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Mr. Edward Vaizey (Wantage) (Con): Does my hon. Friend find it intensely depressing that the mood among Labour Members is not to take account of his remarks but instead to call for a windfall tax on some of our most successful businesses, and that profits are cited but the tax that those companies pay to the Exchequer is not? Does he agree that a windfall tax at this stage would drive many of our most successful companies overseas?
Mr. Fallon: As my hon. Friend probably knows, I am easily depressed when listening to speeches by Labour Members, but even more so today by those who do not understand that the companies whose profits they want to windfall taxour major banks and oil companiesare world-class British companies bringing home to this country very substantial amounts of revenue as well as providing an important part of our financial and scientific base.
I turn to borrowing. Only this Chancellor could consider £35 billion of borrowing to be a small amount. Only this Chancellor could consider missing his revenue targets five years in a row as somehow irrelevant. That is serious, because the trend is now clear. As my right hon. Friend the Leader of the Opposition so swiftly totted up this afternoon, the total amount of borrowing in prospect is some £175 billion. That is additional debt that must not only be repaid in due course but serviced by this generation.
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The Chancellor has again been over-optimistic in his Budget judgment in regard to the amount of revenue that he is likely to get in, and he will end up dependingas many Chancellors have doneon indeterminates such as an attack on excise duty fraud or the latest initiative on tax avoidance. Those measures are all very worth while, and exactly the sort of thing that the Treasury should be doing, but their yield is always unproven and uncertain. I wish I were as sanguine as the Chancellor about the growth rate for the economy as a whole. To me, the high street still looks a pretty miserable place.
In urging the Chancellor to improve his forecasting record, I would like him to admit of a little humility, and perhaps allow a little more transparency in order to allow othersacademics and external expertsmore access to the Treasury forecasting model. I understand the difficulties involving confidentiality regarding individual and corporate taxpayers' details, but as the Chancellor and the Treasury have got their revenue forecasts so badly wrong year after year, I believe that we need an external eye to look at the matter. These processes need more external validation. I live in hope. I was roundly abused by the Chancellor in the Treasury Committee for daring to question the integrity and independence of the Office for National Statistics. Six months later, he announced that he was taking urgent measures to enhance the integrity and independence of the ONS. There is no reason why the Treasury's revenue forecasting model should not be opened up to a little more external scrutiny in the same way.
Finally, I turn to spending. The Chancellor has postponed the spending review by a year, in order to turn it into a fully comprehensive spending review in which every stone is turned and every detail examined. So I was quite struck by the way in which he pre-empted it today. He identified a whole series of Departments that will have no increase at all, then announced that the Department for Education and Skills would receive the lion's share of the increase. We welcome those additional resources, but, as several of my hon. Friends have pointed out, it has been this Chancellor's biggest single failure that he has not secured the reform that needs to accompany them.
Anyone who questions that judgment needs to come down to my constituency of Sevenoaks, where another 20 beds have been taken out of commission at Sevenoaks hospital because the primary care trust has run into deficit. They should come and talk to Kent police, whose so far successful investigation into the Tonbridge robbery has been distracted by the Government's ill-thought-out proposal to merge them with the Surrey and Sussex forces, which was finally postponed only yesterday. They should also come and meet the district and county councillors who want to deliver public services but who are now at loggerheads, wondering what the future bureaucratic structure to be inflicted on them will bring.
None of this bureaucratic tinkering with NHS trusts, ambulance trusts, strategic health authorities, police authorities and district councils will directly benefit patients, victims of crime or council tax payers. On the contrary, all that we can be sure of is that this top-down,
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bureaucratic, Whitehall-driven reform will impose extra cost and distract those local services from doing the job of servicing their local community.
Edward Miliband: I know what a well-informed expert on these economic matters the hon. Gentleman is, sitting as he has done on the Treasury Committee for a number of years. On the subject of depressing speeches, however, I am surprised at some of the things that he has said. Will he not concede that the extra investment that the Government have put insuch as the increase in investment in schools that the Chancellor mentioned todayhas made a difference in his own constituency?
As I was saying, I get depressed listening to some Labour Members' speeches, and to quite a lot of the Chancellor's speech. Of course we welcome elements of public spending, and I particularly welcome the reform to channel more and more education spending outside local councils direct to schools. As someone who initiated local management of schools for all primary schools in this country, I welcome the increase in the direct grant to the head teachers concerned. The overall judgment needs to be questioned, however, and that it the Opposition's job.
Before I gave way, I was discussing the failure to secure real reform to match some of the welcome increases in public expenditure. We heard no more today about the necessary reform to public sector pensions. We hear that discussions continue behind the scenes with the different trade unions, driven through different Departments of State. But we heard no announcement today about how the balance will be redressed between current and future members of public sector pension schemes, and between those who benefit from public sector pension schemes, as we do in the House, and those who have to rely on private provision.
We heard little from the Chancellor about the general drive for efficiency savings. There was the odd mention of Gershon, but no substantiation of the savings that we can now expect, and no justification of some of the original targets. The Treasury Committee will look for much harder evidence that those efficiency savings can be captured, quantified and delivered in the shape of more efficient public services. We heard little today about more local empowerment. We did not hear about reforming working practices, more local pay, really sorting out the delivery of those services at the sharp end or helping to enfranchise police area commanders, hospital managers and head teachers.
This is the Chancellor's 10th Budget. My real regret is that he appears to have learned nothing from the failures of the previous nine Budgets. Whether or not this Budget will help propel him further into Downing street, I do not know. I do know, however, that the country will continue to be the worse off for the mistakes that he has made and the arrogance with which he refuses to recognise them.
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Alan Simpson (Nottingham, South) (Lab): Budget debates are often conducted within a strange sense of time. The short term is about whether the Budget will survive the press headlines and analysis tomorrow. The medium term is defined as how the Budget will look in a month or a year's time. The long term is the end of this Parliament. Anything beyond that is infinity. The difficulty for our constituents is that they have a different sense of time, of the critical issues that face them today, and of issues that Government and Parliament must address in the years ahead, in their working lives and the lives of their children. Against some of those measures, I want to reflect on some of the matters that were not dealt with in today's Budget.
Sadly, the shortest of short-term considerationsfending off the press and seeing off the Oppositionhas almost been dealt with by the Leader of the Opposition. I was astonished by his speech, which was lamentable. It was almost as though he had set out to send himself off. It was an apology for his existence rather than a bid for the intellectual leadership of the nation. In that sense, the challenge to the Chancellor's Budget from the Opposition petered out before it began.
Other challenges are waiting, however, beyond the Opposition Benches and tomorrow's press headlines. Those challenges are what Parliament must do to build a society and economy that will survive sustainably in the decades ahead and that will meet the current challenges and crises facing society. I make no apologies for saying that that is the entire focus of what I hope will be my Budget contribution.
The Tories made some interesting comments. They spoke of a Labour Budget disregarding wealth creation and being indifferent to productivity, and said that those were the cutting edges of the economy that they defended and we ignored. I refer Members to a book that will come out within the next week called "Rich Britain", by Stewart Lansley. It is an analysis of the current state of wealth distribution in the United Kingdom. Among its key observations is that 25 years ago Britain was one of the most equal societies in the developed world, but now we are one of the most unequal. In the years since 1990, the number of people sitting on assets of more than £100 million has increased fivefold. Twenty years ago, the income gap between the chief executive of one of our FTSE 100 companies and the average worker in that company was a factor of 25. Today, the earnings gap has risen to 120. That is the wealth divide that has opened up in our society.
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