Public Expenditure

Part of the debate – in the House of Commons at 8:09 pm on 18th February 1987.

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Photo of Mr David Howell Mr David Howell , Guildford 8:09 pm, 18th February 1987

I find it extraordinarily difficult—and I am not the only one — to understand what either the Social Democratic party or the Labour party is saying and to draw a distinction between the two, when I have found out. All I can go by at the moment is the motion in the name of the right hon. Member for Plymouth, Devonport (Dr. Owen) and others. It deplores the priority which the Government is giving to cuts in the standard rate of tax. That cut in the standard rate of tax would be of great benefit to millions of people on very low incomes. If the Social Democratic party is not concerned with those people, or if it has some other help in mind, it should make its position clear. At the moment, it is against lifting the burden of high tax on low incomes, and that is very puzzling.

The nature of this recovery, it seems to me, is neither temporary nor unsustainable. When Opposition Members argue—reassuringly for us—that when the Tories win the next election something will have to be done, they fail to understand the nature and the long-term, underlying supply side qualities that underpin this steady, sober growth. It is not spectacular but I believe that it is fully sustainable. It will pave the way for a lower tax economy generally, for a reduction in interest rates and for the financing of our public and private services and of the infrastructure—both from public and private resources—in a thoroughly responsible way.

I hope that the Opposition will have second thoughts about their economic analysis. They draw heavily on independent forecasters, so-called, in the City, whose credentials suggest to me that their independence is somewhat coloured by their politics. I advise the Opposition not to rely so much upon independent forecasters and to rethink their position on tax cuts. I do not think that they will, but perhaps we shall hear more about that later.

We are seeing now the sustained expansion of a non-inflationary kind for which we have fought for years. It gives my right hon. Friend the Chancellor of the Exchequer massive opportunities of the kind that no Chancellor since the war has had to put this economy back on its feet, to end the era of defeatism, of Britain being the sick man of Europe, and to make us one of the leading contributors to the world economy and recovery.