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Sir Brian Mawhinney (North-West Cambridgeshire) (Con):
It is one of the traditions of the House to congratulate the Chancellor on his Budget statement, though that does not necessarily mean an endorsement of every detailed part of what he said in policy terms. I have heard eight of the Chancellor's nine Budget statements and they have all been formidable affairs. I
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pay tribute to him, as I do to my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard). It is quite obvious why the national press is reflecting the increased nervousness and sense of rattle on the Government Benches as we approach a general election.
I expect this to be my last speech in this House. I made my first 26 years ago. As is appropriate and traditional, I said nice things about my predecessor, Michael Ward, and spoke lovingly and appreciatively of Peterborough before making some comments about Northern Ireland. I have nothing new to add on Michael Ward and I still appreciate Peterborough and North-West Cambridgeshire. I thank the people there for the confidence that they have had in me for 26 years and for their support and encouragement. I can look them in the eye and say that I have responded, to the best of my ability, on their behalf. I shall come back to the subject of Northern Ireland.
I, too, spotted the comment in Tom Bower's book "Gordon Brown" in which the Chancellor was told by an official what a fantastic economy he was inheriting and snarled, "What am I supposed to do? Write a letter of thanks?" The answer to that question was yes; he should have symbolically written a letter of thanks. There is no debateother than among Treasury Ministers, who have a different agendaabout the fact that the Government inherited what has been called a golden legacy. They have built on it, as one recognises and appreciates. My constituents, in general terms, are better off today than they were when I became a Member of Parliament 26 years ago.
Yet one of the problems that the Chancellor has when making Budget speeches is that he is so partial in what he tells the House. The distinction between what he tells the House and what turns out to be the reality is so considerable, and appears to get bigger every year, that it is not surprising that what he tells us is taken with a large pinch of salt. To put a little balance into his statement, he might, for example, have reflected on the fact that, when he came to power, the current account of the balance of payments was virtually in balance. Last year, it was in deficit to £57 billion, which is the largest in our history. The previous record was the previous year when the deficit was £47 billion. If he had considered that, we might have had a slightly more balanced appreciation of the state of the economy.
Mr. Liam Byrne (Birmingham, Hodge Hill) (Lab): The right hon. Gentleman must surely be aware that the current deficit is only about 1.5 per cent. of gross domestic product. That is in sharp contrast to the 4 or 5 per cent. of GDP that we saw in the 1980s.
Sir Brian Mawhinney: When one is old and grey, the temptation is to offer advice to young men. The Chancellor made much about figures in billions that were considerably less than the £57 billion of deficit last year. One therefore needs to be a little careful in being quite so dismissive of the growingand recordbalance of payments difficulty.
As those of us who listenoccasionally through gritted teethto the "Today" programme know, four years ago and at this point in the previous Parliament, the Chancellor told us that his plans for this Parliament
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were to borrow a total of £16 billion. He has actually borrowed £95 billion. If he had reflected on that fact, it would have given his statement slightly more substance.
Right hon. and hon. Friends will recall what I was doing in 1995. I remember that when the Prime Minister was in opposition, he said that he had no plans to increase tax. That statement is engraved on my heart. However, the British people discovered that it would not take long for this Government to make their plans, and 66 stealth taxes were introduced. Sixty-six is a big number, but I will give the House a bigger onethe £5,000 per household that represents the increase in taxation imposed on our people by this Government.
The Government bridle at the factif I were a Labour Member, perhaps I would bridle toothat many people do not now trust what Ministers say. That problem has been accentuated by Iraq and various other events in the past few years, but it can be traced back to the misleading and disingenuous statement that was made about taxation. It turned out to be spectacularly wrong.
Mr. Purchase: I share the right hon. Gentleman's recollection of the importance of the balance of payments, and I take the other points that he has made about debt. However, is not the point that one takes on debt based on one's ability to pay it back? Is it not a fact that the dynamism of our economy and the growth figures that the Chancellor presented to us today show that households and the nation are far more able to meet that debt? It is probably a smaller proportion of households' total income.
