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Mr. Borrow: Over the past five or six years, businesses large and small in my constituency have appreciated the economic stability provided by Labour Governments, which allows them to plan and invest for the future, in contrast to 18 years of Conservative Government, under various Chancellors.
Mr. Cunningham: In an interview on Budget day or not long after, Digby Jones, director general of the Confederation of British Industry, welcomed the fact that businesses could plan their costs and wages. Anything in the Budget that stabilises, reinforces and encourages businesses, large or small, must be a good thing.
This is the second Budget in which the Chancellor has given extra impetus to the development of brownfield sites. In many inner cities, particularly in parts of Coventry, many brownfield sites that have been derelict for many years are now being developed. Equally, though, we must achieve a balance. If every brownfield site is developed, factories might be built on greenfield sites.
As a movie fan, I also welcome the assistance to the film industry. Many of the special effects used in Hollywood movies have been developed by talents in the British industry.
Mr. Letwin: Does that mean that the hon. Gentleman regrets the passing of the film tax break, which threatened to cost the Treasury £1 billion a year, or does he welcome the Chancellor going back on his original scheme?
Mr. Cunningham: The right hon. Gentleman is entitled to his opinion, but I welcome the Chancellor's measures. Given the pre-Budget predictions by some pundits that all was gloom and doom for the British film industry, I am glad that step was taken.
I welcome the Chancellor's steady-as-she-goes Budget, which maintains investment in health, education and other public services, and I welcome the measures proposed on occupational pensions.
Rob Marris: From his long history of trade union activities, my hon. Friend will be well aware of the manufacturing sector, and he, like me, represents a west midlands constituency—a key manufacturing area. Certain measures in this year's Budget, as in last year's, assist manufacturing, although there is more to do. Will my hon. Friend say more about manufacturing, particularly in the west midlands, and ways in which the Budget will assist venture capital, research and development, and so on?
Mr. Cunningham: Research and development was underfunded in the past. When Rolls-Royce needed R and D aid, it was provided in the form of a loan—not a tax concession—that created many difficulties. Research and development also keeps universities on their toes. The universities of Warwick and Coventry are among many that undertake R and D for companies. R and D support also brings comfort to small employers with 10 to 20 staff, who have families and mortgages to pay and who want to sustain the standard of living that they have achieved through steady employment.
Mr. Desmond Swayne (New Forest, West) (Con): Before the hon. Gentleman took the intervention, he mentioned the impact that the Budget would have on pensions. Can he see any impact that the Budget measures will have on the Government's declared target to have 60 per cent. of pensions fully funded by 2050?
Mr. Cunningham: I would not like to make any forecasts on the basis of that sort of question.
Mr. David Ruffley (Bury St. Edmunds) (Con): I am surprised that the hon. Gentleman has not said anything about the £28 billion savings gap. Can he explain what the Budget does to close it?
Mr. Cunningham: We are all aware of the £28 billion savings gap, and the Chancellor certainly looked at that when he considered the tax situation. Many companies, particularly public utilities, were not reinvesting in their industries; they were taking the profits. They were
encouraged to reinvest, and the hon. Gentleman can get an independent report on that issue from the House of Commons Library.
Mr. Bercow: Will the hon. Gentleman give way?
Mr. Cunningham: I will give way for the last time, but I must then move on.
Mr. Bercow: I am extremely grateful to the hon. Gentleman. Given his long-standing interest in the manufacturing sector and the extreme importance that all of us should attach to small and medium-sized enterprises within that sector, will he tell the House what assessment he has made of the Regulatory Flexibility Act 1980 and the Small Business Regulatory Enforcement Fairness Act 1996 in the United States?
Mr. Cunningham: The hon. Gentleman can do his own analysis of that; I am certainly not going to.
I welcome the Budget. It should be supported as it covers many of our concerns.
6.16 pm
Mr. Oliver Letwin (West Dorset) (Con): I must begin with a tribute to the hon. Member for Coventry, South (Mr. Cunningham). He held the House magnificently for longer than one might have supposed.
This has been a most interesting debate, but I shall restrict myself to commenting on the speeches of Conservative Members. No doubt the Chief Secretary will comment on those made by Labour Members. My hon. Friend the Member for Havant (Mr. Willetts) illustrated brilliantly the impossibility of making administrative savings on a serious scale in the Department for Work and Pensions without simplifying the welfare system. My right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) identified with his customary clarity and mastery the key issue raised by the Budget—namely Labour's third-term tax rises. [Interruption.] The Chancellor correctly identifies himself as the cause of that and enters the Chamber at the right moment.
My hon. Friend the Member for Gainsborough (Mr. Leigh), from his lofty position as Chairman of the Public Accounts Committee, told the House about the horror stories of wasted money and made enormously valuable suggestions about how to reduce that waste. My hon. Friend the Member for Wycombe (Mr. Goodman) exposed with extreme lucidity the deficiencies of the Government's well-intentioned but misguided policies on poverty. My hon. Friend the Member for Cotswold (Mr. Clifton-Brown) surprised the House, because he made clear the remarkable fact that, although official borrowing this year is £37.5 billion, the Government are actually programmed to borrow £44 billion of cash. I owe him a profound debt for pointing that out. My hon. Friend the Member for Witney (Mr. Cameron) accurately pinpointed the causes why so much money has been wasted.
Today and on previous days, the Chancellor's Budget has been described as very political and very clever. It was certainly very political. Indeed, so far as I am aware, it is the first time in recent memory that the Chancellor has used his Budget speech almost entirely to respond to a speech by the shadow Chancellor. Perhaps further historical research in the Treasury will show that it was the most political Budget for more than 200 years. I doubt whether, in a few months' time, it will look very clever.
Andy Burnham: The right hon. Gentleman began by commending his colleague the hon. Member for Havant (Mr. Willetts), who, I believe, began the debate by saying that the right hon. Gentleman had not made any specific statements on the defence budget but that the Opposition were committed overall to ensuring the efficient delivery of public services. That is how the hon. Gentleman began. Does the right hon. Gentleman agree that, only a few weeks ago, he said:
- "I have agreed with my Shadow Cabinet colleagues that the baseline for spending"—
Andy Burnham: The right hon. Gentleman said that the
- "baseline spending across all of these departmental"—
Mr. Letwin: I am grateful to you, Madam Deputy Speaker, but I wish that the hon. Gentleman had finishing reading that out. I did indeed say that, and I went on to say something else. If he had been in the Chamber during the debate, he would have heard this being read out, too:
- "I recognise, moreover, that there will inevitably be cases in which particular programmes, or even the expenditure of whole departments, will need to rise at a rate faster than this. To fund such increases beyond the baseline, specific savings against the baseline will need to be found elsewhere within the non-NHS and non-schools departmental expenditure limits."
The Budget was founded on a startling admission. For the first time in new Labour's brief and so far, I fear, rather inglorious history, the Chancellor admitted that he and his colleagues have been happily wasting £20 billion a year of people's money. In 1998, he said that he was
- "determined to get value for every penny we spend".
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