The Economy

Part of Orders of the Day — Debate on the Address – in the House of Commons at 7:58 pm on 14th November 1990.

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Photo of Mr William Clark Mr William Clark , Croydon South 7:58 pm, 14th November 1990

If the hon. Gentleman does not believe me, I can send him a copy of Professor Patrick Minford's report. He has costed the Opposition's proposals at £22 billion—[Interruption.] If Opposition Members do not accept that figure, they should tell us their figure. I am prepared to accept Liverpool university's estimate.

I remind Opposition Members of what that would mean for taxpayers. A Labour Government would have to find that money and they could do it through an increase in the standard rate of tax from 25p to 35p. That would produce £20 billion. As the higher rate taxpayer would also have his rate increased, that would produce a little extra revenue. If the Labour party does not want to do that, it could raise value added tax by 10 per cent., which would produce just over £20 billion. I am convinced that the general public are entitled to know how much all the glowing promises from various Opposition spokesmen will cost the taxpayer—[Interruption.] If Opposition Members do not agree with the Liverpool university figure, they must tell us their figures.

I accept that the medicine of high interest rates is unpalatable and unpleasant, but it is worth it because the economy has slowed. However, I agree with my right hon. Friend the Chancellor that it will pick up next year. We must be realistic and pragmatic and take various factors into account—the Gulf, the United States economy, and so on. I accept that we are in rough seas, but we have been there before and we have come through.

We have achieved a tremendous amount. We have achieved a strong economy, and we must not deny that or talk it down. We must continue with the present policies. We do not want any U-turns. I am convinced that we shall come through and that Britain will return to prosperity. That is why I welcome the Gracious Speech.