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6.32 pm
The Chief Secretary to the Treasury (Mr. Paul Boateng): This has been a good debate, during which a range of varied opinions has been expressed in all parts of the House, as one would expect. Over the different days of the debate, Members across the House have reflected a range of specific interests and areas of expertise.
There is one issue that I wish to deal with at the outset. I know it is a matter of concern to hon. Members in all parts of the House because they have raised it with me—the issue of whisky, alcohol and tax stamps. Whisky and alcohol are matters of interest in all parts of the House, but tax stamps are a serious matter. I undertake to reply in person to all those who raised specific issues relating to tax stamps, and to pass their views on to my hon. Friend the Economic Secretary, who I know takes these matters very seriously.
Angus Robertson: Scotland's First Minister Jack McConnell is well known for following the orders of London Labour. Is he right to say that he was disappointed by the Chancellor's announcement on strip stamps?
Mr. Boateng: I am sorry that the hon. Gentleman makes such an overtly party political point. He knows that the Government have sought at every stage to involve the industry and that we have set aside some £3 million in a fund for assistance with capital investment targeted at the smallest firms, in order to cover up-front costs. Of course there is a range of opinions about tax stamps and we seek to respond and take them on board, as is appropriate.
Mr. O'Neill: I wonder whether my right hon. Friend can help us. It is not that long ago since he rejected proposals for strip stamps, but he has now changed his mind. What is the reason for this Damascene conversion?
Mr. Boateng: We had to take into account the findings of the Roques committee and the evidence of increasing fraud and evasion. Of course I respect the views of my hon. Friend and others on both sides of the House who have genuine concerns about this issue. However, I should point out that by 2005–06, as a result of the duty freeze announced by my right hon. Friend the Chancellor, the tax on a standard bottle of spirits will be 36p a bottle lower in real terms than now, and £1.33 lower in real terms than if the duty had risen in line with expected inflation since 1997. That is a record that the Conservatives never matched when they were in government.
I shall move on to the main substance of the Budget, and I would like to address a number of the concerns raised by my right hon. and hon. Friends. First, however, let me make a passing reference to some of the points made by Opposition Members. It would be true to say that they set a number of hares running. It would also be true to say that they sought to revive some dead foxes. To say that they added anything to the substance of today's debate, however, would be false. They said absolutely nothing of value about the real issues confronting the British people.
That brings to mind the record of the Conservatives when they were in government. The Leader of the Opposition was Employment Secretary when unemployment doubled—[Interruption.] He laughs. The Conservatives do not like to hear about their own record. He was Environment Secretary when the poll tax was introduced. And who was the man who dreamed up the poll tax in his eyrie at No. 10? It was the right hon. Member for West Dorset (Mr. Letwin), the shadow Chancellor. That is the Conservatives' record.
The fact is that the Tory Front Bench has not changed since those days. The personalities have not changed; they have just got bigger, one way or another, and so have their mistakes. There is a real difference between them and us, and this Budget demonstrates that fact. Only a Labour Government are capable of taking the hard decisions, the right decisions, on the economy and public services. Only this Government are up to the challenge of building on our hard-won record of economic stability and our enviable record of growth. That is the difference between them and us. Only this Government are going to do what we have to do to secure and maintain the stability and growth of the economy, and to invest in the education, skills, science and innovation that will drive the growth and prosperity of our nation.
My hon. Friend the Member for Falmouth and Camborne (Ms Atherton) was right to raise Cornwall's interests. My hon. Friend the Member for Hemel Hempstead (Mr. McWalter) was right to raise the issue of science and innovation. Only this party can be guaranteed to invest in those areas, and to meet the needs of the people of Cornwall.
James Purnell: On that point about science and innovation, did my right hon. Friend hear the shadow Chancellor say that he was going to cut by more than zero per cent.—[Interruption.] He is going to cut in cash terms all budgets other than those in schools and hospitals. Those cuts could involve science, home affairs or defence.
Mr. Boateng: We will come in due course to analyse the pledges made by the shadow Chancellor.
Only the Labour party in government can be relied on to invest in our vital health service, our housing and transport infrastructure. That was the very point made by my hon. Friend the Member for Stoke-on-Trent, North (Ms Walley) when she spoke movingly of the housing needs of her constituents and the need to make sure that we invest in the economy of Stoke-on-Trent. In an uncertain world, we must also invest in law and order, security and defence, to protect our citizens at home and our interests abroad. And we must meet our global responsibilities to others by investing in international development and the achievement of the millennium development goals. In that regard, I think particularly of my right hon. Friend the Member for Coatbridge and Chryston (Mr. Clarke) and his distinguished record on matters related to overseas development.
Not only could the Conservative party not deliver the economic stability to match our investments: it does not even have the desire to do so. It is a party driven by commitment to cuts in public services and lower investment as a matter of blind dogma—[Interruption.] I was not listening, and I will tell the House what to.
Last month, the shadow Chancellor announced a two-year cash freeze in spending—he can deny it at any time. That is a 5 per cent. real terms cut in 2005–06 and 2006–07, with immediate implementation of £18 billion worth of real terms cuts. There was much gnashing of teeth by his disgruntled colleagues, and much wringing of hands, but the policy of the shadow Chancellor and his party is clear—to cut investment at the very time in the economic cycle when it is right to invest, and yet to continue to make spending pledges that simply cannot be funded. In that, they share a great deal with the Liberal Democrats.
Mr. Cameron: Will the Chief Secretary give way?
Mr. Boateng: Not at the moment.
That, of course, left the shadow Chancellor's shadow Cabinet colleagues in a state of abject disarray.
Mr. Cameron: Will the Chief Secretary give way?
Mr. Boateng: I was hoping that the hon. Member for Buckingham (Mr. Bercow), who sits strangely silent in front of the hon. Gentleman, would defend those cuts at this stage. Apparently not, however, so I will give way to the hon. Member for Witney (Mr. Cameron).
Mr. Cameron: If inflation is at 2.5 per cent., and efficiency gains are at 2.5 per cent., how can a freeze be a cut?
Mr. Boateng: Well, the hon. Gentleman should tell that—[Hon. Members: "Answer."] I will. What the Conservatives have promised is a cash cut. That is why the hon. Member for Mid-Sussex (Mr. Soames), who, sadly, is not in his place, said of that cut:
- "It is outrageous. You cannot possibly go into an election with this pledge".
- "If we are to be taken seriously as a party of government which cares about the most vulnerable people on the planet, there has to be a public spending commitment."
Rob Marris: Will my right hon. Friend note that the mathematics of the shadow Chancellor and the hon. Member for Witney, who taunted Labour Members for their mathematics, are faulty? If we have growth from 100—to use the figure used by the shadow Chancellor—with inflation, to 102.5, and we then cut that by 2.5 per cent., we will end up with a figure of less than 100. That is a cut, and that is the mathematics.
Mr. Boateng: Well, the reality is that it is all down in black—
Mr. Letwin: Will the right hon. Gentleman give way?
Mr. Letwin: I am delighted that the Chief Secretary has given way. Will he return to the question asked by my hon. Friend the Member for Witney (Mr. Cameron), which is very simple? Given that the Chancellor believes that efficiency cuts amounting to 2½ per cent. are being made, how can a freeze of a departmental budget at 100 conceivably constitute a real-terms cut in front-line services? The Chief Secretary has to answer that, because the Chancellor has made him answer it.
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