"will not help job creation".
If the small businesses of this country do not think that a Budget is going to create jobs at this point in the economic cycle when the recovery is so weak, that tells us everything about how this Budget has failed.
The Chancellor also made great play of his lending agreements. He did not mention the fact that the banks missed their lending targets. He told us at the last Budget that they were binding, but he did not repeat what the Public Accounts Committee told us last month-that despite all the Government promises from the Dispatch Box over the last two years,
"The Treasury has only limited sanctions available to it to encourage RBS and Lloyds Banking Group to meet what are described as legally binding lending commitments."
Worse than that, the Chancellor employed a trick that would make the Prime Minister proud, because he gave the impression that the new lending targets were higher than the previous ones when, in fact, they are lower. The old targets were expressed as a net figure of total extra lending, while the targets for new lending are a gross figure. He compared a net figure with a gross figure, which means that lending to businesses could actually fall, yet the Government would still have met their target. What a totally transparent and cynical manoeuvre by the Chancellor.
Of course, all these things that were never mentioned in the Chancellor's speech pale into insignificance alongside the missing centrepiece of the Budget-a credible plan to deal with the deficit. Yes, the Chancellor confirmed that we have the worst deficit in the G7. Yes, he announced that we have the second-worst deficit in the OECD after Ireland. Did he convince anyone, however, that he was serious about dealing with the Budget deficit problem, serious about protecting our country's credit rating, serious about avoiding the rise in gilts that mean higher interest rates in a recovery, and serious about confronting the truth that this Government have ended up borrowing one pound for every four that they spend, and that having entered office on a pledge to cut the bills of social failure, they now head for the exit door with Britain spending more on debt interest payments than it does on our entire education system? No, he did not.
The Government seem to believe that if they say often enough that they have a credible plan, somehow fiction will become reality. But the definition of a
credible plan is that someone out there believes them and thinks that it is credible. Let us look at what investors said after the Chancellor sat down yesterday. Standard Chartered called it
"a do nothing Budget that had shades of Nero about it".
"no proper medium-term public spending plans"
"credible plan to return to fiscal sustainability".
The same rating agency that yesterday downgraded Portugal-whose deficit is half ours, by the way-came out immediately to warn that the plan was "too slow". It is clear that the only thing holding together Britain's reputation in the international community is the prospect of a Conservative Government who can sort this mess out.
Peter Luff (Mid-Worcestershire) (Con): Is my hon. Friend aware that he is making a most powerful case for adopting the advice of our noble Friend Lord Bell, who suggested the revival of the 1979 election slogan: "The captain of the Titanic is offering tickets for a second voyage"?
Like some giant fiscal doughnut, yesterday's Budget had a gaping hole in the middle of it where there should have been a proper comprehensive spending review. In table A1 in the Red Book-a table of Budget measures-there are great blank spaces where a spending review normally sits. The Government simply cannot tell us what they are planning to do in 2011-12, despite all the information and all the resources available to them. Is there anything more risible than the Government's explanations as to why they cannot provide the spending review? They tell us that it would impossible to do it in March because of the uncertain state of the economy, but that we can apparently have it in October-yet this has nothing to do with the fact that there is going to be an election in May. They really are taking the public for complete fools.
There is something that Government could do today. The document I have with me was leaked to us. These are the internal Treasury fiscal tables. They tell everyone-all taxpayers-about the departmental spending envelopes for the coming years; they tell what the Treasury expects to spend on debt interest, welfare bills and the like. This is the document that revealed that this Labour Government plan a 9 per cent. cut in Departments. It was leaked to us, as it happens, after the last Budget. This document could be published today in the interests of open information as we approach the election. I will ask the permanent secretary to publish it in the interest of good debate ahead of the election, so that we have at least some basic truths about what the Government's lack of a spending review means for Departments in future.
Of course, yesterday the Government tried to put up a smokescreen around efficiency savings. Three hours after the Budget was delivered-this must be pretty unprecedented in that it happened after the Chancellor sat down-a series of written statements were produced from different Government Departments saying that they were going to deliver efficiencies. I have with me the one from the Department headed by the Secretary of State for Work and Pensions. We find that £550 million of efficiency savings are set out, expressed and explained in three sentences. It is a half-page press release with some notes to editors underneath. Ministers such as the right hon. Lady went on television and said, "I have found my cuts." The most vocal exponent, in fact, was the Children's Secretary, the right hon. Lady's husband, who said, "I have got £500 million-worth of cuts that I have been told to find by the Chancellor. I have found £300 million, and I am working on the other £200 million."
What Ministers do not say is that they have absolutely no idea of their budgets for 2011-12, on which these efficiency savings are supposed to be based. They can produce as many efficiency reports as they like, but-quite apart from the fact that the National Audit Office found that barely a quarter of the savings promised before the last general election can be traced today-that is not a credible way to approach the current problem.
"All quite deliberately vague. We haven't got any detail on where those savings will be gathered. We haven't got a breakdown of the detail: it doesn't exist."
"We certainly don't have a list as of today. It's a figure that we have agreed with Her Majesty's Treasury, as part of Building Britain's Future or whatever the slogan is that's on our press release."
"Corporate services. Christ! Let me see if I can find out"
One thing that the Government could do-I shall ask the right hon. Lady to confirm that they can do it-is publish the fiscal tables that we know exist. The Government claim that they want open and transparent debate about spending ahead of the election, so why do they not publish those tables? What are they trying to hide? If they published the tables, we could have a more serious debate about what the Government are actually planning to do. As I have said, that would help to focus people's attention on the central fact about the Budget: that the Government have not produced a credible plan to deal with the deficit.
That is why, in the end, there has to be a change of Government. Our economy faces the most serious risks. For the first time in our country's history, we face a credit downgrade; for the first time in our country's history, we have a budget deficit that is larger than any other in the developed world. The challenge for a
Government faced with those facts is to produce the plan that will put the economy back on track, and they have failed to do so.
Mr. William Cash (Stone) (Con): My hon. Friend is making an excellent speech. Does he agree that there is another gap in what the Government have been saying? According to figures from the Office for National Statistics, if public sector pensions and other matters related to the financial sector are included, the true amount of debt is as much as £3.1 trillion. Making up for that will involve some very big decisions with which the Government are clearly incapable of dealing.
Mr. Osborne: My hon. Friend is absolutely right. A key part of our proposals is the creation of an office for budget responsibility-an independent office -[Laughter.] Ministers may laugh, but that is something that has been recommended by almost every independent observer of the British economy. It is something, by the way, that the shadow Chancellor in 1995-the hon. Member for Dunfermline, East, as he was then-promised to create if he ever became Chancellor. It would hold the Government to account for the promises that they make. It would also ensure that on Budget day we have proper, independent sets of forecasts, so that we can have a proper debate about the true state of the public finances. We would not get what we were given yesterday: the use of a growth forecast that exists only in the Treasury. It is not the same as the one used by the Bank of England, and it is certainly not the same as the one used by the independent forecasters who are currently examining the British economy.
Incidentally, if the Budget had used the independent forecasters' estimate of growth next year rather than the Treasury's estimate, £10 million would have been added to the borrowing requirement. That is why we need an independent set of forecasts and an independent body to hold us-both parties-to the fiscal promises that we make and, as suggested by my hon. Friend the Member for Stone (Mr. Cash), to produce a proper set of national accounts.
Rather than this fiction, we should have a set of accounts telling us what the liabilities are for the banking assets that we hold, what the liabilities are for public sector pensions, what the liabilities are for the private finance initiative deals done by the Government over the past 13 years, and what the liabilities are for Network Rail. We should have a proper set of national accounts on the basis of which this Parliament and this country could discuss the country's future. That does not exist under the current Government, but I can tell the House that it will exist under the next.
