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3.58 pm
The Chancellor of the Exchequer (Mr. Gordon Brown): We have just heard a rerun of the speech given by the Leader of the Opposition last Wednesday, only without the good jokes. I shall answer, one by one, each of the points made by the shadow Chancellor, the right hon. Member for Horsham (Mr. Maude).
The shadow Chancellor said that the economy is doing badly. He wants to sustain the argument that he advanced last year about the state of the economy. [Interruption.]
Apparently, one member of the Opposition Front Bench thinks that the economy is doing well. I am grateful for that acknowledgement, but the Opposition amendment before the House this afternoon does not say that.
Only one serious report on economic policy has come from the Conservative party in the past two and half years. It was authorised by the leader of the Conservative party to examine the question of Europe, but incidentally it looked also at the British economy. In it, we find answers to most of the questions asked by the shadow Chancellor. The report stated that
The report also examines the Bank of England. After two and a half years, the Conservative party has not given an answer--
Mr. Maude:
We will give an answer on that long before the election--the Chancellor did not even give an answer three days before the election--and our answer will be the result of a great deal of expert and careful consideration; it will not simply be lashed together on Mr. Balls's laptop.
Mr. Brown:
The Conservative party has had two and a half years to think about it, and three former Chancellors have come out in favour of our policy. The Nott committee report says:
Sir Peter Tapsell (Louth and Horncastle):
Will the right hon. Gentleman give way?
Mr. Bercow
: Will the right hon. Gentleman give way?
Mr. Brown:
I am again happy to give way to the shadow Chancellor if he wishes to intervene. If not, what credibility do the Opposition have?
Mr. Michael Fallon (Sevenoaks):
Will the right hon. Gentleman give way?
Mr. Brown:
I will be happy to give way, and the hon. Gentleman could also answer the fifth question about Conservative policy--the privatisation of parts of the national health service.
Mr. Tim Loughton (East Worthing and Shoreham):
Will the right hon. Gentleman give way?
Mr. Deputy Speaker (Sir Alan Haselhurst):
Order. We are not conducting an auction.
Mr. Brown:
I have said that I will give way, but if the shadow Chancellor will not answer my questions, perhaps someone who aspires to that job will.
Mr. Fallon:
While we are on the subject of credibility, the Chancellor has successively claimed to be the architect of independently set interest rates, the deliverer of low interest rates, and, this morning, the backer of higher interest rates. To which of those three claims should we ascribe greater credibility?
Mr. Brown:
Stability in economic policy--the stability that eluded us for 20 years under the Conservative Government and that led the Nott committee--set up by the leader of the Conservative party--to say:
Sir Peter Tapsell:
Would the right hon. Gentleman allow me to put a question to him? If he is so very convinced of the desirability of an independent Bank of England why, when he set up the new arrangements shortly after the election, did he take care to keep the power to override the Monetary Policy Committee and the Governor of the Bank of England if he thought it necessary in a national crisis?
Mr. Brown:
In almost every arrangement that governs the independence of central banks, an override is allowed for exceptional circumstances. Perhaps the shadow Chancellor can tell us whether the Conservative party wants to keep the Bank of England independent but with no override.
I have asked five serious questions about the Conservative party's economic policy, and I have quoted the Nott committee's doubts about the shadow Chancellor's policies. As the shadow Chancellor will not answer my questions, I will take an intervention from the junior employment spokesman, who has controversial views.
Mr. Bercow:
Why did the Chancellor pledge in April 1997 that he would not impose burdensome regulations on business because he understood that successful businesses must keep costs down, when he well knew that he intended to impose an additional regulatory cost of £4,500 a year on the average small business?
Mr. Brown:
That is absolutely untrue. We have cut small business tax from 23p in the pound to 20p. It is perhaps a reflection on the Conservatives that their Government did not do so. We have introduced a small
The only contribution that the hon. Member for Buckingham (Mr. Bercow) has made to economic debates has been to argue that the new deal is a calamity. He wants people to believe that it would be best for Britain if we scrapped the new deal and the working families tax credit. The shadow Chancellor wants us to scrap Bank of England independence. The Conservatives are incapable of answering questions on the economy, and they have no credibility.
Mr. Brown:
We still have not heard from the shadow Chancellor. About six Back-Bench Members have posed as the shadow Chancellor by trying to ask me questions, and I shall be happy to give way to more of them.
Mr. Loughton:
Would the Chancellor remind us whose Queen's Speech we are debating? Is it the Government's programme or ours?
Mr. Brown:
The Opposition have tabled an amendment to the Loyal Address, and they are attacking the Government. I have put some questions to the shadow Chancellor but he has remained silent six or seven times. I have asked him to answer questions on five fundamental aspects of Conservative economic policy. The shadow Chancellor cannot answer those questions because he always gets it wrong. He said last year that unemployment would rise, but it has fallen by 120,000. He said that employment would fall, but it is up by more than 200,000. He said that there would be a downturn but there has been 1.75 per cent. growth. [Interruption.] It appears that he wants to go back on what he said then, but he said that our forecasts were fantasy forecasts. A week later he stepped up his rhetoric accusing us of Peter Pan economics and lyrically saying that we used fairytale figures. Those are not the titles of Jeffrey Archer novels.
Mr. Maude:
Does the Chancellor remember that, when he was shadow Chancellor in 1993, at the beginning of the longest sustained period during which unemployment fell, he predicted that unemployment would rise month after month?
Mr. Brown:
I was quoting from the Budget report. The shadow Chancellor said that we had made fantasy forecasts and that we were talking complacent nonsense. He predicted that there would be a gaping hole in the public finances and a downturn made in Downing street. His problem is that he cannot justify the predictions that he made in Parliament.
"the economy is doing well . . . The UK currently has the low inflation stability business has craved for decades."
Surely that is the first answer to the Conservative party's charge that the Government are anti-business.
"the Bank of England is handling monetary policy effectively on the whole."
Why cannot the shadow Chancellor give us an answer today? [Hon. Members: "Go on."] We have raised four major policy issues with the shadow Chancellor today. They are neither incidental nor accidental, and cannot be dismissed as unimportant to economic policy. The Bank of England's independence is the foundation of monetary and fiscal policy; the new deal is the foundation of employment policy; the minimum wage is the foundation of our policy to make work pay and the working families tax credit is the foundation of our policy for families. Does the country not now deserve to know whether the Opposition support--in principle, not in detail--the minimum wage, the working families tax credit, Bank of England independence and the new deal? If, after two and a half years, Opposition Members cannot answer those questions, they have absolutely no credibility on the economy.
"the economy is doing well".
I think that my right hon. and hon. Friends will find particularly interesting the report's comment that
"a return to 'boom and bust' would undoubtedly threaten prosperity and jobs."
Even the Conservatives are worried about a return to Tory boom and bust. I am happy to give way to the shadow Chancellor, but if he refuses to answer our questions, I will allow Opposition Back-Bench Members to make their points on his behalf.
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