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The Paymaster General (Dawn Primarolo): This concludes two days of Budget debate. The right hon. Member for North-West Cambridgeshire (Sir Brian Mawhinney), who is retiring from the House after 26 years of service, was at times critical of the Government, but he had the good grace to welcome many parts of this and previous Budgets. I pay tribute to him. Not only has he been a courteous Member, but his contributions to seeking peace in Northern Ireland and to the early work that the Conservative Government did on world debt, on which my right hon. Friend the Chancellor has built, were substantial. I am sure that all hon. Members will miss his contributions.
My hon. Friend the Member for Glasgow, Shettleston (Mr. Marshall) is also retiring after 26 years. He described how, over 18 years of a Conservative Government, he saw the destruction of his and his constituents' hopes and aspirations. My right hon. Friend the Member for Llanelli (Denzil Davies), who is retiring after 35 years, made a typically combative speech, while explaining thoughtfully, as others did, the challenges that we face from China and India.
My right hon. Friend the Member for Airdrie and Shotts (Mrs. Liddell), who, with me, became a Minister in the Treasury in 1997, made an eloquent speech on behalf of her constituents. Hon. Members on both sides of the House will miss her greatly, but we wish her luck in sunnier climes as she moves to another part of the world to take up other public duties. I also congratulate my hon. Friend the Member for Ochil (Mr. O'Neill) on his characteristically reflective but at times blunt speech on Government policy. None the less, he demonstrated his experience and excellent stewardship of the Select Committee on Trade and Industry. His final comments were forcefully made about the importance of and the need for investment in skills and a knowledge-based economy, and of ensuring that we rise to the challenge that the global economy poses.
My right hon. Friend the Member for Dumbarton (Mr. McFall)the distinguished chairman of the Treasury Committeethe hon. Members for Arundel and South Downs (Mr. Flight), for Grantham and Stamford (Mr. Davies), for Orpington (Mr. Horam), for Ribble Valley (Mr. Evans) and for Billericay (Mr. Baron), my hon. Friends the Members for Wolverhampton, North-East (Mr. Purchase), for Wolverhampton, South-West (Rob Marris), for Nottingham, South (Alan Simpson) and for Hayes and Harlington (John McDonnell) and the right hon. Member for Fylde (Mr. Jack), and the right hon. and hon. Members who spoke today, have all contributed to the Budget debate.
A number of points have been made today about the Government's strategy, but it ill behoves the hon. Member for Chichester (Mr. Tyrie), who was an adviser
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to a Conservative Chancellor who got the economy into a terrible mess, to start lecturing the Government about how to proceed. Let us look at each of the allegations in turn, starting with the allegation that our tax revenue forecast was not accurate. Opposition Members need to look at the figures very carefully. Net taxes and national insurance contributions have come in on target since the pre-Budget report. Furthermore, the public finance statistics released in February 2005 for January show that the underlying fiscal position remains sound, for example, in relation to the PBR forecast for year-on-year growth of 3 per cent. The total corporation tax receipts have grown more quickly than expected with year-on-year growth in that period. The tax revenues will rise automatically each year as the economy grows, more people are in work and are earning more. That is a sign of economic success and increased national prosperity.
We have an economy in which more than 1.8 million extra jobs have been created since 1997. Every year commentators say that our forecasts are wrong, but every year Treasury Ministers demonstrate that the Chancellor's forecasts are correct. If the hon. Member for Chichester wishes to cite commentators, I suggest he cite all of them, including the Goldman Sachs economic research group, which said in March 2005 that
Mr. Tom Harris (Glasgow, Cathcart) (Lab): My right hon. Friend will be aware that today 310 job losses were announced in a factory based in my constituency that is part of the Weir Group. Given the tremendous efforts that the Government have made to help manufacturing industry, what comfort and support can they offer my constituents and the company which, as well as making that announcement, has plans to move out of my constituency?
