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Orders of the Day — Finance Bill

Part of the debate – in the House of Commons at 5:24 pm on 20th April 2004.

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Photo of Mr Calum MacDonald Mr Calum MacDonald Labour, Na h-Eileanan an Iar 5:24 pm, 20th April 2004

Not necessarily, because the PFI debt remains small compared with overall Government spending and Government capital investment. However, the general point that we cannot ignore PFI debt as an obligation on Government finances is correct. In the past, there has been a temptation to move things off balance sheet to make the figures look better; all Governments should resist that temptation.

The hon. Member for Yeovil pointed out that the Liberal Democrats advocated a much greater spending increase in 1997. I suspect that, had we followed their advice and boosted public spending when we first came into office, we would have fallen into the same trap that every previous Government fell into. We would have exaggerated both the boom in the economic cycle and the consequent slowdown and bust, which would have caused great harm to the economy, disrupted the stability that we managed to achieve and harmed the living standards of our constituents.

Rather than the disaster decried by the hon. Member for Grantham and Stamford, the Government's fiscal policy has been one of the building blocks of the economic success and stability that they have achieved. The Government are rightly given credit for their early decision to give the Bank of England operational independence. That, too, has been an important building block, as hon. Members on both sides of the House acknowledge, but our fiscal policy has been just as important to our success in managing the economy. The Red Book indicates that we shall continue to follow that policy, which is precisely why the Government are planning for a slowdown in the rate of growth in Government spending, other than in key areas such as health and education.

To answer Adam Price, who asked whether the benefit of the successful economic regime pursued by the Government has been spread evenly throughout the country, I dare say that it has not been. However, I am certain that all parts of the country have benefited. I know that my constituency has. When I was first elected to Parliament in 1987, the unemployment rate in Western Isles was more than 20 per cent. As recently as 1997, when the national economy was doing well, it was still in double figures. We all remember how in the 1980s and early 1990s it was regarded as a given that mass unemployment was a feature of our modern economy. In the late 1980s, I would go to local meetings and discuss such things. Everyone accepted that mass unemployment was here to stay, and the debate was about how to reshape and adjust society to cope with the reality of permanent unemployment. Teachers would say how depressing it was to educate children who would leave school and go straight on to the dole queue. People would come to our surgeries having been made redundant. If they were in their mid-40s to early 50s, they knew and we knew that they were never going to work again. All that has changed profoundly.