Orders of the Day — Budget Resolutions and Economic Situation

Part of the debate – in the House of Commons at 5:20 pm on 7th July 1997.

Alert me about debates like this

Photo of Stephen Dorrell Stephen Dorrell Shadow Secretary of State for Education 5:20 pm, 7th July 1997

The hon. Gentleman must contain himself. Let me assure him that there is plenty of evidence.

When the Chancellor stood at the Government Dispatch Box last week he carried with him a weight of great expectations. It is true that for 24 or 48 hours after the event he seemed to have pulled it off. The Prime Minister sat beside him and patted him on the back when he sat down. I could not lip-read and I could not hear what the Prime Minister said. He might have said, however, that the Chancellor's position was unassailable. Chancellors of the Exchequer need to be careful of slaps on the back from their neighbours.

The illusion that it will last for a long time was the one that the Chancellor of the Exchequer sought to create last Wednesday. On Thursday, that illusion was still with us. The Secretary of State for Employment and Education was positively gushing. He said: Yesterday, my right hon. Friend the Chancellor announced a programme that has received almost overwhelming applause and the unified commitment of the British people. He presented the most popular Budget in decades, and he did so in a manner that showed considerable aplomb."—[Official Report, 3 July 1997; Vol. 297, c. 436.] Before long, my right hon. and hon. Friends will be hearing the Foreign Secretary saying from the Government Dispatch Box how his old friend, Gordon, has delivered a major success. Unlikely alliances will be forming on the basis of the Budget.

It was all heady stuff, but it was far too good to last. By the weekend, reality broke through on sober reflection. It is now clear by how wide a margin the Chancellor failed to meet the objective that he set himself. The Chancellor set out his four objectives clearly at the beginning of his speech. He said that he wanted to create stability, to promote investment, to promote employment and to provide for improved public services. Those objectives are, of course, unobjectionable. The charge against the Chancellor is that he failed to deliver on all of those objectives.

Let us take, first, the right hon. Gentleman's commitment to stability. When he was discussing stability, he was, in truth, hopelessly confused. He said at various stages that he was concerned about the strength of consumer demand. He expressed concern about the buoyancy of house prices. He was concerned about the effect of a strong pound on exports. Similarly, he was concerned about the effect of high interest rates on the economy as a whole. He implied in his introductory rubric that he would take corrective action to deal with all the concerns that he expressed. It is now widely recognised that he did not address any of the issues at all.