Orders of the Day — Finance Bill

Part of the debate – in the House of Commons at 7:11 pm on 2nd June 1992.

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Photo of Dr John Marek Dr John Marek , Wrexham 7:11 pm, 2nd June 1992

It is not wrong. I have the statistics here. I shall pass them to the Financial Secretary so that he can educate himself.

The Tory party could also, according to the foreign journalist, have thought about how to cut the burden of taxation. It is much higher now that it was under Labour in the 1970s. The Tory party might also, according to the foreign journalist's piece, have thought about how to regulate the seamy side of the City and, above all, about how to get people back to work and provide enough homes for every family to live in. But not a bit of it.

This second Finance Bill simply puts into effect measures that were announced in the March Budget that were not included in the Finance Bill introduced before the election. Any foreign journalist, and many hon. Members on this side of the House reading the Bill, could remark only upon its inconsequentiality when it comes to the great economic issues that face the country.

Despite that lack of substance, we have had a good debate. A number of Members have made some very good points. As usual, my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) made a succinct and clear critique of the Bill.

I wish to refer to the maiden speech, or perhaps it was a quasi-maiden speech, of the hon. Member for Orpington (Mr. Horam). Certain parts of his speech were clearly not pure Thatcher, especially when he urged the House not to treat inflation as the judge and jury of Government policies and when he asked the Government to get us out of recession and not to worry too much about inflation. I thought that I saw a few of his hon. Friends looking into the distance when he made his speech. Nevertheless, it was very interesting and I was pleased to hear it.

My hon. Friend the Member for Wolverhampton, North-East (Mr. Purchase) made a telling maiden speech. He spoke from the heart about the problems faced by his constituents when it came to the benefits for which they have to apply when out of work. His statement about making workers out of lords and not lords out of workers is one about which I shall have to think for a little longer before I come to a decision as to its validity. It may need just a few qualifications. Nevertheless, I was glad to hear my hon. Friend.

I suspect that the result of the maiden speech of the hon. Member for Rutland and Melton (Mr. Duncan) will be that we shall hear more of Rutland in this Chamber. If his speech is anything to go by, the hon. Gentleman will pay great regard to the needs of his constituents. He referred to the fact that Finance Bills involve special pleading. I have to say to him in a nice way, since it was a maiden speech —though I had to choke back an intervention when he made the point—that special pleading usually comes when 40 or 50 new clauses are tabled by his hon. Friends for the Committee stage of a Finance Bill. I hope, therefore, that he will be a member of the Committee, when I shall ask him to monitor the special pleading with me and my hon. Friends.

My hon. Friend the Member for Leeds, West (Mr. Battle) made his usual speech—[Interruption.] His points were valid and well put. My hon. Friend the Member for Hornsey and Wood Green (Mrs. Roche), speaking for the second time, spoke about London. She is right to say that London has one of the most decrepit transport systems. Something must be done. Hon. Members have only to go to any other capital city in western Europe to see that my hon. Friend is right.

My hon. Friend the Member for Sheffield, Attercliffe (Mr. Betts) spoke well. It was not a maiden speech, and I am sure that we will hear many more contributions from him about the difficulties facing Sheffield in the recession.

We charge that the Government are smug and self-satisfied. They know that they need not be in a hurry, as there is some time before they have to face the electorate again. They are prepared to see our present economic troubles continue with a substantial minority of people living in poverty. Since the election, it has become clear that the Chancellor's estimate of a £28 billion public sector borrowing requirement for 1992–93 was either incompetent or mischievous. In spite of 13 years of Tory rule, public finances are in a desperate state.

It is widely believed that the Treasury now thinks that the deficit will be over £30 billion, as opposed to the £28 billion forecast at the time of the Budget, and that next year it will be about £40 billion. That represents 6 per cent. of GDP. Hon. Members will note that that is double the suggested maximum in the Maastricht treaty. The Government have some way to go before achieving what the Maastricht treaty says should be achieved in the United Kingdom.

In addition, last month's trade figures showed that the current account was above £1 billion again, so I doubt whether the Treasury's forecast of 3 per cent. growth for the years 1993–94 and onwards can be achieved without an early balance of payments crisis. At least in previous Tory-inspired recessions—1974–75 and 1980–81—we had a balance of payments surplus. Not this time—we are in a hole. When a Conservative Government get the country's economy into a mess, the Labour party is usually called upon by the electors to form a Government and get us out of trouble. This time, 42·8 per cent. of the electorate have inflicted another Conservative Government on the country, and it is up to that Government to do something about the recession.

I search in vain in the Finance Bill for any new Government action. It was once said that economic management is like trying to drive a fast car with the aid of only a rear view mirror. The Government are driving the economy in precisely that way, with the aid of a road map called the free market. They are blind as to where the car is going. The car is sliding dangerously on mud at the roadside while the Government continue to behave as if nothing is happening. They are unbearably complacent. If they were to shake themselves out of that complacency, they would do something about manufacturing industry.

In the first quarter of 1992, GDP has fallen yet again by 0·6 per cent. The Treasury said that GDP would recover by 2 per cent. in this financial year. However, the latest figures show GDP coming back by only 1 per cent. at the very best.

Ministers blithely assert that, as exports had increased in volume terms by 3 per cent., the trade figures could be largely discounted and, indeed, were something of a success. Unfortunately, that is not so. With the pound locked into the ERM, what will the Government do if, at the slightest hint of an upturn, it becomes painfully clear that imports will be sucked in to such a catastrophic extent? It is the balance of payments that matters and no amount of ministerial spin-doctoring on the radio will get around that awkward fact.

The Government must extend their economic management. Trading off unemployment against inflation without making use of other economic powers that the Chancellor has at his disposal simply does not work, and, even worse, it creates two nations. The latest unemployment figures show an increase of 42,600 in April. The Government calculated total stands at 2·6 million—9·5 per cent. of the work force. Many others, particularly women, are looking for work and do not appear in the figures. If unemployment were judged in a fairer and more moral way, we would say that it was now 3·8 million.

Is low unemployment in any way a target of Government economic policy or is it simply traded off against inflation with other economic and fiscal policies lying idle and not being used to cut unemployment and inflation at one and the same time? That is what a Labour Government would be doing now.