his Budget statement, the Chancellor was at his most thunderous on the subject:

He added:

    "By 2000, the Budget is forecast to be in balance."

He also said:

    "To balance the Budget for one or two years and then let it run out of control in the years that follow is simply to fail those who depend on public services . . . So this, more than ever, is the wrong time to . . . compromise our commitment to long-term fiscal stability."--[Official Report, 17 March 1998; Vol. 308, c. 1009.]

Mr. Malcolm Bruce (Gordon): Will the right hon. Gentleman give way?

Mr. Maude: In a moment.

That was March; this is now. The Government now plan, even on their hugely optimistic growth projection, to repay not a single penny of debt. They are committed to a permanent Budget deficit. For all their talk of a balanced

29 Jun 1998 : Column 27

Budget, the Chancellor will not reach balance even in a single year. In every year at the peak of the cycle, the Government will add relentlessly to Britain's national debt. Compare that with the same point in the cycle 10 years ago.

The Chief Secretary to the Treasury (Mr. Alistair Darling): Does the right hon. Gentleman recall that in the six years from 1990--during two of which he was Financial Secretary to the Treasury--the Tory Government doubled the national debt, with the result that we are paying £25 billion a year just to service that debt?

Mr. Maude: That is all looking into history. If the right hon. Gentleman wants to examine history, the right time to consider is the same point in the cycle 10 years ago.

Fiona Mactaggart (Slough): Will the right hon. Gentleman give way?

Mr. Maude: I should like to finish my point because of what the Chief Secretary said.

At the same point in the cycle 10 years ago, the then Government were repaying debt at the rate of £40 billion in today's terms. They were also increasing spending in real terms on priority services, and cutting taxes. Today, it is tax, tax, tax, and spend, spend, spend. Labour cannot be trusted with the public finances, and admits it.

Next Section

IndexHome Page