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Economy

My Lords, I am most grateful for this opportunity to call attention to the economic prospects of the United Kingdom and somewhat overwhelmed by enormous list of speakers and their quality. Their experience in economic affairs makes me embark on this debate with a certain amount of trepidation. I very much look forward to hearing the maiden speech of the right reverend Prelate the Bishop of Bradford. Every Labour Government are the same. They leave office with unemployment and debt higher than they when they started. This Government, it seems, will be no different from any of their predecessors. It gives me enormous pleasure to have here with us this morning my noble friends Lady Thatcher and Lord Lawson and my noble and learned friend Lord Howe, who had to deal with the consequences, 30 years ago almost to the day, of the mess left by a previous Labour Administration. We recall the state of the country then. The anglophile American commentator Bill Safire described Britain then as a first-class example of how to ruin a first-class country. It seems that we have gone back to the future. Then, the Conservative Government had to deal with an enormous debt problem. We have never been allowed by the Benches opposite to forget the difficult decisions that we had to take in cutting public expenditure. My noble and learned friend Lord Howe had in 1981 to reduce the deficit from £13 billion to £11 billion. These days, the deficit goes up by £11 billion every month. We had a very high and rising level of unemployment, but my noble friends turned Britain around by insisting on sound money, insisting that we had to live within our means, by controlling public expenditure and by understanding that smaller government released resources for the enterprise of the British people to create growth and wealth again. They did so by cutting taxes—yes, by cutting taxes—in the midst of a recession and demonstrated how that could increase revenues. To come back to the present and to the Administration led by Mr. Gordon Brown, he has squandered the legacy which he inherited from John Major. He inherited the strongest economy that we have had in 100 years and turned it into the weakest since the great depression. The legacy of this Government will be astronomical debt and more than 3 million unemployed. As the all-party Treasury Select Committee pointed out yesterday, some economists are even predicting that unemployment could reach a staggering 4 million. It turned out that the Prime Minister’s golden rule was iron pyrites—fool’s gold. It was a confidence trick, used to justify borrowing and spending beyond our means at the height of the boom, when the income from the Government was at its highest. Even on the Government’s own over-optimistic forecasts, even on their own plans, we can look forward to very substantial cuts in departmental spending—after the election, of course, not now, when a start should be made. However much this Government may devalue the pound, however much they must cut interest rates to the lowest in 400 years, however quickly they turn on the printing presses, they cannot change the reality of our position. We have been spending about 10 per cent more than we earn and saving nothing. We need to save about 10 per cent and bring our spending in line with our income; and to do that, our living standards will inevitably fall, by perhaps 20 per cent, unless we can create growth. How do we create growth and employment? Certainly not by taxing jobs with higher national insurance charges.