Orders of the Day — The Economy

Part of the debate – in the House of Commons at 4:25 pm on 18 July 1994.

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Photo of Kenneth Clarke Kenneth Clarke The Chancellor of the Exchequer 4:25, 18 July 1994

I give the House a presentation on the fiscal prudence necessary to maintain confidence and keep the recovery going, and a Labour Member gets up and suggests that we should abandon one of the tax increases. A few moments ago, my right hon. Friend the Member for Ealing, Acton (Sir G. Young) made a statement on housing policy, and rows of Labour Members agreed that there should be a massive increase in spending on public housing. The Labour party's lack of policy and its instinct to abandon sound fiscal policies and controls on public spending pose a great threat to the recovery.

Labour Members have the nerve to claim that taxes would somehow be lower under a Labour Government. That is preposterous, as history and their current behaviour demonstrate. Taxes would have to be increased to pay for the never-ending list of spending demands revealed by every exchange in this House; otherwise, public borrowing would rocket to unsustainable levels and high interest rates and inflation would return.

I do not understand why the Labour party has got into such a knot about this. The Labour movement is going through an identity crisis. Clearly, Labour is the party of high Government expenditure—higher than its opponents in the Conservative party. Members of the Labour and trade union movement believe that more state spending is required to solve many of the country's problems. Labour Members nodded in assent when my right hon. Friend the Member for Acton accused them of wanting to spend more on public housing only a few moments ago. If they no longer believe in socialism, surely they must still believe that they are the party of higher public spending.