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18 Nov 2002 : Column 389continued
Mr. Jonathan Djanogly (Huntingdon): The Chancellor has repeatedly referred to increased employment, but is it not the case that it is the public sector that has been growing, while the private sector has had massive job losses?
Mr. Brown: No, both the public and private sector have been growing over the past year, and the vast bulk of the 1.5 million jobs created in the economy in the past five years are in the private sector. I should have thought that the hon. Gentleman would be the first to congratulate us on that.
Mr. Patrick McLoughlin (West Derbyshire): The Chancellor mentioned negative equity and the problems that it causes. Does he expect to see negative equity in the property market in this country in the next two years?
Mr. Brown: It is certainly true that house prices, as a share of income, have risen a great deal, but it is also true that because interest rates are low, mortgage rates, as a share of the income of people buying houses and of those who already have houses, are lower than at other times. Whereas, in the early 1990s, mortgage payments were about 36 per cent. of the average income of a house buyer, they are now about 14 per cent., which is why people have been in a position to make their mortgage payments.
Mr. Kenneth Clarke (Rushcliffe): The Chancellor is supplying many hostages to fortune. Had he forgotten, when he replied to my hon. Friend the Member for Huntingdon (Mr. Djanogly), that in the third quarter of this year the number of full-time jobs in the private sector fell by 72,000?
I listen carefully to the right hon. and learned Gentleman because his contributions give an added dimension to Tory party thinking, given that he normally disagrees with his Front-Bench colleagues, and I have followed carefully what he has been saying over the last few years. He said in 1997 that he was against the independence of the Bank of England and he predicted that there would be a recession. He then said that we were wrong not to keep to the spending rules when we cut debt so that we are in a position to borrow at times that are more difficult for the economy, and he now says that our spending is unacceptable. It seemsthis may give comfort to the shadow Chancellorthat on every major issue since 1997 the right hon. and learned Gentleman has been wrong, and he is wrong, of course, in being the only person in the past week to come out in favour of the existing interpretation of the stability pact.
The only reason why the Chancellor is defending the growth and stability pact is that he does not want to raise taxes before the next election, so the only criticism of my forecast may turn out to be its timing, which could be extremely embarrassing for him when tax and spend on the present scale finally comes home to roost.
In the last world downturn in the early 1990s, employment fell by 3.5 per cent, and unemployment rose by almost 1.4 million. Today, as I have said, employment has risen, with 1.5 million more jobs since 1997. The record is undeniableworld conditions are worse now than in the early 1990s, but Britain is doing better. When world conditions were relatively better in the early 1990s, Britain did not just relatively worse, but decisively worse.
Labour has attacked the previous Tory Government's record. The Liberals, of course, continue to attack their record. Home owners and industry have attacked it, and so have the British people. I watched the Conservative party conference, where Tories were attacking it. It was even attacked by the Tory party chairman and the Tory leader, or should I say the current Tory leader? In an interview with The Sunday Telegraph on 6 October[Interruption.] I think that the Opposition should listen to their own leader. Speaking about the early 1990s, he said that
Was it not the shadow Chancellor who had ministerial responsibility for financial services when there was pensions mis-selling? Was he not also Home Secretary? Under the Tories, crime doubled. The Tories complain that the last Government were hectoring and lectured people, but was it not the shadow Chancellor who, as Minister for Local Government, told usindeed, insistedthat the poll tax that he was introducing was clear, simple and fair? The record that is being denounced by the Tories' current leader is the record of the poll tax-introducing, inflation-raising, unemployment-creating, pensions mis-selling, crime-doubling shadow Chancellor, so it is difficult to take lectures from him.
Since 1997, every shadow Chancellor has made forecasts of gloom. We had four shadow Chancellors before the right hon. and learned Gentleman, all of whom predicted recessions. It was not the recessions that came and wentit was the shadow Chancellors. Now we have a fifth shadow Chancellor predicting the worst for the economyI just wonder what the sixth will say. I ask the right hon. and learned Gentleman and his colleagues on the Front Bench: what is Conservative policy on monetary and fiscal matters? Does anyone know? Does anyone care?
During the 1980s and 1990s, when other countries were making decisions on central bank independence, the Conservatives could have made the Bank of England independent. Even after 1997even after we had made the Bank of England independentthe shadow Chancellor continued to oppose the decision.
What of the fiscal disciplines? I see that it is now the shadow Chancellor's argument that ours are too lax, despite the fact that in a speech in April he said that neither of the Government's fiscal rules
If the shadow Chancellor agrees with fiscal discipline, has he in mind another fiscal rule? What fiscal rules would the Conservative party follow? Would it go back to the balanced budget rule, for which the right hon. and learned Gentleman argued in 1997a rule that would mean that we would have to cut billions of pounds from investment in education, health and other public services?
Would the Tories follow the ideological rule, which reveals the truth about the shadow Chancellor and the Conservative party? That is the one that the right hon. and learned Gentleman set out when he stood for the Conservative leadership and received 23 votes in 1997, but has sought to keep quiet about since. He said: