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Mr. Crabb:
That is a good point. A view that had currency some years ago held that, in a globalising world, English being the language of business and the language of Microsoft, there was no reason for English
speakers like ourselves to learn a foreign language. In fact, the reverse is true: in a globalising world it becomes even more important for us to show that we are culturally sensitive and can communicate in indigenous languages in the countries with which we hope to trade and do business.
In last year’s Budget statement, the Chancellor spoke of new targets for expanding trade with countries such as China and India. All that sounded great. For a long time, Members of Parliament had made the case for a concerted effort on the part of Government to help United Kingdom exporters take advantage of the increasing opportunities in major industrialising markets such as China and India. That was expressed very well by the director general of the British Chambers of Commerce in a 2005 interview with one of the Department for Trade and Industry’s in-house publications. He said:
“One real concern is that there is too much focus on Europe . . . Europe is a market that is essentially stagnant. We've got to get where the action is, and at the moment that's on the other side of the globe”.
He was talking about China and India, and also about the United States. The Confederation of British Industry has been making similar points for years, and last year the Select Committee on Trade and Industry did so as well in an excellent report on trade with India.
We look forward to further information from trade Ministers, the Foreign Office and the Treasury about the flesh that they will put on the bones of the new strategy to improve trade with China and India, for I think there is agreement on both sides of the House that we want British companies to do well in a globalised world.
9.6 pm
Mr. Simon Burns (West Chelmsford) (Con): Those who remember, not even a week ago, the praise of Labour Back Benchers when the Chancellor sat down will find it rather odd that today—apart from the hon. Member for Newport, West (Paul Flynn), who wandered in from the cold a few minutes ago—the Labour Back Benches have been completely empty. I can only assume that after the reality of the Chancellor’s Budget had sunk in, Labour Members were ashamed and nervous of the reaction of the country out there, and could not face coming here to take part in today’s debate.
It was interesting that, while the parliamentary theatre of the last minute or two of the Budget statement may have played well with the Back Benches of the governing party, it was my hon. Friend the Member for Tatton (Mr. Osborne), the shadow Chancellor, who so quickly and eloquently exposed the Budget for what it was: a massive con trick. It was interesting because there is an adage in politics that those who cheer loudest on the day of the Budget wake up next morning with the greatest regret. That is what happened on the morning after this Budget, when the opportunity arose to think about all the things that the Chancellor had not said—all the nasty little items that were included in the press releases. We have come to learn from this Chancellor that a relatively brief Budget speech—in parliamentary terms—can omit a
multitude of nasty items that are hidden away in Treasury and HMRC press releases; and last week’s Budget was no exception.
What most people were mentioning to me in my constituency this weekend was the con of the 2p cut in income tax, presented with a flourish by the Chancellor as if it were part of a massive tax-cutting agenda but offset by the abolition of the 10 per cent. tax rate. That is an insult. What it does—and irony upon ironies, a Labour Government are doing it—is make the poorest in society, who will lose the most from the abolition of the 10 per cent. rate, subsidise tax cuts for people who are better off. That almost amounts to a contradiction in terms. It takes the biscuit that that has been done by this Chancellor of all people. He has said so much, but although he talks the talk he does not walk the walk, except to inflict damage on those people in society who can least afford it. Those people should be getting help, not the more wealthy people at the expense of the poorer members of society.
Mr. Newmark: Does my hon. Friend agree that the problem that he rightly addresses is compounded by the fact that the tax credit system is not only a shambles but that the people who have to fill in the forms do not understand them, so that up to 40 per cent. of people do not even claim their entitlements?
Mr. Burns: My hon. Friend identifies a significant problem. Not only do such people not understand because the system and the forms that they have to fill in are so complicated, but when the Government overpay them they add insult to injury by seeking to claw back all the overpayment and saying that despite the complexities in the system people should have been able to identify at the time that something was wrong with the payments they were receiving. [Interruption.] As my hon. Friend the Member for Northampton, South (Mr. Binley) says, that is shameful. It also imposes a severe burden on people who thought they were getting the right sums in tax credits and who now find that they face significant penalties in respect of the repayments that the Government are hell-bent on taking back from them. That is causing considerable hardship. Those of them who are working and paying the 10 per cent. rate in tax will have the double-whammy of having that withdrawn from them when the 2p tax cut comes into force, so they will face an additional financial hardship that will leave them less well off than they are at present.
Mr. Graham Stuart: I wonder whether my hon. Friend has cases in his constituency that are similar to far too many that I have in mine. Many disabled people have difficulties with the system by which they have to claim benefits, which involves telephone call centres. A constituent of mine with hearing difficulties had to depend on a telephone call centre and failed to get the moneys required, and in another case the council started to take action for fraud against a disabled constituent of mine who had had a stroke and who had difficulty speaking, which took him to the brink of suicide. That is the situation that we are in with these tax credits, which are neither just nor fair.
