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Amendment of the law

The right hon. Gentleman shakes his head, but it is there on page 200 of the Red Book. He can read it out if he likes, or I will. [Hon. Members: "Go on!"] Oh, all right. It says that""the current downturn is forecast to be much deeper than that of the early 1990s"." There we go—from the lips of Labour itself, after all those years of lectures about the 1990s, Black Wednesday and all that, we have that admission, and we will treasure it. Of course, when the Government's defence on the deficit is looking a little threadbare, they turn to the argument about the stock of debt—overall levels of Government debt—but that argument is now falling apart, too, because the stock of debt is soaring as well. According to the OECD, Britain will have higher debt than 20 other developed nations—higher than France and Germany. The significance of that is that the Prime Minister said, just a few months ago:""The national debt, even after the difficulties that we go through, will be lower as a percentage of national income than in France, Germany"—[Official Report, 26 November 2008; Vol. 483, c. 716.]" That commitment—that promise—given by the Prime Minister just a few months ago is now completely worthless. We will see whether the Secretary of State for Energy and Climate Change repeats it today. How on earth can the Prime Minister be trusted to get the future right when he does not understand the mistakes of the past or the problems of the present? The second component of a credible and rigorous path to restoring some sanity to the public finances is a clear statement that the principal weapon in dealing with Britain's overspending is spending restraint. Let me be fair: Labour has come off its spending plans. Fantastic! At last! We have been telling it to do that for months. We would like to hear an apology from every single Labour Minister who has stood at that Dispatch Box month after month and said that coming off Labour spending plans meant savage public service cuts. Only a few months ago, the Prime Minister said of my right hon. Friend the Leader of the Opposition:""he wants to cut public spending. He is totally on the wrong side of the argument."—[Official Report, 14 January 2009; Vol. 486, c. 210.]" But listen to what the Chancellor of the Exchequer said on the "Today" programme this morning:""I have cut overall public spending"" in the Budget. In fact, the Budget Red Book shows that Labour will cut its departmental spending plans by £9 billion, and its capital spending plans by £11 billion, over the next four years. That is what the Labour MPs were cheering about at the end of that Budget statement—not that the cheering went on for very long. That is the political tragedy of the Budget. We have moved from the age of prosperity to an age of austerity, but the leadership of the Labour party has been completely left behind by events. There should be a sensible debate in this Parliament, now, about how we can deliver decent public services in a period of tight spending control. We should be discussing how to get better value for money now that the cupboard is bare. We should be deciding—and perhaps have a debate between the parties—on the best way of tackling the long-term drivers of public expenditure, such as unproductive services, welfare dependency and family breakdown. We should be working out what replaces the completely defunct fiscal rules and the two-year spending reviews that used to provide at least some appearance of a fiscal framework. But what do we have from the Labour party? Absolutely nothing. The fiscal framework now consists of a temporary operating rule that will be more permanent than the temporary fiscal rules that were supposed to be permanent. To be fair, some people in the Labour party, and some people who used to be in the Labour Cabinet, want to have debate about the politics of austerity and how to deliver government to the people in a time of spending constraint. The right hon. Members for Birkenhead (Mr. Field) and for Norwich, South (Mr. Clarke) and even the hon. Member for Dagenham (Jon Cruddas) have all called for such a debate, but their problem is that their party is led by someone who still wants to reduce everything to a pathetic dividing line of Labour investment versus Tory cuts. How on earth does the Prime Minister expect to achieve that? How on earth does he expect to advance that argument when, on the basis on which Labour fought the last election, the cuts announced in yesterday's Budget amount to £84 billion? Does he really think people will not notice that, far from seeing so-called Labour investment, we have just seen investment in the health service—capital investment—cut by £2.3 billion next year and investment in schools and universities cut by £900 million? The Government have another problem. Although the Budget accepts the principle that Labour spending plans were completely unaffordable, and although the Government have told us that billions of pounds are being wasted in Whitehall as we speak, they cannot explain why they are still planning to increase spending in 2010 by 2.9 per cent. Indeed, yesterday the Government actually increased their spending plans for 2010—next year—by £20 billion, and only half of that was extra spending on debt interest and unemployment. When will they admit in their arguments what the figures in their Budget tell them? Their spending plans are simply unaffordable. The Chancellor has admitted that there is scope for efficiency savings. On the radio this morning, he said:""Any organisation can always be more efficient…We"—" the Government—""need to be more efficient."" Anyone listening to that might have been under the impression that the Government were actually taking some of those tough decisions to make things more efficient, but the Chancellor will start to constrain public expenditure only in 2011. I wonder why he picked that date—[Interruption.] The Secretary of State says that we want to cut it now. Just to be clear, we are proposing, in a recession, to restrain the growth of public expenditure by £5 billion and use the money to reduce taxes on pensioners and savers and to provide extra courses for people who are leaving university this summer. Even with the right hon. Gentleman's economic understanding, he must realise that that is not a fiscal tightening or a fiscal loosening. It is fiscally neutral and it is the right way to spend money that the Government themselves admit is being wasted at present. Is it not the most cynical trick of all for the Government to pretend that they are only hitting the rich by raising their taxes before the election, while delaying the real tax rises and tough spending decisions until after the election? How courageous. What leadership: a move worthy of a Prime Minister who has never had the courage to submit himself to a democratic vote. Thankfully, the public have seen straight through it. Instead, we see the Labour party lurching left, off the centre ground that Tony Blair put it on to all those years ago. Gone is the language of aspiration and opportunity; in comes the talk of "soak the rich" and "pips squeaking". Never mind that a 50 per cent. tax rate before the election clearly breaks one of the central promises in Labour's election manifesto. It will be interesting to hear what the Secretary of State says about the election manifesto commitment not to raise the top rate of tax. The manifesto said:""We will not raise the basic or top rates of income tax in the next Parliament."" As I understand it, if there is a general election next May or June, that will have happened and the manifesto promise will have been broken. That is from a Prime Minister who, unbelievably now, came into office pledging to restore trust in politics. Of course, it is not the rich who will bear the burden of Labour's historic incompetence. When we look closely at the Red Book, it is clear that the headline-grabbing measures announced by the Chancellor will actually raise less money than the national insurance rise on the jobs and incomes of people earning more than £20,000 a year. Although we do not think that higher marginal tax rates are a good idea, and although we agree with all the arguments that used to be advanced from the Dispatch Box by the former Chancellor and the former Member for Sedgefield that higher top rates of tax can damage enterprise, our priority will be to reverse the tax rises on the many, not the few.