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The objective of reforming the planning system has to be to make it fairer, faster and more efficient. That is as important for infrastructure as for any other form of development. The current Infrastructure Planning Commission does not meet those criteria, which is why we will improve the system by turning the IPC into a
specialised infrastructure unit within the Planning Inspectorate. That will deliver real political accountability and ensure a smooth, efficient transition for infrastructure projects already in train. Without those changes, vital decisions that we need to enhance our country's infrastructure risk being bogged down in legal challenges-from judicial review in the High Court to the European Court of Justice.
We also propose national policy statements-debated here-which will speed up the planning system, while reducing the scope for legal challenges. These statements will avoid planning inquiries getting bogged down on issues of policy, and focus on specific planning considerations such as scale and location. For projects with national significance, crossing many local authorities, such as High Speed 2, we would use hybrid Bills in Parliament.
These reforms are vital to driving forward the pace of growth and infrastructure throughout our country. They will speed up the planning process to avoid planning inquiries taking years, and ensure that there are proper democratic checks and balances. The changes that we are proposing are the changes that will get our economy moving again. They are the changes that will kick start growth and development. They are the changes our country needs, and the sooner the country has the opportunity to vote for that change, the sooner we can get Britain working again.
5.14 pm
Mr. Jeremy Browne (Taunton) (LD): I am grateful for the opportunity to make my final speech as a Member of Parliament before the general election. I wish to concentrate on three dominant themes of the Budget statement. The first is the recession, its consequences and how we can best ensure the recovery. The second is the massive budget deficit that we have as a nation and how we can try to get to grips with it. The third is what the Budget and the political debate say about what sort of society we wish to create. A Budget is not just a bloodless exercise in accountancy; it is also about creating the type of structures and the type of society that we think will make Britain a better place.
I should like to address those three points in turn, but before I do so-if you will momentarily indulge me, Madam Deputy Speaker-I want to talk about the one issue in the Budget that has been raised by far more of my constituents than all the rest put together. That issue is the highly invidious extra taxation on cider, which many of my constituents regard as little more than a tax on being a Somerset person. I know that the fashionable metropolitan elite who rise so effortlessly through the ranks of the Labour and Conservative parties do not regard this as a particularly serious issue. I readily concede that, contrary to the stereotype, there are some people employed in Somerset who do not work in the cider industry. Nevertheless, that extra tax is a serious matter for my constituents for two reasons.
First, there is an economic case for the people who work in the industry. For instance, there is a small, family-run company in my constituency called Sheppy's Cider, run by David and Louisa Sheppy, which employs about 10 people. It is part of the local economy, and we
would not wish to see those jobs or that enterprise put at risk. However, there is also a symbolic importance, which is perhaps equivalent to the importance that people from Scotland attach to whisky or that people from Ireland attach to Guinness. Cider is an emblematic drink that signifies Somerset and other parts of the west country throughout the world. For that reason, a number of people are upset by what the Government announced in the Budget, and we urge the Government to reconsider.
Mr. Greg Hands (Hammersmith and Fulham) (Con): We certainly agree with the hon. Gentleman's sentiments on cider, but unfortunately for him last year the Liberal Democrats proposed a tax freeze on spirits, but not on cider. He also said that fewer of his constituents were drinking cider these days than they used to.
Mr. Browne: Well, because- [ Interruption. ] It is not a U-turn at all: one cannot infer from my views on spirits that I have opposite views on cider. I have just made it clear that I regard cider as an important industry-not just in the west country, but it has a particular strength in the west country-and that it is an important part of the heritage of many parts of western England. Considering that the amount of money that will be raised by the Government's tax measure is so minute compared with the scale of our budget deficit, and given that the hurt and offence that it has caused is so disproportionately large, the Government would be well advised to reconsider.
