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Amendment of the law

If we add up the figures, we may find that I am wrong, but the pre-Budget report mentioned a stimulus of about £21 billion. According to my analysis, the maximum in terms of active stimulating measures in the Budget is not much more than an additional £5 billion. That does not compare with the £820 billion to which the Obama plan amounts in toto, and it is a fraction of what others have demanded. David Blanchflower called for a £90 billion stimulus in the Budget, and the NIESR called for a similar figure—£50 billion or £60 billion. Even the Sustainable Development Commission called for a £30 billion green new deal. The hon. Member for Edinburgh, North and Leith (Mark Lazarowicz) quoted some positive comment about green jobs in the Budget, but most people in the sector have been desperately disappointed by the lack of delivery. According to Friends of the Earth:""The Government has squandered a historic opportunity to kick-start a green industrial revolution"." Even Jonathon Porritt of the Sustainable Development Commission has said that the scale of Government investment""is not going to put us on track to achieving the extremely ambitious targets of the Climate Change Act"," and the Campaign for Better Transport has observed:""The Budget is a missed opportunity on transport."" We have not seen the green new deal. Once again, the Government's rhetoric is not backed up by reality. We are not seeing in this Budget anything like the stimulus that is needed to counteract the difficulties that we face. In this so-called Budget for jobs, I see nothing that is likely to deliver a significant number of new jobs in any part of the United Kingdom. There may be difficult times ahead. It is possible that we shall experience a further round of financial shocks at a global level. Some hedge funds may collapse. What is the Government's strategy for dealing with that? What if there is a fully fledged financial crisis in some of the eastern European economies? What will be the effects on the economy here? I certainly do not have any confidence that the Government have a comprehensive strategy to get us through the next few years. The final dishonesty is to do with tax. People say that new Labour is dead because the Government have finally embraced the idea of a progressive income tax system, but I think the Chancellor was hoisting a white flag yesterday, not a red flag, because this was a defeatist Budget. It is almost as if they have given up, because not only is the cupboard bare financially, as they believe, but it is bare of ideas as well. I welcome the fact that the Government have finally come round to the idea of tax justice, but to give the impression that raising the tax on the 1 per cent. of taxpayers who earn more than £150,000 will do anything to close the massive deficit that we face is deeply and utterly dishonest. The Government must be honest with people. It is my understanding—I would be happy for Ministers to correct me if I a wrong—that 60 per cent. of tax revenue comes from income tax, national insurance and VAT, which are paid by most people—or everyone, in the case of VAT. Therefore, everyone will have to contribute more to close the Budget deficit; otherwise that will be impossible. There is an obscure theorem in economics called Ricardian equivalence, which suggests that in a perfect world of perfect information and perfect markets, a Government do not have to say that they will raise taxes because, in the current situation, people will read the Red Book, see how much the deficit is, and realise that it is inevitable that they will raise taxes. However, most people might not have the time to plough through the 280-odd pages of the Red Book in the way that we Members do, and it is important that the public realise that we will be paying for the mistakes that have been made in economic policy and the management of the public finances for many years to come. This great recession will cast a long shadow. Unemployment continued to rise in Wales from the early '80s right up until 1986, and the Welsh economy did not begin to pick up again and emerge from that lost decade until the early '90s. I fear that we are facing a similar situation now. The Government have not been honest with the electorate—or possibly even with themselves—about the scale of the challenge we face both in terms of the economy, unemployment and growth and in terms of defending public services, because of the economic hole that I believe the Government have, in part, dug for this country.