---

Budget Resolutions and Economic Situation

Since there appear to be no more Labour Back Benchers waiting to speak—indeed, the Chancellor has not been praised for the past half an hour or so—I suppose that I should start by giving some praise to the Chancellor for the work that has been done over the years. It would be churlish not to say that, in Northern Ireland, we now have the lowest rate of unemployment and are the fourth fastest growing region in the United Kingdom, and that there have been economic successes. I am not looking for a job so I can say that without anybody saying that I have an ulterior motive. I fear, however, that the tightening that is hidden behind the Budget will affect that situation. Already we see the fiscal grip tightening on Northern Ireland. Regional rates have gone up, water charges are to be introduced and we are to have a charge for policing. Much of the economic success will be badly affected by the hidden tightening in the Budget. The Budget shows that the Government will face difficulties in the years ahead. Let us consider the meaning of the Budget for the United Kingdom as a whole. Perhaps the clue was in the give-away line when the Chancellor compared himself to Nicholas Vansittart. He may well have been looking back longingly to the days when that Chancellor was able to get 39 resolutions through without any opposition. There were no Back-Bench revolts and there was nobody on the other side opposing the resolutions. On the other hand, Nicholas Vansittart was known for increasing the tax burden, complicated financial schemes for hiding the size of the national debt, paying considerable attention to affecting supposed economies and, of course, privatising naval and military pensions. Perhaps that is the real picture that we get from the Budget and the real picture of the current Chancellor. I want to make three brief observations. Amidst the financial machine-gun effect, with £100 million here, £20 million elsewhere, £15 million for microgeneration of energy, new boards for technology, and enterprise networks—those things will be rolled out—there are a number of worrying messages in the Budget. The first message is that when the Chancellor says that he gives, it does not necessarily mean that we receive. He announced that there will be more direct payments to schools, with the money for primary schools going up by £13,000 a school and money for secondary schools increasing from £98,000 to £152,000. He said that the same increases would be announced for schools in Scotland, Wales and Northern Ireland, but when the Secretary of State made the announcement for Northern Ireland, we found that a sum of £16 million would be spread among nearly 1,000 schools, but that does not work out at £13,000 a primary school and £54,000 a secondary school. I suspect that there is a lot of spin in the Budget and many initiatives that are simply regurgitations of money that has already been spent, and I could give further examples of that. Secondly, more money does not mean better services. I heard Labour Members taunting Opposition Members who wanted tax cuts by asking how they could have tax cuts without cutting services. The fact of the matter is that since the Government came to power in 1997, with ““education, education, education”” as their agenda, there has been a 47 per cent. real increase in education spending, yet the Chancellor lamented in the Budget that there are still underachieving schools, people leaving school who need a second chance to get further education and A-levels and schools in which there are insufficient science teachers. Spending money has thus not necessarily improved services. In many cases, spending money has simply bloated bureaucracy. If the structures are right, it is of course possible not to take more in tax, yet still improve services. We had this debate on education the other week. If the right structures are in place, improvements can be made to services, even with less money. Thirdly, if problems are identified, it does not mean that answers are given. The Chancellor talks about the need for enterprise and a competitive economy. We know that in Northern Ireland because we are heavily reliant on the public sector. We have an open and small economy that does not have internal economies of scale, so we have to export and thus must be competitive. During the years of the troubles, entrepreneurs were forced out by gangsters and so on, so we lost the enterprise culture. The problems have been identified, but I do not see much in the Budget to address them. If anything, the enterprise culture will not be stimulated, and let me give one example to explain why. The tax burden on local companies will increase. The Chancellor could have considered reducing corporation tax—we have seen the success of that elsewhere—but he did not, even though there was consensus about it and evidence that it could have led to an improvement. I know that my time is nearly up, so I will conclude by saying that the Budget is not expansionary and will not address the problems that the Chancellor identified. Other hon. Members have pointed out that he has walked away from the great problems that face us, such as pensions and health. Many of the burning problems that the Government should be addressing have not been dealt with in the Budget, so although I accept that there have been successes, I have no hesitation in saying that this is not the Chancellor’s best Budget. The Budget will not address the problems that face us.