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Mr. Michael Howard (Folkestone and Hythe): I begin by drawing attention to my declaration in the Register of Members' Interests, and by expressing my gratitude to the Chancellor for giving me sight of his statement fully 10 minutes before he got up to speak. Some of the pages, which were completely blank, were especially interesting.
I congratulate the Chancellor on his statement. He delivered it with great force and he was, as ever, almost completely in command of his material. We welcome many of his announcements. I am sure that these warm words will come as no surprise to him. Praise from his political enemies is nothing new to him. After all, only last week, the Prime Minister let it be known that the Chancellor was probably the best Chancellor in the world. To the Prime Minister, he is the Carlsberg Chancellor. True to form, the Chancellor returned the compliment, saying that the Prime Minister was the best friend that he had had in politics. The Prime Minister knows that with this Chancellor one has to read the small print: the Chancellor used the past tense. It seems to me that his phrase had something of "Goodnight" about it.
The Chancellor laid great emphasis in his statement on what he called the fundamental strength of the United Kingdom economy, and to the extent that it is true, of course we all welcome it. Does he not agree, however, that there were serious concerns about the UK economy before the tragic events of 11 September? Those include concerns about the current account deficit, with Britain spending more than we earn. According to the Chancellor's forecasts today, that deficit is expected to continue, and indeed to grow. There are concerns about the long-term sustainability of spending plans that outstrip
the rate at which the economy is growing. There are also concerns about the impact of new taxes and red tape on the ability of British business to win orders and create jobs.The Chancellor referred to the need to improve Britain's public services, but we have heard all this before. Year after year, we have had promises from this Government. In 1997, they said that there were 24 hours to save the national health service. In 1998, the Prime Minister said,
Despite all the promises, all the tax increases and all the hype and hyperbole, services such as health, education and transport have got worse over the past four years. Did the Chancellor read the recent front-page editorial in The Mirror on the state of the NHS? It said:
Does the Chancellor agree that morale in all the caring professions and the public sector as a whole is now worse than ever? The chairman of the British Medical Association said,
The Chancellor made great play of the Wanless report which, of course, we shall study carefully. However, he must have forgotten the terms of reference that he set Lord WanlessI am sorry, I mean Mr. Wanlesswhich asked him to consider a health service that was exclusively publicly funded. It should not surprise anyone that Mr. Wanless came up with the answer that the Chancellor
wanted him to find; that a publicly funded service would be better. If you ask a Labour question, you get a Labour answer.Twelve days ago, the Chancellor said that the
What is the result of all that so-called support for enterprise and business? As a result of the Chancellor's Budgets, the director general of the Confederation of British Industry now says:
Of course, we welcome any measures to help business, and we will look carefully at the details of what the Chancellor has announced today. However, under his stewardship of the economy, Britain has fallen from ninth to l9th in the world competitiveness league. Is that not the real impediment to new job creation? Is it not the case that 3,865 new regulations were introduced last year alone, the highest figure on record? Why did a survey of 4,000 firms across Europe just last week say that companies run into more problems trading with the UK than anywhere else? Is not that alone a damning indictment of the Government's record? Is it any wonder that the last quarter saw the sharpest fall in manufacturing investment since the 1970s?
Is it any wonder that the burden on business is growing, when the Secretary of State for Trade and Industry says that her Department suffers from lack of focus, confusion for the customer, too many schemes, and inadequate leadership within the Department and by the Department across Whitehall? What a kick in the face for the Secretary of State for Transport, Local Government and the Regions, the Secretary of State for Environment, Food and Rural Affairs and the right hon. Member for Hartlepool (Mr. Mandelson), all of whom held the post of Secretary of State for Trade and Industry in the last Parliament.
Nothing that the Chancellor has said today goes anywhere near addressing the £10 billion a year burden of extra taxes and red tape that he has imposed on
business. What about the benchmarks of success that he set up? He is always making promises about productivity. Year after year, we have had promises from him. In his first pre-Budget report four years ago, he said:
Let us look at the growth figuresthe Chancellor was rather proud of those. He pointed to UK growth in comparison with the rest of the G7. I very much hope that we will grow more quickly than our competitors, but if that is to be the Chancellor's new indicator of success, he cannot take one year alone. Why has he not mentioned the fact that in the first four years of the Labour Government, the United Kingdom economy grew at a slower rate than that of our competitors, slower than that of the G7, slower than that of the OECD, and slower than the United Kingdom economy itself in the last four years of the Conservative Government?
One of the many problems that the Chancellor faces is the extent to which he has to clear up the mess that he has made. He suggested that he would improve capital gains tax, but who introduced the current complicated structure in the first place? It was the Chancellor himself. He says that payroll services for small firms are to be made more effective and less costly. We all welcome that, but who introduced the additional burdens on small business payrolls in the first place? It was the Chancellor himself, asking them to administer schemes such as the working families tax credit and stakeholder pensions.
Of course, some of the other measures that the Chancellor outlined today are welcome. We welcome the extra spending for the armed forces and the security services, and the measures that he proposed to help alleviate world poverty. He gave more details of his pension credit, but he did not say much about the employment credit and the integrated child credit. I hope that he will tell us in his reply how much those will cost and how he proposes to pay for them. I hope that the right hon. Gentleman will spell out clearly how he intends to pay for Government spending after 200304. After his
prevarication during the general election campaign, will he now tell us whether he intends to increase national insurance contributions?We welcome the increase announced today in the retirement pension and the winter fuel payment, but what about tomorrow's pensioners, cruelly hit by the Chancellor's pensions tax? When he first introduced it in July 1997, he tried to justify it by saying that pension funds were in surplus and companies were enjoying pension holidays. He has helped to destroy the surpluses and put an end to the holidays. How does he now justify his savage attack on pensions?
Last week we challenged the Chancellor to deliver a pre-Budget report with a difference. We said that it was time to acknowledge the serious causes of concern about the UK economy, and the burdens that he has imposed on British business. We said that it was time for the Government to act on the state of crisis in our public services. He has failed those challenges.
The burdens on business remain. Public services will continue to get worse, to the growing distress of patients, passengers and parents. It is not only patients on the waiting list; it is not only passengers and parents on the waiting list; the whole nation is now on the waiting listwaiting in vain for the Government to deliver on their promises.
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