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Budget Resolutions and Economic Situation

I shall give way later, but I want to make some progress first. I want to say a little about each premise. First, there is a genuinely interesting argument about the right response to globalisation and the balance between tax cuts and public investment. The question is simple: should it be a rule of economic policy that public spending must fall as a proportion of national income to provide room for a falling tax burden? The Budget, with its emphasis on the Chancellor’s long-term ambition for education, rejects that premise because Labour Members believe that the right sort of public spending can contribute to economic growth and will not hinder it. To put the problem in the context of today’s global economy, there is what might be called a ““race to the bottom”” model of economic development, whereby we should try to cut taxes as much as we can to be competitive. The problem with that model is that it cannot answer some basic questions about our country and our economy. For example, business makes representations about transport investment at every Budget. A skilled work force—not only in higher education and schools but level 2 and 3 work force skills—is important, and I welcome the extra money for schools in the Budget. The science base is an essential driver of innovation and enterprise. Again, I welcome the extra resources for science teaching in the Budget. The right policies for welfare to work, as well as child care and parental leave, are vital. I believe that there is now cross-party consensus that the good economy must be about gender equality, too, and that those policies are important.