This is what is so sad about this Budget. It presented the Government with an opportunity finally to rise to the challenge. After all, what did the Chancellor have to lose? It is obvious that he will not be in office after the election even if Labour wins it. The forces of hell have been unleashed against him-forces of hell not too distant from the family life of the right hon. Lady. It is absolutely clear that if Labour were elected, the Prime Minister would choose a new Chancellor: the right hon. Member for Normanton (Ed Balls). The current Chancellor therefore had a unique opportunity to do what he
thought was right for the country rather than what he thought was politically convenient for his party, but he completely failed to meet that challenge.
We need a new Government to fix the broken economy, to deal with the budget deficit that threatens the recovery, to boost enterprise and small businesses, to get Britain working and to build an economy that works for everyone; and the sooner that Government are elected, the better.
The Secretary of State for Work and Pensions (Yvette Cooper): Was that it? [Hon. Members: "Oh, come on!"] Was that it? In those 26 minutes there was plenty of sneering and plenty of posturing, but I did not hear about a single policy to get the economy growing, or a single serious policy to bring the deficit down once the economy is growing. There were no plans to help the unemployed, and no plans to support business-and this from the man who wants to be Chancellor of the Exchequer in less than two months' time? It would be funny if it were not so terrifying.
Yvette Cooper: I will give way to the hon. Gentleman again if he can identify one serious policy presented by the shadow Chancellor during his speech. He did not present any proposals to support- [Interruption.]
Sir Patrick Cormack: What I would say to the right hon. Lady-supported as she is by the hordes of Midian behind her-is that, in less than half an hour, my hon. Friend the Member for Tatton (Mr. Osborne) demolished the vacuous nonsense which would do such pernicious harm to the country and which was presented to us in an hour yesterday.
Yvette Cooper: I am afraid he did not. What he made clear was quite how shallow the approach of the Conservatives really is to the very serious problems that have faced the economy as a result of the global recession. The challenge now is to build the recovery. Our Department is investing a great deal to back young Britain-in helping young people into jobs and finding them work experience-but running the economy is no job for an apprentice. The hon. Member for Tatton (Mr. Osborne) should take that seriously.
Yvette Cooper: In fact, our debt as a proportion of GDP is still lower than that of many of our European competitors. Moreover, we have presented a serious set of proposals to bring borrowing down once the economy is growing and also, critically, to support the economy and support growth now.
The Conservatives have got it wrong on the recession at every turn-wrong on Northern Rock, wrong on the banks, wrong on help for the economy, wrong on supporting the unemployed. As for their policy of cuts this year, that would send the recovery on to the rocks at just the time when it matters most. Conservative Members simply do not seem to understand the seriousness of the challenges we face, and the importance of helping those people who need our support in order to get into jobs and pursue a prosperous economic future.
We have just come through the toughest world recession for many generations, and without Government action we would have seen millions of people lose their savings when the banks crashed, hundreds of thousands more people lose their jobs and struggle to find work, thousands more businesses go bust and thousands more people lose their homes. Yet despite the world recession being so much deeper than in the '80s and '90s, the level of business failures has been half that of the '90s, unemployment has been half that of the '80s and '90s, and the rate of repossessions has been half the rate it would have been if the '90s experience had been repeated. That is because of the action this Government took, but which the Conservatives opposed. Time and again they wanted to repeat their approach of the '80s and '90s, when the Government turned their back and shrugged their shoulders, and left people to face long-term unemployment, and business failure too.
Mr. Cash: Will the right hon. Lady concede that House of Commons research shows that 19.6 per cent. of young people are now unemployed, and that if we add in the jobseekers and those who are genuinely unemployed but who are not included in the figures the Government give, the number of unemployed is well over 4 million? Does she deny that?
Yvette Cooper: The hon. Gentleman is referring to the International Labour Organisation youth unemployment survey, and, in fact, its figures include significant numbers of full-time students who are also looking for work. We believe that youth unemployment is a serious issue, which is why we have set out proposals to help young people get back into work, but the hon. Gentleman's party refused to fund and support those proposals, so they refused to help any of these young people get back into jobs.