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Budget Resolutions and Economic Situation

I advise the hon. Gentleman to look again at the projections in the Red Book, because if they are followed through they will wipe out all the expenditure and public spending gains in the previous 13 years. Although I do not want just to reiterate this single quote from the Chancellor, which will hang around Labour's neck in the coming campaign like an albatross, please let us remember that the Chancellor did not only say that the cuts would be "deeper"; he also said that they would be "tougher", by which he presumably meant he was going to cut deeply where no one had cut before. That is the wrong approach. Among the G20 nations, only Argentina and the UK stand apart in choosing to provide no further fiscal stimulus. That might have been justifiable if the rate of recovery had exceeded the Chancellor's predictions, but that is not the case. The Red Book revised the growth forecast for coming years downwards, not upwards, yet despite that the fiscal response remains roughly as it was in the 2008 pre-Budget report. With the honourable exception of the previous two speakers from the Labour Benches, especially the right hon. Member for Oldham, West and Royton, our debate has centred on how deeply the cuts in public spending must slice and how quickly they must happen. Therefore, it is right and proper that a different approach is suggested. I believe that the best way forward is to grow the economy out of recession for the very reasons the right hon. Gentleman spelled out: growth in the economy is the single greatest determinant of closing a budget deficit, just as a reduction—a loss of capacity in the economy, such as the 6 per cent. we have lost over the past two years—is the dominating and overwhelming reason for the £167 billion public sector deficit. The fiscal stimulus is not the cause of this record borrowing, therefore. The stimulus we have had over the last year is one of the reasons why the borrowing has not been even greater and why the economy has not gone totally off a cliff over the last 12 months. Therefore, it is all the more puzzling that the Red Book does not contain a stimulus for this year. In the introduction to today's debate we were treated to a discussion of economic history from the shadow Business Secretary and the Schools Secretary. I was reminded that Denis Healey said that Margaret Thatcher had given us "sado-monetarism", but, of course, Joe Stiglitz has called the stance of this Government "fiscal fetishism" whereby""cutting back means the economy goes into a downturn and the markets lose even more confidence, triggering another recession or depression."" We should learn the lessons of other countries' experiences. In the 1990s, the Japanese Government's debt was 65 per cent. of GDP. Following a prolonged economic downturn and slowdown, they withdrew fiscal support too soon, and that debt is now approaching 200 per cent. of GDP. There is a strong case for a directed capital acceleration or fiscal stimulus this coming year to do the very thing to which the right hon. Member for Oldham, West and Royton drew our attention: getting the economy moving into a growth cycle, which would have more effect than anything else in reducing the budget deficit. We cannot cut our way out of a recession, but we could cut our way into a double-dip recession. Yet the Red Book proposes no further fiscal stimulus, so that is precisely what those on the Treasury Bench are proposing. These are difficult times for public finances and it is proper that we identify not only general efficiency savings, as the other parties have done, but projects that could be cut altogether and rendered null and void, thus saving the country billions of pounds. I am thinking of the £100 billion over the next generation that is proposed to be spent on Trident missiles. The right hon. Member for Maidstone and The Weald (Miss Widdecombe), who is leaving the House, said that one of her great delights during her time in this place was seeing both parties move to support the Trident missile. Let me forecast that both Labour and the Tories will have to move in the opposite direction over the next few years, because the missile system is now not only totally unjustifiable and immoral, but totally unaffordable under any sensible projection of the UK's finances. As we ditch the Trident system, so let us ditch the remnants of the identity cards system, the underground repository for nuclear waste and, as the climax of this identifiable cuts agenda, which contrasts with the vagueness of the efficiency savings proposed by the Government and the Opposition, we could abolish an entire Government Department in the form of the Scotland Office in Dover house. That would save only £10 million, but I am sure that when the Conservative party looks into its innermost soul it will acknowledge that it has always wanted to abolish an entire Department and will see the sense and logic of getting rid of the Scotland Office, which has managed to overrun its budget by 15 per cent. over the past year. That has been done under the nose of the Chief Secretary to the Treasury. I have enjoyed and relished this Chamber for all of my 23 years here. The rest of the Palace of Westminster I can take or leave, but this is a fantastic Chamber and a fantastic place for debate to be joined. It has a great atmosphere and at its best it is second only to the Scottish parliamentary Chamber, which looks better on telly. None the less, this is a fine place to have enjoyed debating. I have met and clashed with a number of formidable debaters and speakers from both sides of the House, and I have enjoyed every minute of doing that. I wish well the individual Members—if not necessarily their parties. However, I should say that what has happened over the past 23 years has strengthened my absolute conviction that the case for our having full determination over Scotland's finances and resources has never been more urgent and has never required to be better made than it is now.