Budget Resolutions and Economic Situation

Part of the debate – in the House of Commons at 1:47 pm on 11 April 2003.

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Photo of Desmond Swayne Desmond Swayne Opposition Whip (Commons) 1:47, 11 April 2003

The sketch writer for the Daily Mail characterised my gait during the Chancellor's speech as being so rigid as to resemble that of someone who had recently been rescued from a vat of starch. I have seldom been criticised for sitting up straight; my mother normally criticises me for slouching. The explanation for my peculiar gait—the reason why I was sitting so rigidly upright—is that I was making a desperate attempt to remain awake. The Chancellor spoke for an hour or thereabouts, but he did not take us through the important detail in the Red Book. He spent his time discoursing on what might reasonably have been released as a series of what we used to call planted questions, but which now go by another name.

One matter of substance that the Chancellor did dwell on, and which is generally true, is how well placed we are compared with our European partners in terms of any downturn. In many respects, he is right. We are much better off than France and Germany, in that they are over-taxed and over-regulated. However, the difficulty with which the Chancellor must wrestle is that by degrees, he is making our economy more, rather than less, like theirs. So as we proceed, we will be less advantaged.

I shall now dwell on some of the detail in the Red Book that the Chancellor avoided. It stretches credulity to the limit to believe that the Chancellor expects to be rescued next year by economic growth of some 3 per cent. I know of no independent analyst who takes such a forecast seriously. That will mean an increasingly big hole, and being rescued by growth is a diminishing prospect. If we examine the economy, we see that it is the unproductive, wealth-consuming sector that is growing. All the advertisements of vacancies in the newspapers are, by and large, in the public sector. As economic growth proceeds, the generation of tax receipts will not grow with it as it has in the past, because the entire economy is skewed by public sector growth, perhaps at the expense of the private sector. Certainly in my part of the world—the south—retail is already in recession. We have known for some time that manufacturing has been in recession, so I do not accept the recipe that growth will rescue us.