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Sir Peter Tapsell: Keynes was in favour of deficit financing during a recession.

Mr. Leslie: And, boy, we certainly had recessions--not just one, but two. We are glad that the hon. Gentleman has reminded us of that.

I also want to highlight the way in which the Government have chosen to prioritise capital and infrastructure investment. That announcement, made in the past few weeks, has not yet been fully appreciated: the state--the great oil tanker--has begun to be turned around. Year on year, taxpayers' money was consumed at the expense of investment in capital infrastructure in schools, hospitals and transport networks.

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Capital infrastructure helps to improve the quality of the economy and helps business by ensuring that we have long-term infrastructure available throughout the economy to support the industrial capacity we need for future generations. The Government's well-placed policies to give tax breaks through the working families tax credit and the lowest ever corporation tax rate are also welcome; and the acclaim with which many in the business community have greeted the Government's policies has been alluded to.

In monetary policy, the Government have struck the right balance by depoliticising interest rates and passing decisions to the Monetary Policy Committee of the Bank of England.

Mr. David Ruffley (Bury St. Edmunds): Before the hon. Gentleman reaches the end of his list, will he explain why, under the Chancellor's economic stewardship, the savings ratio has fallen from 12.7 per cent. in the second quarter of 1997 to 9.1 per cent. in the first quarter of this year?

Mr. Leslie: The hon. Gentleman was not listening to me--it might be useful if he made his own speech. My point in respect of monetary policy relates to the depoliticisation of interest rate decisions and their removal from the scope of political intervention of the sort seen under the Conservatives. In the run-up to the election, they took great risks with the economy at the expense of long-term investment in their attempt to front-load the economy and make it appear as sweet as possible to the electorate. They failed abysmally and, as a consequence, the new Labour Government had to clear up the mess they left.

Mr. Geraint Davies: Does my hon. Friend agree that the reduction in the savings rate is a symptom of a buoyancy and confidence in the economy which, as the motion tells us, we last saw in 1990, during the boom years of the Lawson era? It is a symptom of confidence and it is not necessarily linked with tax changes, as has been spuriously argued.

Mr. Leslie: That is right. Commentators have talked about consumer confidence.

Mr. Loughton: Given the hon. Gentleman's comments about how right it is that the House is no longer in charge of setting interest rates, will he applaud the Bank of England if, on 9 July, it puts up interest rates for the seventh time, with the result that mortgage rates rise for many of his constituents and mine?

Mr. Leslie: The hon. Gentleman falls into the trap of the previous Government. Politicians have always tried to make decisions about technical and important economic indices, but I prefer to leave such matters to the intelligent and informed views of the members of the Monetary Policy Committee of the Bank of England, who are in a far better position to take such decisions than I am as a politician.

The hon. Gentleman likes to think of himself as an expert on such matters--I am sure that his ambition is to be Chancellor one day. He has been impressive as a member of the Finance Bill Standing Committee, making many long and intricate speeches--and he certainly has

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the braces for the role. I am sure that the country prefers experts to make decisions on such important matters, and the Chancellor's depoliticisation of monetary policy has been widely acclaimed. However, it is not wholly outside the realm of the Government to influence monetary policy; it is important that we deal with inflation and try to achieve targets when and where we can.

Something that has disappointed me most as Member of Parliament for a Yorkshire constituency is the ridiculous boardroom excesses of companies such as Yorkshire Water. This week, the board of directors of Yorkshire Water awarded themselves a 30 per cent. pay rise. Kevin Bond, the chief executive, has, in one year, awarded himself a 69 per cent. increase in salary, taking it to £298,000. The salaries of the board of directors now total almost £1 million, with increases of 69 per cent. at the helm and 30 per cent. as a whole--but what are they going to say to Yorkshire Water's employees when they come seeking pay increases for the new year? Are the directors going to tell the employees that they are not important? Are they going to give them 30 or 69 per cent. pay increases? It will be interesting to see what they do. It is vital that company directors across the country act responsibly, recognise that they must set an example and show pay restraint.

