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Huw Irranca-Davies (Ogmore) (Lab): I am loth to remind some hon. Members of the Ireland-Wales game at the weekend, but if, during that glorious spectacle, I had gone to the bar and been told by the barman, "I'll give you two pints of Guinness. By the time I've finished pouring, one will be full to the brim and the other will have such a massive frothy head on it that you'll only get three quarters of a pint," which one would have been the full pint?
Mr. Boateng: I could not have put it better myself.
The shadow Chancellor has told us—again, he can deny it if it is not true—that he would find the cuts by cash freezing departmental expenditure limits for all Departments except schools and hospitals. Let me read to the House what he said, so that Opposition Back Benchers are clear about the policy that they will have to defend on the doorsteps. The right hon. Gentleman said on 16 February 2004 that he has
"agreed with my shadow Cabinet colleagues that the baseline for spending across all of these departmental budgets will be 0 per cent. growth for the first two years."
He went on to declare in the same speech that he appreciated that that represented a "tough constraint" for his colleagues.
My right hon. Friend the Secretary of State for Transport managed to extract from the shadow Pensions Minister an admission that the cash freeze stood as Opposition policy. If it does not, we would like to hear it. The hon. Member for Havant (Mr. Willetts) said:
"We never intended it to be Department by Department—we were referring to the envelope within which public spending would be made."—[Official Report, 17 March 2005; Vol. 432, c. 425.]
Why then did the hon. Member for Arundel and South Downs (Mr. Flight), who was the shadow Chief Secretary at the time that the medium-term expenditure
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strategy was announced, say in a letter to Tory business supporters that Tory plans meant real reductions in areas other than health, education, pensions and welfare? That is what the shadow Chief Secretary told a Conservative City group.
The shadow Chancellor has attempted to use the James review to indicate that he would offset the effects of the departmental cash freeze. We are still waiting for the James review to be published, although we have had the slides. Slide 31 concedes that the Opposition plan to cash freeze the defence budget. Is that correct or not—or is there more to slide 31 than we have seen?
Mr. Letwin: The Chief Secretary is obviously struggling, so let me help him. In those years defence expenditure will increase by 9 per cent., transport expenditure by 10 per cent., international development expenditure by 18 per cent., police expenditure by 12 per cent., schools expenditure by 13 per cent. and national health service expenditure by 21 per cent.. Those are huge increases. He is quite wrong about other spending items, too—we will not freeze spending on certain Departments, but reduce it. DTI expenditure will decrease by 10 per cent. and DEFRA expenditure by 27 per cent., because we do not need four fifths of the people currently at the DTI, we do not need £120,000-worth of potted plants, and we do not need more DEFRA officials than there are dairy farms in England.
Mr. Boateng: We will not pay for our defence by getting rid of potted plants. The reality is here in front of me; is there something else that we need to know? The James review—[Hon. Members: "The slide."] Well, this is all we have been given. The top figure here is £27.6 billion; £27.6 billion; £27.6 billion—that is a cash freeze. If it is anything else, we want to know.
Mr. George Osborne (Tatton) (Con) rose—
Mr. Boateng: I shall give way in a moment; do not worry.
Mr. Boateng: I give way to the hon. Gentleman—let him explain.
Mr. Osborne: I am grateful to the Chief Secretary for finally giving way. Will he read out what is five columns down his document, which compares the actual Conservative and Labour plans and shows that the Conservatives plan to spend more on defence than the Labour party in 2007–08?
Mr. Boateng: The difficulty is—[Hon. Members: "Ah!"] Hold on a minute. The Conservatives say one thing in answer to one question, but they have put another thing on the slide. The reality is that their defence budget is frozen for 2005–06, 2006–07 and 2007–08, and no amount of wriggling can get over that.
Let us go beyond what the Conservatives have said on slide 31 and look at the record. We heard a typically bravura performance from the right hon. and learned Member for Rushcliffe (Mr. Clarke).
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Mr. Boateng: If I can just finish, then by all means the right hon. and learned Gentleman will have his chance to defend his reputation. Under his Budgets, when the Conservatives were last in office, the average rate of real growth in the NHS was just 1.6 per cent. In his last three Budgets, he cut education spending by £80 a pupil in real terms. Let us hear him defend that.
