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8.50 pm
Mr. Brooks Newmark (Braintree) (Con): I first draw Members' attention to my ever-diminishing entry in the Register of Members' Financial Interests.
I join others in paying tribute to my hon. Friend the Member for South Staffordshire (Sir Patrick Cormack), my right hon. Friend the Member for Maidstone and The Weald (Miss Widdecombe) and my hon. Friend the Member for Daventry (Mr. Boswell) for their services not just to our party but to the House. I doubt that I will last as long as them in the House, and I have huge respect for all they have achieved. They are incredibly independent individuals who have followed their own paths and achieved great success here, and I wish them luck after they retire.
In Budget after Budget when he was Chancellor, the Prime Minister consistently pledged, "No return to boom and bust". It was his defining mantra, but now we know that he did not abolish boom and bust, he simply fuelled it. Millions of families, pensioners and businesses are now paying the price for more than a decade of economic mismanagement and fiscal imprudence.
The Budget that we are debating was the current Chancellor's chance to leave a better economic legacy for our country than his predecessor, the Prime Minister. It was a chance to present a credible plan, get the British economy moving again, support hard-working families, offer a new direction for public services, reverse the tax on jobs and offer equality of opportunity for all. Instead, we got a do-nothing Budget from a Government with nothing new to offer. The legacy of this Labour Government is clear: they have taken Britain right from boom through to bust. It is on that record of boom and bust that the Prime Minister will shortly be judged at the ballot box, and it is that record that I wish to examine a little today.
I begin with the budget deficit. With due respect to the right hon. Member for Holborn and St. Pancras (Frank Dobson), who is no longer in his place, he seems to live in a parallel universe. We are living with perhaps the worst budget deficit in the G7. We have a worse deficit than even Greece. In fact, I believe it is the worst in the developed world. For too many years, the Prime Minister has been effectively maxing out the nation's credit card, and his solution and that of the Chancellor in the Budget is to say, "Let's take out a new credit card."
We are treading on dangerous ground, and in fact the Government have been chastised by both the European Commission and the Bank of England for their lack of clarity in dealing with the budget deficit. The financial markets have begun to punish their fiscal imprudence. I believe that in the credit default swaps market, McDonald's is rated higher than the British Government today.
This Budget did nothing to allay anybody's concerns. Reducing projected borrowings by a projected paltry £11 billion provides no basis for rejoicing. Indeed, as we have heard, the Red Book shows that Government borrowing in 2009-10 is projected at £166 billion, which works out-I am sorry that the hon. Member for Taunton (Mr. Browne) is not here to hear this-at £456 million a day, or £19 million an hour, or £317,000 a minute, or £5,280 a second. That is the legacy that this Government are leaving for us to clear up, after 6 May hopefully.
On public debt, the last Conservative Government bequeathed national debt of some £350 billion. Under the Prime Minister's stewardship and his ceaseless moving of the goalposts of his now discredited golden rules, debt is forecast to reach some £777 billion this year. That means that each and every person will owe a liability of an extra £23,000 by 2014. As debt has increased, so has the cost of servicing it. We read in the Red Book that the debt interest for 2010-11 will be £41.6 billion. As we are discussing education today, I should say that that is in fact bigger than the whole of the schools budget of £40.6 billion. However, that is not the whole story. The Minister may be familiar with my analysis of the true extent of Government debt. Counting liabilities that are hidden off the balance sheet, debt now perhaps stands at a staggering £2.2 trillion. That includes public sector pension liabilities, to which my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) alluded, which are almost £1 trillion, private finance initiatives and bank debt-we must count the debts of the banks that we have acquired.
The Chancellor may be comfortable for debt to rocket to a predicted £1.4 trillion on-balance sheet in 2014-15, but that is more than 100 per cent. of gross domestic product, and we cannot keep our heads in the sand any
longer. The hard decisions must be taken now, and we need mechanisms in place to prevent any future profligate Chancellors-of any party-from frittering away taxpayers' money. The Conservative party would establish an office of budget responsibility to provide an independent audit of all Government liabilities and to hold them to account for all their fiscal promises.