Mr. Burns:
My hon. Friend highlights a significant problem that many Members in all parts of the House deal with in their constituencies. Through no fault of
their own, the most vulnerable and weakest people in society are facing hardships that the state is inflicting on them through an inflexible bureaucracy.
Sir Nicholas Winterton: May I ask my hon. Friend to comment on the following question? Why should the Government set up an expensive, incompetent bureaucracy to pay back to people money that should never have been taken from them in the first place?
Mr. Burns: In his own robust way, my hon. Friend makes an extremely telling point. That has baffled all of us for too long, yet the Government are not prepared to acknowledge the problems that have been identified and to take action to remedy them.
Another problem that I have is the lack of any meaningful mention in the Chancellor’s speech of the national health service. It is the elephant in the room. As all Members have problems in their constituencies with the national health service, it is extraordinary that the Chancellor said nothing specifically about it during his Budget speech. The problem is so great—this is interesting in terms of the concept of collective responsibility—that Ministers demonstrate in the streets in their constituencies against measures that have been taken within the health service in their local communities that are a direct result of Government actions.
The Under-Secretary of State for Health, the hon. Member for Bury, South (Mr. Lewis), campaigned against the closure of a maternity unit in his constituency, when he is the very Minister responsible for maternity services. The Government’s Chief Whip demonstrated in her constituency, as did the Labour party chairman, who is a member of the Cabinet. One would have thought that at the beginning or end of a Cabinet meeting, or even during, she could have passed a note to the Secretary of State for Health to see what could be done, but no. The only redress that that Cabinet Minister has is to demonstrate in the streets against the very policy that her own Government are implementing. We have been reduced to an extraordinary system: the only way in which Ministers can try to change Government policy, even when they are in the Department responsible for it, is by demonstrating in the streets.
The Chancellor should have done something with the record increases that he has put into the health service over the past six or seven years. It would be foolish to deny that that has happened, and I, for one, am more than happy that the Government have made that extra money available to the health service. However, what is causing problems for my constituents and for people who work in the health service is that the money is not reaching front-line services in the expected amounts, as a proportion of the extra money being made available.
Mr. Stewart Jackson (Peterborough) (Con): Is my hon. Friend aware that the Select Committee on Health last week branded work force planning in the national health service under this Labour Government as a disastrous failure, saying that millions of pounds have been wasted training doctors and nurses for jobs that do not exist? Only Labour could deliver such a laughably incompetent result.
Mr. Burns: My hon. Friend makes a telling point but I must disappoint him, because when the Government, through the Department of Health, respond to that report, the Secretary of State for Health will, in her amicable way, tell us that everything is fine in the health service. In fact, if we remember correctly, last year was the best year ever. If last year was the best ever, with closures, compulsory and voluntary redundancies, drug bill problems and delayed operations, heaven help us when there is merely a good year. The money that the Budget has provided over the past seven years is not reaching front-line services in the amounts that it should.
The Chancellor should have told the country what he and the Government were going to do to ensure better value from health service money, and to ensure a tightening up, so that the health service has strict and proper management. The service is so large and has so many employees—there are more than 1 million of them—that one needs a strong management, not a bloated bureaucracy. Unfortunately, in too many areas of the health service, there is a bloated bureaucracy and waste and inefficiency. The way in which the national health service property made available to patients is looked after leads to waste, as does the manner in which drugs are prescribed. All those areas need tightening up, so that the money is directed where it should be—to front-line services.
That is why the Budget that the Chancellor delivered last week—the last that he will deliver—was a wasted opportunity and a con trick on the British people. They do not like being conned, and it is quite plain that they have seen through the Chancellor’s smoke-and-mirrors exercise and recognised it for the con that it is. Given that he is never wrong, if and when he moves next door to No. 10, he will have the consolation of there being someone else at No.11 whom he can blame when the economy fails to respond to all— [Interruption.] I do not think it will be the Economic Secretary—that would be a step too far at this stage in his career—but I wish him well. The fact is that it was a wasted opportunity and it was a con trick on the British people. They have seen through it, and they have seen through this rotten Government for what they are.
9.20 pm
Mr. Mark Hoban (Fareham) (Con): It is difficult to know how to follow that virtuoso performance from my hon. Friend the Member for West Chelmsford (Mr. Burns).
When preparing for the debate, I studied the Economic Secretary’s form, and I found a book, “Reforming Britain’s Financial and Economic Policy: Towards Greater Economic Stability”, edited by the hon. Gentleman and the former permanent secretary to the Treasury, Gus O’Donnell—probably the only former permanent secretary who is still speaking to the Chancellor. When I checked Amazon yesterday, I found that it is not one of its most popular books—it is ranked at No. 77,287 in Amazon’s list of bestsellers— [ Laughter.] Members should not mock because it is a better seller than the companion volume, snappily titled, “Microeconomic Reform in Britain: Delivering Opportunities for All.”
