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That was written by the right hon. Member for Witney (Mr. Cameron), yet now, of course, that is his party's policy.

It was interesting that the Chancellor said very little about science in his Budget speech. I welcome the Government's announcement of a green investment bank, as, I think, does the whole House. I also welcome the creation of technology and innovation centres, and the £25 million of investment they will bring, although it is rather curious that it is felt we need them when we have the Technology Strategy Board, which has been doing extraordinarily good work since it was set up.

The Chancellor stated that he wants to promote research, innovation and enterprise, yet it appears that the research part of that has been rather overlooked in favour of innovation and enterprise. It is all well and good to concentrate on translating our excellent research into commercial activity, but unless we have investment in the basic research itself, we will not have the raw material to develop the economy in the long term. We must guard against the nonsensical idea that fundamental and applied research are in somehow different silos. They are not; they are part of the same continuum, and if we do not invest in both of them, we will lose out.

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Despite frequent references to innovation in the Budget, there was no reference to the science and innovation investment framework which, since 2004, has been one of the Government's most powerful measures in giving a long-term structure to science and innovation. Nor was there any reference to the Government's target of achieving expenditure on research of 2.5 per cent. of GDP. That seems to have been lost.

In reality, therefore, despite being committed to science and innovation driving the post-recession economy, the Chancellor mentioned that only once, and, tellingly, he spoke about science in the past tense. It was not about the future: the Chancellor told the House that the Government had increased investment in British science by some 88 per cent. in real terms over the past 10 years. That is true, and they should be congratulated: this Government's commitment to science has surpassed that of any previous Government in my lifetime. However, the reality is that that is now in the past tense.

This Budget should have been about the future, but sadly it was not. In respect of science and engineering, it appears that the job is done. The Government appear to accept that, at best, we have peaked in our efforts and that success is now to limit cuts rather than to make a case for future investment. Frankly, that is at odds with what the Government have been saying over previous years. In February last year, the Chancellor said in his Oxford Romanes lecture that

Yet that is exactly what we now seem to be doing. There is to be £600 million of cuts in science, research and higher education precisely at the time we need to be investing more. Lord Mandelson said last week that we have drawn a line in the sand in respect of protecting our science spend. Sadly, if the height of this nation's ambition is simply to draw a line and say that we are not going to increase spending in future, we will slip behind.

We should take a look at what our overseas competitors are doing in terms of investment. President Obama said:

That was not just rhetoric, because he backed it up by pledging $21 billion of investment-the largest commitment to scientific research ever seen in the States-with 5.7 per cent. of the US federal research and development budget to be spent on science by 2011. In Australia, science spending has increased by 25 per cent. In the same week as the UK's pre-Budget report announced a £6 million cut, the French Government announced a fresh €35 billion investment in the knowledge economy and in the green economy, some €11 billion of which is to be allocated to the top French universities. Countries such as Singapore, China and India are all investing huge sums, but what did we do? The Prime Minister announced a £15 billion economic stimulus package, but £12.5 billion of it went on a 2.5 per cent. VAT cut for people to spend in the shops purely on retail. That was not an investment in the nation-one can imagine what that £12.5 billion could have done if it had been invested in our science base.

In reality, what science is delivering for this country is beyond reproach. The Royal Society produced its major report last week and it was tremendous reading. It
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mentioned that over the past five years university spin-outs employed 14,000 people and had a turnover of £1.1 billion and that over the past decade university bioscience departments have generated more than 200 companies. Despite what the report says, without considerable investment in our science base the UK will face decades of slow economic decline. The report that my Committee published a week or so ago on the impact of cuts on the science budget concluded that a failure to increase investment in science is inconsistent with the Government's policy ambition of growth in the sector and undermines their previous good record.

