---

Budget Resolutions and Economic Situation

I refer hon. Members to my declaration in the Register of Members’ Interests and place on record my great pleasure at following the hon. Member for Stoke-on-Trent, North (Joan Walley), a fellow member of the Environmental Audit Committee, who spoke with her characteristic sincerity and commitment to her constituents. I do not know about other new Members, but I was thoroughly looking forward to my first Budget. After all, they used to mean something. However, now I am not so sure. With the big decisions increasingly taken elsewhere, the annual event appears reduced to the theatre of gesture politics. As my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) observed, it is increasingly thin gruel, as last week showed. As a new Member, I applied three tests to the Budget. First, is it relevant to my constituents? Secondly, does it recognise what is needed to shore up the competitiveness of the British economy in a changing world? I speak as someone who has experienced trying to run a business in Brazil, one of the emerging giants that is set to change the global economy. Thirdly, does the Budget demonstrate that the Treasury is showing sufficient urgency in the face of climate change? I speak as a member of the Environmental Audit Committee, which placed on record only last week our concern about the possibility of institutional inertia in the Treasury in the face of the scientific evidence. On the first test, there are things to welcome, including more investment in reassurance policing, increased focus on youth services and increased investment in child care. There are local concerns about the long-term funding behind that package, but there are things to welcome. However, they are overwhelmed by two key omissions. First, there is bafflement in the local community at the silence about the national health service. Our local context is that we have two, much-admired hospitals, which have performed extraordinary feats at the cutting edge of cardiac care and cancer treatment. They are Harefield hospital and Mount Vernon hospital. Both face genuine uncertainty about their long-term future against the background of an overriding strategic imperative to cut beds in north-west London. Our primary care trust has a deficit of £30 million and the community is braced for announcements about real labour cuts that will cut deep into the local health community. Hillingdon residents are gradually realising that they can no longer rely on NHS dentistry, with the news that seven out of 10 Ruislip dentists intend to quit the NHS. Financial crisis in the NHS underlies that theme, at a time of unprecedented investment. My constituents ask where the money has gone, who is responsible for the mess, who will sort it out and how that will be done. Was it unreasonable of them to expect the Chancellor of the Exchequer, the man with his hands on the levers of power, who expects to become Prime Minister, to explain at the Dispatch Box how the problems will be solved? He was quick to take the credit but reluctant to step up to the plate when the going gets tough. It is a test of leadership for a man who aspires to be Prime Minister, and he failed it. A second concern is a failure to tackle a growing sense of insecurity in the community, especially among elderly people. Anxiety about the value of pensions is wrapped up in that but it is linked with concern about the rising costs of living, especially those associated with people’s houses. Much has been made of the council tax, which is biting deeply, but rising utility bills and the costs of energy in the home are being talked about more loudly. Linked to that is confusion about the signals that the Government send about the need to set aside money for long-term savings. There is no more guilty agent of confusion in that mess than the Government’s system of pension credit. I am genuinely surprised at the Government’s complacency in the face of the collapse of the savings ratio. I have even heard Treasury Ministers argue that that is a symptom of economic success. My concern arose when I visited the local headquarters of one of our main high street banks to find out what consumer attitudes were to pensions and savings products, and I was told, quite calmly, ““We no longer bother to sell them. The public don’t want them. They aren’t interested, and we don’t make any money out of selling them.”” That is where we have got to. That is the culture, the language and the atmosphere around savings in this country, and I would suggest that it represents a structural problem in the economy that requires more attention than simply chucking some money into child trust funds, however welcome that might be. It is in the Budget’s failure to address the two key concerns of health and attitudes towards saving that it fails the first test of relevance to the concerns of my constituents. The second test is to determine whether the Budget recognises what is needed to shore up the competitiveness of the British economy. It is generally accepted that that competitiveness has in the past been based on low levels of tax and flexible labour markets. It is becoming increasingly clear, however, that the management of the economy is now resulting in significant risks being taken with those advantages, the effects of which we might have to live with for some time. Other speakers have been more eloquent than I can be in pointing out the fault lines that are becoming increasingly evident: in terms of growth, we are at the bottom of the EU pack; our productivity growth rates are at their lowest levels since 1990; and our business investment is down to 9 per cent. of gross domestic product.