I begin by drawing attention to my declaration in the Register of Members' Interests, and by expressing my gratitude to the Chancellor for giving me sight of his statement fully 10 minutes before he got up to speak. Some of the pages, which were completely blank, were especially interesting.
I congratulate the Chancellor on his statement. He delivered it with great force and he was, as ever, almost completely in command of his material. We welcome many of his announcements. I am sure that these warm words will come as no surprise to him. Praise from his political enemies is nothing new to him. After all, only last week, the Prime Minister let it be known that the Chancellor was probably the best Chancellor in the world. To the Prime Minister, he is the Carlsberg Chancellor. True to form, the Chancellor returned the compliment, saying that the Prime Minister was the best friend that he had had in politics. The Prime Minister knows that with this Chancellor one has to read the small print: the Chancellor used the past tense. It seems to me that his phrase had something of "Goodnight" about it.
The Chancellor laid great emphasis in his statement on what he called the fundamental strength of the United Kingdom economy, and to the extent that it is true, of course we all welcome it. Does he not agree, however, that there were serious concerns about the UK economy before the tragic events of
The Chancellor referred to the need to improve Britain's public services, but we have heard all this before. Year after year, we have had promises from this Government. In 1997, they said that there were 24 hours to save the national health service. In 1998, the Prime Minister said,
"we are delivering on our promises".
In 1999, the Chancellor said that the year would be
"New Labour's year of delivery".
Last year, Government advisers said that it would be the year
"when things really started to happen".
Six months ago, the Government said that they would put schools and hospitals first. Now, 2002 is almost upon us and the Chancellor is trying the same trick again. Every year they make these promises, and every year they break them.
Despite all the promises, all the tax increases and all the hype and hyperbole, services such as health, education and transport have got worse over the past four years. Did the Chancellor read the recent front-page editorial in The Mirror on the state of the NHS? It said:
"Things haven't got better" under Labour,
"they've got considerably worse. The Mirror's had enough of phoney pledges and promises on the NHS. Labour has been in charge for nearly five years. They can't hide behind the handy 'Tory policies' excuse any longer. It is now Labour's health services policies that are failing. And failing badly."
If the Government and the Chancellor can no longer convince The Mirror with their phoney pledges, such as those in today's statement, who on earth do they think that they can convince? They certainly cannot convince the chairman of their own party, the Minister without Portfolio, Mr. Clarke. [Hon. Members: "Where is he?] Indeed. He is certainly not one of the Chancellor's best friends, but he confessed at the weekend that the health service had indeed got worse under Labour. I hope that there will be no more argument about that.
Does the Chancellor agree that morale in all the caring professions and the public sector as a whole is now worse than ever? The chairman of the British Medical Association said,
"our morale has been driven to distressingly new depths".
The new head of Ofsted has warned that schools are facing the worst ever shortage of teachers. The chairman of the Police Federation described police morale as being at an all-time low. The Chancellor must explain why, this year, he is now only managing to spend half the increase in Government investment that he was planning to spend just six months ago.
The Chancellor made great play of the Wanless report which, of course, we shall study carefully. However, he must have forgotten the terms of reference that he set Lord Wanless—I am sorry, I mean Mr. Wanless—which asked him to consider a health service that was exclusively publicly funded. It should not surprise anyone that Mr. Wanless came up with the answer that the Chancellor wanted him to find; that a publicly funded service would be better. If you ask a Labour question, you get a Labour answer.
Twelve days ago, the Chancellor said that the
"central economic theme of our Pre-Budget Report will be our support for enterprise".
We have heard all that before. Year after year, we have had promises from the Chancellor. In his 1997 Budget, he said:
"This Government will support the small businesses of Britain."—[Hansard, 2 July 1997; Vol. 297, c. 307.]
In 1998, he said that his measures would reward
"enterprise and entrepreneurship throughout the whole economy."—[Hansard, 17 March 1998; Vol. 308, c. 1097.]
Two years ago, he said that his Budget would encourage
"a dynamic Britain of enterprise and fairness".—-[Hansard, 9 March 1999; Vol. 327, c. 173.]
Last year, he again promised to "reward enterprise and entrepreneurship" and earlier this year, he said that his Budget would "boost enterprise".
What is the result of all that so-called support for enterprise and business? As a result of the Chancellor's Budgets, the director general of the Confederation of British Industry now says:
"The reputation of the UK as a low tax economy where overseas investors . . . want to invest is under serious threat".
As a result of the Chancellor's Budgets, the British Chambers of Commerce now says:
"The bottom line is that the sheer quantity of red tape on business is damaging our economy, stifling enterprise, job creation and economic growth."
Every year the Chancellor makes promises, and every year he breaks them.
