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Budget Resolutions and Economic Situation

Indeed. Could it be that they have worked out something about the Budget that the Chancellor did not tell them yesterday? I suspect that the answer is yes, and I shall come to that point later. We have however had some good speeches. As one would expect from a member of the Education Select Committee, the hon. Member for Warrington, North (Helen Jones)—the only Labour Member who is actually here—made a detailed speech on education. She said that spending should be focused on the curriculum and teachers; we will doubtless all agree with that. She also said that poverty can be a greater barrier to progress in schools than ethnicity. To judge by my own constituency experience—I have the largest number of Muslim voters of any Conservative Member of Parliament—she is absolutely right. The hon. Member for North Durham (Mr. Jones), who is not in his place, gave us a tour of his constituency, where all appears to be well in the national health service. I have to say that that is not my and my hon. Friends’ experience, nor was it the experience of the hon. Member for Rochdale (Paul Rowen). In a short speech, the right hon. Member for Leicester, East (Keith Vaz) paid a gracious tribute to my right hon. Friend the Member for Hitchin and Harpenden and touched on one of his passions: the European Union. I do not know whether he is still an enthusiast of the euro, but if he is, the Chancellor will doubtless enjoy the opportunity to talk to him about it. My right hon. Friend the Member for Fylde (Mr. Jack) made—as one would expect from an ex-Treasury Minister and the Chairman of the Environment, Food and Rural Affairs Committee—an expert speech. He discussed in some detail his own research into the Treasury’s lack of assessment of the value of its tax cuts, and his research into mortgage rates in Britain. If he wants to speak to me about his ideas on taxation and air travel, I will be very happy to listen. I will now commit my colleagues, without having consulted them, and say that if he wants to talk to any of them about inheritance tax, they will see him. I am sure that they will be pleased to hear that. My hon. Friend the Member for Sevenoaks (Mr. Fallon), as one would expect from a member of the Treasury Committee, concentrated on the state of the NHS, as did my hon. Friends the Members for West Suffolk (Mr. Spring) and for Billericay (Mr. Baron). The latter made an interesting point about waiting times and used a particular statistic to which I intend to come later. My hon. Friend the Member for South-West Hertfordshire (Mr. Gauke) gave us a forensic analysis of the Chancellor’s record, and I am sure that the Chancellor will enjoy discussing that with him when my hon. Friend questions him at the Treasury Committee. We all know that the Chancellor looks forward to those occasions very much indeed. This is the Chancellor’s 11th and final Budget. He wishes to be Prime Minister—an honourable aim. He wants to take the country in what he genuinely believes is the right direction. We can all surely agree on what the right direction means—improved competitiveness, better productivity growth, a manageable tax burden, borrowing that is under control, strong savings and value for money in the public services. We need all those things if the British economy is to flourish in the competitive and globalised world economy of this 21st century. For after all we must not, amidst all the headline-grabbing frenzy of yesterday’s Budget statement, forget the starkness and seriousness of the international challenge that confronts the British economy. We must at least try to raise our eyes from this debate and look ahead and look abroad. By 2050, it is estimated that China’s share of world trade will have risen from roughly 18 per cent. to 24 per cent., but North America’s will have fallen by 2 per cent. to 23 per cent. The EU’s is set to fall by almost half, from 22 per cent. to a mere 12 per cent. So the choice is clear. Even to maintain our position—to keep up with US rather than EU growth rates—we have to compete to prosper, if we are to meet the challenge of the 21st century. The economy must travel in the right direction. So we need improved competitiveness. However, according to the World Economic Forum, since 1997 we have dropped from fourth place in the competitiveness league to 10th. Nor is that a one-off. The Institute for Management Development’s global competitiveness survey tells the same story. In it, we have dropped from ninth to 21st. Eleven Budgets on, the Chancellor has taken our competitiveness in the wrong direction. We need better productivity growth. From 1992 to 1997, our annual productivity growth was 2.6 per cent. Between 1997 and 2001, it fell to 2.1 per cent. and between 2001 to 2005 it fell again, to 1.5 per cent. Eleven Budgets on, the Chancellor has also taken productivity growth in the wrong direction. We need an overall tax burden that is going in the right direction, but our tax burden is—hon. Members have guessed it—going in the wrong direction. In 1997, it was £270 billion. Eleven Budgets on, it is £517 billion, a rise of no less than 41 per cent. in real terms—the highest tax burden in the history of the British economy. Business taxes alone have risen by £50 billion since 1997 and this year’s Budget will take them up again, by an extra £1 billion next year, as my hon. Friend the Member for Tatton (Mr. Osborne) said earlier, and by £1.8 billion the year after. With all that tax, one would have assumed that borrowing was under control. But we look at the Red Book and see that over the next five years the Chancellor is planning to borrow another £153 billion. Each year he will borrow more than the entire budget for schools. Let us not forget that the £153 billion figure is only the Chancellor’s forecast. This Budget is actually the seventh one running in which he has had to come to the House and admit that his Budget borrowing forecast was wrong.