The UK risks losing its brightest academics to countries with demonstrable guaranteed investment for the future, and we cannot allow that to happen. The Council for Science and Technology-the Prime Minister's own think tank-said:

Tonight, we have heard about lots of things being protected. The right hon. Member for Skipton and Ripon (Mr. Curry) was right to say that we cannot simply protect things for the sake of protecting them and that there must be a real long-term mission-science clearly can deliver that.

Science is not a stop-go activity: Honda and Ford can suddenly say that they will close their labs for three months because the money is not coming in, but science is not like that. We know that if we close our labs and stop investing, our brightest and best scientists will go elsewhere. Interestingly, the Royal Society's report said that it was people who actually make the difference. These scientists are the people we need to invest in, but sadly it appears that that will not happen.

The real opportunity, in response to this Budget, was for Her Majesty's Opposition to say what they would have done about science, but we did not hear a word from them. The hon. Member for Windsor (Adam Afriyie), who represents the Tories on science, said that there would be no extra investment until the current credit crisis was over and we had solved the current recession problems-that is 10 years down the line. If we wait 10 years for that sort of action, our science base will be lost. The Government have had a terrific record so far on investing in science and it is very sad that when the country needs them most, they have suddenly lost heart and failed to make that investment. Perhaps they will have a rethink if the Government are returned to office after the general election, but if anyone takes their place, I hope that they will put science at the heart of what they do.

8.14 pm

Mr. Andrew Turner (Isle of Wight) (Con): This Budget bears little relation to the times in which we live and comes from a Government who have run out of time altogether. After the deepest recession in generations, Governments, financial institutions and credit rating agencies around the world are reaching a new consensus that urgent action must be taken to reduce budget deficits. Only recently, the European Commission called for more information on how the Government would go about halving the deficit from 2011. Markets are crying out for the detail of how this will be achieved, and the British people are demanding to know that
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their children's futures will not be sacrificed under the burden of this Government's debt. Yet the Budget is utterly lacking in the action needed to reduce the deficit. The Chancellor was content simply to make projections, when he should have been detailing plans, and to talk vaguely about an end point instead of precisely focusing on how we will get there.

As such, this is a Budget of half measures, damaging delays and illusionary targets. Most worryingly, no effort was made to bridge the credibility gap. The director of the Institute of Directors noted:

He went on to say that

Roger Bootle, economic adviser to Deloitte, said:

Although the Chancellor has revised his figures, borrowing still stands at more than 10 times its 1997 level. I recognise that unprecedented action has been taken in the form of the fiscal stimulus, but the Government have ignored the unprecedented consequences in the form of drastically higher debt. Indeed, Britain's national debt will hit an unprecedented £1.3 trillion by 2014-15, which is more than double the level of just a year ago and amounts to more than £50,000 per household. If we do not quickly get a handle on this, our triple A credit rating will be downgraded, investors will lose confidence and the recovery will stall, if not worse. This situation will not just sort itself out, it will not just evaporate and it cannot be left for future Governments or future generations to sort it out; it is our moral duty to begin reducing the deficit now, and that requires action from the Government today.

In the absence of a plan, the main positive in the Budget is that things are not quite as bad as expected: our borrowing is £167 billion, rather than £178 billion; the interest on the debt is slightly lower than expected; and the structural debt is predicted to be 75 per cent. of GDP by 2013-14, rather than 78 per cent. But saying that the situation is "not quite as bad" is not the same as detailing how it will get better. One cannot give a Budget, let alone run an economy, on happenstance and fortunate recalculations alone.

Like the portrait of Dorian Gray, what beauty there is to this Budget is only skin deep. When we look below the surface, we see that the Chancellor utterly ducked making the tough decisions in the best interest of the country and instead chose to penalise the overwhelming majority of hard-working people. There is nothing stealthy about that. Although the Chancellor may coat it in the best intentions, it is plain that he chose tax hikes over public sector cuts. He made the wrong choice again on small businesses. When he should have cut the main rate of corporation tax, he instead chose to extend targeted tax relief for some businesses. That does very little to offset the £4.5 billion cost of the one penny rise in national insurance, which will be detrimental to all businesses. In the absence of any decisions on the deficit, the Chancellor took the wrong decisions on taxation.

