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Mr. Francis Maude (Horsham): This statement has one purpose, and one purpose only--to capture tomorrow's headlines. It will do nothing to reverse the underlying damage that the Chancellor's policies are doing to our economy.

Under this Chancellor, saving has fallen by a half and productivity growth has fallen by two thirds. The burden of tax under this Chancellor is rising by more than in any of our competitor countries in Europe. In opposition,

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the Prime Minister and his party opposed every reform that has made Britain competitive. His policies since the election have chipped away at the dynamism that took 18 years to build. This statement does nothing to rebuild that dynamism.

Will the Chancellor now admit what even the Prime Minister has let slip, and what the Organisation for Economic Co-operation and Development confirmed last week--that the burden of tax in Britain is rising, more quickly than anywhere else in Europe? Extra taxes total £40 billion, or £1,500 for every taxpayer. There are extra, rising taxes on motoring, marriage, mortgages, saving, giving, pensions, enterprises, the new economy, dividends, property, insurance, travelling and retirement.

Only one Labour Member is prepared to speak thetruth about taxes--the hon. Member for Brent, East (Mr. Livingstone). It is no wonder that the Prime Minister is trying to suppress the hon. Gentleman, or that he does not want him to have a voice. The hon. Gentleman has said:


The reality is that the more that the Chancellor denies that he has raised taxes, the less people will believe him. Is not his decision today to climb down and make some concessions on the energy tax an admission that the environment was never anything but a cover for new taxes? The Chancellor has admitted that these new taxes will inflict severe damage--that is why he is making the concessions--so why can he not bring himself to abandon them altogether?

The Prime Minister said earlier this year that it was irresponsible to abandon the automatic road fuel duty escalator. The Chancellor said that to do so was impossible, and in fact he has dramatically increased the escalator since the election--three times in two years, so that it is now well above the level that he inherited. Does not that amount to an admission that it was nothing more than a stealth tax to raise extra money? Is not today's statement a belated admission of the damage that he has done to hauliers, so many of whom have already moved abroad? That business is now lost to Britain, and it will not return just because he has made this belated admission.

All those taxes erode Britain's competitiveness. Is not the world already tough enough for businesses without them having to carry the Chancellor on their backs as well? The House can rarely have heard--[Interruption.]

Madam Speaker: Order. I ask the House to come to order. The right hon. Gentleman must be given a proper hearing.

Mr. Maude: The House can rarely have heard a Chancellor speak so complacently of an economy that, last year, missed recession by a whisker and where manufacturing was in recession. [Interruption.] The Chancellor laughs, but 190,000 people in manufacturing in constituencies represented by Labour Members lost their jobs. The number of business failures has risen and is continuing to rise. Even the Chancellor cannot be smug about that.

What has happened to productivity growth--the test that the Chancellor set for his policies? The OECD has already shown that it has fallen since the Chancellor took

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over. He thinks that it is funny, but it is the test that he set for himself. The OECD figures show that productivity growth has fallen by two thirds since he took over. In case he wants to trash that as being only the OECD number, as he trashed the tax numbers, let him look at his own paper--published yesterday--on the trend rate of growth and the graph that shows that productivity growth has plummeted since he took over. He can postulate a long-term increase in the productivity rate to justify his higher rate of growth only by taking an eight-year average--by including the whole of the period of the previous Government during which productivity did grow by more than 2 per cent. a year. That growth just about offsets the catastrophic fall in productivity since then.

Let the Chancellor answer this: given his sustained attack on people who save, is he surprised that the rate of saving has fallen by a half? Does he think that that matters? Does he think that it is trivial to the future of Britain's economy?

The Chancellor has made much of his so-called measures for enterprise, including capital gains tax. We have seen all this before--a few concessions to catch the headlines and distract attention from the real damage being done to business. Was not the president of the Confederation of British Industry right to say that any cuts in business taxes


Of course, we support schemes to increase share ownership, but what has happened since the Chancellor took over? When we left office, 15 million people owned shares--today, it is 12 million. Now, the right hon. Gentleman claims to be the champion of share ownership. If he really wants to help the self-employed, instead of fiddling little schemes, why does he not scrap IR35, his new stealth tax? It is already driving thousands of entrepreneurs abroad--congratulations, a new Labour brain drain.

It is no wonder that four out of five firms now think that Labour is hostile to them. The Chancellor has been beating them over the head with higher business taxes and more regulation. He offers them half an aspirin and expects them to be grateful. They do not want half an aspirin; they want him to stop beating them over the head with the higher taxes and extra regulations.


