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Finance Bill

I will not be led into debating the merits or otherwise of devolution; I am not going to do the SNP's dirty work for it. I will let what the hon. Gentleman has said speak for itself. The Treasury Committee's summary also contained these calm, measured words:""We note that the Chancellor's forecasts for public borrowing and national debt represent the worst fiscal outlook since the Second World War"." That represents a very long period. Crucially, it goes on to discuss a point raised by a number of my hon. Friends, stating:""The credibility of any attempt to restore the public finances will depend on an acceptance that the structural deficit must be addressed as well as the consequences of the current extraordinary circumstances."" It is the very large underlying structural deficit that gives me such cause for concern for future Finance Bills and Budgets. In his last Budget statement as Chancellor, the present Prime Minister predicted public sector net borrowing of about 2 per cent. of GDP for the year we have just entered. This year's Budget revises that figure to about 12 per cent. What a dramatic change! The Chancellor forecast that the UK economy would shrink by 3.5 per cent. this year—I have already alluded to that figure—and that it would grow by 1.25 per cent. next year. The International Monetary Fund says that the figures will be 4.1 per cent. this year and a shrinkage of 0.4 per cent. next year. Even the Government's own figures undermine their Budget forecasts. Within two days, the Office for National Statistics had revealed a still larger reduction in economic activity for the first quarter of 2009. On the most optimistic assumption, public debt is going to rise to 80 per cent. of GDP within four years. That terrifying figure is twice as high as what we thought was a sustainable level of public borrowing and public debt. In this year's Budget, public net debt was expected to be 39 per cent. of GDP this year but it is now put at 59 per cent., increasing to 79 per cent. by 2013-14. I know that that outcome puts Britain only in the middle of the advanced economies in terms of the percentage debt to GDP ratio—an argument often used by the Government. [Interruption.] I will happily repeat it, as I have an unfortunate habit of speaking too fast. As I have already said, I know that this outcome would put Britain only in the middle of the advanced economies in terms of the percentage debt to GDP ratio, but the tragedy is that if we had not had the spending splurge of the last six, seven or eight years, we could have been in a much stronger position. To employ the phrase of my hon. Friend the shadow Chancellor, if we had indeed fixed the roof when the sun was shining, we could now be in a uniquely strong position to take the world by storm, yet the spending splurge of the last five, six or seven years enfeebled our position. We could and should have been so strong; this Finance Bill should not have had to face the challenges it seeks to address. We have crippled a golden opportunity. This Government like to take credit for paying off a bit of the national debt: they paid it off when they stuck to Conservative spending plans and it all went wrong when they started following their own.