Of course, we welcome any measures to help business, and we will look carefully at the details of what the Chancellor has announced today. However, under his stewardship of the economy, Britain has fallen from ninth to l9th in the world competitiveness league. Is that not the real impediment to new job creation? Is it not the case that 3,865 new regulations were introduced last year alone, the highest figure on record? Why did a survey of 4,000 firms across Europe just last week say that companies run into more problems trading with the UK than anywhere else? Is not that alone a damning indictment of the Government's record? Is it any wonder that the last quarter saw the sharpest fall in manufacturing investment since the 1970s?
Is it any wonder that the burden on business is growing, when the Secretary of State for Trade and Industry says that her Department suffers from lack of focus, confusion for the customer, too many schemes, and inadequate leadership within the Department and by the Department across Whitehall? What a kick in the face for the Secretary of State for Transport, Local Government and the Regions, the Secretary of State for Environment, Food and Rural Affairs and Mr. Mandelson, all of whom held the post of Secretary of State for Trade and Industry in the last Parliament.
Nothing that the Chancellor has said today goes anywhere near addressing the £10 billion a year burden of extra taxes and red tape that he has imposed on business. What about the benchmarks of success that he set up? He is always making promises about productivity. Year after year, we have had promises from him. In his first pre-Budget report four years ago, he said:
"The first challenge is to increase our productivity."—[Hansard, 25 November 1997; Vol. 301, c. 773.]
In his second report a year later, he said that productivity was
"a fundamental yardstick of economic performance", and that he would
"set in place measures to improve productivity"—[Hansard, 3 November 1998; Vol. 318, c. 681.]
Two years ago the right hon. Gentleman said:
"Britain can now aspire to a new economic ambition for the next decade: a faster rise in productivity than our main competitors"—[Hansard, 9 November 1999; Vol. 337, c. 883.]
Last year he said that Britain had
"the opportunity to achieve high levels of productivity growth"—[Hansard, 8 November 2000; Vol. 356, c. 315.]
All the while, as the Chancellor has been making such statements, Britain's productivity growth has been falling. It has fallen from 2.2 per cent. in the last four years of the Conservative Government to 1.5 per cent. in the first four years of the Labour Government. Under the Conservatives, we had productivity growth above the G7 and Organisation for Economic Co-operation and Development average; under Labour, it has been below the G7 and OECD average. On productivity as well, every year the Chancellor makes promises and every year he breaks them.
Let us look at the growth figures—the Chancellor was rather proud of those. He pointed to UK growth in comparison with the rest of the G7. I very much hope that we will grow more quickly than our competitors, but if that is to be the Chancellor's new indicator of success, he cannot take one year alone. Why has he not mentioned the fact that in the first four years of the Labour Government, the United Kingdom economy grew at a slower rate than that of our competitors, slower than that of the G7, slower than that of the OECD, and slower than the United Kingdom economy itself in the last four years of the Conservative Government?
One of the many problems that the Chancellor faces is the extent to which he has to clear up the mess that he has made. He suggested that he would improve capital gains tax, but who introduced the current complicated structure in the first place? It was the Chancellor himself. He says that payroll services for small firms are to be made more effective and less costly. We all welcome that, but who introduced the additional burdens on small business payrolls in the first place? It was the Chancellor himself, asking them to administer schemes such as the working families tax credit and stakeholder pensions.
Of course, some of the other measures that the Chancellor outlined today are welcome. We welcome the extra spending for the armed forces and the security services, and the measures that he proposed to help alleviate world poverty. He gave more details of his pension credit, but he did not say much about the employment credit and the integrated child credit. I hope that he will tell us in his reply how much those will cost and how he proposes to pay for them. I hope that the right hon. Gentleman will spell out clearly how he intends to pay for Government spending after 2003–04. After his prevarication during the general election campaign, will he now tell us whether he intends to increase national insurance contributions?
We welcome the increase announced today in the retirement pension and the winter fuel payment, but what about tomorrow's pensioners, cruelly hit by the Chancellor's pensions tax? When he first introduced it in July 1997, he tried to justify it by saying that pension funds were in surplus and companies were enjoying pension holidays. He has helped to destroy the surpluses and put an end to the holidays. How does he now justify his savage attack on pensions?
Last week we challenged the Chancellor to deliver a pre-Budget report with a difference. We said that it was time to acknowledge the serious causes of concern about the UK economy, and the burdens that he has imposed on British business. We said that it was time for the Government to act on the state of crisis in our public services. He has failed those challenges.
The burdens on business remain. Public services will continue to get worse, to the growing distress of patients, passengers and parents. It is not only patients on the waiting list; it is not only passengers and parents on the waiting list; the whole nation is now on the waiting list—waiting in vain for the Government to deliver on their promises.