I said that last year and I say it again today. We support increases in health and education spending. It is just a pity that waiting lists are longer; it is just a pity that class sizes are higher; and it is just a pity that there are fewer police on the beat and that crime is rising.

What happened to the Prime Minister's famous pledge that Labour would


Cut them? They are up by nearly as much as health and education added together. The Government said that they would reform welfare. Well, that did not last long.

The Chancellor ought to target help on those who cannot help themselves--that is the common-sense approach. He punishes people who try to help themselves. He punishes people who want to do the right thing, who want to work and save, who tell the truth.

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This Chancellor claims to be prudent. He is only prudent with the truth. He says one thing, he does another. He talks pro-business, he acts anti- business. He talks less regulation, he imposes more. He claims taxes are falling when everyone knows that they are rising. Anyone independent who tells the truth, he rubbishes. Any definition that is inconvenient, he changes. Any statistic he dislikes, he fiddles. He is the salesman who says, "Don't worry about the fine print, just look at the slogans." He is the man in the pub who says, "Give me a fiver and I'll buy you a pint."

There is a new corruption infecting British politics today: the corruption of the smug few who are trying to make mugs out of the many.

Mr. Brown: I will deal with each point that the shadow Chancellor made in turn, but let me ask him first about misleading the House. Last year, he said that there would be a recession; there has been 2 per cent. growth, so he has got that wrong. Last year, he said that investment would collapse; investment has been rising 6 per cent. this year. He got that wrong. Last year, he said that unemployment would rise dramatically. It has fallen by 100,000, and he got that wrong. Last year, he said that savings would collapse. Savings are rising; he has got that wrong. Last year, he said that we could not afford £40 billion on health and education. We can afford £40 billion, so he got that wrong.

The only thing that is certain about the right hon. Gentleman's predictions is that he always gets them wrong. He is extreme and incompetent; so far right, and now exposed as so far wrong. [Interruption.] They do not like it. His words were "fantasy forecast", "Peter Pan economics", "Wonderland politics", "false and fairy tale figures" and "reckless gambles"--and he accuses me of trying to make the newspaper headlines.

The shadow Chancellor's first question was about tax. The tax burden is falling. [Hon. Members: "Oh.] Yes, it is: 37.4 per cent. to 37 per cent. to 36.8 per cent. It is falling beyond the plans that we inherited from the previous Government. If people want to understand why it is falling, there is a 10p tax rate--a Labour tax cut. Income tax has fallen from 23p to 22p--a Labour tax cut. Corporation tax is down to 30p--a Labour tax cut. Small business tax is 10p--a Labour tax cut. Today, there is capital gains tax at 10p--a Labour tax cut. The people who put up taxes are the Conservatives: 22 tax rises. That is why no one will trust anything that they say on tax.

I listened to what the shadow Chancellor said about what now passes for a Conservative economic policy. The Conservatives opposed Bank of England independence and put at risk stability. They opposed the necessary interest rate rises and put at risk inflation. They now opt for top-rate tax cuts, just like in 1988. In fact, their economic policy is 1988 all over again. Boom and bust--that is the Tories' economic policy on which they will fight the general election. It is hardly surprising, because he was one of the architects of boom and bust. He was at the Treasury from 1990 to 1992, as spending went out of control and interest rates were at 15 per cent.

On the Conservative policy on taxation and spending, the shadow Chancellor tells us that he opposed the £40 billion spending on health and education last year. [Interruption.] The shadow Chancellor opposed spending £40 billion on health and education. He said that it was

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reckless, wasteful and that we would have to go back a bit and cut public spending. To pay for the tax cuts that he announced yesterday, he would have to cut public spending. Tax cuts for the few to pay for public spending cuts for the many. Over the next few months, the Conservative party must tell us which hospitals they would close, which schools they would shut, how many and which teachers they would make redundant and how many nurses in which constituencies they would put out of work.

This is not theory. The Conservative health spokesman is going round the country telling people that he would have private medical insurance for people and would cut out non-urgent operations from the national health service. Already his friend, the shadow Home Secretary, has said that she wants new charges in the national health service.

So that is the dividing line. The Tory party--stop/go. Labour--stability and steady growth; Labour creating employment. The Conservatives are the party of unemployment. Labour is the party that helps working families with child benefit, the working families tax credit and our cuts in taxation. The Conservatives would hurt working families. Labour is the party of public services. The Conservatives are the party that would privatise public services. Tax is falling in this country. The party that would put taxes up is the Conservative party.


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