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Amendment of the Law

Part of the debate – in the House of Commons at 8:55 pm on 29th March 2010.

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Photo of Greg Hands Greg Hands Shadow Minister (Treasury) 8:55 pm, 29th March 2010

I certainly will, and I thank my hon. Friend for the intervention. I also acknowledge the work of my hon. Friend Bill Wiggin, who made some very strong points about cider at Environment, Food and Rural Affairs questions last Thursday. The voice from across the Conservative party has been unanimous in condemning the rise in duty. We should target strong, mass-produced products that, as they have such a low apple content, are barely cider at all. That is the Conservative approach.

Mr. Caborn also made his final speech. I rather enjoyed our debate on "Newsnight" last Monday about the role of the Unite trade union in taking over the Labour party. I found it interesting at the time that he failed to support the British Airways workers going to their jobs. I was in his constituency on Friday, as he knows-I will come to that in due course-and I have to say that the Federation of Small Businesses in Sheffield takes a very different view of the Budget from the one that he described today.

My right hon. and learned Friend Mr. Ancram made a lovely speech. He reminded us that he has represented three seats. I wonder whether he had the opportunity to make three maiden speeches. It is our loss that he only has the opportunity to make one farewell speech. He appropriately spoke of the responsibility that we all have through the generations, and in this case about the Government's appalling debt crisis and the moral imperative for us to find a solution.

Mr. Hutton is another Labour ex-Minister with whom I enjoyed a debate recently, at the Financial Times election forum. Tonight he gave a thoughtful speech that confirmed the very good reputation that he has had in the House. I agree with him that we are not a post-industrial society. In fact, to return to Sheffield for a moment, I made a very important visit on Friday to ITM Power, which is making zero-carbon, hydrogen-powered cars and was very impressive. The right hon. Gentleman, as is his wont, attacked the Government, in this case for their proposal for a credit adjudicator and the new 50 per cent. tax rate, as he did last year, to be fair to him. We wish him the best and hope that he has a double reason to celebrate on 6 May. Not only is it his birthday, but I believe he will celebrate and cherish the fact that it will be the last day of the current Prime Minister being in office. He was absolutely right when he said that Mr. Brown would be an awful Prime Minister.

My right hon. Friend Mr. Curry, who is also retiring, made an elegant speech, which covered many broad intergenerational themes, including our role in the world. Mr. Clelland is standing down too, and he called the Budget "unexciting". Perhaps he meant it as a compliment, but, as a do-nothing Budget, it is not what the country needs. However, he spoke well in support of our policy on high-speed rail and made some important points about the value of clubs and charges, with reference to amusement machine licence duty.

My hon. Friend Mr. Maples, who is also standing down, spoke appropriately about our responsibility to the next generation on debt. He spoke powerfully about facing up to the implications of debt unless we get a grip on our public finances, and the need to boost business and improve skills in the work force. He made important points about improving ethics in the City.

Alan Simpson mentioned his support for the Tobin tax, which was the Government's position until the Obama Administration told the Prime Minister that it would definitely not go ahead. Instead, the Conservative party is in line with the US Administration in calling for a banking levy on leverage. In my short five years here, I have always found the hon. Gentleman to be a first-class parliamentarian and I wish him all the very best.

Mr. Kennedy made some important points on behalf of his constituents. He talked about his support for Government spending, but left me wondering what he thinks of his successor's pledge to make "savage cuts". Mr. Betts argued for high-tech value-added business in his constituency and praised the green investment bank, which was again a policy that the Conservative party first proposed.

My hon. Friend Mr. Soames made a characteristically powerful speech, describing a disastrous Government. I entirely agree. Laura Moffatt, who is also standing down, gave a characteristically loyalist speech, but I wish her all the best in her future career. David Simpson gave various warnings about what would happen if we did not get policy on the economy right.

My hon. Friend Mr. Spring talked about the noble reasons for his entering politics in the 1970s and his regrets that, thanks to the Government, we seem to have come full circle on many matters. I think he said that history is repeating itself. He rightly attacked the Government's tax on jobs through the big increases in national insurance and highlighted the work of Policy Exchange on the severe negative impact that the tax rise would have on growth. We will miss him greatly. He has been an invaluable help to our shadow Treasury team and I wish him all the very best for the future.

Mr. Willis also gave a final speech. He spoke well of the future of UK science and engineering and the importance of innovation. He said that the Budget provided little cheer. It is unfortunate for him that he will find it difficult to square his rhetoric with his leader's pledge on savage cuts.

I am sure that the contribution of my hon. Friend Mr. Turner will not be a final speech. He spoke well about our moral duty to decrease the debt and said that we cannot leave it to the people who got us into the crisis to get us out. Mr. Drew claimed that he was standing on a different programme for the election from that of the Government, but I feel that his fate will nevertheless probably be the same.

My hon. Friend Mr. Dunne made some important points about growth and the Government's optimism, to which I will revert in due course, and also attacked the deficit and the cynical failure to spell out the consequences of freezing personal allowances and other Labour subterfuges, including the impact on petrol retailers. My hon. Friend Christopher Fraser spoke strongly about the need to take measures to strengthen the family. We wish him all the best in his future career and send best wishes to his wife, too.

