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Budget Resolutions and Economic Situation

He was indeed. We are now borrowing more than we have borrowed at any time in our peacetime history. The then Chancellor went on to say:""A prudent estimate of the current trend rate of growth is only 2¼ per cent., so raising the long-term growth rate of our economy is our major challenge."" The IFS green budget and the OECD estimate that the trend growth rate is now 1¾ per cent., so there is another failure. The then Chancellor also said that past Chancellors had""deluded themselves into believing that growth, however unbalanced, was evidence of their success. I will not ignore the warning signs and I will not repeat past mistakes"," but oh yes he did. He also said that one of important elements of growth was business investment, but now, in 2010, we are seeing the largest fall in business investment since records began. The then Chancellor said:""Half the adult population of our country hardly saves at all." " Under the current Government, saving rates have reached record lows. He also said:""I want the United Kingdom to be the obvious first choice for new investment, so I have decided to cut the main rate of corporation tax."" He went on to boast about our tax competitiveness on the basis of the corporation tax rate. In 1997, our rate was lower than the OECD average; now it is higher. In 1997, ours was the 11th lowest rate in the world; now it is the 23rd lowest. In 1997 ours was the third lowest rate in the EU 15; now it is the sixth highest, and the Prime Minister is standing in the way of our proposals to reduce corporation tax further. The then Chancellor said that""it is time for the welfare state to put opportunity back into people's hands."" He also focused on young people, saying:""There will be no fifth option—to stay at home on full benefit."—[Official Report, 2 July 1997; Vol. 297, c. 303-308.]" Now 923 young people aged between 16 and 24 are unemployed, and the figure is 50 per cent. higher than it was in 1997. The figure for economic inactivity is at a record high, at over 8 million. That was not a Budget that stood the test of time. It introduced fiscal rules that have been abandoned. It boasted of dismantling the internal market in the national health service, which had to be reintroduced. It proposed individual learning accounts, which had to be abandoned after being abused by fraudsters. It proposed a university for industry; that proposal led nowhere. Nevertheless, we could at least say that that was not an empty Budget. It was packed with ideas, although most of them were bad ideas. In contrast, yesterday's Budget showed that the Government have completely run out of ideas and run out of steam. I can, however, find one similarity between the hyperactive Chancellor and the fading Prime Minister who will go to the electorate very shortly. Both can be described in this way: fired with enthusiasm. This is a Government who are just trying to muddle through—a Government who have run out of steam, run out of ideas and run out of courage. With this Budget, they are ending with a whimper.