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7.23 pm
Mr. Derek Twigg (Halton): I welcome the statement made by my right hon. Friend the Chancellor. His excellent performance today underlined why we are getting the economy right and what was wrong under the Tories. This Budget, like previous Labour Budgets, deals with the legacy left to us by the Conservative party, but it also takes us forward into the millennium and deals with the issues of today and tomorrow.
The Budget rewards work and makes it pay. It offers a better deal for families. It rebuilds our public services. It provides a better deal for small business. It locks into economic stability. The Chancellor made the important point that he was doing away with the arguments of left and right, the notion that there was only one way of doing something, and the public-private argument. We see the Government taking the best of each sector, and using that to make sure that the economy grows; that we get better public services; and that people live better lives.
The connection between greater wealth and the provision of better public services is not often recognised. Greater wealth allows us to invest more in public services, as the Labour Government will continue to do and as the previous Government never did.
The Budget must be seen in the context of the Tory legacy and fundamental weaknesses in the economy left to us by the previous Government: inflation was rising; they had ducked decisions on interest rates, leading to the problems that faced us in the first year of our government; they had lost control of the public finances; and the national debt had doubled.
The Conservative Government wasted important public money on social security. They paid it out but did nothing to help people get back to work. They did not use the money well, so they wasted the Department of Social Security budget. It was all boom and bust under the previous Government--they never aimed at stability or long-term planning.
Another part of the Tory legacy was Black Wednesday, which cost us a great deal of money and caused severe problems for the economy. A further example is the Tory
Government's handling of the BSE crisis, which cost £5 billion. Their attempts to deal with the mess that they had created cost another £2 billion. There was also the cheap sell-off of public services. Important public assets were sold off on the cheap, and shortly afterwards we saw the share prices rocket.
Ms Diane Abbott (Hackney, North and Stoke Newington):
My hon. Friend referred to the problems caused to the previous Government by Black Wednesday. As he will remember, the problems of Black Wednesday were caused by fixed exchange rates and the unsustainability of such a system. Does it occur to him that, if we went forward into economic and monetary union, which is just another fixed exchange rate system, with no real evidence of the true convergence of the economies, we might experience our own Black Wednesday in due course?
Mr. Twigg:
The Government have made it clear that certain criteria must be met. Our competence in managing the economy is on a different level from the incompetence of the previous Government. We have only to recall how they dealt with the poll tax. Councils around the country are still paying for it. That is part of the catalogue of Tory incompetence over 18 years in power. As a result, we have had to take some tough decisions early on, to get the country back on the right course and achieve stability.
As a party, we introduce important policies which support work and families, and help pensioners and society generally. The Conservatives oppose the new deal, the working families tax credit, and the national minimum wage. We hear much about America, although America has a national minimum wage. They oppose the cut in VAT--they would raise it further if they were in power. They have opposed the entire plan to improve economic stability. They are not interested in getting the country back on the right track, after the mess that they created.
The Government's economic policy has had a major positive impact on my constituency. The Chancellor is right to focus on economic stability, growth, better public services and more jobs. We are getting away from the boom and bust of the previous Government. Inflation is now close to its target level. We are taking tough action on borrowing. The borrowing record of the Conservatives was astoundingly bad. They took incredible risks with the economy. In the early 1990s, interest rates peaked at 15 per cent. I will not go into what they went up to in just one day on Black Wednesday, but they certainly went up to 15 per cent.
Mr. David Taylor (North-West Leicestershire):
For a year.
Mr. Twigg:
For a whole year. Under our Government, interest rates peaked at 7.5 per cent. That is a result of the fact that we have been dealing with the mess and taking decisions that the previous Government ducked. Mortgage rates are at their lowest for 30 years. Interest rates will probably come down again. That helps stability and allows us to plan for the future.
According to a report today in the Financial Times, a survey by the Office for National Statistics shows that UK manufacturing rose during January. Reports in the local financial press and from various organisations refer to a
soft landing for our economy. Again, that is a result of the Chancellor's excellent economic policy. There has even been a rise, albeit small, in high street spending. According to a recent Gallup poll, the majority of fund managers thought that the economy was going forward. All that is confirmation that the Government are on the right track.
Mr. Tim Loughton (East Worthing and Shoreham):
The hon. Gentleman cites as a source for his economic criteria fund managers in the City of London. Does he agree with those same fund managers, whose best forecast for GDP growth next year is about 0.7 per cent., which is rather less than half of the top forecast of his Chancellor this afternoon? Were the fund managers right then, and are they wrong now?