This is all about transparency, and the Government have not been transparent with the public on the true extent of the nation's debt, among other things. A lack of transparency permeates every aspect of the Prime Minister's legacy of boom and bust, yet surely now more than ever, taxpayers deserve transparency. The Government have rightly demanded rigorous transparency from banks and companies, but they lose all credibility when they refuse to apply the same standards to themselves. It seems that few lessons have been learnt. In his Budget speech, the Chancellor failed to mention the stealth hikes that are hidden in the small print. He has frozen all personal allowances, effectively increasing taxes for 30 million hard-working individuals up and down the country.
The Chancellor also promised details on spending cuts, but instead, we have a £20 million black hole where details of future spending should be. Departmental officials have even admitted that they know nothing of those details. For a Government claiming economic rectitude to have no spending plans beyond next year simply defies belief, and economic and financial credibility. We need to create transparency throughout government-both local and national.
Savers are the economic bedrock of society, and those who prudently put away money during the good times in preparation for the hard times must be rewarded, yet that logic is entirely antithetical to our boom-and-bust Prime Minister. That is why household savings had dropped almost to zero when the recession hit. We are consistently one of the lowest-saving countries in the OECD. I was pleased with the doubling of the individual savings account limit in the Budget, but we need to go further to restore a savings culture. The path to prosperity depends on an economic model based on savings and investment, not consumer borrowing and Government debt.
The poorest pay the highest taxes: the poorest 20 per cent. pay 39 per cent. in income tax while the richest 20 per cent. pay 35 per cent. Indeed, when the withdrawal of benefits is taken into account, low-paid earners have a marginal tax rate of some 96 per cent. Furthermore, child poverty has increased for the third year in a row. Today, some 4 million children live in poverty. Tony Blair's ambition of halving child poverty by 2010 has been left in tatters by this Prime Minister.
As the Joseph Rowntree Foundation has concluded, the strategy against child poverty and social exclusion pursued since the late 1990s is largely exhausted. Today, one in five young people cannot find a job. In my constituency alone, unemployment has trebled. Will the 1 per cent. increase in national insurance be an incentive for employers to hire more people? I suspect not, and we are right to propose abolishing it.
The Prime Minister talked about the collapse in sterling. In 1992, when he was shadow Chancellor, the Prime Minister said that
"a weak currency arises from a weak economy which in turn is the result of a weak Government".
Never was a truer word spoken. We have heard about the sell-off of gold at prices four times below its level today, losing the Exchequer some £6 billion. The tax credits system has lost billions of pounds through incredible mismanagement, and the Public Accounts Committee has pointed out that
"tax credits suffer from the highest rates of error and fraud in government".
My constituents would certainly agree. Every week I, like many hon. Members, hear from families facing real hardship, uncertainty and stress at a time they can ill afford it. I am a firm supporter of tax credits, but the system needs urgent reform. For a start, the Government should have used this Budget to focus on tax credits for households with incomes less than £50,000.
The dissection of the Prime Minister's blueprint from boom to bust could go on, but the message is clear. The very boom and bust that the Prime Minister hubristically claimed to have abolished will now be the epitaph of this Labour Government. The Chancellor said that this Budget would be about choices, and his choice was simple-generate the ideas and reform necessary to get Britain moving again, or end Labour's terms in office with a continuation of the Prime Minister's boom and bust politics. The Chancellor made the wrong choice. A Budget comprising back-of-the-envelope sums and delivered with one eye on the ballot box was not the Budget that Britain needed. We do not need more of this debt, waste, tax and irresponsibility. Short-sighted political positioning should never come above the economic interests of the nation. We need change, vigour and ideas to get our economy moving again. In a few weeks' time, I hope that that is exactly what we will have.
9.2 pm
Andrew Mackinlay (Thurrock) (Lab): Much of this long Budget debate has focused on apportioning blame for the present crisis. Many institutions and individuals, in Parliament and outside-and Parliament itself-must take a considerable amount of the blame for the problems that we face, including the failure to regulate, over-confidence and arrogance. However, the crisis also took place against the backdrop of things that were way beyond the capacity of the UK to control or monitor. We have to be realistic about that.
