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Mr. John McFall (West Dunbartonshire) (Lab/Co-op): It is a pleasure to contribute to the debate. I congratulate the Chancellor on his 10th Budget. He spoke for about 60 minutes and enlightened us. Sadly, the Leader of the Opposition spoke for eight minutes, so he has an awful long way to go to give us an insight into what the Conservative party's thinking is on the economy. It must be the shortest speech on record. I think that that is rather disgraceful and a discourtesy to the House.
We can echo that today, 10 years later. I note that he broke with tradition then. He held his Budget on a Wednesday and eschewed the traditional right of a Chancellor to drink Scotch whisky when he presented it. Instead, he favoured Scottish mineral water. I congratulate him, though, on being consistent on Scotch whisky and having a freeze on duty for all these years. That is good news for constituents in my area, where we have whisky plants. I also note that the FTSE 100 was 4,751 on the day of the Chancellor's first Budget and is now 5,985. That underlines a decade of economic prosperity and stability.
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I also note that the Chancellor described 2005 as being the toughest year of his chancellorship, with the virtual doubling of oil and commodity prices, as well as a slow-down in the UK's main export market, which is Europe, and the country having to adjust to a more sustainable house price growth in the UK housing sector.
Mr. Charles Walker (Broxbourne) (Con): Is the right hon. Gentleman aware that since 1997, our stock market has been one of the worst performing stock markets of any major industrialised nation in the western world? Does he think that the Chancellor should take some responsibility for that?
Mr. McFall: Only in the past week or two, I had the opportunity to have meetings with people from the London stock exchange and such comments never passed their lips. In fact, they said that they are on a high, that equities are good and that they are looking forward to keeping themselves independent and not having NASDAQ or Macquarie coming in. The vibrations from the City are very good. I suggest that the hon. Gentleman follows my example, goes to the City, speaks to people and gets an understanding of what the City is about.
Mr. Ian Austin (Dudley, North) (Lab): In addition to the Leader of the Opposition's speech being the shortest that any of us can remember, does my right hon. Friend agree that it was also the most feeble, because it failed at any point to respond to any of the measures that the Chancellor had outlined?
Mr. McFall: I would not want to be discourteous to the right hon. Member for Witney (Mr. Cameron), but what I can say is that I was left bemused about the future direction of the Conservative party on economic policy. We all found that. It is about time that the Conservatives came up to the plate and explained to us what their actual policies are. As one politician said in American, where is the meat? That is what we are looking for.
I welcome the investment in education that the Chancellor announced today. I did not hear about this from the official Opposition, but the fact that we have an ambition to match spending in public schools with that in private schools must be a good thing. I hope that they go back and, in their clubs and social events, mention that the country has made a great innovative move. There are other people in society who will benefit from their education in the same way as they have done. I can only commend that move by the Chancellor.
I also commend the extra investment in science and infrastructure. I speak as a former science teacher and I know that, as someone from a science and engineering background, I am in a minority in the House. If we are to tackle the competitive issues that face the country, which the Chancellor has outlined, we need to ensure that we increase the number of science and engineering graduates in this country. We should be mindful of the fact that the Chancellor said that China is producing 4 million graduates.
Mr. Brooks Newmark (Braintree) (Con):
I would be interested to know what the right hon. Gentleman feels about the Government not supporting Sussex university, which is to close its five-star chemistry department.
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Mr. McFall: It is a matter for universities to decide what they do and on what particular issues they focus. What I would be concerned about is if the country as a wholeUK plcwas not facing up to and addressing the national shortage of science and engineering graduates. We must focus on the big picture.
As well as the science infrastructure, I welcome the investment in the Olympics, as the right hon. and learned Member for North-East Fife (Sir Menzies Campbell) mentioned. It is important to give our young people opportunities and ambitions. That investment, as well as the investment in child tax credits and child trust funds, can only be well used. Inculcating the savings habit in young people is increasingly important, and ensuring that those on lower incomes enjoy being involved in the savings environment is also extremely important.
Mr. Graham Stuart (Beverley and Holderness) (Con): Does the right hon. Gentleman agree that as the Chancellor of the Exchequer inherited the strongest economy in Europe, he should have been in a position to deliver the first target for the reduction in child poverty by 200405? Does he join me in decrying the fact that hundreds of thousands of children remain in poverty when the Government had the means and stated the aim of doing away with it?
Mr. McFall: I am aware that in 1997 the Labour Government inherited an unemployment rate of 3 million. Since 1997, we have produced 2 million jobs, and that is the best antidote to poverty. I speak as an ex-school teacher, as I mentioned earlier, and one of the sad features of life when I was teaching in the 1970s and 1980s was meeting young people five or 10 years after they had left school who had yet to get a job. If people do not have a job, they are not fulfilled and they do not contribute to societyit is a spiral of decline. It is important to provide jobs, and I commend the Government on those extra 2 million jobs.
This was the first Government with the stated aim of reducing child poverty. The Chancellor mentioned the 700,000 who had been lifted out of poverty, and that can only be a good thing. Is there a bigger hill to climb? Of course there is, and I would like to think that we could all tackle it together.
Mr. Andrew Smith (Oxford, East) (Lab): Would not comments from the Opposition about child poverty have greater credibility if they would make the pledge to eradicate child poverty in a generation and match our commitment to help the poorest families out of poverty? Is not the reason they do not do that because under their third fiscal rule they would not make the spending available to conquer poverty?
Mr. McFall: I agree that if we could achieve our aims and ambitions on a consensual basis it would be good. The Leader of the Opposition has still to flesh out his economic policy, and that is one suggestion that he could take on board.
Ed Balls (Normanton) (Lab):
Perhaps we should be more understanding of the Leader of the Opposition's position. He has asked the right hon. Member for Wokingham (Mr. Redwood) to discover his economic
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policies for him over the next two years. Until the right hon. Gentleman has come up with the plan, it will be hard for the Leader of the Opposition to respond to any Budget. However, the third fiscal rule will make it very hard for the Conservatives to match our pledge on education spending. If they intend to cut spending as a percentage of GDP, it will result in lower spending on science and education.
Mr. McFall: I look forward to the recommendations that the right hon. Member for Wokingham (Mr. Redwood) produces, because to use skiing terminology, he is exciting and he goes off piste a lot. I am sure that we may look forward to some innovative suggestions in the future.
The Treasury Committee is considering savings issues at present and recently examined the issue of tax credits. Tax credits are a good scheme, but they must be delivered in practice. My right hon. Friend the Member for Birkenhead (Mr. Field) gave evidence to the Committee and I know that my right hon. Friend the Paymaster General has read the transcript, but it is worth underlining what he said. I suggest that trying to modify the tax credit system runs the danger of it starting to perform like the Child Support Agency. The choice is between a flexible system or a fixed award. As my right hon. Friend the Member for Birkenhead pointed out, if we change to the fixed award, Members of Parliament will be inundated with complaints about the unfairness of a scheme that does not quickly take into account changed circumstances. I suggest that my right hon. Friend the Paymaster General stays the course.
The Committee visited Preston to examine the IT in the tax credit office. From our experience and that of our constituents, we know that not all the information is on the computers when they telephone that office. The IT system is in much need of repair, so I hope that my right hon. Friend takes up the comments made by the Committee on that point.
The Committee is also holding a short inquiry on the Turner report and the pension recommendations. It will be short because we want to be able to publish our report before the White Paper is produced. Our focus will be on the design of the national pension savings scheme and the role of financial services regulation.
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