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Budget Resolutions and Economic Situation

I welcome the fact that we have had a full debate today. It is the first of at least two more days on the Chancellor’s Budget. The debate has been interesting. I understand why the tax changes caught the eye yesterday and dominated the debate today, but an important part of any Budget is the Chancellor’s update of the state of the British economy. This afternoon, only the contribution of my hon. Friend the Member for North Durham (Mr. Jones) fully recognised how substantial and significant the change in Britain’s economic fortunes has been over the past decade, directly as a result of many of the fiscal and monetary policies introduced by my right hon. Friend the Chancellor. The British economy is now growing faster than that of other G7 countries. It has a higher proportion of men and women in work than America, Japan and all our European neighbours. The productivity gap with Germany and Japan is now closed, the gap with the US is narrowing and the gap with France now halved. Inflation in the British economy over the last decade is half that of the previous decade; while interest and mortgage rates are half the 11 per cent. averaged in the 20 years before. The British economy now has the platform of investment, stability and employment to enable us to equip the British people with new skills for the jobs of the next decade and beyond, and to equip British firms with the new skills, markets, investment and innovation that they need to compete successfully and to generate jobs and wealth for the next decade and beyond. Let me deal with the contributions to the debate. I shall start with those of the Front-Bench spokesmen. I have to say that the hon. Member for Wycombe (Mr. Goodman), along with his hon. Friend the Member for Tatton (Mr. Osborne), struck a very different note from their leader’s response to the Chancellor’s Budget statement yesterday. The right hon. Member for Witney (Mr. Cameron) started by saying:"““Well, the Chancellor has finally given us a tax cut.””—[Official Report, 21 March 2007; Vol. 458, c. 829]" Perhaps he did not fully understand what he had heard from the Chancellor, but that is not surprising, as he was getting feverish and whispered advice from the hon. Member for Tatton and the right hon. Member for West Dorset (Mr. Letwin). The right hon. Member for Hitchin and Harpenden (Mr. Lilley) said this afternoon that this was not a tax-cutting, but a tax-raising Budget, while the hon. Member for Billericay (Mr. Baron) said that he was not sure, as there was a dispute about whether it was tax-cutting or tax-raising.