Ed Balls: A fascinating publication.
Mr. Hoban: The hon. Gentleman said it. That came in 304,974th, but it was streets ahead of the third work he has authored, this time with the Financial Secretary to the Treasury— [Interruption.] They are all on Amazon. The pamphlet was entitled, “Towards a new Regional Policy”—
Mr. Hoban: So why on earth does it rank 1,465,145th in Amazon’s bestseller list? The Economic Secretary may feel that he is the Harry Potter of the Treasury, but he is certainly not the J.K. Rowling of economics.
I urge Labour Back Benchers, few as they are, not to go out to buy that book because it needs a rewrite. The first rewrite is to make sure that Economic Secretary writes a full defence of the third fiscal rule—the one the Chancellor announced on Wednesday. Having told us for months that he rejected our policy of sharing the proceeds of growth, the Chancellor announced on Wednesday that he would adopt it, so over the next spending review period, Government spending will grow at a slower rate than the economy as a whole— yet another Conservative policy adopted by the Chancellor.
Typically, the Chancellor has not even told his close colleagues about that change in policy. Even his campaign manager, the Leader of the House and the hot tip to become the Economic Secretary’s new boss, did not know about the third fiscal rule because yesterday he managed to launch an attack on it during his interview with Andrew Marr. No one should be surprised that the Chancellor did not tell anyone about it because, as Andrew Turnbull said:
“There has been the absolute ruthlessness with which Gordon has played the denial of information as an instrument of power.”
That is not the only rewrite required in the book. Let me read out a couple of extracts from the section entitled, “Maximum transparency for credibility”, a title which, after 11 Budgets, catches the hubris of the Chancellor and his sidekicks. On page 39, it states that
“the suspicion that the government is manipulating information or policy for short term motives is as damaging to credibility and the economy as evidence that it has done so.
As the Budget was analysed, it became apparent that there was both suspicion and evidence that policy was being manipulated for one, single short-term motive: the Chancellor’s coronation as Labour leader.
Let me read out another passage from the same book:
“Recent history shows that credibility of macroeconomic policy making is a valuable commodity—once promises on tax, borrowing or interest rates are broken it is hard to rebuild credibility in future promises.”
How right that is. In each of the last seven Budgets, the Chancellor has had to revise upwards his borrowing forecasts. As for tax, the Chancellor lost his credibility many Budgets ago. There is more where that comes from in the book, so perhaps it is time for the Economic Secretary to rewrite his book and to admit the mistakes of the past 11 Budgets. Perhaps then he will have a bestseller on his hands.
Let me turn to today’s debate. Only four Labour MPs from the Back Benches participated in the debate and only two of them actually voiced their support—
one of them could not stomach being here at the end and one of them arrived half-way through. On the Opposition Benches there were eight speakers. Let me turn to some of the comments that were made.
The Chancellor has been likened to Stalin in the last week, but the right hon. Member for Oldham, West and Royton (Mr. Meacher) was certainly the voice of old-fashioned socialism. He made the point that politics prevailed over social justice in this debate. He accepted, as I think that most people on both sides of the House accept, that there had been problems with tax credits. He then argued that the inequality of the 1930s and the Edwardian era was returning and that the politics of the Government contributed to that. Given his attack on the Government and their record, it is amazing that he managed to be a Minister in that Government from 1997 to 2003.
The hon. Member for Eastleigh (Chris Huhne), who is not in his place, recognised, as we do, that the share of tax from green taxes has fallen since 1997. He also supported the argument that there is popular support for green taxes as replacement taxes, but not, as the Chancellor has used them, as stealth taxes.
The hon. Member for Islington, South and Finsbury (Emily Thornberry), who has apologised for not being here for the winding-up speeches, talked about history. She said that, in the past, Departments were dependent upon being in favour with the Prime Minister for their funding, but now their funding clearly depends on whether they are in favour with the Chancellor. We saw what happened to the Home Office budget when the right hon. Member for Norwich, South (Mr. Clarke) was Home Secretary. It was frozen in real terms for the duration of the next comprehensive spending review. As many colleagues on the Opposition Benches have pointed out, there has been barely a mention of the NHS in two Budgets and one pre-Budget report, so clearly the Secretary of State for Health has fallen out of favour with the Chancellor.
My hon. Friend the Member for Mid-Worcestershire (Peter Luff), a distinguished Chairman of the Trade and Industry Committee, explained exactly why the Budget had such a short-lived good press. He said quite clearly that the Chancellor has tried to fool people in this country too often. People expect the damage to be hidden in the small print and have woken up very quickly to the reality of the Budget. He rightly pointed out that in the pre-Budget report, taxes on businesses had gone up by £2.5 billion.
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