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AMENDMENT OF THE LAW

The hon. Member for Beckenham (Mrs. Lait) made an interesting speech; the House will hope that her more pessimistic predictions for the global economy do not come to pass. I am grateful for this opportunity to congratulate the Chancellor of the Exchequer, my right hon. Friend and Edinburgh colleague, on his first Budget. I particularly welcome the increases in child benefit and child tax credit and the winter fuel allowance for 2008-09. By any standards, the past 10 years of economic management have been a success story. Continued economic growth throughout the decade has been enjoyed alongside 10 years of low inflation and modest interest rates. Thanks to the stable and prospering economy, the number of people in employment in this country has risen steadily to record levels. The number of unemployed is at its lowest for 28 years and in my area that number has fallen by 57 per cent. It is fair to add that the economic success of the UK in the past decade has not taken place against a background of great global economic stability and tranquillity. After all, during that period there have been a number of shocks to the global economy, such as the dotcom bubble and the Asian financial crisis. All other G7 countries have experienced at least one quarter of negative growth in the past decade. Currently, the global background is once again somewhat tumultuous. I guess that at this time there is more apprehension about the future of the global economy than at any time since Labour came to power. Hon. Members and those outside no doubt listened more carefully than usual to the Chancellor’s statement on the outlook for the global economy. There is clearly a big question mark over where the world economy will be in 12 months’ time—primarily, of course, because of what has been happening in the US. In the context of the Budget debate, there is always a huge focus on what we now call the public sector net cash requirement. That is understandable; the Chancellor has direct responsibility for striking the right balance between what the Government spend in any year and what they take into the Exchequer through taxation. During the Budget debate of two years ago, I raised the question of our balance of trade in goods and services. My question, to which I did not receive an answer, was about the extent to which we should be concerned about our trade deficit. Our balance of trade in goods and services has been negative for many years. We are net exporters of services; the balance of trade in services reached £36 billion in 2007. However, the increase in the negative balance of trade in goods has been even faster; it reached £87 billion last year.