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Motion made, and Question,

put forthwith, pursuant to Standing Order No. 51 (Ways and means motions), and agreed to.

16 Mar 2005 : Column 270

Budget Resolutions


Motion made, and Question proposed,

1.22 pm

Mr. Michael Howard (Folkestone and Hythe) (Con): May I begin by welcoming the return of the Chancellor to the general election campaign, not that I am entirely sure that it was worth waiting for?

Earlier this week, the Prime Minister's official spokesman was asked whether the Prime Minister and the Chancellor had discussed the Budget. The spokesman said that

So that has confirmed it: the Prime Minister, like the rest of us, has just heard what is in the Budget for the very first time.

This is a vote now, pay later Budget. The simple fact is that if Labour gets in again, taxes go up again. This Budget is not about what is good for our country; it is all about the interests of the Labour party. But I can agree with the Prime Minister on one thing: this Budget is the last Budget this Chancellor will ever deliver.

When the Chancellor promised to increase the stamp duty threshold to help first-time buyers, why did he not admit that he is the Chancellor who raised stamp duty in his first four Budgets and froze the stamp duty thresholds in his first eight Budgets, making the property ladder a step too far for so many first-time buyers? When he announced the raising of the thresholds for inheritance tax, why did he not admit that he is the one who has dragged millions of people into the net of death duties? When he talked about helping savers, why did he not admit that he is the one who hit savers with his £5 billion a year raid on pension funds?

When the Chancellor offered help to pensioners to pay their council tax bills, why did he not admit that while he offers them £200 off their council tax bills, we offer a discount of up to £500? When he reannounced more spending on business support, why did he not admit that his extra spending never achieves value for money and always leads to more bureaucracy and more waste? What this Chancellor gives with one hand he takes with the other.

There is one item of Whitehall expenditure that the Chancellor and I agree is a total waste of money: the £130,347 a year the taxpayer spends paying for the Chancellor of the Duchy of Lancaster to run the Labour
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party's election campaign. But, unlike the Chancellor of the Exchequer, I appreciate the efforts of the Chancellor of the Duchy of Lancaster. From my point of view, he could not be doing better, so I say, "Carry on, Alan, carry on!"

Labour's faltering campaign will not be helped by this vote now, pay later Budget. We can all see the sweeteners, but let me tell the House what they hide. They hide the crippling tax rises for hard-working families that are inevitable if Labour wins. They hide the massive waste of taxpayers' money that defines this Government. They hide the huge burden of regulation that under this Government has increased, is increasing and will continue to increase.

This Government and this Chancellor have run out of solutions to the problems Britain faces. Their only answer is to tax, to spend and to waste—to get people to vote now and to pay later.

This Chancellor has got form: 2001 was vote now; 2002 was pay later. The Chancellor is a fan of all things American. The famous American baseball coach Yogi Berra must have been thinking of the Chancellor when he remarked:

In the 2001 pre-election Budget, the Chancellor cut taxes by £1 billion. In his 2002 post-election Budget, he raised taxes by £8 billion—his biggest ever tax-raising Budget. He gives with one hand and then he takes with the other.

This dodgy Government, who brought us the dodgy dossier, are now publishing a dodgy Budget based on dodgy numbers. The Chancellor likes to rattle off a whole series of numbers—magical balances conjured out of thin air, intended to convince people that there is no black hole and that he will not have to raise taxes after the election. These figures are like mirages in the desert: we get closer and closer, and then discover they do not exist.

We have heard it all before. Look what happened with the pre-election budget of 2001. Gripping the Dispatch Box as though it were the windpipe of the Chancellor of the Duchy of Lancaster and barking out numbers like a bingo caller, the Chancellor of the Exchequer said that

But now we know what actually happened in those years. Instead of all those surpluses, we had deficits—a deficit of 14, a deficit of 21, a deficit of 13 and a deficit of 7. The £58 billion surplus turned into a £45 billion deficit. Today, the Chancellor has confirmed a current deficit £6 billion higher than the one he forecast at the last Budget just a year ago. He now proposes to borrow over the next six years no less than £168 billion. So much for prudence.