I hope that this is not the last occasion on which I will address the House, although it will probably be the last time I speak as the Member for Hammersmith rather than the Member for Fulham. I am proud to have served as the first Conservative Member of Parliament for Hammersmith since 1966, and I greatly hope that Shaun Bailey will succeed me in that part of the constituency. He will be the first Conservative Member of Parliament for Shepherd's Bush since Sir William Bull in 1918, and I shall return to Sir William later.

First, I want to consider gold. When debating the last Labour Budget, we should examine the Labour Government's overall record under the right hon. Member for Kirkcaldy and Cowdenbeath in the past 13 years. I was fascinated by the end-of-the-year investment review of the decade in The Sunday Times, which was published just before Christmas. The review featured the best and worst-performing investments in the past decade-that is, since 2000. It showed that the best-performing asset class was gold, and that the worst-performing shares in the same period were Royal Bank of Scotland shares. Whatever our Prime Minister intends to do after he is given the heave-ho, let us hope that he has no intention of becoming a fund manager. The Prime Minister told last year's Labour party conference that the test of a Government is the quality of their judgment, but on gold and their economic record in general, their judgment has been calamitous.

It is worth dwelling for a moment on the subject of gold, as my hon. Friend the Member for Mid-Sussex did, because the Prime Minister says that he has made the right calls throughout. We have noted that he is resisting freedom of information demands, and many of us know why. In May 1999, he first signalled to the market that he would sell 400 tonnes of gold at a 20-year low in the price. That is never a good time either to telegraph a big sale or to sell, and that became known as the Brown bottom. The Prime Minister sold off Britain's gold for between $256 and $296 an ounce, raising around $3.5 billion. Since that time, the price has almost quadrupled, despite low inflation, and the total loss to the economy is independently reckoned to be a staggering $6 billion. That was the Prime Minister's version of black Wednesday. Unlike 1992, it was not partly driven by the force of circumstance; it was a decision taken by our Prime Minister entirely of his own volition and entirely at his own choice of time.

I mentioned that the Budget has gone down very badly in my constituency, but to get a wider cross-section of views, on Thursday and Friday, I went to Leeds, Morley and Sheffield in Yorkshire. Judging by the mood at the Leeds chamber of commerce and the Sheffield Federation of Small Businesses, the Budget went down very badly there too. The mood in Morley, where the Secretary of State for Children, Schools and Families will be a candidate, was particularly hostile. Our candidate Antony Calvert and I launched our document, "Getting Morley Moving", which went down very well in Morley high street and Morley market.

Of course, the Budget is all about debt. Remarkably, Labour has embarked on a strategy designed deliberately to increase our debt. At Prime Minister's questions in December 2008, at the outset of this crisis, we were told that

"we need debt to rise, we do not resile from that."-[ Hansard, 17 December 2008; Vol. 485, c. 1096.]

As we know, Labour has already doubled the debt and will double it again. Remarkably, in this Budget, the Chancellor presented as a triumph the reduction in the forecast borrowing from £178 billion to £167 billion. At that point, he rather reminded me of a football manager who praises the quality of his team's consolation goal after they receive a 5-1 drubbing.

As various of my hon. Friends have pointed out, the amount of debt this year-£167 billion-is more than the Treasury raises in income tax. Borrowing is almost £500 million a day, and in the 15 minutes of my speech, the Government will have borrowed another £4 million, which is more than most people could ever dream of earning in their lifetime. As important as the new debt is the amount that we are paying as a country in interest on existing debt, which someone mentioned. This year, at £43 billion, debt interest will overtake the defence budget, and next year it will overtake the schools budget.

The figures on debt interest are grim, but the main risks-remarkably-are on the downside. There are two main risks. First, there is an assumption that interest rates will remain low. Most figures for debt interest in 2014 assume an average interest rate on that debt of 4.4 per cent. I hope that interest rates will remain low, and that is a big priority for an incoming Conservative Government, but clearly, the risk is that interest's rates might rise, not fall. Secondly, there is an assumption that growth will be strong. As my hon. Friend the Member for Ludlow pointed out, despite a small downgrade in the growth forecast in 2011, the Government are still forecasting growth of between 3 and 3.5 per cent., but independent forecasts are for 2.1 per cent. The Treasury forecasts growth rates of 3.25 to 3.75 per cent. in all years thereafter, but again, the risk is that we will undershoot that-there is not much chance that we will overshoot it. Lower growth feeds through to a bigger deficit, which in turn leads to more debt interest. We have to take urgent action to prevent this perfect storm of high debt, high interest payments, downwards pressure on our currency, low growth and static or worsening employment from happening.

On Thursday, The Sun said that this Budget and the Chancellor could be summed up in four words, "spend now, pay later"-only he is spending now, and you will pay later. Budget day was a real throwback to the 1970s, not just with the size of the borrowing and a Government seemingly crying, "Crisis, what crisis?", but with picket lines outside the Treasury and this very Parliament. There is better news for the country-I can report a return tonight to double digit poll leads for the Conservatives, just as happened in 1979.

I conclude by returning to the subject of my predecessor as Member of Parliament for Hammersmith, Sir William Bull. He was once suspended from the House for calling the Prime Minister a traitor. I do not intend to make the same comment today, but I will say that with the Government borrowing £500 million a day-and borrowing more this year and next than all other Governments in history combined-and given how Labour has run the whole economy into the ground, it is the whole Government who have betrayed our country.

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