Let me turn to the three main themes that I wish to address. I start with the recession, which ought to be-and is-of concern to us all, although I sometimes think that people in this House, and perhaps the wider public, underestimate the scale of the recession that we have just gone through. Last year-2009-was the worst peacetime year for the British economy in terms of growth since 1921. Our economy shrank by almost 5 per cent. last year, and, as part of the international downturn, this country has been in a truly precarious position. I invite the House to think of our economy as a sickly and frail patient lying in the operating theatre in a hospital. In those circumstances, my party and I believe that the Government were right to try to administer all the different treatments at their disposal to ensure that the patient survived the severe shock to its system that it had suffered.
The Government tried quantitative easing as part of their contribution. They also tried, and continue to try, extremely low interest rates-only 0.5 per cent., and they have been at that level for a sustained period. We have also had a devaluation of the pound. Far less emphasis has been given to the relative value of the pound compared with other major currencies than would have been given a generation ago, but there has been a severe devaluation of our currency. We have also had, in different forms, the fiscal stimulus, and we have debated in this House whether that stimulus has had as much of the desired impact as we would like. Nevertheless, it has contributed to trying to keep the ailing patient in some form of health. We are still in an extremely precarious position, however, and we should not assume that that we are safely out of the woods just because the economy grew by an anaemic, minute amount in the last quarter of last year. We cannot turn the life support machine off until we are absolutely certain that the patient is alive, and at the moment, we do not have that certainty.
I hope, and believe, that the economy will not dip back into recession later this year, but that remains a possibility. The growth figures in the Budget-even the ones that were revised down-are still optimistic, according to many assessments. We should therefore not assume that we are out of the woods. This is a challenge for the Conservatives, because the timing of deficit reduction is of paramount importance, and there are risks attached to cutting too soon, as well as to cutting too late.
Mr. John Maples (Stratford-on-Avon) (Con): That would normally be the case in a recession if we were talking about the cyclical part of the deficit, but what we have here is a structural deficit of 9 per cent. last year and 8 per cent. next year, if the figures are right. How long does the hon. Gentleman think we should take to eliminate that?
Mr. Browne: The hon. Gentleman is making an interesting point, and I want to engage him directly on it. The deficit is always rolled into the £167 billion figure, but it has two component parts, and different economists take different views on the size of those parts. However, there is a deficit, and the country will have to get to grips with it, either by raising taxes or by cutting expenditure. My party has a preference for cutting expenditure, but there will have to be a mix of the two. The Government have announced large numbers of tax rises, although they are being much less specific about the reductions in expenditure until after the election. They are being more explicit about the tax rises.
The other component of the deficit will, we hope, be dealt with by the economy returning to healthy growth and burning off the deficit in that way. That is why, when I caution the Conservatives, I am not just saying that there is a risk of going back into recession in relation to employment or to business failures, although those factors are obviously important. Healthy economic growth will also be crucial in making the numbers add up in our deficit reduction programme. We could have a debate about how we should best stimulate that growth, but I do not propose to go a long way down that avenue this afternoon.
We need to ensure, however, that there remains demand in the system. So far as I can see, the Conservatives seemed to acknowledge that need this morning. We can achieve demand by spending public money, or by allowing private individuals to spend more of their money by cutting their taxes, which appears to be the Conservative shadow Chancellor's policy. There would be a risk to the recovery itself, however, if we were to try to cut the deficit quickly by taking money out of the economy, whether from the public or the private sphere.
The second subject that I want to talk about is the deficit. This country is still borrowing an additional £450 million every single day, and our budget deficit this year remains at more than 12 per cent. of gross domestic product. According to the ready reckoner, any country with a deficit of more than 10 per cent. of GDP in any financial year is in serious trouble. Well, this country has gone way beyond that point for two financial years, and our deficit this year is comparable to that of Greece, whose problems have been well documented. It would of course be fair and accurate to point out that Greece's cumulative debt is roughly double ours, which
is why we have not yet had the degree of difficulty that it has experienced. Nevertheless, our borrowing this year as a percentage of GDP is comparable to the worst cases elsewhere in Europe. We are going to have to deal with that, and that is a truth that all the parties will need to explain to the electorate. To varying degrees, I would say that none has done so sufficiently yet.
