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Finance Bill

I agree. I am somewhat surprised to agree with a Liberal Democrat about council spending. I can tell the hon. Gentleman that in May 2008, sadly, a Liberal Democrat-Conservative coalition took control of the council in my natal city, Wolverhampton—the city in which I live, and which I represent—and what is it doing? It is cutting all kinds of things all over the place. It is making millions of pounds of cuts. When either the Liberal Democrats or the Conservatives were in opposition, however, they decried Labour for not spending more. That is what happens when a Tory-Liberal Democrat coalition takes control: big cuts are made. I am talking about what happens at the micro level, of course. You will know about it, Madam Deputy Speaker, because you represent an area close to Wolverhampton. That is what happens, and it is what I think would happen if we had a Conservative majority Government after the next general election. What I am saying is not simply conjecture. It is to do with what has been said about the Budget, what has been said about the taxation measures in the Finance Bill, and what is being done in my home town. I do, however, agree with a critique of this Finance Bill which has applied to many other Finance Bills. I say that as one who, as some Members know, has had the great pleasure of being a member of six Finance Bill Standing Committees over the years. It is true that we have experienced too many tax changes—not just under the present Government, although they have probably accelerated the process—and our tax regime is too complicated. Part of the reason for its being too complicated is the fact that the rich keep paying accountants to come up with loopholes that they can then exploit, quite legitimately—if, to my mind, often immorally. Those loopholes have to be closed, and the more that are closed, the more complicated are the avoidance schemes that the well-paid accountants come up with. More complicated measures are then needed to close the additional loopholes. The cycle goes on, and the tax books and the tax legislation become thicker and thicker. I think that there is more than a grain of truth in the critique that there is too much chopping and changing and the regime is too complicated. I am saying that to my own Government. However, this year's Finance Bill confronts me with a measure that attempts to implement a difficult Budget which was introduced in extremely difficult times. The background to that is the fact that, as I understand it, the accumulated national debt of the United Kingdom doubled between 1992 and 1997, under the last Conservative Government, and under the present Government—my Government—the accumulated national debt will double over the next five years. We have paid off some of it, and the economic expansion took care of some of it, but we are now proposing to double it so that, in round terms, the accumulated national debt will reach an amount equivalent to 80 per cent. of gross domestic product. There is no doubt that that is a huge increase. No Labour Member has any illusions on that score. We all know that it will be very difficult for our society and very difficult for our economy. However, I think that we also need some figures with which to compare it—the figures for the accumulated national debts of our main competitor economies. I refer not simply to economic competition, but to building the kind of societies in which I think many of us throughout the House would wish to live. When it entered the current world recession, Italy's accumulated national debt—I must confess that I have been to Italy only once, for a long weekend in Milan, which was very enjoyable; I am not a Chiantishire type—was more than 80 per cent. of GDP, while ours, in round terms, was in the low 40s. I put it in that way because, first, I do not know the exact figure, and secondly it is very difficult to obtain the exact figure. As Members will know, I believe that PFI contracts should be included in the national debt, and I think that there is consensus on the fact that our accumulated national debt was in the low 40s as a percentage of GDP if the Government's PFI liabilities were included. If we double a percentage in the low 40s, we reach 80 per cent. Again, in round terms—I speak from memory, and I stand to be corrected—the accumulated national debts of both France and Germany were around 60 per cent. of GDP. It is more difficult for me to get a handle on the accumulated national debt of the United States, because it has 51 jurisdictions with tax-raising powers—50 states and one federal Government in the district of Columbia—but I estimate it at 60 per cent.-plus. There are many different ways of calculating the amount: it will depend on whether local government borrowing is included, for instance. The percentage in my beloved Canada was far lower, although that, too, is slightly difficult to get a handle on, because Canada has about 13 tax jurisdictions. The low figure is due to a liberal Government, not a conservative Government. They are engaging in deficit financing and fiscal expansion, albeit from a much better position in terms of accumulated national debt. The percentage in Japan was far higher. Someone may know the exact figure, but I believe it to have been about 90 per cent., if not more. It may even have been more than 100 per cent. So where is our country going to be in five years' time if the Chancellor's figures pan out? I appreciate that that is a big "if"; people have said that, and I agree with them. We are trying to look five years down the road and no one has a crystal ball, because if they did they would make a fortune at the race track—and I do not think the Chancellor of the Exchequer has done that. We expect to have about 80 per cent. of GDP in accumulated national debt. That is a big burden, but its order of magnitude is lower than the likely figures for all our G7 competitors except Canada. In comparative terms, therefore, I am somewhat less concerned than I might otherwise be about the accumulated national debt.