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Keith Vaz: It is disgraceful to say that.

Mr. Soames: It is not disgraceful at all.

The right hon. Member for Birkenhead (Mr. Field), the only welfare reform Minister whom the Government have had who was worth his stuff, said:

I say again that the Chancellor of the Exchequer is responsible for debauching the public pensions of this country. My hon. Friends will agree with every word of a passage from an article on pensions in The Times by Lord Rees-Mogg, who said that the Chancellor

Many Conservative Members will agree entirely.

There was a great failing, too, by the Paymaster General. I am sorry to disoblige her, but the shambles of the tax credit system for which she is responsible is one
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of the most disgraceful episodes in the Government's history. Many people in my constituency and, indeed, throughout the country, are still paying the cost of that grotesque incompetence. The Chancellor has utterly failed to get a grip on the unfunded costs of public sector pensions and has made a unique contribution to off-balance-sheet accounting of well over £800 billion.

Before I conclude, I applaud the Chancellor's determination to try to do more to prepare Britain to compete in the great global economy. Because of the war in Iraq, which I supported at the time, and which I still support, although I deeply resent the way in which the Americans handled the post-conflict arrangements and the trouble that flowed from that, the exercise of soft power has become even more important. America's soft power has diminished like the winter snows, and the country has lost almost all credibility abroad. America has 13 carrier groups that it can deploy throughout the world, but to bomb the living daylights out of 30 people is not the most sensible way of using military power. Soft power matters. Our country has a wonderful tradition of the use of soft power, and our assets include the BBC World Service, the British Council, British art and culture, the great traditions of democracy at Westminster, the monarchy and the law. All those things command great influence overseas, so they are vital assets.

I am glad that the chapter entitled "Meeting the productivity challenge" in the Budget report includes a well-written passage about the United Kingdom as a competitive centre for global investment. However, when she deliberates on public spending I urge the Paymaster General to consider the need to deploy our soft power on an even greater scale. If we are to maximise the great opportunities afforded by the global economy, we must put more money into the great services provided by the British Council, the World Service and the Foreign Office. It is tremendously short-sighted to diminish the unbelievable expertise of the Foreign Office. Across the world, our remarkable diplomats do a wonderful job, so hacking away at the Foreign Office's overall budget is extremely short-term, bad politics and not in our national interest. It is in our national interest to make sure that those great assets are properly funded so that services do not struggle on a shoestring. A grotesque amount of money is spent ineffectively and inefficiently, and it would be spent much more efficiently and effectively by organisations such as the Foreign Office.

When travelling abroad, Ministers are always begged to provide more training places at our military establishments, not just at the Royal Military Academy Sandhurst, Cranwell or Dartmouth, but at some of the engineering and signals establishments—wonderful sources of brilliant expertise and knowledge that are acknowledged all over the world as leaders in their field. We are wonderfully good at defence diplomacy. Lord Robertson, when he was Secretary of State for Defence—and a very good one, in my view—made much of that in his White Paper. With the cuts and the huge pressure on the Ministry of Defence and on manpower, it is important to remember that defence diplomacy is a huge plus for this country. It may not be a great big item in the context of the health service and the education service, but it is vital to our national interest.
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I had hoped that the Chancellor would announce yesterday a set of reforms to the planning system and the overweening bureaucracy and regulation that would release the energy of our economy. I am deeply depressed by what I heard from my hon. Friend the Member for Tunbridge Wells (Greg Clark) yesterday about the lack of integrity in the presentation of the Gershon figures. I hope that the Paymaster General will this evening give a truthful and accurate exposition of the Gershon figures. She may not have heard my hon. Friend say that the National Audit Office has not thought fit to sign off the Government's figures because it does not regard them as accurate.

I hope the right hon. Lady understands that the overwhelming bureaucracy and red tape are the reason that companies such as Google, Oracle and Amazon locate in Dublin, rather than London. That is very bad news for us. Those are the very companies that we want to attract and which we used to attract. We face losing not just low-skill, low-paid jobs to big emerging economies, but much more seriously, high-skill, high-paid jobs. China and India are producing 4 million university graduates a year.

The Chancellor's response to the global challenges facing Britain is to saddle this country with the highest tax burden in our history and record levels of red tape. I am glad to hear on all sides that the Chancellor has woken up to the international and domestic triumph that is the City of London. I declare my interest, which is registered in the Register of Members' Interests.

The booklet entitled, "Financial services in London: Global opportunities and challenges" is a very good document that has been warmly received in the City. Having kept the City at a distance and not having helped it at all for years, finally the Chancellor embraces it as he knows he is about to become Prime Minister. That is a good thing, because the City of London has done more for the country than anyone could possibly imagine through its expertise and its overseas earnings.

There remains tremendously important work to be done to fix a crisis in competitiveness, productivity, training and education to prepare our economy and our people of all ages for the global challenges that we face. This was not a Budget that prepares Britain for a new global economy.

3.4 pm

Mark Lazarowicz (Edinburgh, North and Leith) (Lab/Co-op): Tackling climate change and protecting the environment was one of the central themes of yesterday's Budget. When I saw that the Conservatives had put up the right hon. Member for West Dorset (Mr. Letwin) to open the debate, I thought that that would be a major theme of the Conservative contribution today. The right hon. Gentleman was evidently allocated to perform another role in the debate, but at least he did not perform it in the same foaming-at-the-mouth, carpet-chewing style of his leader yesterday, for which we must be grateful.

Although the right hon. Member for West Dorset did not take up the issue of climate change and the environment, I should like to record my welcome for the fact that the Chancellor chose to put it at the heart of the Budget, thereby reflecting the increasing concerns of our constituents. Some environmental organisations have,
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naturally, criticised the Budget for not delivering all that they would want, but that is in the nature of campaigning organisations. That said, some elements of the Budget have received a positive response from those organisations.

Mr. Graham Stuart : The hon. Gentleman's expertise is recognised across the House. This Budget focused more on green issues than did the previous nine, but does he accept that the history of those 10 Budgets has been the Chancellor's failure to convert into action Labour's intentions before the 1997 election to change from taxing "goods" to taxing "bads" and fundamentally change this country's approach to its environmental responsibilities. That is why emissions have risen, and yesterday's Budget will make little difference.

Mark Lazarowicz: No, I do not accept that. We are on course to meet our targets, as long as we continue to take the right policy decisions. We must, however, do more to ensure that tackling climate change is at the centre of Government policy. Growing public concern has been reflected in this year's Budget and in previous policies. I hope that the general positive response that the environmental proposals have received—from the hon. Gentleman, it would appear, in some respects—will hearten the Chancellor and encourage him to do more to ensure that climate change is at the top of our priorities. In that context, important decisions will be made over the next few months about the emissions trading scheme, about bringing aviation into the scheme and about the response to the Stern review.

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