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6.45 pm

The Economic Secretary to the Treasury (Mrs. Helen Liddell): I deeply regret that my right hon. Friend the Chancellor is not present this afternoon, because he could not possibly believe just how bad the Opposition have been. The debate had made being savaged by a dead sheep seem like a stimulating experience.

The right hon. Member for Horsham (Mr. Maude) began his attack on the Government's economic policy by saying that my right hon. Friend the Chancellor was addressing a committee of the European Parliament. As my right hon. Friend the Chief Secretary pointed out, there is a Pavlovian response from Conservative Members at the mere mention of the word "Europe". What galls them even more is that, after 14 months in government, Britain at last has a respectable position in Europe. The Government are acknowledged by the British people to be carrying out their responsibilities in Europe. It is a measure of the extent to which this country was undermined by the previous Government that we had a beef ban.

The Opposition are thoroughly ashamed of their record; otherwise, why would they be so frightened of our going back over their record of 18 years in government? I can tell hon. Members who are new to the House that, in 1997, the previous Government were very fond of casting minds back to 1979. Is it not interesting that they were prepared to count back 18 years, but object to our counting back 18 months. We have to live with the consequences of their economic incompetence, which was so graphically exposed by my hon. Friends earlier.

Mr. Tyrie rose--

Mrs. Liddell: I will come to the hon. Gentleman later. After all, he is giving seminars to his Front Bench on whether the public finances are sound.

It is no wonder that hon. Gentlemen and hon. Ladies--in fact, no hon. Ladies took part in the debate; perhaps they have too much good sense in these matters--are ashamed of the previous Government's record. We have only to look at their performance: whole economy investment fell by 16 per cent. from its 1989 peak to its 1993 trough; business investment fell by 20 per cent. from 1989 to 1993; manufacturing investment fell by 27.7 per cent.; labour force survey unemployment rose by almost 1 million, but they laughed at rising unemployment--[Interruption.]

Mr. Deputy Speaker: Order. The House must come to order. We cannot have conversations all over the Chamber. The hon. Lady should be heard.

Mrs. Liddell: Thank you, Mr. Deputy Speaker. I am not surprised that Conservative Members do not want to hear about their record in government. It was a shameful record. Indeed, it is clear from some of the performances that they have learnt nothing from the arrogance of their years in government. They should have come to the House tonight and apologised for the state in which they left the

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economy. They talk about the golden legacy, but it is fool's gold. We are now having to deal with an economy that has inherent structural problems caused by the incompetence of the previous Government.

Talk of a golden legacy is nonsense. Thanks to the boom-bust policies of the Conservative party--policies which have damaged growth, held back investment and cost jobs--in the past 20 years we have had the two deepest recessions, and one of the largest booms, since the war. We must set the economy to rights, because it affects ordinary people.

Let us consider some of the structural problems that have been caused by the performance of the Conservative party. Productive investment has fallen. We badly need to boost productivity in our economy, for the simple reason that, from day one of the Conservative Government in 1979, government was characterised by short-termism and a lack of attention to the fundamentals of the economy.

Mr. Tyrie: By how much did the British economy grow under the last Labour Government, and by how much did the British economy grow, on average, during the 18 years of Conservative rule?

Mrs. Liddell: I thought that we were not supposed to look back. The last Labour Government was 18 years ago, and we are now setting right the errors of the Conservative Government. [Interruption.] As Conservative Members want me to talk about the Labour Government's performance, I am happy to do so. Gross domestic product growth in the first quarter of 1998--[Interruption.]

Mr. Deputy Speaker: Order. I do not expect anyone to shout at the hon. Lady while she is speaking.

Mrs. Liddell: Thank you, Mr. Deputy Speaker. Shouting is usually the way in which Conservative Members try to get through these arguments; they want to introduce irrelevancies because they do not want to talk about facts.

Mr. Maude: If productivity and investment are so important, why do Government figures show that productivity, which was rising, is now falling, and why does the Red Book show business investment falling consistently in future years?

Mrs. Liddell: Perhaps the right hon. Gentleman should have another seminar from his hon. Friend the Member for Chichester (Mr. Tyrie) about the impact on productivity of the previous Government's performance. There is a fundamental requirement to make basic structural changes in the economy. Structural changes are about improving education and skills, and about putting back to work people whom the previous Government abandoned on the dole queue. From their patrician standpoint, the Conservatives do not care about the ordinary people who were thrown on the scrap-heap by their policies. Labour Members lived daily with the consequences of their economic performance.

Less than two years into a Labour Government, GDP growth in the first quarter of 1998 was 3 per cent. higher than a year earlier. Whole-economy investment in the first

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quarter of 1998 was up 8.6 per cent. on a year earlier. Over the same period, business investment was up 10 per cent. In March, employment was up 429,000 on a year earlier. The International Labour Organisation figure for unemployment in April was 264,000 lower than a year earlier.

Conservative Members do not like those facts; they have gone quiet because they cannot deny the impact that we have had on the economy. With our long-term policies, we shall restructure the economic policies and economic performance of the country. We want to do that partly because we want to ensure that the people of the country enjoy a much better life style.

There was an interesting vignette as the Chief Secretary was talking about the national health service. This is a week of extreme importance to Labour Members, as we mark the 50th anniversary of the national health service. Fifty years ago, the Conservative party opposed that national health service. During earlier exchanges, my right hon. Friend pointed out that the shadow Chancellor had said that the national health service--and the welfare state--was responsible for a downturn in private provision of medical services. Yes, it was--and thank goodness, because, where I come from, before there was a national health service, young and old people died. Day in, day out, we lived with the consequences of the objections that the Conservative party has to public funding of the health service.

In 1998, the Government are proud of the national health service, and our policies are designed to ensure that we will maintain--[Interruption.]

Mr. Deputy Speaker: Order. I have already appealed to the House to come to order.

Mrs. Liddell: That noise was a measure of the contempt that Conservative Members have for the national health service and for ordinary people.

I shall discuss some of the arguments that have been made.

Mr. Owen Paterson (North Shropshire): Will the Minister give way?

Mrs. Liddell: No; I want to make progress.

The shadow Chancellor failed to take into account his hon. Friends' performance in the Committee of the Finance Bill. They utterly failed to acknowledge the responsibilities of a responsible Opposition. Conservative Members, who cannot even decide whether they support higher public expenditure, would have spent £6 billion more than the Government.

In the seminar provided for the shadow Chancellor, he could not make up his mind whether the country's finances were in a good position. He has yet to respond to the challenge that the Chief Secretary made to him about MIRAS. As Financial Secretary to the Treasury, the right hon. Gentleman condemned mortgage interest rate relief. He repeatedly refuses to address the key issues for the people of this country.

I am grateful for some of the things that the hon. Member for Gordon (Mr. Bruce) said in recognition of Government economic policy, but we differ on some points. Listening to his colleagues' performance, in the

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Committee on the Finance Bill and elsewhere, one would conclude that they want £17 billion of additional expenditure. They know how to spend, but not how to tax. The hon. Gentleman asks us for fiscal tightening when the Government are tightening the economy by 2.75 per cent. and yet, whenever we introduce a measure requiring fiscal tightening, the hon. Gentleman's colleagues vote against it. He must decide which side he is on.

Mr. Malcolm Bruce: On many occasions we have supported--as did the Conservative party--fiscal tightening, especially on anti-avoidance measures.


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