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Finance Bill

It is a pleasure to follow my hon. Friend the Member for Christchurch (Mr. Chope), who correctly said that I used to work for him when I was at the London School of Economics. The hon. Member for Ealing, North (Stephen Pound) was there at the same time, but for the avoidance of confusion I must point out that he was a mature student. My hon. Friend also reminded me of my first outing on a Finance Bill, in 2002, and the first long debate on the Bill was about alcohol duty. I did not realise that alcopops were the flavour of the month at Christchurch Conservative club, and Britain's high commissioner to South Africa, who was a Treasury Minister at the time, explained that the drink that we all knew as WKD was actually known by young people as "wicked"—it was an educational process for us all. I thought that my hon. Friend's forensic scrutiny of the Bill was a bid to join the Public Bill Committee, and if he wishes to participate, I am sure that we will find a place on it for him. The length of tonight's debate has been helpful and has given Conservative Members the opportunity to contribute at some length. My right hon. Friend the Member for Wokingham (Mr. Redwood) and my hon. Friends the Members for Chichester (Mr. Tyrie), for Poole (Mr. Syms), for Mid-Worcestershire (Peter Luff), for Bournemouth, East (Mr. Ellwood), for Ludlow (Mr. Dunne), for Braintree (Mr. Newmark), for Beckenham (Mrs. Lait), for Stone (Mr. Cash) and for Christchurch all made excellent speeches, and that is an impressive list of Back Benchers. I wish I could say that Labour Members turned up in such numbers to support their own Finance Bill, but Labour Back Benchers made only three speeches. The speech made by the right hon. Member for Birkenhead (Mr. Field) was perhaps not welcome to his Front-Bench team, and even the hon. Member for Wolverhampton, South-West (Rob Marris) was slightly quizzical in his support of the Bill. By contrast, the hon. Member for Edmonton (Mr. Love) was a little ray of sunshine, being the only Member, other than those on the Treasury Bench, who believes that the Government's forecasts for economic growth will be met next year, despite the views of a number of economic forecasters—the International Monetary Fund, the European Commission and a range of others. He was perhaps the only person, apart from the Chief Secretary and the Financial Secretary, who was wholehearted in his support of the Budget tonight. One of the themes that recurred was kicked off by the right hon. Member for Birkenhead—the scale of public debt and the fact that the Chancellor announced in his Budget last month that borrowing for this year would be £175 billion and for next year would be £173 billion. It is right that in a Finance Bill debate, in which we debate measures relating to the national debt and public finances, we discuss the size of the national debt and what can be done to bring it under control. The right hon. Member for Birkenhead talked about the need for proper spending controls and the need to establish some control over Government spending. He referred to the lack of discipline in the Government's finances and remarked that the only discipline imposed on the Government is the gilt markets' decision about whether not to fund the Government's borrowing. Although the Government intend to borrow, in terms of national debt, £175 billion this year, their funding requirement is way in excess of £200 billion. It is worth remembering that today the Treasury Committee produced its report on the Budget and was critical of the Government and the lack of any fiscal discipline and rules in place. It said, in its recommendations:""We do not see how the Temporary Operating Rule acts as any kind of constraint at all on the current fiscal decisions made by the Chancellor, and we struggle to imagine any course of action he might have taken in this year's Budget that would have been inconsistent with it…It is clear to us that the only real financial discipline that is currently imposed on the Chancellor is the opinion of the gilt market on the sustainability of the public finances."" Several hon. Members expressed concern about how the Government's funding requirement would be met. The hon. Member for Edmonton, who met the Debt Management Office this morning, was convinced that the funding requirement would be met, but we already know that the DMO has changed its method of placing Government debt to try to maximise the chance of success in funding the debt. My right hon. Friend the Member for Wokingham explained that, given the quantitative easing programme embarked on by the Bank of England and its appetite for buying up gilts—and the reforms to the liquidity rules that the FSA has announced recently—that will provide another source of demand for debt. It is clear from the speeches in this debate, from both sides of the House—including the hon. Members for Taunton (Mr. Browne) and for Dundee, East (Stewart Hosie) as well as Labour and Conservative Back Benchers—that the scale of debt and the time it will take to get it under control overshadows not only this Bill, but many Finance Bills to come. It will provide a real challenge to future Governments to get that level of debt under control.