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Stephen Hesford (Wirral, West) (Lab): I am sure that the House looks forward to the devolved Assembly being reconstituted. We, like the hon. Member for Belfast, North (Mr. Dodds), wish the Northern Ireland economy continued success.
This is the second Budget debate in which I have spoken since I entered the House. The first was our first Budget in 1997. It is good to be back and to review what we have done in the interim. It has been said that, where there has been success in the economy, it is because of the legacy that we inherited. I wonder how long that can be said with any credibility. If there are alleged defects in the economy, that is said to be entirely our fault. I am not sure how Opposition Members can credibly have it both ways, but those who have addressed the Budget seem to be arguing that. I look forward to the winding-up speech from the hon. Member for Wycombe (Mr. Goodman) to see how he can square that circle. Which is it: the inheritance and the economy are good, or the economy is not so good and it is our fault? Which would the Conservatives have the public believe? I know what I have observed between 1997 and today.
Listening to the Leader of the Opposition's speech, it occurred to me that he is a digitally remastered version of the right hon. Member for Richmond, Yorks
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(Mr. Hague), who between 1997 and 2001 had nothing to say on policy but cracked a few good jokes. Once the public realise that the only difference between the two right hon. Gentlemen is that the Leader of the Opposition has hair, I look forward to them reacting the same at the next election as they did in 2001, and—
Mr. Deputy Speaker (Sir Michael Lord): Order. Perhaps it would be a good idea if the hon. Gentleman started to address the Budget.
Mr. Paul Goodman: The hon. Gentleman appears to be under the misapprehension that the success of the economy depends on Labour or Conservative Governments. Will he acknowledge that the success of the economy depends on the strength of British business? The question is whether this Government are making things better or worse, and I shall address it when I wind up the debate.
Stephen Hesford: I look forward to that. The hon. Gentleman will want to deal with the record growth and stability under this Government, with 54 periods of continuous growth—an achievement that no previous Government have managed.
I wish to deal with the success that my constituents have enjoyed over the past nine years and the background to the Budget. Our economy has faced oil price shocks. We have had the highest sustained oil prices for a quarter of a century, which have doubled since 2004 and trebled since 2002. Growth among the eurozone economies has been slow, yet the UK had the largest export market in 2004 and 2005. Those are not merely figures, they are the underlying reasons why employment in my constituency is at record levels.
In previous decades, faced with such challenges, our economy would have tipped into recession. Indeed, I intervened on the hon. Member for Beverley and Holderness (Mr. Stuart) to remind him of the two largest shocks that the UK economy had suffered since the war under the previous Conservative regime. Inflation rose to 25 per cent. and unemployment passed 2 million. That is what used to happen, but it has not happened this time. That is a key backdrop to the Budget that my right hon. Friend delivered yesterday.
Labour's economic reforms have helped the UK economy continue to experience successive periods of growth. In 2005, the UK's economic growth was higher than that of any other major European economy. These things do not happen by chance, and I certainly do not accept the argument that it is down to inheritance. We have low inflation and stable interest rates, which are key to hard-working families in my constituency. In the previous years of boom and bust under the previous regime, any parts of the economy that did well tended to be in the south-east, while the north-west, where my constituency is, suffered at the hands of the mismanagement that occurred. Under this Government, we have low inflation, stable interest rates and stable growth. The north-west has benefited from that, as have all parts of the country in their respective ways.
Mr. Graham Stuart:
Would the hon. Gentleman care to read something other than the brief that he has been
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given by the Labour Whips? If he bothered to read, "Devolving decision making: 3—Meeting the regional economic challenge", he would find that this Government have failed to narrow the so-called north-south divide. In fact, they have compounded the problem, contrary to the contention that he advanced, having strayed momentarily off-piste from his brief.
Stephen Hesford: The hon. Gentleman's constituency is across the Pennines from mine. If he knew the region that I come from, Merseyside, he would know that it is going forward. Liverpool is to become European capital of culture in 2008 and the open golf championship is to come to Royal Liverpool golf club in my constituency in 2006 for the first time in 40 years. That was made possible by a package put forward by the Labour-led council, backed up by the economy that I am describing. In previous years, the open golf championship disappeared from my area because of the lack of investment and no infrastructure being put in. All hon. Members, from whichever party, are welcome to come to Hoylake for an enjoyable week when it takes place. There is no need for them to write to tell me that they are coming. [Interruption.] I cannot put everybody up, unless they want to sleep on the floor.
The International Monetary Fund recently reported:
"Macroeconomic stability remains remarkable . . . supported by sound policies implemented by strong institutions and underpinned by monetary, fiscal, financial, and structural policy frameworks that have increasingly instilled confidence in the authorities' conduct of macroeconomic policies."
Hon. Members may laugh, but those are the true circumstances, not the fictions that we have heard so far.
When the leader of the Conservative party made his opening speech yesterday, why did not he deal with the Budget speech, but deliver a prepared, pre-arranged rhetorical eight minutes—the shortest response to a Budget speech in living memory? He did that because he truly represents his party, which has nothing credible to say about the Budget.
The global economy is undergoing a major transformation. As my right hon. Friend the Chancellor said yesterday, the Budget takes the UK economy forward in an increasingly difficult global economic environment. Far-reaching and fundamental changes have been driven by technological advances, greater international trade, investment and rapid growth in emerging markets such as China and India. I look forward to the winding-up speech of the hon. Member for Wycombe and the Conservatives' response to the challenges of those two rapidly expanding countries. He does not appear to recognise what I am saying—
Mr. Soames: What is the hon. Gentleman saying?
Stephen Hesford: I am saying that this country's economy will survive the challenges of the new economies in the east whereas, under a different regime, we would have tipped into recession. That was the previous Government's record—any kind of shock tipped us over.
Mr. Bone: Does the hon. Gentleman realise that trade with India is decreasing rather than increasing under the Government?
Stephen Hesford:
That is because the Indians got off to a quick start. However, our economy will survive
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India's rapid growth and thrive on it. We will conduct more trade with India, which will become another economic partner. The Labour Government have enabled Britain to be better equipped for such challenges.
The Government will support parents and families to survive the shocks, balancing work and family needs through tax credits. Unlike some other hon. Members, I pay tribute to my right hon. Friend the Chancellor for introducing the tax credits, because, in my constituency—I can speak only for my constituency—they have been a success. Six thousand families in my constituency benefit from tax credits and the new maternity and paternity rights that are coming on stream. In other parts of the Wirral, not necessarily strictly in my constituency, Sure Start and nursery education make important positive differences.
Let me deal with the Budget itself. [Hon. Members: "Thank goodness."] It is well worth waiting for. Economic growth will continue under the Government. I have spoken about the 10 years during which I have watched the delivery of Budgets. The four if not five previous shadow Chancellors have predicted recession regularly.
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