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8.36 pm
Mr. Christopher Leslie (Shipley): The hon. Member for Kingston and Surbiton (Mr. Davey) must have heard a different Queen's Speech from the rest of us. Now that we have heard Liberal Democrat economic policy, there may be some consensus across the House. The hon. Gentleman suggested that it was bad that Government finances had gone into surplus, and that all the money--
some sort of war chest--should instantly be spent. In fact, however, we can start to repay some of the national debt and to reduce the £26 billion consumed annually by debt service payments. That money can be used for investment, which is precisely the Government's strategy.
The recklessness and irresponsibility of the Liberal Democrats has already been demonstrated from their Front Bench by the hon. Member for Truro and St. Austell (Mr. Taylor). He told us his plans for a carbon tax, which would somehow offset the Liberal Democrat pledge to raise the personal income tax allowance to around £10,000. They want to spend more and more, but to cut the tax burden, too. How will they do that? And what on earth would the carbon tax mean? Would it be added to fuel duty? What sort of carbon are they talking about? [Interruption.] Clearly, the Liberals cannot take the heat as some of them are leaving the kitchen.
Mr. Davey:
Does the hon. Gentleman know that carbon is an element and that there is only one sort?
Mr. Leslie:
If the hon. Gentleman wishes to be pedantic, he might explain which form of carbon he would tax. Will it relate to fuel duty, or to diesel? Will it affect electricity? Will it be across the board? People deserve to know what the Liberal Democrats mean to do.
Mr. Letwin:
I thought at first that the hon. Gentleman was merely having fun, but as he is serious, let me explain the difference between the carbon tax and an energy tax. The former, although we do not propose it, is at least rational in that it taxes those whose emissions are environmentally dangerous, while the Government's proposed energy tax specifically fails to do so.
Mr. Leslie:
Carbon dioxide and hot air may both fall under a tax, which would obviously mean a heavy levy on the Conservatives and the Liberal Democrats. It is interesting that the two parties have teamed up and that the Tories see the merit in Liberal policies.
It is a curious anomaly that the Conservatives have moved an amendment to the motion but that their Back Benches have remained empty throughout the evening. Tonight was their golden opportunity to criticise the Government and to set out the future of the nation as they see it. They have miserably failed to take that opportunity. At the 1997 election, the Tories tried to propagate through their "demon eyes" campaign the scare tactic that Labour should not be allowed to blow it. Not only has Labour not blown it, we have improved matters. We have shown convincingly that stability and confidence can be put in place by a sensible left-of-centre Government. I am proud of our stewardship, which has dispelled the myth that Labour Governments are imprudent and incautious.
It was interesting to read today the comments of the International Monetary Fund on how well the economy is performing. There is clearly a consensus internationally on how the Government and the Chancellor are managing the economy. I am pleased that we have been able to put firm foundations in place for the future.
I come to the progress of our monetary policy. The Monetary Policy Committee and the independence of the Bank of England have enabled us to create a safer and more transparent way of setting interest rates that is free from the political dogma and the whims of the partisan
Conservative party. In October 1998, the right hon. Member for Horsham (Mr. Maude), the shadow Chancellor, said:
Fiscal policy is the other side of the equation, so we must also examine the Chancellor's policies not just for expenditure, but for taxation and public borrowing. As I said earlier, an enormous amount is wasted each year--£26 billion--to finance past borrowing. We should try to reclaim that money by beginning to pay off the national debt. That is the sensible way of managing our budget.
The "Haguenomics" theories of the Conservatives have created a credibility gap. Somehow, they believe that they can have a golden rule on borrowing, which will create a balanced budget--they have taken a copy of the Gramm-Rudman amendment from the United States--along with a tax guarantee stating that the proportion of the gross national product going on public expenditure should constantly decrease. What on earth will they cut to achieve that?
We have heard this afternoon that the shadow Chancellor once said that he wanted public expenditure to be reduced to about 25 per cent. of gross national product. That presages a variety of worries for many people--and not only in health and education, but in other policy areas.