One thing of which I am certain is that the Chancellor and the Prime Minister are the best people to provide good stewardship and see the UK through the crisis. I have two historical parallels. At the time of the Norway debate, 70 years ago, Winston Churchill should arguably have taken some of the blame for that disaster as First Lord of the Admiralty. However, I have never had any doubt that he was the best person to prosecute the war with vigour and to victory. Margaret Thatcher could have been charged with abdicating her responsibilities and giving the green light to the Argentine dictators to take the Falkland Islands, but I have no doubt that she had the greatest chance of pushing the invader out and prosecuting that war with great success. In the same way, this Labour Government need to be returned in order to see us through this crisis and I have every confidence in their capacity to do so.
I would like to refer to some aspects of the Budget. There has been a real attempt to protect fragile industries and small and medium-sized businesses, and, in many cases, to incubate them against the crisis swirling around
us in the economy. It is essential that we protect our public services and, in so doing, maintain demand and stimulus. The Government's long trek to reducing public expenditure is the correct and prudent approach, unlike the approach that our friends in the Conservative party would rush to and which would create a deeper hole and crisis in the short term. The Chancellor is the best person to see us through the crisis, and I believe that his strategy is correct.
Eighteen years ago, I made my maiden speech here. It was my fifth attempt to get elected to Parliament, and over the years I have been a Labour candidate of some sort on 13 occasions. It is with great pride that I have stood for the Labour party, and it is also with immeasurable pride that I have been the Member of Parliament for Thurrock, representing people of all persuasions to the best of my ability. It has been a great honour and privilege to serve them. My constituency has changed greatly-for the better-in 18 years: there is higher employment and greater diversity, in terms of ethnicity and social class, and one could justifiably say that it is booming. The Labour Government will leave to the people of Thurrock a rich legacy, particularly in the improvement of education. My borough had been greatly deprived for many years by the old Essex county council. Getting unitary status and developing academies has benefited the children of my borough enormously over the past 18 years, particularly since the advent of the Labour Government.
Of course, during those 18 years there have been some frustrations. It is a great pity that the Labour Government have never addressed the West Lothian question. It is a mistake to ignore this, as if it would go away. I also wish that we had gone faster on electoral reform, but as I leave Parliament, there is a real opportunity for a substantial change in the electoral system during the next Parliament. I wish, too, that we had tackled the upper House, whose functions are extremely important, but whose construction is of questionable legitimacy. If I had a chance of being one of the last to get there, that would be fine, but I would love to be one of the first of the new. If there are elections to the upper House in the future, and if I am fit and well, I would certainly like to throw my hat into the ring.
I should add, before I digress totally, that the Budget also referred to my constituency in relation to the Dartford-Thurrock toll, which, as my right hon. Friend the Chief Secretary has said on several occasions, the Government want to privatise. I have no ideological objection to privatising the Dartford tunnel toll, but I do ask him again how he plans to do it. Mandarins, who are removed from the real world, have conjured up this idea, and Ministers repeat it like a mantra. I am not necessarily opposed to it, but I invite him, for the third time, to tell us how he plans to privatise or sell the Dartford toll. It is not clear to me how it could be achieved or what would be of benefit. I think it will be seen to be a non-runner.
As I said, my constituency has changed greatly in my 18 years. To the great benefit of the community, we have absorbed large numbers of people who have come to this country, often in very distressful and adverse circumstances. We had the Bosnians in the mid-1990s, Kosovans, Afghans, people from war-torn parts of Africa and people trying to get out of the despotic regime that currently disfigures the wonderful country of Iran. That has put a great strain on my staff and colleagues, and
we have done our best to protect and promote these people's interests. However, I have been particularly frustrated by how the Home Office has been unable to get on top of the chaos at Lunar house. Many hon. Members from across the political spectrum share that view. It is just unbelievable that there is such chaos upon chaos, but it also has distressing human consequences for families who do not know their status and who cannot travel or make contact with loved ones. I urge the Government to address that with some dispatch. We are also very proud of the growing Nepalese and Gurkha community in Thurrock. In particular, their young people are becoming wonderful role models in our schools.
The Budget had a significant section on Government savings. I personally think that whoever forms the next Government needs to have a war on quangos, of which there are far too many, and also stop this perpetual so-called-but wholly bogus-system of reorganisation. Both parties have been guilty of that in the past. There is enormous cost and loss in reorganisation. Good people retire early and are never seen again. It is like painting the Forth bridge, and the product is not much better at the end, if it is at all better. We had local government structures from 1888 to 1974 that worked well and underwent organic change. This obsession, of both the Tory and Labour parties, with reorganising the public sector nationally and locally is frankly bonkers and very costly, and I hope that this trend will end.
