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Orders of the Day — Finance Bill

Part of the debate – in the House of Commons at 6:19 pm on 6th July 1983.

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Photo of Mr David Evennett Mr David Evennett , Erith and Crayford 6:19 pm, 6th July 1983

—and, despite groans from the Opposition, it was endorsed by the electorate last month. The people want economic and financial realism from the Government, and the results of the financial policies pursued in recent years are beginning to show through. The economic situation is rosier than it has been for a long time, with recovery coming at an accelerating pace. Some confidence is returning to industry and the mood of business men has changed to that of cautious optimism. Order books are getting larger and stocks are being rebuilt, aided by Government policies and a cheaper pound. If recovery is to be sustained, the next move to growth in the economy must come from higher exports and greater private investment.

We hope, now that the election is over and the Conservatives are safely re-elected, that foreign investment will flow into British firms and that there will be more domestic investment in private industry. Hopes for growth in British exports depend to a large extent on a revival in world trade. They also depend heavily on our export competitiveness, so that policies for increased investment and higher exports must remain top Government priorities.

The financial policy as outlined in the Bill is designed to achieve those objectives. Economic recovery will be encouraged and sustained by the measures outlined by the Chief Secretary today. The financial strategy expressed in the Finance Act 1983 was based on a continuation of the policies of the last few years. The Bill is part of that strategy and is designed to promote further progress towards a sound economy. In this quest, the continuation of anti-inflationary policies remains crucial.

The Conservatives have brought public expenditure under control at a realistic level. We have given substantial aid to small businesses, those which will create the wealth of the future, the wealth for our national economy which we so desire. The Government have given tax cuts to people to improve incentive and, contrary to what we heard earlier, such cuts definitely improve incentive.

The Government must reduce the tax burden further because it is far too high in Britain. They have cut taxes on business, which will help to cut costs and increase competitiveness. This is the way to export, this is the way to the future. Most important of all, the Government have rightly ignored those voices urging a tremendous boost to the economy by pumping in more and more public money for possible short-term gain. Such a policy would destroy the financial and economic gains of the past few years. In the long term, such an inflationary public spending spree would not only destroy jobs but put the British economy into irreversible decline.

Everyone would like to spend more money, whether an individual, a Government, or a company. We would all like to spend money on those services in which we personally and passionately believe. When the economy is prosperous and expanding and when wealth is being created, we can do that. When the Government's financial policy has turned the economy round and we can make progress once more, I am sure that we shall be able to spend money in that way, on such desirable projects. Until then, the Government must not deviate from their set course. They have achieved so much so far. We are not at the end of the tunnel but we are well on the way. I welcome the Bill as another stage in the Government's programme for making the country economically and financially prosperous again.