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Budget Resolutions and Economic Situation

It is a privilege to follow the hon. Member for Crawley (Laura Moffatt). May I take this opportunity to wish her well when she leaves the House? The last Budget statement in the life of this Parliament has been made and we have had the usual post-match analysis from politicians, pundits and experts. The general opinion seems to be that the Chancellor was playing for a draw and that the real match will be held after May, although it may be under new management—only time will tell. With that in mind, and given the fact that we are now heading for a general election, I was not entirely surprised by the Chancellor's statement, although in fairness to him, he seemed to resist the temptation to indulge in pre-election giveaways—not that there was, perhaps, much left to give away. Also in fairness to him, he has inherited a legacy that few of us would envy. Ruth Sutherland, writing in The Observer, said that the Chancellor's predecessor"““presided over an increasingly unbalanced and indebted economy in which the City grew over-mighty and our industrial base shrank alarmingly””." It is little wonder that the Budget was high in rhetoric and low in substance. Despite the Chancellor's efforts, I find myself surprisingly in agreement with the leader of the Liberal Democrats when he said that the Budget was more of an obituary than a manifesto. Indeed, the opening sentences of the Chancellor's statement set the tone of vagueness and ambiguity that permeates most of his Budget. Although I understand the reasons for this, I agree with my hon. Friend the Member for East Antrim (Sammy Wilson), who is also Minister of Finance and Personnel in the Northern Ireland Executive, when he expressed concern about the lack of detail on future spending plans and how the Chancellor intends to reduce the level of public sector borrowing in the coming years. The Chancellor tells us that we are emerging from recession, and perhaps there are signs of that, but there is a wide variety of views on that—often, it has to be said, from those who did not foresee the recession in the first place. Even if we are emerging from the recession, however, we are among the last of the developed countries to do so. The Chancellor says that borrowing is lower than forecast, but it is still worryingly high. We have heard many figures quoted in the debate. The deficit this year is 11.8 per cent. of gross domestic product; the Government have committed themselves to reducing it by half within four years, but that is based on growth figures that are open to challenge. Even if the deficit is halved by 2014—and it is a big if—the CBI and others have said that it will be too little, too late. Cutting the deficit appears to rely on spending cuts that remain vague and on extremely optimistic projections for the economy. The frightening level of the national debt must be tackled. Whoever occupies No. 10 and No. 11 after May will have some hard decisions to make. One of the Chancellor's ideas on how to reduce borrowing is the encouragement of economic growth. He has rightly stressed that this is the key to genuine recovery. He has repeated the Government's commitment to find new ways to enable small businesses to grow, to invest in and improve our national infrastructure and to promote research, innovation and enterprise. Those are good aims. We should all do what we can to encourage the private sector and to reduce the public sector. We can help local British companies by reducing unnecessary red tape, as we heard earlier, and bureaucratic procurement procedures. I welcome the Chancellor's commitment to developing traditional and new infrastructure. We can help by bringing forward some capital projects for schools, hospitals and roads. That is what we have done to good effect in Northern Ireland. I was encouraged by the fact that an extra £15 billion of Government contracts will go to SMEs. I was also encouraged by an announcement that entrepreneurs' relief from capital gains tax will be doubled to £2 million and taxed at 10 per cent. This will be welcomed by small businesses. I was further encouraged that the investment allowance for small firms will be doubled to £100,000. If British businesses are to compete, we must be at the cutting edge in energy supplies and digital communications, for example. I fully agree with the Chancellor's statement that access to finance is vital for small businesses. I am encouraged that the Royal Bank of Scotland and Lloyds will provide a total of £94 million of new business loans, nearly 50 per cent. of which will go to smaller firms.