Mr. Woodward: As the hon. Gentleman has such high moral views on the subject, will he comment on the remarks made earlier today by my right hon. Friend the Member for Horsham (Mr. Maude)? Having castigated those involved in the water industry, what is his response to Mr. Gavyn Davies's reaping a £16 million benefit from changes that the Labour Government have made to capital gains tax? Does the hon. Gentleman applaud Mr. Davies for doing that, or does he think that he should hand the money back, as he would have those working in the water industry do?

Mr. Leslie: The hon. Gentleman lists in the Register of Members' Interests a shareholding in Sainsbury and, although he might no longer do so, the shadow Chancellor, the right hon. Member for Horsham (Mr. Maude), has declared a directorship in Asda. I should be interested to know what were the pay awards to the directors of those companies. [Hon. Members: "Answer."] Perhaps the shadow Chancellor will tell us what pay was awarded to him as a director of Asda--

Mr. Woodward: The hon. Gentleman cannot answer my question.

Mr. Leslie: It would be interesting to discover whether the award was within the inflation target or above it. [Interruption.]

Mr. Deputy Speaker (Mr. Michael J. Martin): Order. We should not have all this noise.

Mr. Leslie: Thank you, Mr. Deputy Speaker. It is important that company directors set an example by showing restraint. The same applies to all people in a position of responsibility.

Throughout today's debate, we have watched an Opposition who have not got their act together. They attack the Government for not spending enough in some respects, but say that we spend, spend, spend in others. It

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is difficult to know whom we should believe. We have had an interesting look at the history of the Conservative party in office, and the House has been reminded of the exchange rate mechanism debacle. That has been very instructive in reminding us of the mess that the Conservative party created. It is clear that the legacy that it calls golden is an outrageous, appalling mess, and it is left to us to help to clear up the problem and put the economy on a sound footing, ensuring that we focus on the long-term interests of the people and businesses of the country.

6.29 pm

Mr. David Heathcoat-Amory (Wells): In this debate, Government Members, particularly the Chief Secretary to the Treasury, have talked about every period of economic history except the past year. They were willing to debate every policy except their own. It seems that, after only a year, Labour Members are already terrified about talking about what the new Government have done. We can understand their embarrassment, but it does not excuse the failure of the Chancellor of the Exchequer to answer the debate or at least be present to answer for his policies.

We understand the Chancellor's discomfort, because he has created two economies in this country. We heard in the debate about the boom economy affecting the City, the service sector and consumer expenditure, but there is another economy for manufacturing and exporting, which is going into recession. That ought to worry Government Members. Instead of making platitudinous remarks about how everything is wonderful in their constituencies, they should start to take note of the letters that we know they are receiving from businesses in their constituencies which tell a different story.

We know that Labour Members are receiving those letters because businesses have begun to copy them to Conservative Members on the Standing Committee on the Finance Bill. My hon. Friends will confirm that we are receiving letters from businesses exasperated by the failure of Labour members of the Committee to speak up about the gathering recession in their constituencies.

Mr. Woodward: Does my right hon. Friend agree that it was extraordinary during the Committee stage of the Finance Bill that Government Back Benchers had letters from their constituents that were copied to Conservative Members, but they consistently failed even once to speak on behalf of their constituents and simply allowed themselves to be railroaded by the Government Whips?

Mr. Heathcoat-Amory: My hon. Friend was a member of that Committee, and he knows that the Forum of Private Business copied to us letters written by businesses represented by Labour Members, who were entirely silent about the difficulties that those businesses faced as a result of tax increases. It was up to us, as it always will be, to defend the interests of working Britain.

The reason for that distortion and the two economies that the Government have created is that this country has not one economic policy, but two. Indeed, one could almost say that we have two Chancellors, or a single Chancellor in two disguises. One Chancellor is panicked

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by the broken promises on waiting lists and class sizes into reverting to the tax and spend policies that Labour Chancellors always follow.

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