No. I said when I gave way to the hon. Member for Gravesham (Mr. Pond) that it was for the last time. I should conclude.
The extra spending on education, modest though it be— I apologise to the hon. Member for Kingston and Surbiton (Mr. Davey), a Liberal Member who no doubt agrees with my strictures on public spending, for not giving way to him—is drawn down from the contingency fund. We drew money down every year, but we usually waited to discover that we did not need it before doing so. What happens if a contingency arises? What happens if mad cow disease turns into mad sheep disease or there is some disaster we wait to see? The Chancellor has waved those arguments aside in order to have something to say to cheer up his Back Benchers in his July Budget.
The Budget imposes a dramatically increased tax burden. That is from a Chancellor who lectured me all the time in opposition about the extent to which we had increased the tax burden on the British economy. We now have tighter monetary policy. The Governor of the Bank of England has been let free to have charge of monetary policy. When I was Chancellor, I found that it was no good looking to market expectations. The markets guess what the Chancellor or Governor is going to do. They do not tell the Chancellor that they have inner wisdom that is denied to him.
When I was Chancellor, the expectation was that interest rates would peak at about 7 per cent. by this stage in the cycle. In fact, I never, ever went higher than 6.75 per cent. Interest rates of 8 or 9 per cent. are now predicted. I remind the Order Paper wavers that that can only produce in two years' time slower growth, slower creation of jobs and possibly a rise in unemployment if the Government have overdone it completely, and some abatement in the expected rise in living standards. In two years' time, the economy will have slowed down too much.
I know what the Government will do. I do not think that the Chancellor will mind if the economy slows down too much. He is cynically prepared to pay that cost. If the economy slows down too much, he will kick-start it. There will be more public expenditure. He will start cheering up the lobbies and prepare to cheer up the electorate. He is increasing taxes now as soon as he can after the election in ways that he thinks people will not notice, in order to spend public money more generously to buy votes later in the Parliament and win the election.
The Chancellor's policy is simply the dreaming up of cynical excuses to justify the tax hikes, despite election promises, and make a political Budget sound as if it has a respectable economic purpose. In my opinion, that will sacrifice jobs and growth in the meantime.
The sole purpose of a Government's economic policy should be to create the stability that enables jobs to be created, living standards to rise and the British economy to become one of the most successful and efficient in the western world. The legacy that the Labour Government were given gave them every ability to do that, in the national interest. The party that has taken power puts politics before the national interest. Only a day after the Budget, it is not very popular. The true costs will be felt by the British public in the next two, three or four years. We have to bring that home to the British public.