Cutting the deficit and getting the economy growing are one of today's defining issues. No doubt in the coming weeks all parties will be publishing their plans
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on how to reduce the deficit while promoting growth, but the Budget was the Government's unique opportunity to reassure the markets, secure the recovery and, most importantly, to help the British people. They have comprehensively failed in every respect. Indeed, it is nonsensical to expect the same Government who caused the problem on the one hand to offer an effective solution on the other. So, we need an alternative. If we do not get a grip now on tackling the continued implications of the economic crisis, it will be superseded by a social crisis that will make the recession look like small change. We must also give people greater opportunity to invest their own money rather than restricting financial freedom through the higher taxes that the Government are so keen on imposing.

8.21 pm

Mr. David Drew (Stroud) (Lab/Co-op): I am delighted to take part in the Budget debate. Unlike a number of other hon. Members tonight, I hope that this will not be my valedictory speech, because I am standing at the election and intend to win. I intend to win on a slightly different programme from that on which other hon. Members are putting themselves forward.

I am grateful that normal politics have returned and we are at least having a debate on aspects of the economy and economic growth that have perhaps been avoided for too long. My take on this, of course, is that the Budget falls against the background of a difficult and steep decline in our economic fortunes. The recession is here. Numerically, we might be just about climbing out the other side, but anyone who thinks that we are there and can put the flags out is, I think, completely optimistic and naive.

I go around my local firms-people are always surprised when I say this, but Stroud is a centre of manufacturing and some 25 per cent. of our jobs are in that sector, which is much more than twice the national average and means that Stroud is as close to a valley town in the north-west as it is to the traditional south-west town, so I have some knowledge of manufacturing-and I would make three quick observations. First, the recovery is fragile and any attempt to jam on the brakes in terms of public spending has an impact on not only the public sector but the private sector. The two sectors are so inextricably linked that anything that effectively crunches the public sector will have a completely deleterious effect on the private sector. That matters, because the last thing that we want for those who work in both sectors is a rapid increase in unemployment. As we learned from the 1980s and 1990s, that is not a price worth paying. More particularly, it leads to a cost that we have to pay through unemployment benefit and all the benefits that go with that. That is, I hope, a lesson that the Government have learned.

Some of us take a position that it is wrong to cut, and it is certainly wrong to cut now and to cut some of the things that, sadly, the Front Benchers seem to be too intent on cutting in a race to the bottom. I have been struck by the words of Joseph Stiglitz and our own Danny Blanchflower-I tried to persuade my Government that he would be an excellent new representative of the Bank of England, because he has seen the recession both in terms of the causation and latterly in terms of
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what we need to do. I am aware that, as colleagues have mentioned, we have a budget deficit and that we have to do something about it, but some of the schemes end up cutting jobs in the public sector-the jobs of those who had no fault whatsoever in the financial collapse. Why should they be made to pay the consequences? Instead, we should be considering some of those vainglorious projects that Governments from my party and from other parties have too often seen as shibboleths but should be anything but. I offer Trident, ID cards, withdrawal from Iraq and Afghanistan as a starting point, if we are going to talk about budget deficit reduction.

As much as I want to see some aspects of public spending reduced, I still think that we overdo and completely exaggerate the impact of the public debt situation. According to all the figures, Britain will remain in the middle of the Group of Seven if we carry through some of the changes that are being mooted. As I have said, I approach the matter from a completely different perspective. I think the most fascinating figures of all, which form a backcloth to all this, are those that show that until the 1970s, we spent roughly 5 per cent. per annum on gross domestic capital investment in the public sector, which went down to 0.9 per cent. in the '80s and '90s and which this Government have brought back up to 3.9 per cent. If we include the private finance initiatives-I have my disagreements with them-the figure is substantially higher than that. I am proud of that. We have rebuilt schools and health facilities, and we have put money into the social infrastructure of our country. Why should we destroy all that because of other people's faults?

