I am grateful to be called by you, Mr. Deputy Speaker, so early in this debate. In my five years in the House this is the most important Budget statement that I have heard. I came into the House in 1983 when the Chancellor made his first Budget speech. This is one of the most tempestuous Budget speeches that we have heard. The reason for saying that is clear, because the speech demonstrated the divide in philosophy between the Government and the Opposition. That was most precisely marked when we discussed the reduction in the top rate of income tax to 40 per cent. That showed the divide between the Opposition and the Government.
If anything, this is the most capitalist Budget that we have seen in the House this century. The Economic Secretary to the Treasury nods his head in approval. It is an offensive Budget to all our people. It is wrong to believe that our people wish to have tax cuts at any price—cuts that will benefit their pocket to the detriment of people as a whole. It is also wrong to suppose that we can ignore the spontaneous clamour in the National Health Service about the cuts that have taken place there.
The Chancellor gave a series of figures about the increases in public expenditure, and at Prime Minister's Question Time the Prime Minister also gave those figures. Those are the normal increases that we see in society year in, year out, and they are a reflection of inflation and pressure on the economy. They do not reflect real spending in the economy.
Hon. Members should consider what the Government have been doing in the Health Service. In Middlesbrough a hospital was closed because the health authority had to save £1 million. It made that saving by closing the Carter Bequest hospital.
It was wrong of the Government to give the nurses their pay increase before the last election and then to say to health authorities that they had to fund it out of savings. Obviously, it was right to give the nurses the benefit of an increase, but the way in which the Government funded it was wrong, and that has been the cause of the disruption and spontaneous protest in the Health Service. The Budget has not done anything to rectify the imbalance that is creeping into our economy. The public services are being starved of money, but a wide range of people will do well out of this Budget.
The Chancellor said that by reducing the top rate of income tax to 40 per cent. those on top incomes will work harder. That simply repeats the shibboleth that we have heard for many decades that people will work harder if they are given such an incentive. In this leisure world it is more probable that people will use the extra money to improve the quality of their life and to enjoy the leisure facilities that are available to them. In any event, there is no evidence whatever that people in business, those with responsibility, will be prepared for financial gain to work harder than they work now. That is one of the great shibboleths of our time and it is certainly one of the shibboleths of the Government.
People who are not so well off will gain nothing from the Budget. In 1979, I remember sharing a platform in Newcastle with Jack Jones, the leader of the Transport and General Workers Union. Mr. Jones told the audience that if the Conservatives were elected they would cut the benefit link between earnings and price rises, whichever was the higher. That was the basis upon which benefits were based. That was our philosophy, and we aimed to protect people who could not protect themselves by giving them the benefit of an increase either on the basis of increased earnings or increased prices. The Conservatives said that they would cut that link, and that was the first thing that the then Chancellor in the 1979 Conservative Government did. He based the increase in benefits not upon earnings but upon price increases. Inflation has come down and earnings have risen above inflation, and we have seen the gap between those who have and those who have not growing steadily. That is a direct consequence of Government policy and philosophy, and it is creating tensions and pressures in our society.
The argument has often been advanced that there is a link between violence on our streets and unemployment and that it is between those who have hope and those who have not. The Budget will do less for those who do not believe that they have a place in our society than it will do for the better off. The essential philosophy of the Opposition is that we want to see an egalitarian society. The priorities that we have had since the 1970s are not the priorities of the Government. One of our priorities is to keep people in work.
The Chancellor said that the Budget surplus was £3,000 million. It is perhaps no coincidence that we have 3 million unemployed, because it means that for every £1,000 of surplus there is a person unemployed. That is wrong. This is a financial Budget, not an industrial Budget. It will do nothing for our trade or industry and it will not lead to more investment in industry. We would like to see interest rates coming down. That would help industry, because the cost of borrowing would be lower and investment would go up. The Budget placed no emphasis on jobs or on the investment that we want to see in industry. It does nothing to encourage investment in manufacturing to offset the balance of payments crisis that is coming on our manufactured goods.
That brings us back to Tory philosophy. Getting rid of the exchange rate in 1979 led to massive investment in the United States, and now in Europe, by British investors. In the last Parliament I asked what was the return on that investment, and a Conservative Back Bencher, Mr. Stefan Terlezki, who is no longer a Member, said that it was £5,000 million a year. That is a return to Victorian values. In the last century, that was how our economy worked. Our balance of payments deficit on manufactured goods was covered by the invisible earnings of the City of London.
Why has that investment not taken place here? Why was it more fit and proper to invest in real estate in the United States, Germany, France and Belgium than to invest in our own industry? That philosophy has turned out to be not simply anti-worker, but anti-British. It has reduced our future status as a nation state.
The Chancellor is storing up many troubles and difficulties for the years to come. As was said by my right hon. Friend the Member for Islwyn (Mr. Kinnock), our economy was based on the oil revenues, which went up again after Sheikh Yamani resigned in Saudi Arabia. The figures are clear: the public sector borrowing requirement has gone down as the oil revenues have gone up. Those revenues have simply been used to ensure that we, as a nation state, do not borrow money.
As the nation, under the present Government, does not borrow the money, where does the money go? It does not crowd out any more the private sector; it goes straight from the Treasury to the City of London. Over the past few years, the alliance between the Treasury and the City has supervised the sale of national assets. When the Conservatives came to power, they wished to sell those assets on the basis of a doctrine: they did not believe in natonalisation.
The concept of privatisation is legitimate. It was an ideological commitment that the Conservative party made at the time of the 1979 general election. But, as the public sector borrowing requirement came down, the City of London was able to take up more and more public assets. Now the Secretary of State for Energy is about to privatise the electricity industry for £28,000 million, and the money is there because the Government have ensured that it should be.
As well as the sale of assets and North sea oil, there is the massive consumer boom referred to by my right hon. Friend the Leader of the Opposition. That boom is based on plastic money. Although interest rates are at 28 or 30 per cent., people are prepared to indulge in the consumer society as long as they can use plastic money and the payment is made later. They do not look at the 28 per cent. interest rate. That, too, will be a problem for the Government, but it is a house that they have builded over the past five years.
Having sat through five Budget speeches, I feel that we, as a nation, have been set up for the launch of a capitalist society. The Government do not mind a man standing on his own two feet, as long as he stands on the backs of those poorer than himself. The moral lesson that they wish to teach is: "Stand on your own two feet, but stand on the back of someone poorer than yourself who has not got and will never have your advantages."
The divisions in our society are getting deeper and deeper. This is a financial Budget, but it is also a political Budget, cynically aimed at those who are doing well in society in the hope that those who are poorer will not understand it, and that those who are doing well will be seduced into not caring for their fellow man. That is the wrong philosophy, and it will backfire. The day will come when there will be a backlash against the Government's principles — against the idea that money is all that counts, and that people do not count. When that backlash comes, there will be a significant turning of public opinion away from this Government.