Dawn Primarolo: I am sorry to hear that. It is another example of the challenges of globalisation. As the hon. Member for Cities of London and Westminster (Mr. Field) pointed out, globalisation can be an opportunity, but it also offers huge challenges. I am sure that the Scottish Executive and the Department for Work and Pensions will do all that they can to work with my hon. Friend and assist his constituents.
The right hon. Member for Horsham (Mr. Maude) said that the debate needed honesty. I shall answer his questions about regulations, but also return to the honesty of the Opposition and their £35 billion cuts to the public sector. His speech was mostly thoughtful and considered. The Government have established the Panel for Regulatory Accountability to scrutinise regulatory proposals, and we have accepted proposals in the Better Regulation Task Force report to reduce the administrative burden on business. We have also accepted the recommendations of the Hampton review. Before the Hampton and Arculus reports, there had never been a survey of the regulatory landscape by any Government. This Government are the first to address cumulative administrative burdens. He asked how that would be taken forward. The Departments have plans in place to reduce the administrative burden by pre-Budget report 2006, and the Panel for Regulatory Accountability will set a target or targets against which to deliver. With regard to Hampton, Departments will have 18 months to develop a plan for integration, and the full transition will take place within four years.
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I am sorry that the hon. Member for Tunbridge Wells (Mr. Norman) is also retiring. He has not been in the House a great length of time, but has made important contributions during that period. Members in all parts of the House will be sorry to see him leave. He always makes thoughtful and challenging points, as he did today. He spoke about growth. In recent years, GDP growth has become more balanced, with the composition shifting away from private consumption. More recently, investment and export growth has been picking up. Business investment growth has picked up convincingly, rising for seven consecutive quarters and rising by almost 5.5 per cent. in 2004, the fastest rate in six years. He went on to speak about manufacturing. Conditions have been picking up recently. Official data show that manufacturing output grew in six of the past eight quarters, and output was up 1.3 per cent. on the previous year in 2004.
On competitiveness, I ask the hon. Gentleman to read the reviews. The KPMG review said that the UK's competitive framework was the third best in the world. In September 2004, the World Bank ranked the UK as No. 1 in Europe and seventh in the top 20 countries in which to conduct business. The OECD said that the UK's economic and administrative regulations were the lowest in the OECD. That is not a recipe for an uncompetitive nation. As we know, when we look at the figures for tax and undertake international comparisons, whether with the G7 or with our European partners, we see that the UK's level of taxes is competitive, below the European average and competitive with most of the economies with which we seek to compete for jobs.
The economy is enjoying the longest period of growth since records began. Whereas every other G7 country experienced at least one quarter of negative growth in the recent world downturn, Britain did not. The economic fundamentals are sound. That is why my right hon. Friend the Chancellor was able to announce continued investment to modernise our primary and secondary schools, increase payments to head teachers so they can spend more in their schools, support young people to stay in education, increase help to hard-working families, help with the £200 winter fuel allowance to pensioners and give local free bus travel.
Compare that with the Conservatives. What is on offer? I come back to the point made by the right hon. Member for Horsham. Let us have a little honesty.
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According to their medium-term expenditure strategy, their proposals will cut £35 billion from front-line services. That was admitted by the hon. Member for Havant (Mr. Willetts), supported by the hon. Member for South Suffolk (Mr. Yeo), who confirmed that both his Budgets had been frozen in the first two years and that he would take money from the Department for Environment, Food and Rural Affairs, should he ever be a Minister, and transfer it to the Department for Transport. From their very mouths came the admission that they would cut £35 billion.
It is about time the Conservatives told the British public the truth. What they are interested in is cutting public services without telling members of the public why they are doing so and dressing it up as extra choice or extra services, when the truth is that it is the decimation of public servicesthe very things we need to be a competitive nation, create more jobs and invest in our children. It is about time the Conservatives came clean. I commend the Budget to the House. Opposition Members keep imploring us to be honest, and we are. I look forward to their honesty when they explain their medium-term financial plans and why they will cut that money.
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