There is a way out of this recession. I make no apology for saying that I am an advocate of the green new deal. Let me make it very clear that that is not the Green party new deal, because many of the people who contributed to it are quite well-known Labour party people, as well as those of no party. Let me outline in the time that I have left some of the ways in which I think we can grow sensibly, sustainably and even morally out of the problems that we made for ourselves. Of course, I am talking about investment in energy efficiency and microgeneration, the creation of thousands of green jobs, a windfall tax on the profits of the oil and gas companies, developing financial incentives for green investment and reducing energy use and changes to the UK's financial system, including a new way in which we calculate interest rates to advantage green investment in particular. We need to reconsider how we have treated financial institutions. I think that the Government are right to step in and help, if not to take over a number of the financial institutions, but I am exceedingly wary of having a Dutch auction in getting rid of them.

Last but not least, there should be much more transparency in the way in which we demand financial reporting and a clamping down on tax havens. Of course, the one great cheer that came from the Government Benches when the Budget was announced was the announcement on what is now being called the "Belize gambit", whereby this Government, for the first time, have begun to get serious about tax evasion, tax avoidance, tax loopholes and tax havens. At face value, looking at the notion of tax information exchange agreements, we now have a sensible way forward. Sadly, there are problems with TIEAs. They are termed in a pretty amorphous way, and they are not easy to operate because it takes
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two to tango and although the British Government might be willing to disclose certain information, that does not necessarily mean that those with whom we might wish to tango will give us the information that we want.

I hope that my right hon. Friend the Financial Secretary to the Treasury will say something about how we are going to raise billions of pounds from those who have made little or no contribution. It is about time that they made a proper contribution, but we need to clarify how TIEAs will function in practice. That will rely on issues to do with the identity of the person under investigation or examination; what information is sought; the tax purpose for which it is sought; the grounds for believing that the information requested is held within the jurisdiction of which a request is made; and-last but not least-to the extent known, the name and address of any person believed to be in possession of the requested information. So, it is a question of knowing who has the money and for what purpose, and then making sure that they are willing to disclose the true financial picture.

We are not talking about going into foreign jurisdictions. We are talking about people who, it is claimed, are either domiciled or, to some extent, resident in this country, but who exploit tax havens far too readily and easily. There is a history of TIEAs not working terribly well, so I hope that my right hon. Friend will give me some good news about how we will operate a much more robust and rigorous attempt to drive down what many of us feel are the worst excesses of capitalism, whereby people do not pay anything like the right rate of tax in this country, even though they derive many benefits from this country. This is about fairness, justice and the reality of the world today.

If my right hon. Friend wants any help, he will be pleased to know that I am presenting a Bill tomorrow-the tax and financial transparency Bill-that I hope the Government will take up. It looks very clearly at how they could take forward the measures that I have been talking about, and I hope that he will come and listen to me present the Bill tomorrow. It contains just the sort of thing that the Government are looking to find out about. It would release billions of pounds to the Exchequer from people who should be the most liable for the problems that they cause.

To conclude, I very much hope for a proper debate not only on the Budget, but on the way in which we have got ourselves into an unholy mess, because of the way in which the financial sector has behaved. Let me give an example to show how serious the situation is. Today, when I visited a company that will remain nameless, it was made clear to me that it was in a parlous state, but that it had managed to see things through because of its ingenuity. That made me think about how interrelationships with the financial markets impact on ordinary manufacturing companies in this country. Two things had really hit that company. First, it had invested heavily in Iceland, from which it learned the awful lesson that those who pay higher rates of interest are not necessarily able, ultimately, to defend what they are doing. The second thing was the way in which foreign banks have shut down loans virtually overnight. That is why lending through British banks-

Madam Deputy Speaker: Order. I am afraid that the hon. Gentleman's time is up.

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