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Rob Marris (Wolverhampton, South-West) (Lab): I pay tribute to the right hon. Member for Wokingham (Mr. Redwood). He is right, of course. The world might fall in tomorrow. On present trends, I disagree with him. I shall give him a small example with a statistic that he used towards the end of his speech—the position of the EU 15 in 2050. He had severe doubts whether we would have 10 per cent. of world trade by then. It is difficult to predict, but on current population projections, the population of the 15 in 2050 will be approximately 5 per cent. of the world population. To suggest that as the rich west we would be batting double at 10 per cent. of world trade seems to me to be entirely credible. It may not happen. I hope I am here with the right hon. Gentleman to check. It is true that the world might fall in tomorrow, but I do not think it will. Nor does the Organisation for Economic Co-operation and Development.
The OECD last October, five months ago, stated:
"The UK is a leader in the quality of its monetary and fiscal policy frameworks amongst OECD countries."
"The framework has played a key role in improving macroeconomic stability relative to both the past and to other OECD countries."
The International Monetary Fund last December commented:
"Macroeconomic stability in the United Kingdom remains remarkable . . . This impressive record owes much to good macroeconomic, financial, and structural policies, underpinned by sound policy frameworks".
In its "Audit of Assumptions for Budget 2006", the National Audit Office, at paragraph 67 on page 14 in relation to the underlying growth rate stated:
"Over the four year Rolling Review period since 2002, the rate assumed for underlying or trend growth for the purposes of making the fiscal projections was 2½ per cent. per year up to the end of 2006."
That is the rate assumed by the Chancellor and the Treasury. The NAO goes on to state that
"Looking forward, the Treasury assumption of 2¼ per cent. from 2007 onwards is at the bottom of the range of external estimates . . . On this basis, the Treasury assumption currently appears reasonable and cautious".
Of course the world might fall in tomorrow. Past indications, like the stock market, provide only a limited indication of the future, but the indication is that the world—the roof—will not fall in tomorrow.
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On borrowing, I share some of the concerns of the right hon. Gentleman, and I have done so for a number of years, as hon. Members know. I shall not recite the figures, but they were far worse under the Labour Government in the mid-1970s and under most of the Conservative Government through the 1980s and 1990s. There is a role for Government borrowing, but the focus should be either counter-cyclical or investment—I use the term "investment" in its commercial sense, and not in its somewhat devalued political sense, where it is used as a substitute for the word "spending".
Table C1 on page 250 of the Red Book lists net investment and public sector net borrowing. In 2003–04, net investment was 1.3 per cent. of GDP and public sector net borrowing was 3.2 per cent. of GDP, so there was less investment than borrowing, which is worrying for me. Similarly, in 2004–05, net investment was 1.8 per cent of GDP and net borrowing was 3.4 per cent. of GDP. The estimate for the financial year that is about to end is net investment of 2.1 per cent. of GDP and public sector net borrowing of 3 per cent. of GDP. The estimate for next year is net investment of 2.2 per cent. of GDP and net borrowing of 2.8 per cent. of GDP. In 2007–08, the estimate is net investment of 2.3 per cent. of GDP and net borrowing of 2.2 per cent of GDP. In 2008–09, the estimate is net investment of 2.3 per cent. of GDP and net borrowing of 1.7 per cent. of GDP. In 2009–10, the estimate is net investment of 2.3 per cent. of GDP and net borrowing of 1.6 per cent. of GDP. In 2010–11, which is as far as the table goes, the estimate is net investment of 2.3 per cent. of GDP and net borrowing of 1.5 per cent. of GDP. I think that that trend is healthy, and I welcome it.
Adam Afriyie (Windsor) (Con): The hon. Gentleman is underpinning his argument with lots of forward-based statistics on debt and borrowing. What would happen to those figures if PFI borrowing were brought into the equation?
Rob Marris: I cannot give the hon. Gentleman the exact figures. He has raised the question of PFI borrowing, and I think that in a commercial sense, which I am sure appeals to him, if one were to include PFI borrowing—I agree that we should have the full figures—it would to my mind, although perhaps not to his, be investment, because it goes on schools, hospitals and roads. Given my politics, I would call that investment, although I hasten to say that I do not know whether the Chancellor would include it in table C1.
John Bercow The hon. Gentleman has neatly elided into precisely the topic that I want to cover. Leaving aside both the sustainability and the cost of existing Government borrowing, is it not in any sense a source of concern to him that there is a huge disparity between the vast increases in public spending, for the purpose of which the Chancellor is borrowing so significantly, and the very poor increase in productivity? In the health service, spending has vastly increased, but, for example, the number of clinical episodes has not.
Rob Marris:
I refer the hon. Gentleman to box 2.2 on page 22 of "Productivity in the UK 6: Progress and new evidence", which was released with the Chancellor's papers today. I will not detain hon. Members with the
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figures, but, as I think that he appreciates, it is notoriously difficult to measure productivity in the NHS. Turning to what I take to be his case—he will correct me if I am wrong—he has done himself a disservice. We should all be concerned about public sector productivity, and I am convinced, although he may not be, that the Chancellor and the Government are concerned about that, too. He has done his case a disservice with his comment about the NHS—I made a similar comment to this on the first day of last year's Budget debate. If the average time allocated for a GP to see a patient goes up from eight minutes a patient to 12 minutes a patient, it is a significant decline in productivity, which I wholly welcome, and I suspect that Conservative Members welcome it, too. In a commercial sense, that is one example of declining productivity in the NHS, but I think it fantastic.
Mr. Graham Stuart: One of the problems associated with longer GP times is the time spent using choose-and-book technology, which takes nearly twice as long to use as was originally expected when it actually works. As the hon. Gentleman knows, the Prime Minister's policy unit reported in 2004 that it felt that there had been a 20 per cent. drop in NHS productivity. This is the great crisis: in the early '90s, NHS productivity was growing strongly; under this Labour Government—I think that the hon. Gentleman would agree that Ministers should take responsibility for this—productivity has fallen on normal stable measures.
Rob Marris: As I said to the hon. Member for Buckingham (John Bercow), I refer the hon. Gentleman to box 2.2 on page 22 of "Productivity in the UK 6: Progress and new evidence", which the hon. Member for Buckingham is avidly reading—the hon. Gentleman will probably seek to intervene on me again. Box 2.2 discusses
and points out that it is extraordinarily difficult to measure NHS productivity—the report's authors are much more knowledgeable on public sector productivity than me. I have already said that I believe that the Chancellor and the Government think that public sector productivity is extremely important, but it is very difficult to measure whether an apparent decline in productivity in a particular part of the NHS is desirable in social terms.
John Bercow: The hon. Gentleman's prescience is impressive indeed—he foresaw that I would want to intervene on him again, and he was right to do so. He is an extraordinary parliamentary specimen, because it is commonplace for an hon. Member to refer other hon. Members to statistics that support their case, but it is relatively uncommon for an hon. Member to refer others to statistics that directly contradict it. He knows that in the box to which he has referred the figures show a decline in productivity of between 0.6 and 1.3 per cent. a year between 1995 and 2004, but in the same box the Government complain that the figures
In other words, if the figures support the Chancellor, the Chancellor is content, but if they do not, he tries to rubbish them. Does that concern or preoccupy the hon. Gentleman, because it should?
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