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Budget Resolutions and Economic Situation

My hon. Friend is absolutely right. Income tax applies to pensioners and pensioner income, and it is also a stealth tax on them. Also barely mentioned in the Budget, of course, are the other £19 billion of tax rises previously announced, often in the pre-Budget report books rather than speeches, that are coming down the track. That was one of the great missing parts of the Budget speech—the extraordinary tax rises pencilled in, but not discussed by the Chancellor. In addition, there are the tax measures on small businesses. The Chancellor said yesterday that he was going to provide""extra support to small businesses through the tax system".—[Official Report, 24 March 2010; Vol. 508, c. 259.]" Who could complain about that? What he did not tell us was that the extra support is more than cancelled out by the other tax rises on small businesses that are in the pipeline. He told us that he was cutting business rates, but the Red Book reveals that he is expecting to raise an additional £1 billion in revenue from business rates next year. The Chancellor made a great fuss of doubling the small business investment allowance. The Treasury cost it at £100 million, and the Chancellor paraded it as something that he was doing for small businesses. He did not mention the fact that he is increasing the small companies tax rate at a cost to small businesses of £420 million—four times the amount that he is giving with one hand is being taken back with the other. No wonder that the response of the Federation of Small Businesses was that the Budget""will not help job creation"." If the small businesses of this country do not think that a Budget is going to create jobs at this point in the economic cycle when the recovery is so weak, that tells us everything about how this Budget has failed. The Chancellor also made great play of his lending agreements. He did not mention the fact that the banks missed their lending targets. He told us at the last Budget that they were binding, but he did not repeat what the Public Accounts Committee told us last month—that despite all the Government promises from the Dispatch Box over the last two years,""The Treasury has only limited sanctions available to it to encourage RBS and Lloyds Banking Group to meet what are described as legally binding lending commitments."" Worse than that, the Chancellor employed a trick that would make the Prime Minister proud, because he gave the impression that the new lending targets were higher than the previous ones when, in fact, they are lower. The old targets were expressed as a net figure of total extra lending, while the targets for new lending are a gross figure. He compared a net figure with a gross figure, which means that lending to businesses could actually fall, yet the Government would still have met their target. What a totally transparent and cynical manoeuvre by the Chancellor. Of course, all these things that were never mentioned in the Chancellor's speech pale into insignificance alongside the missing centrepiece of the Budget—a credible plan to deal with the deficit. Yes, the Chancellor confirmed that we have the worst deficit in the G7. Yes, he announced that we have the second-worst deficit in the OECD after Ireland. Did he convince anyone, however, that he was serious about dealing with the Budget deficit problem, serious about protecting our country's credit rating, serious about avoiding the rise in gilts that mean higher interest rates in a recovery, and serious about confronting the truth that this Government have ended up borrowing one pound for every four that they spend, and that having entered office on a pledge to cut the bills of social failure, they now head for the exit door with Britain spending more on debt interest payments than it does on our entire education system? No, he did not. The Government seem to believe that if they say often enough that they have a credible plan, somehow fiction will become reality. But the definition of a credible plan is that someone out there believes them and thinks that it is credible. Let us look at what investors said after the Chancellor sat down yesterday. Standard Chartered called it""a do nothing Budget that had shades of Nero about it"." Citibank said there were""no proper medium-term public spending plans"" and no""credible plan to return to fiscal sustainability"." The same rating agency that yesterday downgraded Portugal—whose deficit is half ours, by the way—came out immediately to warn that the plan was "too slow". It is clear that the only thing holding together Britain's reputation in the international community is the prospect of a Conservative Government who can sort this mess out.