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9 Apr 2003 : Column 304—continued
Norman Lamb (North Norfolk): Does the hon. Gentleman agree that it is essential that the US ends its block on TRIPS—trade-related aspects of intellectual property rights—reform, so that countries such as Zambia and others in sub-Saharan Africa can get low-cost drugs to address the awful plague of HIV/AIDS?
Mr. McFall: I agree entirely, and I mentioned that the Doha round collapsed on the issue of pharmaceuticals. That needs to be revived. We will not make progress against such a background.
We are kidding ourselves if we feel that what we will put on the table on Saturday will complete our task. It will not, and I know that the Chancellor and others are aware of that. The big issue is the EU subsidies. We must ensure that multilateral organisations are put back on track after the disasters of the past few months. That is extremely important for us all. It is important for us economically, but also for our brothers and sisters in developing countries.
2.34 pm
Mr. John Redwood (Wokingham): I have declared my interests in the register.
This Budget takes the breath away in terms of the things that the Chancellor did not admit to and the things that he would not say. This was a Budget by a Chancellor of tax and waste who has perfected the techniques of taxing, taxing and taxing again. He taxes when you are not watching and when you are. He taxes money that many people did not know they had and taxes the money that they desperately need.
If only the money were being well spent; if only hospitals were suddenly full of beds and waiting lists were suddenly reduced; if only all schools offered places of high quality that parents would wish their children to go to; if only we had a transport system of which we could be proud. If so, some of us might say that although we would not have raised as much tax ourselves, at least we have something worthwhile.
We know that our transport system is a disgrace by international standards and by the standards of the past in this country. We know that the health service is groaning, with too many managers, middle-ranking executives, spin doctors and others. It does not have enough real doctors and is short of beds by a large margin. We know that our education service is extremely patchy and is still letting down many children in the most deprived areas of the country, as the Government remain wedded to intervening on local
government and sending out directives and circulars by the dozen, the hundred and the thousand over its years in office so far.The Government still have not learnt that one cannot teach children by circular from Whitehall. They still have not learnt that the system needs the power of better management, better direction and more parental choice, district by district and borough by borough.
The Budget is also a demonstration that we have a Chancellor of fiddled figures and failed forecasts. He tried to disguise the enormous surge in borrowing that he will impose on the long-suffering taxpayers of this country over the next few years. Had he been more honest and spelt out the figures—as he had to do in the Red Book today—he would have told us that there is to be a £166 billion surge in borrowing between 2001–02 and 2007–08, a relatively short period. My guess is that just as his forecasts last year went lamentably astray, these forecasts are again going to err. The error will be on the side of the Chancellor disguising the true extent of the black hole in his Budget figures, and underestimating the true extent of the borrowing that he will have to incur.
Mr. James Plaskitt (Warwick and Leamington): On the subject of borrowing, does the right hon. Gentleman recall that the total borrowed under the previous Conservative Government surged, to use his word, by £304 billion?
Mr. Redwood: I remember a policy called the exchange rate mechanism; it was warmly recommended by the Labour and Liberal Democrat parties and was the only consensus economic policy that the Conservatives ever followed. I remember that that caused high borrowing. The hon. Gentleman obviously thinks that high borrowing was a bad thing at that time. I hope that he will join me in condemning the Chancellor's wish to try to emulate that surge in borrowing over the next few years. Just as surely as that borrowing did damage in the early 1990s, so will this borrowing damage our economy today.
Borrowing is not a cheap or easy option; it is not a cop out. The borrowing all has to be repaid with interest. It means that one pays not just once, but twice, because the law of compound arithmetic is very cruel on those who do the borrowing and need to do the repaying. It is not the Chancellor who will repay all that money, but my constituents and his. Very often it is the poorest of this country who get sandbagged by the Chancellor's taxes.
Lembit Öpik: By implication, the right hon. Gentleman criticises the Government for not putting more money into public services. Is he for or against an increase in finance for Welsh public services, including free social care, bearing in mind that he gave money back to the Treasury from the Welsh budget when he was Secretary of State for Wales?
Mr. Redwood: I remember increasing the things that mattered in Wales and keeping open hospitals that others might well have closed. My case is not that I want more spending, but that I want the money properly
spent. I do not want it spent on the army of spin doctors, quangos, middle managers, pen-pushers and directive-seekers. I want it spent on nurses, doctors and beds, with some left over so that we have less borrowing and less taxation. What this Government have also got to learn is that the higher the tax, the worse the economy performs. The bigger the increases in taxes, the more businesses are damaged. As the businesses are damaged, the revenues go down and the spending goes up. The Chancellor is in danger of being locked in a vicious cycle. As happened last year, he could discover that his revenues fall short and that his expenditures surge. That is the price and penalty of a bad economic policy.
Mr. Love: The right hon. Gentleman mentioned earlier that there would be some money left over. The hon. Member for Arundel and South Downs (Mr. Flight) has suggested that that might be as much as 20 per cent. Does the right hon. Gentleman agree with that figure? If not, what figure would he supply?
Mr. Redwood: I seem to remember my hon. Friend the Member for Arundel and South Downs (Mr. Flight) saying that elements of the overhead could be cut by 20 per cent. I thought that that was a very modest estimate of what could be done. I should like to cut 100 per cent. of the overhead of regional government in England. On cue, my right hon. Friend the Member for Haltemprice and Howden (David Davis) has arrived in the Chamber. He knows about these matters, and I wish him every success in his campaign.
We want regional government to be taken from the map of England. I do not want England balkanised, and I do not want the bill for balkanisation sent to me. I want to be represented locally by councillors in a unitary council—as I am now—and I want to be represented nationally through the high court of Parliament. I believe that there should be direct communication between the leaders of major councils and Ministers, and between senior council officers and officials in Whitehall. There is no need for the hundreds and thousands of people in regional offices tucked away in towns and cities. Many people have never even heard of them, but they cost us far too much money.
I am afraid that the hon. Member for Edmonton (Mr. Love) walked right into a massive trap, because 20 per cent. off the overhead is not enough. That proposal shows the modesty of my hon. Friend the Member for Arundel and South Downs and my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard), the shadow Chancellor, who supervises such matters. I would urge them to be even bolder, and to identify those overheads where we can sweep the whole lot away. However, the hon. Gentleman is leading me down tempting paths not central to my case today.
The Chancellor is also the Chancellor of boom and bust. It was interesting to note that he did not even have the gall today to mention boom and bust. This is a Chancellor with a record, who now stands arraigned in the high court of Parliament for having created too many busts after all those booms. He is a man who knows all too much about the bust.
We have only to look at what has happened to the stock market under this Chancellor. It soared in the first three years. Why? It was because the Chancellor stuck to
Conservative economic plans—lower taxes and lighter regulation. What has happened to the stock market since the Chancellor's policies were truly unrolled? Of course, it plunged.Labour Members are giggling away, and they would probably ask whether I had noticed that other stock markets around the world had fallen as well. I have noticed that, but the London market fell further and faster and harder than many of its competitor stock markets. The difference in the rate and extent of the fall is the price of the Chancellor.
Mr. Plaskitt: I appreciate the right hon. Gentleman giving way a second time. It is kind of him, but I think that I should correct his view of stock markets. The UK stock market is down 44 per cent. from its high point, but the French market is down 58 per cent., the German 65 per cent. and the Japanese 61 per cent. The right hon. Gentleman is not right.
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