Mr. Clarke: In those Budgets, we debated the Budget measures and the spending costs. The Chief Secretary, for whose remarks I am personally very grateful, spent three minutes describing the Budget in standard terms, saying that it was building in stability, and then, 12 minutes ago, started on this absurd dissection of what a Conservative Government might be doing in 2011. We all know that we have no idea what any Government will be spending in 2011 unless six intervening Budgets, six public spending rounds and global economic circumstances make no change, whoever is in power. Will he address the fact that under the plans published in the Budget, taxation is going to be raised by fiscal drag—by about £2.4 billion a year—and that, even after that, the Institute for Fiscal Studies says that taxation will have to be put up by the equivalent of about 1 per cent. of GDP?
Mr. Boateng: What the right hon. and learned Gentleman is not prepared to address is the fundamental strength of this economy—the fact that we are able to take in more tax because more people are in work and companies are more profitable. Above all, we are able to do that while maintaining our fiscal rules and ensuring that our borrowing is for investment and is affordable. We remember that in the last year of his stewardship of the economy, the Conservatives were spending more on servicing their debt than on schools.
Mr. Boateng: I will not give way now; I will finish my argument. That is the record of right hon. and hon. Conservative Members, and we will take no lessons from them in that regard.
I turn to regulation, about which we heard a great deal from the shadow Chancellor, who alleged that we had failed to address regulation in the Budget. We have done nothing of the sort, but let us look at the Conservatives' record on regulation. According to the right hon. and learned Member for Rushcliffe,
—to reduce regulation, that is—
According to the right hon. Member for Kensington and Chelsea (Mr. Portillo),
"We were rather notable regulators. We passed volumes of new rules and laws interfering with almost every aspect of business and social life."
The Leader of the Opposition has said:
"Conservatives too were less responsive to these concerns, and less effective in deregulating, than we should have been."
That is the reality of the Conservatives' record on regulation. Our proposals on regulation, contained in the Budget, mean a 25 per cent. reduction in form-filling, the creation of a national regulatory forum, and a better
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grip on regulators' performance at the centre, with a better regulation executive. My hon. Friends the Members for Crosby (Mrs. Curtis-Thomas) and Dundee, East (Mr. Luke), among others, have talked of the importance of these measures to small and medium-sized enterprises in reducing the burden of regulation.
We have here a Budget that contains deregulation measures that have been praised by no less a person than the CBI director general himself, who described them as worthy of applause and
"at the heart of the UK's battle to be competitive . . . Both the Hampton Report and the Better Regulation Task Force contain practical ways . . . ensuring that the proposals will be workable, and looking forward to their being workable."
As I have said, that is not praise from us; it comes from the CBI director general. For the same reason the World Bank has found that Britain is the best European Union country in which to do business, and it is what marks us out from our competitors in the EU. We have been successful in growing our economy, and continuing to do so.
The Budget is good news for pensioners, all of whom will benefit by about £11 million from free bus travel alone. Those in need will gain most. Under the Tories, the wealthiest would gain three times as much as the poorest. It is good news for home buyers, of whom an additional 300,000 will be exempted from tax each year—more than 50 per cent. of first-time buyers. It is good news for hard-working families: those with children will gain most. We are on target to reduce by a quarter the number of children living in low-income households by 2004–05. Under the Tories, so many of them were trapped in poverty. It is good news for our youth and the next generation: there will be better education facilities and better access to skills, whereas under the Tories so many were failed. It will bring real benefit to business too, securing our hard won stability by maintaining the push for productivity and growth with practical measures on regulation and training.
Business, pensioners, youth and hard-working families are not thinking what the Conservatives are thinking, but not forgetting either: in fact, they are remembering. They are saying "No more boom and bust." They are saying "no" to cuts and charges. They are saying "Forward, not back". That is the record and the reputation that we will take out to the country whenever we are called on to do so. We will be going forward, not back. We are proud of what we have done for business, proud of what we have done for hard-working families, proud of what we have done for pensioners. Forward, not back! I commend the Budget to the House.
(1) That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance.
(2) This Resolution does not extend to the making of any amendment with respect to value added tax so as to provide—
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