Mr. Twigg:
The Chancellor set out his strategy clearly today. He is confident about the growth factor, as am I. A number of important issues are raised by the Budget, which should be examined in more detail. The Opposition have had a difficult time attacking the Budget. They have gone off at a tangent, with lengthy debates about Europe and other matters that are wholly irrelevant. Conservative Members have real difficulty, because this is a good Budget; it makes good sense to most people and will improve their standard of living.
Conservative Members like to talk a lot about families, but their record in government was one of failure. The Budget supports lower and middle-income families and provides help when it is needed most--when people have children. As a father, I totally and utterly support that. The Conservatives did not provide such support. The child tax credit has been introduced, child benefit has been raised--13,300 families in my constituency will benefit from that--and there will be a major improvement in the standard of living of people with children.
Mr. Jonathan Sayeed (Mid-Bedfordshire):
Will the hon. Gentleman give way?
Mr. Twigg:
In a moment. I have taken two interventions and I want to continue with my speech.
When we came to power, child benefit was £11.40 a week. It is going up to £23 a week, which is a major increase for which we deserve credit. The Conservative party has an interesting record on child benefit--it froze rates between 1987 and 1991--and also froze married couples allowance between 1990 and 1995. That does not support the Conservative Members' view that they have always been in favour of child benefit increases and the married couples allowance.
Mr. Sayeed:
Has the hon. Gentleman read any part of the Red Book? Would he care to look at page 112? Item 17 shows that the married couples allowance will be abolished from April 2000. That will save the Treasury £1.6 billion, but the children's tax credit will not be introduced that year. Although the hon. Gentleman does not realise it, the Chancellor has fiddled the figures--he has taken money away by abolishing the allowance, but he is not giving money back through the children's tax credit.
Mr. Twigg:
I am interested in the points that the hon. Gentleman makes, but I would like to hear him praise my
My constituency has a large number of pensioners. I often think--wrongly, and I shall explain why--that some pensioners have felt a bit left out of the previous two Budgets, although we have done a considerable amount in terms of the standing fuel charge, extra fuel payments and the cut in VAT on fuel. We have also taken a number of other initiatives. The Budget contains a £3 billion package for pensioners, with an increase in the winter allowance to £100 over the next three years. That means that slightly more than 14,000 pensioners in my constituency will benefit from help towards their fuel bills. That underlines the Government's commitment to helping pensioners and shows that the particular difficulties that pensioners have during the winter have been recognised.
There has also been an increase in the minimum income guarantee for pensioners and it has been related to earnings rather than prices--it was nice to see the look on Conservative Members' faces when my right hon. Friend announced that measure this afternoon; they did not have much to say about it--and 200,000 pensioners will be taken out of paying tax. Many pensioners in my constituency will benefit from that.
My right hon. Friend talked about rewarding and improving our public services. It is useful to put into context what the Government have already done. Like the other improvements in funding, the £19 billion commitment to education in the comprehensive spending review will benefit my constituency. For example, five schools had been waiting for more than 10 years for new classrooms, but, within 18 months of the Government's election, three have had plans for new classrooms approved. I understand that a fourth school hopes to have its plans approved shortly. That money will help with bringing class sizes down, which is another great commitment that is widely supported in my constituency.
Halton borough council has been given £2 million from the standards fund, and five summer schools have been set up to improve literacy and numeracy. Those important developments have been achieved because the Chancellor has made improvements by providing additional cash for schools in his Budgets. Additional money has already been made available for school books and a further commitment, to which I shall refer in a moment, has been made today.
There has been talk about national health service waiting lists. I can tell Conservative Members that my local hospital not only met the reduction in its waiting list last month, but exceeded it by 282. That excellent performance shows that that money is being well spent--and that is not to mention the additional money that has been provided for mental health and other health services in the Halton area.
On transport, there has been significant change andI can see a significant difference between this Government's policies and those of the previous Government. I referred to that matter briefly a few weeks ago in my speech on the local government settlement. For many years, we in Halton have been trying to get extra money to deal with the maintenance problems affecting
the Widnes-Runcorn bridge. We were unable to get that money under a Tory Government, but, this year, the Labour Government have allocated an extra £2 million, which is an important investment. Dealing with those problems may prevent more fundamental problems occurring later. There has been additional money for transport generally in my constituency, and the Government's integrated transport strategy is important not only because of the problems with the bridge but because we have a busway and because there is a low rate of car ownership compared with other constituencies.
I am particularly interested in education. The Government have made clear their commitment to lifelong learning, skills and training and, through investment in further and higher education, they are trying to provide a better economic base from which firms can prosper. The further education college in my constituency has an important role to play and the Government have allocated extra money in the comprehensive spending review to be spent on further education and supporting students. The Government recognise the importance of further education to getting the economy on the right track and providing skills and investment in our communities.
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