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Mr. Kelvin Hopkins (Luton, North) (Lab): Will my hon. Friend give way?
Rob Marris: I will not, I am afraid, because I have limited time.
We need to consider whether we should do more for the public sector and public services. The fact is, the economy is stable and strong, and there is spending and investment in the public sector. We are catching up on 18 years of under-investment, yet the Government are spending, and have been spending, less as a proportion of GDP than was spent for most of the 18 years in which the previous Government were in power.
There was a strange exchange when my hon. Friend the Member for Hastings and Rye (Mr. Foster) asked the hon. Member for Orpington (Mr. Horam) who, like many Conservative Members, had been banging on about regulations, which three regulations he would abolish. The hon. Gentleman could not name one, and referred to tax credits. If he wishes to get rid of tax credits, his local party and constituents would be interested to hear about that.
The hon. Member for Eddisbury (Mr. O'Brien) chuntered on about the Chancellor when the hon. Member for Ribble Valley (Mr. Evans) was speaking about deregulation and saying that the Budget did too little, too late. However, on 1 December, I asked the shadow Chancellor, the right hon. Member for West Dorset (Mr. Letwin), for three examples of regulations that he would abolish. I shall not read out his entire reply, but he said
"I can give the hon. Gentleman not three but thousands and thousands of examples. I will send him a very long list."—[Official Report, 1 December 2004; Vol. 428, c. 640.]
I did not receive that list, so I wrote to the right hon. Gentleman on 2 December and also reminded him verbally. I finally received a letter dated 16 December on 29 December, citing three regulations that the shadow Chancellor and his party would abolish—the statutory dispute resolution regulations, the Cattle Identification Regulations 1998 and the Care Homes Regulations 2001, which set national minimum standards, so abolition would dilute standards of protection for older residents.
I have still not received the long list I was promised. Conservative Members may claim, incorrectly, that the Chancellor is a late convert to deregulation, but three months have passed since the shadow Chancellor said that he would send me a long list, despite the fact that I gave him reminders both verbally and in correspondence. The right hon. Member for Wokingham (Mr. Redwood), the Opposition spokesman on deregulation, has not, as far as I know, produced a deregulation list either inside the Chamber or in any other public forum. Conservative Members should not berate us about regulation, and are simply engaging in rhetoric unless they can produce concrete examples. The shadow Chancellor has been able
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to produce only three examples in three months, and the hon. Member for Orpington could produce only one, which was hardly what most of us would classify as a regulation.
I should like to finish, because I am conscious that other people wish to speak. However, I have been waiting all day. I want to consider the position that an economy can get into when a right-wing Government take over and promise to cut taxes. That has happened in the United States of America. In January 2001, George W. Bush took over leadership of the United States, which at that time had its soundest economy for decades. In four years, he threw that away. Between 2001 and 2004, US federal tax revenues dropped by $600 billion. I shall not alarm hon. Members with all the figures that I have read in an excellent article in the 7 March issue of MacLean's Magazine, but some of them are frightening for America, and frightening in terms of what could happen in this country if a right-wing Government were elected with an agenda of cutting taxes.
Mr. Baron: Will the hon. Gentleman give way?
Rob Marris: No, I shall not give way because of time. In any case, I think that the hon. Gentleman hopes to speak.
If we got a right-wing Government that cut taxes and said that they could run things more efficiently, we would risk experiencing the same spiral as that in the States, whereby a budget surplus of $128 billion in 2001 has turned into a deficit of $412 billion this year, and the cost of borrowing and servicing the debt at a federal level is now 8.6 per cent. of the federal budget. On current projections, by 2014 all federal Government revenue will be consumed by four areas of spending: health care for the elderly and the poor; social security for pensioners; defence, and interest on the national debt. Furthermore, on those projections, by 2031, the US Government will not even be able to service the national debt. That shows how such things can quickly spiral out of control when a right-wing Government get in on false promises.
