Orders of the Day — Budget Resolutions and Economic Situation

Part of the debate – in the House of Commons at 5:30 pm on 10th March 1999.

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Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry 5:30 pm, 10th March 1999

The overall Budget delivers £4 billion of tax cuts. The right hon. Gentleman should consider carefully the measures that he supported when he was a member of the Cabinet. They would have meant an increased tax burden, compared to the measures that we are discussing. Business would have faced a greater tax burden, had the proposals that he supported continued. We do not agree with imposing such burdens on business. We are reducing the burden, compared to that which would have been imposed by the right hon. Gentleman.

The Chancellor was able to present that Budget yesterday because, early on in office, he took the tough and difficult decisions necessary to ensure that we have economic stability. By ensuring that, he could announce the initiatives proposed yesterday.

It is particularly significant that my right hon. Friend was able to do that, given the situation that we inherited when we took office in May 1997. Conservative Members do not like to be reminded of the economic mess that they left behind, but I shall remind them, and I might even mention not just boom and bust, but Tory boom and bust. I certainly shall not be referring to a golden economic legacy, because it clearly was not.

We inherited an economy in which output was rising at a rate that simply could not be sustained, inflationary pressures were building, with inflation set to rise sharply above its target level, and there was a large deficit in public finances—£28 billion, to be precise. Contrast that with the £4 billion surplus this year. Moreover, for the coming five years, we estimate that there will be a Budget surplus totalling £34 billion.

Look at what happened under the Conservative Government. Their deficit over the last economic cycle was not £50 billion, not £100 billion, but £1 billion short of £150 billion. Even with my poor mathematical skills, I know that that is £149 billion. That is the legacy created by the right hon. Member for Wokingham and his Government.