Sir Brian Mawhinney: That is an interesting thought, and I do not have the statistics at my fingertips. However, the Chancellor reminded us today that the figure for average earnings was £23,400. If one takes £5,000 from that, average earnings look a lot less attractive than would have been the case if the Government had stuck to their pledge not to increase taxes.
My right hon. and learned Friend the Member for Folkestone and Hythe was absolutely right to point out that this is a vote now, pay later Budget. The Chancellor would not have even recognised the position of council tax payers had an election not been planned for a few weeks time. However, it is worth recalling that council tax has gone up by 70 per cent. under this Government, and a third of the increase in the basic state pension has been eaten up by council taxes. It is no wonder that the so-called grey vote is on the march. We respond to it out of instinct; the Government respond purely on the basis of trying to get themselves through 5 May.
May I clarify two statistics for the right hon. Gentleman? In my city of Wolverhampton, the council tax has gone up quite a lot under this Government. In eight years, it has gone up by 16 per cent. in real terms, and we must consider real-terms increases rather than the gross increases to which, I suspect, he referred when he mentioned the figure of 70 per cent. On the money for the poorest pensioners, in 1997, a single pensioner was expected to live on £69 a week. However, from April, the figure will be, in round terms, £115 a week. In real terms, that is a 40 per cent. increase.
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Sir Brian Mawhinney: I am tempted to engage in this argument, but I will not except to say that it seems to me that the hon. Gentleman is using two different sets of inflation statistics to enhance his position. I heard the figures for an increase from £69 to £115, and I am perfectly happy to accept that such a £45 increase has occurred. However, that has taken place over eight years, which equates to 5.75 per cent. a year. Had the Chancellor said to us that he was happy to be able to tell us that he could increase pensions by an average of 5.75 per cent. per year, we would have had a better opportunity to assess the comprehensiveness of the statement that he made to the House.
I wish to mention something else that the Chancellor forgot to say, but that would have given substance and balance to his statement. He forgot to say that for every job in the private sector that was lost last year, two jobs were created in the public sector. We are all in favour of employment, and we do not enjoy seeing our constituents out of work. Two jobs for one seems, on the face of it, a good exchange. However, the Government are seeking to persuade us that they have changed their attitude to wealth creation and substituting two public sector jobs for one private sector job in one year is not a recipe for wealth creation in the medium term.
I was extremely interested in what the right hon. Member for Dumbarton (Mr. McFall), the distinguished Chairman of the Treasury Committee, said about China. He has no means of knowing this, but one of my sons is completing a PhD in Chinese history at Harvard and has taught for some time in China. My wife and I have been out to visit on a couple of occasions, and one cannot help being impressed by the level of activity and economic growth there.
I want to add a further point to those that the right hon. Gentleman made and with which I agree without reservation. China is so big that we must not fall into the mindset that it is homogeneous. It is taking our jobs at the moment because it pays less. However, when costs rise in one part of China, another part will come along that is even poorer than Beijing, Shanghai and Hong Kong. That part of China will start the process all over again and, after that, a third part will come along to start the process again.The right hon. Gentleman knows that I do not indulge in criticisms of what he says in the House, but if I have a criticism of him, it is that he almost understated the threat. Last year, my son taught in one of Beijing's universities for a year. He taught not just English, but how to write job applications for the west so that the students could be trained abroad and bring back their skills to inject into the local community.
I have just stood down after six years as a trustee of Boston university in the United States. I triedI have to say, I failed, but that is Boston's disadvantage, not mineto persuade it to be involved in a university link-up with China to develop the technology, the potential and the investment for years to come. Had the Chancellor been so minded, he could have said that he was going to give some of the pockets of money to British universities on the understanding that they would go to China and India, which I agree is also important, to look for new opportunities to develop the knowledge economy in new ways. He told us that that is fundamental to the country's future, and no doubt all hon. Members would agree, but it is one thing to say
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that and another to produce the resources to drive that forward. When the right hon. Member for Dumbarton has the Chancellor in front of him next Tuesday, he will have the opportunity to raise that with him.
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