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Adjournment (Whitsun)

A fellow Scot speaks from the Back Benches. Other new Members made equally trenchant and interesting speeches, some laced with humour as well as intelligence. I did not agree with every point raised but, surprisingly, I agreed with quite a few, even though they were made by Opposition Members. I made a late entry into the Chamber this afternoon, but not just to avoid having to pronounce the name of that wonderful constituency in the west of Scotland, which I shall have to learn before too long. I was fortunate in arriving late for that reason, but my main purpose is to deliver the speech that I wanted to make in the Queen’s Speech debates but was unable to do so, largely because so many fine new Members were making their maiden speeches. It was enjoyable and interesting to hear them yesterday. I want to raise some fairly serious points about the economy, so my remarks are addressed mainly to my right hon. Friend the Chancellor of the Exchequer. I know that the Deputy Leader of the House is one of his close friends, so perhaps he will put in a good word for me after he has heard my speech. Support for the Government has rested largely on our success with the economy. We have had strong and steady growth for eight years and unemployment has fallen to astonishingly low levels. We have had buoyant house prices and rising public spending, all of which has brought dividends and contributed to two further substantial election victories. We must ensure that our economic record continues in order to win fourth and perhaps even fifth terms in office. The benign economic environment has meant that voters, particularly Labour voters, have forgiven the Government for other less popular policies. Even I have disagreed with Ministers and the Government on some issues. The Iraq war has already been mentioned, but when people came to vote, they put the pound in their pockets, their jobs, their secure homes and their schools and hospitals first in their reckoning. That is precisely what they did at the last election. In Luton, North, my support depends strongly on my constituents’ reaction to what they experienced under the Conservative Government 12 to 14 years ago. That is because my constituency was then the epicentre of negative equity and repossessions. It was the No. 1 constituency in that respect, and my constituents have not forgotten it. That folk memory continues to this day and will serve us well in future years, though I do not want to rest only on the bad record of our Conservative predecessors. We need to be proud of the good things that we do, too. We must keep the economy strong. The truth is that we are now facing rather more difficult times. Forecasts have been made in the newspapers both today and yesterday of the difficult times that lie ahead unless we take appropriate action. Growth has long been driven primarily by consumer spending and economic demand. That has been based, in turn, on rising asset values. Since the collapse of the exchange rate mechanism in 1992, house prices have risen and there has been a surge in stock market values. Growth was so strong that it accommodated a substantial appreciation of sterling in the late 1990s—much to my surprise, I must say, because I had thought that such an appreciation would damage economic growth. That did not happen and we sailed through it, just as we sailed through a sharp fall in the stock market subsequently. Such events may have been expected to throw us off course, but the economy has continued to grow. House prices have been the basic reason for that. As they have continued to rise, so have the asset values that matter to most people—their own homes, particularly for working people. The price of their house is more significant than the state of the stock market. That is not true of other countries, but it is certainly true of Britain. House prices have now reached a point at which the ratio between earnings and house prices is twice that of 10 years ago. Such a surge cannot continue indefinitely and demand must derive from other sectors. The Government—the Chancellor, in particular—have done well in driving public spending ahead, especially in health and education. That has brought benefits in employment as well as economic growth. I urge the Chancellor to continue with his public spending programme to ensure that we have not only social benefits, but the economic benefits of full employment.