Orders of the Day — Budget Resolutions and Economic Situation

Part of the debate – in the House of Commons at 8:15 pm on 27 November 1996.

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Photo of Mr Nirj Deva Mr Nirj Deva , Brentford and Isleworth 8:15, 27 November 1996

In a minute.

We need to create more jobs and more confidence and attract more investment to create an economy of which we will all be proud.

When the country voted at the last general election, the Conservative party received the largest number of votes that a party has received in British political history. We were in the midst of a bad recession in Europe and around the world, but still the country voted for us. That was not a mere act of faith; it reflected certainty in the ability of the Conservative party—and the Conservative party alone—to turn the country around. That expectation has now been met; the Government have delivered.

When the votes were cast in 1992, growth in gross domestic product, because of the world recession, was minus 0.5 per cent.; today it is 3 per cent. and growing. Interest rates were 10 per cent. and climbing; now they are about 6.5 per cent. and steady. Inflation was about 5 per cent.; today it is steady at 2.8 per cent.—below the European average. In 1992, 750,000 more people were out of work; today, 750,000 more people are in work and supporting their families. In each of the past 32 months, unemployment has fallen; in my constituency, it has fallen phenomenally. I am proud to say that my area is prospering. We have a trade surplus. British overseas investments are spreading joint venture projects across the world. Last year, we earned nearly £30 billion from our overseas investments. It is indeed a proud record.

I want to say well done to the Chancellor and the Government, for producing a Budget that has started cutting personal taxation. In 1995, personal allowances were increased by £240; age-related personal allowance was increased by £280; the lower rate band was increased to £700; the basic rate limit was raised by £1,200; the basic rate of income tax was reduced to 24 per cent.; tax on savings income was cut to 20 per cent.; the capital gains tax retirement relief age limit was reduced; the inheritance tax threshold was raised to £200,000; insurance benefits were exempted from tax; and duty on beer, wine and cider was left unchanged. Spirits duty was cut by 4 per cent., fortified wine duty by 6.7 per cent., pools betting duty by 6 per cent., and general betting duty by 1 per cent. The small companies rate of corporation tax was cut to 24 per cent.

This year, the Chancellor has gone further. He has said that there is room for further manoeuvre. The Budget cut the basic rate of income tax to 23 per cent., and personal allowances were raised by another £200. The lower rate band was raised by another £100 and the inheritance tax threshold by £15,000. Business rates were frozen. I can say with the utmost confidence that that has helped many small business people, including small shopkeepers. There are some 250,000 small retail businesses—many in the Asian community—and about 700,000 people depend on those family businesses. They welcome the freezing of business rates. I hope that the Chancellor will in future be able to do something to alleviate some of their recent difficulties.

The duty on ultra-low-sulphur diesel has been cut, as has road fuel gas duty. The small companies rate of corporation tax has been cut to 23 per cent. It is a Budget that we should all be proud of. It is an honest Budget by an honest Chancellor in an honest Government.

Yes, my right hon. and learned Friend the Chancellor could have sought, had he wished in an election year, to woo the voters, but he did not. Why not? Because, unlike the Labour party, he believed that the economic interests of the country were more important than the electoral interests of the Conservative party. Labour has yet to learn that, in government, it is always important to put the national interest first. It has consistently failed itself, never mind the people of this country, by always putting its party interest first. Good news for Britain is bad news for the Labour party. Good news for the people of Britain means gloomy faces across the Floor. That is why the country has praised this extraordinarily good and sensible Budget.

This morning, I listened to some of the comments that the Labour party was spinning in the media. I understand that it is in the nature of politics to oppose. By opposition, one questions, and by questioning one elicits for the common good knowledge that can make policies work better. To mislead the country and paint a picture that is not true is not to oppose but to spin yarns. Spinning yarns is not the traditional role of the Opposition. To spin yarns in the media is to mislead the public and the business community. Yarn spinning wrecks confidence in the country; it makes the country look inadequate and international investors become suspicious. To spin yarns is not clever. It is too self-interested and too self-serving. When the election comes, the electorate will not be fooled.

I want to put on record some of the comments made this morning about the Budget by members of the wider business community. The director general of the Institute of Directors said: The Budget is good for business and helps companies to thrive and create jobs. By emphasising the need for maintaining stable growth rather than agreeing to irresponsible tax giveaways, the Chancellor has given the business sector the best support. The Forum of Private Business, reported in The Times, said: The best budget in a decade for owner-managed firms. The chairman of GKN said: This is an appropriately prudent Budget which is good news for business. The City, reported in The Guardian—of all places—said: Don't you just love it? Within the constraints he has had to operate, this was a well-judged, and well-delivered piece, just what the City wanted and difficult to attack politically.The Times said: So he has taken the sensible political decision that low interest rates are more important than tax cuts. This is also the best decision for the economy. I could go on for a long time recording the praise that was heaped upon my right hon. and learned Friend the Chancellor by the wider community.

We have come to a point in our economic development which requires us to understand what is happening globally. A party which does not understand what is happening globally, such as the Labour party, so fixated on talking down the country, would, if ever elected, destroy the base that has been created after 17 years of Conservative government.

I remember when I was a student and Labour was last in power. Travelling around the world, I was embarrassed to be British. I was embarrassed when the Chancellor of the day had to beg money from the International Monetary Fund. I was embarrassed when he told the media that he had to ask the trade unions what to do before presenting the Budget. We should never be embarrassed again.

I have a rather long speech here, but my colleagues are anxious that I move on. We must look at the Government's record to understand the scale of their success in turning the country round since the last general election. No wonder the Labour party is trying to imitate us. It can imitate us by all means, but the more it imitates us, the more it flatters us, and the more it flatters us, the more the country will understand that it will be better to vote for the tutor at the next election than the new and untried student.

We on the Conservative Benches are all old hands at managing the economy well. Labour's record, throughout its history, is of economic mismanagement that has been utterly disastrous. One cannot teach an old dog new tricks; we can try, but in the end it reverts to its own traditions. Each party has an imbued culture, an underlying foundation, and its own ethos and values. In the case of the Labour party, it is a pervasive socialism which, try as Labour might, will never go away.

Along with that all-pervasive socialism comes the desire to intervene, which is a polite word for meddling. The Labour party wants to meddle in people's lives, in business, in how our children are educated and in how people support their family. That desire to meddle, and Labour's belief that it knows what is good for us, comes from the party's socialist roots. That is why the Labour party is, and always will be, socialist.

Without the need to meddle, and without its socialist roots, the Labour party will be left without a philosophy. Without a philosophy, it will be nothing as a party. It will believe in nothing and stand for nothing—other than a determination to obtain power. It will then become nothing—the ultimate nihilistic experience. The party will implode, smiling sanguinely, as some hon. Members are doing now, with a stiff upper lip to the last, behind its facade.

Original thinking, like original sin, is unbecoming in the modern Labour party. The Labour party's modernity is entirely based on its unoriginality. The modern Labour party does not think; it copies. It does not innovate or develop; it merely reflects, like a mirror, our policies.