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Finance Bill

It is instructive to go back to the debate on the Finance Bill last year. At that point we had the forecasts from the 2008 Budget, which even at that stage demonstrated how little room for manoeuvre the Government had. They forecast a £43 billion deficit last year. The Chancellor actually had to borrow £90 billion. They forecast a national debt approaching £600 billion. The forecast now is for £1.6 trillion. They reported public finance initiative liabilities to 2030-32 of £189 billion. That figure is now £200 billion. They reported a colossal £87 billion deficit in the trade in goods. That is now rising to a £93 billion deficit in the trade in goods. Even with sterling weakened—15 per cent. down against the euro and 25 per cent. down against the dollar since last summer—the overall balance of trade deficit remains at £44 billion, unchanged from the year before, and is forecast to rise by 10 per cent. to £49.5 billion in 2009. Those forecasts did not inform the Finance Bill. Since the pre-Budget report last winter, we have found out that the Government were out by £12 billion on last year's borrowing, out by £140 billion on the three-year borrowing forecast, and out by £400 billion on the medium-term national debt forecast in five months. That is an extraordinary set of figures. It is clear that there is likely to be a glaring black hole in the public accounts, not least because the revenue yield, which is intended to fund, at least in part, some of the spending commitments in the Finance Bill, is based on growth forecasts believed by no one, except, perhaps, members of the Treasury ministerial team—and I am not sure whether even the more sensible Ministers in the Treasury team take the prediction of 3.5 per cent. seriously. There is little in the Bill or in the Chief Secretary's opening speech that would convince me that the Government understand, first, that cutting public expenditure in the teeth of a recession risks prolonging it and making it worse, and secondly, that a longer and deeper recession will make the job of balancing the books even more difficult in the medium and long term.