Mr. Letwin:
Does the hon. Gentleman recollect from his school days the power of compound arithmetic? Does he accept that, if public spending grew by one percentage point less than gross domestic product each year for 15 years, we would achieve exactly that result?
Mr. Leslie:
I shall not talk about my school days, because they are obviously very distant. However, what is the effect of a downturn on public expenditure? If a downturn ever occurred, the shadow Chancellor's pledge would mean that he would be forced to scale back on public expenditure much more harshly than would otherwise be the case. In a downturn, expenditure would be needed on the jobseeker's allowance and other welfare payments--unless, of course, the Conservatives plan to cut the jobseeker's allowance. We have to consider the possibility that they would slash such benefits. We have heard that the working families tax credit would go over the edge, but we should ask about other things, too.
The Conservatives say that we are being reckless and irresponsible on social security spending. Are they referring to the £100 winter allowance for pensioners? I assume that they are. What about the significant increases in child benefit? Such payments come under social security expenditure. Are those the areas of expenditure that Conservatives think should be cut? Do they think that such priorities should not be funded? Many people would like to know. I would be happy to give way
for a Conservative Member to make a commitment on such matters. I do not think that they will; that is the problem with the Conservatives these days.
If I were not a Labour Member, I would start to feel sorry for the Conservatives. They have a long way to go. I do not know how old I will be by the time that there is another Conservative Administration. I could well be in my fifties or sixties; I might even qualify for a free television licence as an over-75-year-old. I suspect that the shadow Chancellor would not be in post for very much longer, in the unlikely eventuality of Michael Portillo winning the Kensington and Chelsea by-election. It will be interesting to see how swiftly he progresses to the Front Bench and exactly whose job he will take. There will probably be much nervousness on the Conservative Front Bench. [Interruption.] I am sure that the hon. Member for East Worthing and Shoreham (Mr. Loughton) will not be laughing on behalf of the leader of his party.
We must scrutinise exactly what the Conservatives threaten and what risks they would create in many other areas, too. The hon. Member for Rochford and Southend, East (Sir T. Taylor), who is admittedly on the extreme edge of the Conservative party--his comment is none the less a hint for the future--talked of ridiculous farming subsidies.
Mr. Loughton:
It might be useful to the House if the hon. Gentleman remembered that we are debating his Government's Queen's Speech and not the Conservative party's.
Mr. Leslie:
I am addressing the Opposition amendment. I am trying my best to draw dividing lines between Government policy and what the Opposition oppose and propose.
Farming subsidies are very important. When, for some reason, I was watching "Dimbleby" one Sunday about two weeks ago, I noticed that the shadow Chancellor said:
Kali Mountford:
Research and development?
Mr. Leslie:
As my hon. Friend suggests, that could include research and development.
Had the Government not created today's financial climate, we would not be able to afford some of the major capital investment and infrastructure improvements that are coming on line, not only in my constituency but elsewhere. Those are the issues about which people are concerned.
Let us consider Conservative attacks on the burdens on business and regulation. When one asks what they are, one is of course told of the working families tax credit and the minimum wage--and even the Financial Services Authority, which has been criticised in this debate. It will be interesting to see what position Conservative Members take on that. We need to know the areas in which the Conservatives are proposing to scrap, keep or amend policies. Answers and further explanations are required.
"We would not have given up control of interest rates in the first place."
Therefore, we can all assume that, should the prospect of the Conservatives returning to government ever materialise--on the form that has been apparent this week, that is a distant prospect--they would reverse the Bank of England's independence. In the absence of any other policy from them, we wait to hear whether that is so. We need to contrast the stability that has been set in train by this Government and the stop-go economics that the Conservatives would restart.
"Investment in industry is something Governments should not be doing anyway."
We must presume that that refers to farming subsidies and all sorts of arrangements that support industry.
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