The Government have gone into great detail in the Budget about tax rises. They are talking about roughly a third of the deficit being dealt with through tax rises, and two thirds being dealt with through expenditure cuts. Where they are very specific in terms of tax rises, however, they are very vague in terms of reductions in expenditure. That probably suits the Government as we approach the election in trying to create the right dividing lines, as they would see it, between them and the Conservatives on tax, while ignoring what they see as potentially disadvantageous dividing lines between them and the Conservatives and other Opposition parties on public expenditure reductions.
Mr. Stewart Jackson (Peterborough) (Con): Does the hon. Gentleman regret-and will he apologise for-his party's wholehearted support for a single European currency, given that if we were in the single currency, we would simply not have the flexibility in fiscal and monetary policy that we now have to deal with these issues, including the deficit?
Mr. Browne: I had thought that the Conservative party was supposed to have stopped banging on about Europe. I do not remember having mentioned the single European currency in my speech. My view is that it is would not be right for Britain to join it now, but I would not rule it out as an article of blind faith for all time. It is not inconceivable, in my view, that there could be a time in the future when joining might be more advisable, but that point has not yet been reached.
I was talking about the deficit, about what reductions in public expenditure would be necessary and about the Government's vagueness on that subject. It was somewhat depressing to hear the hon. Member for Meriden (Mrs. Spelman) a few moments ago. When she was asked to identify how a particular policy initiative would be paid for, she dipped yet again into this pot marked "administrative waste" and said that there was so much money available in it that it could fund unlimited goodies. I remember being present at Treasury debates a couple of years ago, when all that administration was carried out in much the same way as it is now, where I was told by the Conservative shadow Chancellor and other Conservative Members that the Conservative party would match Labour's spending commitments in every single Department. If the party was going to match all those departmental commitments when all that money was being wasted, why did they not raise concerns at that point about the need to reprioritise that money? I am sceptical of the ability of administrative trimming to pay for the largesse that the Labour and Conservative parties claim it will pay for.
I readily acknowledge that there is a way to go, that my party has not spelled out every detail and that we need further policy development, but the reason why respected commentators readily acknowledge that the Liberal Democrats have gone further in this regard than both of the old parties is that we have been more
specific and more detailed about the type of cuts in public spending that we think are necessary. So, for example, people who receive tax credits when they have salaries that would be the envy of most households will see a reduction in those credits.
For another example, we have talked about child trust funds. Just over a year ago, I remember participating in a Statutory Instrument Committee on which I was the only person willing to say that child trust funds are not affordable in the current circumstances. Both the Labour and Conservative parties supported them at that time, even though we were already living in a different budgetary context from when the policy was first introduced. We have also talked about longer-term projects such as ID cards and aspects of our defence procurement. We have gone through such strategies in much more detail than the other parties, but this is a process that all political parties will have to face sooner rather than later. There is a conspiracy of silence before the general election, and I believe that people deserve better than that in a democracy.
That brings me to the final feature of my speech. A Budget this close to a general election will, of course, inevitably be a political as well as an economic exercise. We are looking as politicians-and, I suppose, the wider public, insofar as they are following these matters in detail-at what the Budget says about the values and policy priorities of the Government of the day and those of the Opposition parties that aspire to replace that Government. When I looked at the Budget in that regard, I found it wanting.
I give some credit, however, insofar as there was something that came at least some way towards representing a vision on environmental-led growth, green jobs, environmental investment and so forth-areas that my party has been keen to bring to the fore. As I say, there were some elements of that in the Budget speech. However, two other features of my party's policy platform to which I had hoped the Government would give more prominence were conspicuous by their absence. The first is a vision of a fairer, more equitable society in which, in particular, people on low incomes are more self-reliant, have more of their own money to spend and can forge their own way in the world with greater freedom and independence. That vision of taxation has been a central feature of our policy platform, in the form of our proposal to raise the starting point for income tax to £10,000 a year.
