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.

Alert me about debates like this

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

The hon. Gentleman makes my point for me. That conflicts with the approach of the right hon. Member for Wokingham. That is one reason why we were not prepared to endorse that raft of tax increases proposed by the Conservative Government, and why the tax burden is reduced as a result of the Budget. I am grateful to the hon. Gentleman for drawing that to my attention.

We have economic stability because we took the difficult decision to take politics out of the setting of interest rates. We will not hear the Tory policy on that from the right hon. Gentleman. The Opposition Front-Bench spokesmen have taken a Trappist vow of silence on that. I think that I know the view of the right hon. Member for Wokingham. It is a shame that he cannot discuss it openly. He smiles because he knows that he would not have given independence to the Bank of England. It is a shame that he cannot speak his mind on the issue. Unfortunately, he cannot say what he truly believes.

We took the necessary steps to put public finances back on a sound footing. They were not in that condition when we took office. We have created a new framework for stability in monetary and fiscal policies. It is because we have taken those steps that, for the past seven months, inflation has been at or around the target level of 2.5 per cent., and short-term interest rates have peaked at half what they were in the early 1990s, and have fallen by 2 per cent. in the past two months alone. As my right hon. Friend the Chancellor said yesterday, that reduction in interest rates will save the typical home owner around £900 a year on his mortgage. Britain now has the lowest mortgage rates in 33 years. Long-term interest rates are now at their lowest level since the mid-1960s.

The right hon. Member for Wokingham talks about jobs being lost. I understand the pain felt by people who have lost their jobs. I know my constituency well, and I share my constituents' pain, frustration and anger when jobs are lost. But my constituency now has more people in work than on 1 May 1997. Throughout the north-east, which has been affected by the global downturn, more people are in work. Nationally, 400,000 more people are in work than in May 1997. Those are the facts. The right hon. Gentleman likes his own prejudices to get in the way of the facts, but on this occasion he should look carefully at the true position.