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Budget Resolutions and Economic Situation

I accept that exchange rates are a factor in the competitiveness of an economy, but I would suggest that the more important factors are the levels of taxation and the flexibility of the labour markets. That has been proven over time. When the hon. Gentleman intervened on me, I was going through a checklist of the fault lines in the economy. We must recognise the indisputable fact that we are now living with the highest burden of taxation for 20 years. It is not only the scale of the taxation but its incredible complexity that concerns my constituents. I understand—my Front-Bench colleagues may correct me on this—that some 3,500 pages have been added to the Yellow Book since 1997, which is the clearest possible evidence of the instinct to tinker and to add to complexity. The bottom line is that, when I hear the Chancellor speak, I do not believe that I am listening to someone with any real understanding of what it is like to run a business or to take risks in the pursuit of prosperity and the creation of wealth. That is also the growing view of businesses in my constituency. Another test failed. The third test involves examining the sense of urgency, and the sense of ambition, shown by the Treasury in the face of climate change risk. This ought not to be in doubt, because I do not think that anyone doubts the Chancellor’s sincerity in his mission to reduce poverty in Africa. He must therefore be aware that the biggest risk to that agenda will be the impact of climate change on the poorer regions of this earth. As I have said, the Environmental Audit Committee is concerned about the institutional inertia and lack of momentum at the Treasury, particularly in recent years. The Budget has not won the Chancellor any new friends among the green movement. Friends of the Earth called it ““utterly inadequate””, adding that its measures would"““collectively only make a small impact on emissions””." I happen to think that that judgment might be a little harsh, but I have no doubt that we are right to be concerned about the Treasury’s lack of urgency and momentum, set against the backdrop of rising carbon emissions in this country. Climate change presents an immense challenge, and the attitude of the British Government is enormously important, not least in regard to the international process that is key to finding a solution. The problem with that incredibly complex process is that it is going too slowly, and that it is being held back by concerns about the cost of mitigating climate change. In order to accelerate that dialogue, progress and momentum, we need proof that we can grow our economy and reduce carbon emissions at the same time—that we can green and grow. That is the key for harnessing support for these measures in the developing world. Britain continues to have an historic opportunity to take the lead in making that case, but we need the will to accelerate the technology to deliver a sustainable low-carbon future. A modern, forward-looking, digital Government would be alive to the prospect of being in the vanguard of economic opportunity. They would recognise that the twin concerns of energy security—now very real—and the trend of fossil fuel prices reinforce that imperative. That requires real leadership and clear policy making to send the long-term signals that business men and our fellow citizens need.