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 4:46 pm on 20th April 2004.

Alert me about debates like this

Photo of Quentin Davies Quentin Davies Conservative, Grantham and Stamford 4:46 pm, 20th April 2004

I was about to do so. The hon. Gentleman should exercise a little patience. I intend to be very specific. I do not need to go into all the political rhetoric, some of which I have already referred to; what is important is the presence of omissions—lacunae—and one instance of quite egregious distortion of the facts, or confusion about reality, which certainly should not appear in a document of this kind. I should have thought that the hon. Gentleman would agree with me about that striking omission.

There is nothing about aggregate savings in the economy. It is impossible to know what portion of our gross domestic product we are collectively saving. What we can learn about is the extent of the Government's "dis-saving"—their negative contribution—because the figures for their borrowing, or fiscal deficit, are in the document. There is also something about the rate of saving as a proportion of disposable income, the so-called savings ratio, but we are not told what the level of disposable income is. There is a numerator with no denominator. Nothing in the document tells us what household savings amount to. Nor is there anything about the corporate sector: it is possible to read the whole document without knowing whether it is a net saver or a net borrower.

How is it possible to have an intelligent discussion about fiscal policy and Government borrowing without knowing what are the counterparts of that borrowing? Who are the lenders, and who are the savers? The Government are borrowing—we know that—but who are the potential lenders? Is the private sector a lender? The savings ratio is clearly very low: the household sector is saving on a net basis. I shall say how low it is in a moment. The corporate sector we simply do not know about. If we want to find out about the fourth relevant variable, the balance of payments on the current account—the extent to which we are importing capital—we discover that the figures are presented in an extraordinarily confused, confusing and potentially misleading fashion.

There should be a figure for aggregate savings, and clear flow of funds charts showing the position of the household sector, the corporate sector and the Government. I hope that someone is listening, and will ensure that that is done next year.

There are no historical indices for savings. As the current savings figure is not mentioned, I suppose it is not surprising that there is nothing about past savings. Nor are there any historical comparisons relating to the savings ratio, although a figure of around 5 per cent. is given for the current household savings ratio on page 232. I am glad to see that Mr. Beard is following the book conscientiously. Again, therefore, anyone reading this document will be completely unaware that less than 10 years ago—seven or eight years ago—the household savings ratio was double that rate at 10 per cent., which was probably the average for the previous 40 or so years. To present the current savings ratio with no sense of whether it is increasing or falling, or of how it relates to the historical trend, is an extraordinary state of affairs, and does not give a clear picture of the position to the public, for whom the document is, I imagine, designed; certainly, the public will have paid for this document.

There is also no figure for household debt. If the Paymaster General would like to intervene on me and tell me that I have missed something—admittedly, it is a long document—of course I will give way to her. I could not find any figure for household debt at all. On page 232, it says that the level of household debt in January this year has increased by 13 per cent., in relation to January 2003. Just giving the percentage increase without the underlying level does not help us much, however. One must wonder why the household debt figure is concealed in this fashion. Why is such a selective percentage increase figure given without the underlying aggregate being revealed? The only possible reason is that it is extremely embarrassing to the Government. That goes to the heart of the integrity of the document and the extent to which it is either a vulgar piece of political propaganda or a piece of professionally presented disinterested information, delivered by Her Majesty's Treasury to the great British public.

Another matter of great concern is business investment, which we discuss a great deal in this place, and which is always an important part of the national accounts. In any presentation of the national accounts in any other country, I am certain that we would see a figure for business investment. The only way that we can work out business investment from this document is to look at the graph on page 235. If the hon. Member for Bexleyheath and Crayford follows that graph, he can then try to read off business investment. By the way, he will see that it has fallen by about 20 per cent. over the last seven or eight years as a proportion of GDP. There is no absolute figure, but we can, if we want to take a long time, work out roughly the absolute figure, because there are GDP figures elsewhere in the document. When we work out that figure, we find something that is unfavourable to the Government, and a negative part of their record, but it has been concealed by the spin doctoring of the document, which, I repeat, is highly regrettable.