I would also urge my hon. Friends to stop their obsession with creating things such as quangos-or whatever gobbledegook they call it-with names like "Stepping Stones", "Partnership", "Looking at Blue-Sky Policies", and all that kind of nonsense. Why do we not stop all that, have some definite structures and call public servants precisely what they are, with titles such as "borough engineer" or "surveyor", which we understand, rather than "director of this" or "director of that", for the six weeks before a further reorganisation?
I am pleased that my friend the hon. Member for East Antrim (Sammy Wilson) is here. One of the great successes over the period in which I have been in Parliament has been the resolution of conflict in Northern Ireland. It is a wonderful place and I intend to spend more time there recreationally when I leave this place. I am also going to work on my notebook-alas, it is not a diary, like that of my hon. Friend the Member for Sunderland, South (Mr. Mullin), but there are some good things in it, and I want to codify them.
Members who are leaving this House will want to say the following on behalf of those who are bravely standing again and hope to be returned. Being in this House is a priceless privilege, but it is also seven days a week, 52 weeks a year. There are many critics, and we should be subject to some criticism, but some of it is very harsh and unfair. I say to those who think that they can be a Member of Parliament better and more cheaply that not only can they stand for election, but arguably they have a duty to do so. They need to stand up for what they claim.
The last point that I want to make, in thanking all the staff here, my staff, and my wife and family for their support, is this. Theodore Roosevelt said 100 years ago:
"Far better it is to dare mighty things, to win glorious triumphs, even though checkered by failure, than to take rank with those poor spirits who neither enjoy much nor suffer much, because they live in the gray twilight that knows not victory nor defeat."
I send my best wishes to Members from right across the political spectrum who are standing for re-election. I thank them for their fellowship while I have been in this House, and I hope that this place will strengthen itself in the next Parliament.
9.14 pm
Mr. Brian Binley (Northampton, South) (Con): I have listened to some excellent speeches, many of which have been by people who will be leaving this House. It has been a privilege to be here, and I know that we all wish them well in the years to come.
I also listened to some good people in Northampton over the weekend. I wanted to know what they thought about the Budget. I hate to say this-no I don't-but they gave me some bad news for the Chancellor, because they told me that the Government had not been honest about the size of the problem that the country faces. They feel that the Government have not been truthful about growth forecasts, their borrowing requirement, or their handling of public sector debt, and they are unhappy with the plan to cut the deficit through increased taxation.
My constituents told me that they felt there were just two certainties. The first was the continuation of debt, waste and taxes, and the second was the continuation of pain for themselves and concern for the business world. They thought this was a fairytale Budget of could-bes, might-bes and maybes, and that it did little to eradicate the fears that they have voiced. They did not think it was good enough. The really sad thing was that not many of them felt any great hope for the future-certainly not for the next four or five years. It is worrying that a Chancellor presenting his last Budget should create such an effect.
So much for the responses of the people of Northampton. I want now to discuss one of the problems that they identified in a little more detail, however-that of public sector debt. I am not surprised that my sensible constituents expressed concern about this. We have only to look at the Treasury forecasts to understand just how much debt we face. A figure of 44 per cent. of gross domestic product was given for 2008-09. The figure for 2009-2010 is 56 per cent., and it is set to rise to 78 per cent. in 2014-15. That is all because the Government apparently took the advice of a lady we remember well, who won the pools many years ago. When asked what she was going to do with the money, she said she was going to "Spend, spend, spend".
That is exactly what has happened in recent years, as illustrated by this Prime Minister's vain boast that he had done away with bust. He thought he was infallible, but we are now paying the price. So certain was he about this that he told the Financial Services Authority to apply a light touch. The policy of spend, spend, spend has ended up just as we all thought it would: with bust, bust, bust. The Prime Minister's arrogance has led to a longer, more persistent recession than we would otherwise have experienced. The real problem for many people is that the cost will be borne by their children and grandchildren, and they will not thank Mr. Blair or Mr. Brown for that legacy.
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