Amendment of the Law

Part of Budget Resolutions and Economic Situation – in the House of Commons at 5:16 pm on 10th March 1992.

Alert me about debates like this

Photo of Mr David Steel Mr David Steel , Tweeddale, Ettrick and Lauderdale 5:16 pm, 10th March 1992

It is not my normal practice to intervene in Budget debates. I hope that my hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) will be able to catch your eye tomorrow, Mr. Deputy Speaker.

In the absence of the leader of my party, my right hon. Friend the Member for Yeovil (Mr. Ashdown), because of the effect of Glasgow weather on his health, I shall begin by saying that when I last had a cold my doctor, who is also a friend, came through the bedroom door bearing a bottle of whisky, a jar of his own honey and a lemon. He said, "You add these to hot water and you will feel much better." I said, "This is the national health service at its best, but will it cure me?" He replied, "No, it won't do you any good at all but it will make you feel better." And this is a hot toddy Budget. It will not do the economy any good but it will make people feel better temporarily, for as long as the infusion lasts. I believe that that is what it was designed to do.

The Budget was designed not to help the country over the months or years ahead but to get the Government through the next few weeks as they hope. The real question is whether the Budget in these terms would have been introduced by the Government after an election in precisely the same terms in which it has been introduced this afternoon. The answer is manifestly not.

We unreservedly welcome some of the individual tinkering changes. There is relief on business rates; arrangements for value-added tax and late payments, which will help small businesses; inheritance tax changes for family businesses—they are welcome, and especially for family farms—relief for the car industry; and the increase in income support levels. These minor changes would, I hope, have been carried out by whatever Government were in office and at whatever stage in parliamentary terms.

Our basic complaint is that the Budget's fundamental strategy is wrong. It will do nothing to stimulate the investment that the country requires. In the middle of his statement, the Chancellor of the Exchequer produced a curious little homily about the difference between public investment and private investment. The right hon. Gentleman more or less said that all public investment was somehow bad and that private investment was good. It was—[Interruption.] That was the general tenor of his remarks. We say that such is the long-term damage that has been done to our economy that we need the stimulus which can be achieved only by the public sector if we are to turn the economy round.

My hon. Friend the Member for Berwick-upon-Tweed put the matter well in his pre-Budget submission when he said: Most economies were not as badly managed as Britain's was during the late 1980s, and few of our main competitors have Britain's underlying weaknesses of a poorly-skilled and educated workforce, an inadequate transport infrastructure and a poor record of investment in research and development. That is why we have suggested that a programme should be brought forward which would include school and college building; energy conservation measures—how little there was in the Budget on the improvement of the environment and energy conservation; a tiny fiddling around on the margins on unleaded petrol and that was all, nothing else—major investment in railway infrastructure and, in particular, in housing because Britain is suffering from an increase in homelessness. It is one of the standing condemnations of the Government that, having introduced an excellent programme of council house sales, they have not allowed local authorities the freedom to spend the income derived from that on housing.

To give a brief example from my constituency, I had to take a deputation to see a Scottish Office Minister the other day because one of my housing authorities is unable to proceed with a programme to improve the housing stock in my constituency, including improvements such as double glazing, which surely the country should welcome; colour-washing to improve the environment of some of our rather dowdy housing schemes; internal improvements and the construction of new homes, which are needed because the waiting list in my area has risen by 37 per cent. in one year.

The key point is that, while the Government are restraining local authorities from carrying out such sensible programmes, 10 per cent. of the labour force in my area is in the construction industry which is suffering chronic unemployment.

Our alternative proposals to the Government's Budget strategy would result in a 400,000 drop in unemployment in the first year and a 600,000 drop in the second year. As each unemployed person costs the Exchequer £8,500 today, we are talking about a consequential saving to the Exchequer of £2·5 billion by the end of the second year. In all the waste of public expenditure there is no greater waste than the money spent on the growth of unemployment benefits that are paid out under the Government.

The Government are aiming for a snapshot election. What the country will want to look at is not the record over 13 days but the record over 13 years. They will look at the record unemployment, the unprecedented number of home repossessions, the unprecedented level of debt in our society, the record homelessness, the growth of the cardboard cities and, in particular, the squeeze on young people whether through the reductions in social security or in education assistance. When the Government are judged on 13 years as distinct from 13 days in the aftermath of a Budget, they will be found by the country to be severely wanting.