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Budget Resolutions and Economic Situation

What emerged was the work of Sir Peter Gershon and Martin Read, and the question of how to pay for it was addressed. I have listened to the Secretary of State trying to explain how he will make his £500 million of savings from a budget that is not increasing in real terms—as shown by the forecast for the retail prices index in the Red Book—and I think that we have made it much clearer how we could afford to get rid of this appalling national insurance increase, for which he is in large part responsible. We have addressed the question—I was addressing it in the interview he quoted—of how to account for any changes, and we have explained how we would pay for them. There is a big, serious question—the one that we are debating and that we will resolve in our proceedings today: whether there is a credible plan for dealing with the nation's problems of a budget deficit and debt. We are having a very entertaining debate, but the dimensions of the problem that the Budget should be addressing, and which we need to address, should overwhelm everything that we do. On that question, the Budget turned out to be a mere holding statement—probably not the statement that the Chancellor of the Exchequer wished to give. I am afraid that he fell into some of the usual traps—the whole recession somehow came from overseas; it was nothing to do with here—and he tried to present as good news the fact that the deficit was going to be only £167 billion, which is just under 12 per cent. of GDP. The fact that the deficit was mildly smaller than his horrendous forecast is not good news. When it came to how the Chancellor would start to tackle his stated objective, there were optimistic forecasts, which I honestly do not believe are likely to be achieved. Everything is being disposed of on the basis that we are likely to get into a mini-boom from next year onwards and to sustain it, and that huge cuts could be made in infrastructure spending. I shall not keep arguing the past, but it was private finance initiatives that enabled the schools capital programme to take off; indeed, huge cuts in infrastructure spending have already been set out by the Government in the Red Book. The problem is that the ballpark figures were plucked from the air and kind of attributed to each and every Department. What the Children's Secretary illustrated was that an individual Department cannot give any meaningful description of how it is supposed to be making its contribution to eliminating the £11 billion of waste or making the £5 billion of lower priority spending cuts that were cheerily set out in the Budget speech and the Red Book.