We need your support to keep TheyWorkForYou running and make sure people across the UK can continue to hold their elected representatives to account.

Donate to our crowdfunder

Orders of the Day — Finance Bill

Part of the debate – in the House of Commons at 2:20 pm on 20th April 2004.

Alert me about debates like this

Photo of Mr Paul Boateng Mr Paul Boateng Chief Secretary, HM Treasury, The Chief Secretary to the Treasury 2:20 pm, 20th April 2004

I beg to move, That the Bill be now read a Second time.

The 2004 Budget set out the next steps of the Government's economic policy making by outlining what we would do to lock the hard-won progress that we have made into this country's economic stability and growth so that it endures, and to equip the country with the means with which to compete in a global knowledge-based economy. The Government have examined the challenges and pressures that face the nation now and will do so in future, and we are determined to take the right steps to meet those challenges.

We are here today for the Second Reading of the Finance Bill and, as I look around the Chamber, I see the cast assembling for the many long hours of debate that lie ahead, under the leadership of my right hon. Friend the Paymaster General. I know that those of us who are graduates of previous Finance Bills feel a sense of anticipation regarding the struggle that is to come.

The Bill reflects the determination on the part of the Government to introduce the measures that will implement the next stage of our economic policy—a policy that has been and continues to be characterised by stability—enterprise fairness. In so doing, the modernisation of the tax system and the protection of tax revenues go hand in hand with greater investment in public services and improvements in efficiency. Together, they will lock in the stability that this country has enjoyed during the seven years of the Labour Government's stewardship of the economy.

Our proven macro-economic policies and the tough fiscal decisions that we have taken have already provided us with a sound economic foundation on which to base our policies. The United Kingdom is enjoying the lowest inflation for 30 years, the lowest interest rates since 1955, and the lowest unemployment for a generation. While America, Germany, France, Japan and much of Asia have suffered recessions, the British economy has grown uninterrupted since 1997—over 46 consecutive quarters. On that foundation, we shall continue to build an enterprising and knowledge-based culture. In doing so, we shall work to ensure fairness in the tax system and throughout our society, and to strike a balance between economic growth and environmental protection.

Compare and contrast that record—our policy, our programme—with that of the Conservatives. They ruined the economy in the 1990s. Their record shows why they can never again be trusted with the economy and why our hard-won economic stability cannot be taken for granted. Their extremist policies do not add up, they would require massive cuts in vital public services, and they show why no one can afford to believe the Conservatives, now or in future. Not only have they failed to learn from their mistakes—[Laughter]—but their new policies are more extreme than before. Underpinning their smiling and laughing faces is hard-nosed, hard-faced extremism. [Hon. Members: "Oh!"]

I hear a certain amount of incredulity from Conservative Members. It is good to see Mr. Flight. When he assumes his place, we know that it is that time of year: he has been let out and will be set loose on the Finance Bill. Well, good—Government Members welcome that, because we have some questions for him. We want to ask him about the newsletter that he sent to the Conservative City Circle—an interesting body, which receives newsletters from him from time to time. Whenever the Conservative party wishes to disown the hon. Gentleman, it glosses over the fact that he is the shadow Chief Secretary and refers to him as the party's "City expert". Well, the Conservatives' "City expert" has been writing to the Conservative City Circle, and in his letter he states:

"Our medium term expenditure strategy . . . calls for real reductions in areas other than Health, Education, Pensions and Welfare".

We hope that in the course of the hon. Gentleman's address to the House this afternoon, he will explain where the cuts are to fall.

The Conservatives have apparently identified some £18 billion in cuts to be made immediately. The shadow Defence Secretary said of the cuts:

"It is outrageous. You cannot possibly go into an election with this pledge."

The shadow International Development Secretary said:

"If we are to be taken seriously as a party of government which cares about the most vulnerable people on the planet, there has to be a public spending commitment."

Because the cuts must fall on the police and security services as well, the shadow homeland security Secretary has—according to The Sunday Telegraph, a journal of record if ever there was one on matters concerning the Conservative party—

"protested that the cuts, if implemented, would badly damage their future departments."

The shadow Home Secretary has

"asked for reassurance that the freeze would not lead to cuts in police numbers."