What surprised me more, coming from a Labour Government, was the lack of a vision of how we could do more to increase social mobility, so that people could prosper and succeed in the world without the welfare or well-being of their parents being necessarily an accurate guide to their prospects. My party has given the greatest policy priority to the so-called pupil premium, which represents a direct attempt to target more money on improving the life opportunities of people who start at a relative disadvantage. I do not claim that Labour has done nothing in that regard; many Labour politicians-indeed, politicians in all parties-take the agenda seriously. Nevertheless, I think that it could and should have been a bigger and more explicit feature of the Budget.
Laura Moffatt (Crawley) (Lab): Will the hon. Gentleman tell me how he thinks his party's policy of abolishing child trust funds will help to increase mobility for young people and families?
Mr. Browne: I can. All the research-I hesitated before I used that word, because it sounds as though I am contracting out my views to "experts"-all my instincts and everything that I and others have read suggest that children who start at a relative disadvantage in terms of parental income or exposure to knowledge and learning at a young age need assistance when they are three, four, five and six years old. Giving them a pot of money when they are 18 years old gives them an amount to spend, but it does not fundamentally address their relative disadvantages in terms of lifetime opportunities. If that money is to be spent, it would be better spent on targeting children from poorer and more disadvantaged backgrounds more precisely and at an earlier stage in their lives.
Let me make a final observation about the bigger picture and the vision as a whole. When I mentioned, in passing, the two old parties, I heard some noises off scoffing at that description. However, I detect a sense in the country that if people keep voting for the same two tired old parties, they cannot expect anything other than the same two tired sets of policy proposals. There is a mood for change in the country. Back in the 1950s, 98 per cent. of the people who voted in a general election voted for either the Labour party or the Conservative party. We had a very tribal society, in which people knew what side they were on and voted accordingly. At the last general election, for the first time since the second world war, the proportion of votes for the two old parties fell below 70 per cent., to 68 per cent. We live in a more fluid, more mobile, freer society nowadays.
A group of Conservatives to whom I was talking recently told me, "When it comes to this Budget, we must make certain that we win the election by persuading people that the problems are the responsibility of Gordon Brown." I said, "I think you are right: I think many people readily accept that the Prime Minister bears a large share of the blame for Britain's economic woes." However, I went on to ask "Why do you assume that people who identify the Prime Minister as being culpable should regard the Conservative party as being part of the solution?"
In order to be successful, someone who runs an Indian restaurant has to do more than just persuade people that they do not like Chinese food, because there are more choices out there than ever before. That is why it was so extraordinary that the shadow Business Secretary observed that he would prefer the current Prime Minister to stay in office at the head of a majority Labour Government than the Conservatives to be the largest party in a balanced Parliament. That was an extraordinary statement for a Conservative Front Bencher to make, and, although the shadow Business Secretary has become a national treasure in many ways, it shows how out of step he is with the mood of the time, because the old type of politics, under which Labour and Conservatives swapped between themselves, is no longer a reliable guide to the future. To say that we know what will happen if neither of the two old parties can convince the people that they deserve to govern alone because we
saw what happened in 1974 is just like saying we know what is going to happen in 2046. We have no idea what will happen 36 years from now.
This is the last Budget of an old era, because we will now increasingly find that we need a form of politics that addresses a wider range of public concerns than the current political parties can articulate.
Mr. Angus MacNeil (Na h-Eileanan an Iar) (SNP): I am listening carefully to the hon. Gentleman's speech. Will he confirm that Scotland currently provides a great example of the new politics, in that the Scottish National party has formed a successful minority Government there? He might also like to dwell on the fact that in Scotland support for the Liberal Democrats has almost halved since 2005.
Mr. Browne: I have always thought it an act of supreme charity by the Liberal Democrats that the electoral system in Scotland means that the Conservative party was saved from absolute extinction there. That just goes to show that we are motivated by a benevolent desire to look after ailing parties, not just by self-interest.
The Budget symbolises the old politics, as does the debate between the two Front-Bench teams. In the coming election and the decades ahead we will find a new and more diverse type of politics that will both give people a greater range of opportunities and reflect the more varied and freer society we live in today.
Madam Deputy Speaker (Sylvia Heal): Order. I remind Members that Mr. Speaker has imposed a 12-minute limit on Back-Bench contributions.
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