Conservative Members make the false promise that they, in government, would be more efficient. They say that they could run government more efficiently—to the tune of £35 billion less—than the current Government. I shall give them an example of how they cannot even run their party efficiently, let alone the Government. As some hon. Members know, I was born and raised in Wolverhampton. There are only two Marrises in the phone book in Wolverhampton. One is my mother, who lives in a village outside the city, and the other is me. I am the only person of that name in Wolverhampton, and I represent the constituency. Yet I got telephone canvassed by the Conservative party and asked to support it in the general election. A message was left on my answerphone, and I can assure Conservative Members who are present that I am not "doubtful", and that I shall vote Labour in my constituency, where I live.
A month later—again, hon. Members should bear in mind the fact that I am the only registered elector in the whole of Wolverhampton with the surname Marris—I
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got a letter from the Leader of the Opposition asking me to support the Conservative party in the general election, whenever it might be. That is one example of a political party that aspires to govern and claims that it will to do so more efficiently, yet cannot run itself efficiently enough not to canvass Labour Members of Parliament who, like me—and my right hon. Friend the Paymaster General—have distinctive surnames.
6.38 pm
Mr. John Baron (Billericay) (Con): No Budget is all bad or all good, and this Budget is no exception. However, the electorate, especially in Essex, will soon realise that it is a vote now, pay later Budget.
The Budget confirms that tax increases are inevitable should Labour win the next election. Most economic experts, including the International Monetary Fund, the Organisation for Economic Co-operation and Development and the Confederation of British Industry, say that the Prime Minister is spending, wasting and borrowing too much. That makes tax increases even more inevitable.
Even if one ignores the tax increases that are factored in, the burden of taxation is set to rise to 38.5 per cent. of GDP—the highest for 25 years. That is a worrying trend, because it affects our competitiveness. The Chancellor was right to focus on the competitive challenge from countries such as China and India. It is widely accepted that those countries are becoming global powerhouses and will prove a greater competitive threat to us in the years ahead. However, the Government's response, with higher taxes and spending, is the wrong way to face that challenge.
Britain needs lower taxes and less regulation if it is to compete effectively. However, our productivity is being undermined by a Government who continue to raise taxes, and this Budget has done nothing to put that right. It is little wonder that our position in the world competitiveness league table has slipped from something like fourth to 11th in recent years.
We are storing up trouble for ourselves in the years to come, and it is no good the Chancellor comparing our growth rate with that of the eurozone, which is suffering from very sluggish growth rates for a whole host of reasons, including its membership of the euro. The Chancellor should look instead to the better performing economies around the world for a comparison. We shall maintain our economic position and standard of living for our citizens only if we keep up with the best, rather than comparing ourselves with the mediocre.
The tax increases that have been introduced in recent years, which this Budget has done nothing to correct, will also ultimately hinder our ability to help the disadvantaged and vulnerable in the longer term. Despite promises to the contrary, we have had something like 66 tax increases since 1997, and the Government's total tax receipts have increased from about £270 billion in 1997 to about £400 billion last year.
Another way of illustrating that is to look at our tax freedom day. This measures when Britons start working for themselves and stop working for the Treasury. This year, tax freedom day in this country fell on 30 May. In 1964, by contrast, it fell on St. George's day, 23 April.
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By 1970 it had advanced to 26 May, and it stayed around that date until the latter days of the last Conservative Administration in 1997, when it fell by a few days. Since then, under Labour, it has risen by six days and is set to rise further. The situation in the eurozone is even worse. Average citizens there must work right through to the end of June before they start to work for themselves.
In America, by contrast, tax freedom day this year fell on 11 April, the earliest for 37 years. It should be noted that—contrary to what the hon. Member for Wolverhampton, South-West (Rob Marris) said—the US has some of the lowest taxes and unemployment rates of all the industrialised countries. Growth there is about 4.5 per cent., while in the eurozone, which has some of the highest levels of unemployment and taxes, growth is about 1.5 per cent. Growth in the eurozone has been consistently lower over the years. Britain is, as we know, somewhere in the middle. These figures confirm to me—and, I hope, to the hon. Gentleman—that there is indeed a link between lower taxes and greater prosperity. The greater our prosperity, the more we shall be able to fund our public services and look after the disadvantaged in our society over the longer term.
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