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Budget Resolutions and Economic Situation

I have listened to this debate with growing incredulity this afternoon and for some hours yesterday, as speaker after speaker on the Labour Benches has risen to deny that the last Government's profligacy could in any possible manner have had an effect on the economic situation that we now find ourselves in. We need to remind ourselves that we have a £150 billion deficit, which, as my hon. Friend the Member for Spelthorne (Kwasi Kwarteng) pointed out, represents about 12% of GDP. Back in 1976, when another Labour Chancellor, Denis Healey, went cap in hand to the International Monetary Fund because we were bust, that figure was only 7%. Our economy has been completely and utterly out of balance. We spend £43 billion on interest alone, which is more than we spend on education, and more than we spend on defence, the Foreign Office and overseas aid combined. That is an absolute disgrace. There is no doubt that the previous Government brought us to within a scintilla of being where Greece is. We would have been there, if we had had a credit downgrade and our interest rates had gone up. That is where we would have been headed if Labour had won the election. The previous Government presided over a halving of the manufacturing sector in this country, a fall in our share of world trade, and an expansion of the gap in prosperity between the north and the south. We should take no lessons on economic management from Opposition Members. I welcome the Budget, which is a Budget for growth and jobs, against a tough background. Nobody enjoys figures such as the 0.6% contraction in the last quarter, or the OBR's downgraded forecast of 1.7% growth for this year, but equally, nobody who looks at the previous Government's record can imagine that under Labour, those figures would be anything but worse. Labour Members offer no constructive alternative. Instead, they offer opportunistic objections to every sensible suggestion by the Government about saving on expenditure. Every time an Opposition Member stands up and says, ““No. We don't want this measure on tuition fees and we don't like moving from RPI to CPI in pensions,”” and so on, they are really saying, ““We're going to increase expenditure, and we're going to increase either the deficit or taxation as a consequence.”” That opportunistic approach is at odds with their rhetoric of prudence, which is in turn at odds with the marchers' placards on Saturday calling for no cuts whatsoever. That did not stop the Leader of the Opposition strutting his stuff on the stage in Hyde park and trying to assume the mantle of Martin Luther King. He had the dreams, but he did not have the detail or the substance. Tax for corporations will be reduced under this Government to 23%, which is 16 percentage points lower than the rate in the US. On the radio the morning after the Budget, Sir Martin Sorrell told us that WPP, the largest advertising agency in the world, would relocate to this country from Ireland. On that subject, even when suffering and having to go to the IMF, what is the one thing that Ireland holds on to and defends above all else? It is its low corporate taxation rate, which, at just 12.5%, has enabled that country to attract double the average level of EU inward investment. We need to bring taxes down. I welcome the fact that small business taxes will be reduced to 20%, and that we will support entrepreneurship by doubling the enterprise allowance to £10 million, so that those who go out and create businesses and wealth for themselves are encouraged to do so. In the process, they employ people, generate wealth, and pay the taxes that pay for the front-line services that we all want protected. I was astonished by what the right hon. Member for Holborn and St Pancras (Frank Dobson), who I am pleased to see is in his place, said. He regaled us with all the benefits of red tape and told us all about how regulation was such a marvellous thing. In the real world of business, not a single business person would ever say that. I have not heard one business person further that argument. I welcome the fact that we will implement Lord Young's review in full, and that we will ensure that companies that employ fewer than 10 people and genuine start-ups will be exempt from domestic regulation. That is a step forward. I also welcome the support that we are providing for the young. There will be 50,000 new apprenticeships, increasing to 250,000 over the period of this Parliament, and the work placement schemes—the 80,000 places that we heard about earlier. We will also double the number of university technology colleges from 12 to 24. I am pleased that something was done on fuel, particularly for rural areas such as mine in Central Devon, and I am particularly pleased about the rise to 45p of the tax-deductible mileage allowance, which will help many voluntary organisations that rely on voluntary drivers. I also welcome the fact that the Budget is fair in raising the tax threshold, because it means that we will take more of the poorest hard-working people in our land out of tax altogether. That is the right and the decent thing to do. I shall conclude now—because I am aware that others wish to speak—by saying that this is a Budget for growth, it is a Budget that stands for enterprise, and it is a Budget to which Labour Members have no answer.