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Mr. Bruce: It is fine for the hon. Gentleman to say that, but I can reverse the challenge. We were committed to putting money into education and putting 1p on income tax, which his party opposed. As a consequence, education has been chronically underfunded. There is a legitimate debate between parties about priorities. We have made ours clear and the Government have made theirs clear. Some of the new deal spending from the windfall tax is not delivering all the results that were promised, not least because the situation is changing under the Government's feet.

I am conscious that the debate finishes at 7 o'clock, so I shall bring my remarks to a close soon. Relying on interest rates, which is the consequence of the

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Chancellor's fiscal stance, has forced the pound up further and unbalanced the economy even more. The one issue on which I agree with the shadow Chancellor is that we are creating a boom and a bust at the same time--a boom in the consumer sector and a bust in manufacturing. The Government's economic policies are undermining our wealth-creating base. A clear commitment to the single currency would have helped the Government and our exporters by stabilising the pound at a more competitive level and easing pressures on interest rates. It is not too late for the Government to take such issues on board.

Where the Chancellor has genuinely put the economy first, he has done well. The operational independence of the Bank of England is the best example. Where politics have come top, economic policy has been blown off course. There has been no fiscal tightening for the consumer, to avoid frightening new Labour voters. There has been no stability for the pound, to keep Mr. Murdoch, sweet. There has been no extra investment in education, to stick to Tory spending levels for political reasons. The Tories are not in a strong position, given their record, their pre-election economic policy and their lack of an agenda since the election. However, the Chancellor has to strengthen his nerve if he is to tackle the problems head-on. He must adopt a less relaxed fiscal policy, make a real commitment to education and deal with exchange rate stability, which he always refuses to talk about. Those issues must be addressed if we are to secure sustainable, long-term growth, which Liberal Democrats and the Government want and the country needs. The Liberal Democrats have set out their policies. The Government have acknowledged and adopted some of them and would do well to consider others to help secure the stability, long-term success and prosperity that we all want.

4.54 pm

Ms Helen Southworth (Warrington, South): The Opposition have called the debate in the hope of re-creating themselves in the public eye. They want to rewrite history, pretending that the Tory Government created a golden age and a dynamic economy. Maybe they are even pretending that they created a fair society. They seem to be hoping for collective national amnesia on a grand scale. They hope that we shall all join them in the land of make-believe. I am afraid that they are away with the fairies; they are in never-never land. Tory Britain was never how they say that it was, and they will never get the British people to believe them.

Let us look at the reality of what the Tories did to the economy when they were in power. The defining moment of the previous Tory Government was 16 September 1992--Black Wednesday. The Chancellor, the Prime Minister and the Government panicked. They took interest rates up by 2 per cent., immediately followed by a further 3 per cent. rise. While they were losing their heads, they were losing billions of pounds for this country. They provided management schools round the world with a text book case of how to cause chaos, then how to make it worse.

Then, in the 1993 Budget, the Tories were desperate to make up the money that they had wasted. They started raising taxes and put VAT on fuel, when Britain had more winter deaths among old people from hypothermia and cold-related illnesses than any other European country. That showed Tory priorities. Then they declared a beef war with the European Union over its response to the BSE crisis

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that their mismanagement had created. They called the war off a month later with nothing gained, leaving British beef farmers and taxpayers paying the cost for years. The Tory Government brought the dreaded words "negative equity" into common parlance, which haunted middle-income families. One thousand homes a week were repossessed during the last months of their Government.

During the Tory years, Britain's manufacturing base declined from 58 to 28 per cent. of the economy, and the Conservatives took no effective action to restructure, reskill and stabilise industry. While the right hon. Member for Huntingdon (Mr. Major) was Prime Minister, more than 8 million British people experienced unemployment at least once. Job insecurity became endemic. That is what people remember about Tory Britain.

Another first: until the right hon. Member for Huntingdon became Prime Minister, all the Governments in the history of the United Kingdom had borrowed a cumulative total of £190 billion. Despite receiving £120 billion from North sea oil and £80 billion from asset sales, the Government of the right hon. Member for Huntingdon added more than £180 billion to the national debt in less than six years. That is a phenomenal and appalling achievement--truly one to remember. British taxpayers have to spend £25 billion a year on repaying the interest on that debt alone and they are still feeling the consequences.

The Tories were in government for 18 years and gave us the most unstable economy in the developed world, growth rates below those of every other European country and the two deepest and longest recessions in post-war history. The right hon. Member for Horsham (Mr. Maude) was querying boom and bust. He could not remember what it meant. The Tories had boom and bust, constantly changing policies, repeated rows over Europe, no plans, no strategy and no vision. When business was asking for urgent action on the skills gap, the previous Government reduced the training budget by £34 million in real terms. When business was asking for investment, they crossed their fingers and hoped that something would happen. When business was asking for action on transport, they came up with the cones hotline.

Just before last May's election, The Economist said of the right hon. Member for Huntingdon:

This afternoon, that party is in its proper place: on the Opposition Benches. It has a new leader, but it is the same party. Who are the Tories in opposition? They are newborn babes; they have no recollection of the mess that they created. They are innocents who bear no responsibility for Black Wednesday, the skills gap, the investment gap, the doubling of national debt, the billions of pounds that were wasted and the millions of people out of work.

When it comes to the present economic strategy, what do these people say? They look at our public spending review and say that we must cut public spending. They look at our Finance Bill and say that we must increase public spending. They oppose reforms to close tax loopholes, but say that we must do more to close such loopholes.

Mr. Gibb: The hon. Lady was a member of the Committee that considered the Finance Bill. Will she give an example in that Committee of an occasion on which the Opposition called for a public spending increase?

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Ms Southworth: I would be very happy to send the hon. Gentleman a list of the many more than 20 occasions on which Tory amendments would have increased public expenditure and reduced Government income.

We do not know--who does?--what the Tories say about Europe; that changes by the minute. In opposition, as in government, the Tories do not know where they are going; they have no coherent plan, no vision and no agreement among themselves. On top of that, it seems that, in the Finance Bill Committee, they could not add up. They were not credible as a Government and they are not credible as an Opposition. If they hope that the electorate will not notice, Conservative Members, like their new leader, will catch a cold.

By radical contrast, this Government are putting in place an overall economic strategy with discipline and effectiveness. Our central economic objective is high but stable growth with greater job opportunities, so that everybody can share in higher living standards. We are rebuilding the economic infrastructure, creating new partnerships between Government and industry to address the problems of instability that we inherited and to build prosperity. Our policies are clear. We are securing economic stability by ensuring low inflation and sound public finance. We are encouraging work, providing employment opportunities for all and making work pay. We are raising productivity by improving skills, increasing investment, ensuring that markets are accessible and competitive and encouraging research and development.

Mr. Tim Loughton (East Worthing and Shoreham): Will the hon. Lady give way?

Ms Southworth: If you are still in you seat, you cannot be asking me to give way.

Mr. Deputy Speaker (Mr. Michael Lord): Order. The hon. Lady must not refer to the Chair in that way.

Ms Southworth: I apologise, Mr. Deputy Speaker. I meant to say that the hon. Member for East Worthing and Shoreham (Mr. Loughton) cannot be asking me to give way if he is still in his seat.

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