The Chancellor proposes to borrow more in every one of the next five years than he forecast he would have to borrow in the last Budget just a year ago. His forecasts of surpluses are no better than the Prime Minister's forecasts of weapons of mass destruction. The fact is that the Chancellor's pre-election numbers today are about one thing and one thing only—votes.
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Something was missing from the Chancellor's Budget statement today. I listened in vain for the endorsement from his old friends, the International Monetary Fund. I listened hard but there was none. Could that be because it is thinking what we are thinking? It said last week that Britain's national accounts have

Today, the Chancellor confirmed that the IMF is absolutely right. Indeed, it is not the only one thinking what we are thinking. The IMF's damning judgment is reinforced by a chorus of disapproval from almost every independent economist and international organisation that has examined his figures. The Institute for Fiscal Studies says that

The most astonishing reaction of all to the Chancellor's stewardship of the nation's finances, however, came from the Chief Secretary to the Treasury—he is resigning and is planning to leave the country. The question for the future is not whether taxes would go up under Labour, or when, but which taxes would go up? Will it be capital gains tax on homes, a devastating tax on home ownership, or council tax, now the stealthiest tax of all, or national insurance, Labour's tax of choice? To fill the Chancellor's black hole, he would have to tax people's income by an extra 3p in the pound—3 per cent. on national insurance. That is £1,000 a year more for a typical working couple. That is on top of the 66 tax rises that we have already had from this Chancellor. That is the scale of the tax rises that we will face if Labour wins the election.

We all know what would happen to the extra money raised from the tax bills of hard-working families and pensioners. It would be wasted, just as Labour has wasted most of the extra money that it has raised in the past eight years—

Those are not my words, but the words of the Financial Secretary. At last, someone at the Treasury is telling the truth, but he will not last long. The Chief Secretary wants to go to South Africa; the Financial Secretary is more likely to be sent to Mongolia.

What happened to the Prime Minister's promise, made three years ago, that if the national health service is not

Let us look at the facts. Average waiting times are up. Cancelled operations are up. Super-bug deaths have more than doubled since 1997. The Chancellor used to praise the wisdom of Derek Wanless and his report on the NHS. We now know that what he actually told the Chancellor was, "Your policies" since 1997 "have made" the NHS "worse". What did the Chancellor reply? According to reports, there was

Poor Sir Derek, he committed one of new Labour's cardinal sins—he told the truth—so he never became Lord Wanless after all. Nothing in today's Budget will give people the cleaner hospitals and 21st-century health service that they deserve.
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What about education? Labour promised to cut truancy by a third, but it is up by a third. Nothing in today's Budget will give parents and teachers the school discipline and higher standards that they want.

Labour promised to be, "Tough on crime, tough on the causes of crime". The Chancellor must remember that phrase—he dreamt it up only to see it nicked by the Prime Minister. For the first time ever, more than a million violent crimes were committed in our country last year. The chief constable of Nottinghamshire said this week that the police cannot cope any more. Nothing in today's Budget will get extra police on to our streets or deal with the growing lawlessness in our society.

The Prime Minister claimed:

pensioners. Now his Turner report says that millions more will retire without adequate pensions. The right hon. Member for Birkenhead (Mr. Field), the Prime Minister's first Pensions Minister, said that

Labour Members really ought to listen to him. The current Secretary of State for Work and Pensions said only yesterday:

But nothing in this Budget will restore confidence in pensions and savings.

So where has all the money gone? It has gone on bureaucracy and red tape. Today, the Chancellor tells us that he will curb bureaucracy and red tape, but we have heard it all before. In 1998, he launched a "Better Regulation Guide", and in 1999, a Regulatory Reform Bill. By 2002, it had turned into a red tape checklist. All the while he was piling £40 billion-worth of regulation on British business. Asking the Chancellor of the Exchequer to cut red tape is like asking the Chancellor of the Duchy of Lancaster to run a decent election campaign. It is just not going to happen.

Has not the Chancellor learned anything from his recent study trips abroad? This country faces major economic challenges in the years ahead from emerging economic powerhouses such as China and India. As a result of this Government's policies, however, we are much less well placed to meet those challenges today. The Chancellor repeats his claims about the economy—claims that The Economist recently described as

Now we know what happened when he took office. We know what Treasury officials told him:

Since then, we have fallen from 4th to 11th in the world competitiveness league. Our trade has gone from a surplus to a record deficit, as confirmed by page 234 of the Red Book. We have lost a million manufacturing jobs, and our productivity growth rate is down by a third. While other European countries are cutting taxes to improve their competitiveness, Britain's tax burden under Labour is set to be the highest for 25 years.
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The Chancellor should listen to the Prime Minister's former chief economic adviser, who says:

Only in this dysfunctional Government would the Chancellor not talk to the Prime Minister and the Prime Minister not listen to his chief adviser on the economy. Britain needs a Government who will get a grip on spending, not a Labour party that has let spending get out of control. Britain needs a Government who will deliver value for money, not a Labour party that wastes taxpayers' money. Britain needs a Government who will invest in front-line services, not a Labour party that hires more bureaucrats and sets up more quangos.

People will face a clear choice at the election: more waste and higher taxes under Labour or lower taxes and value for money with the Conservatives. That is the battleground at this election. That is what this election is going to be all about. And I say, "Bring it on."

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