Finance Bill

The measures in the Bill and the emergency Budget in general have been called many things. The Chancellor has described them as ““tough but fair””, the Prime Minister has described them as ““open”” and ““responsible”” and the Exchequer Secretary, who is no longer in his place, has referred to the comments of the Chief Secretary on the Bill's Second Reading. The four characteristics that the Chief Secretary chose to attribute to the Bill and the emergency Budget were ““fair””, ““business-friendly””, ““responsible”” and ““unavoidable””. I shall address each of those in turn and relatively quickly as I understand that others wish to speak. First, however, I want to consider the premise on which the Bill is being marketed to us. According to the coalition, the Bill addresses the need to reduce the deficit that was caused by profligacy of the previous Government. In Committee, the right hon. Member for Wokingham (Mr Redwood) said that ““we are where we are because of the utter mess bequeathed to us by Labour in the last Government””. It seems that reference to this supposed mess has become mandatory in all interventions by Cabinet Ministers and Members on the Government side for the duration of the Bill's passage through the House. In the coalition's view, the credit crunch is but a minor detail when studying the public sector debt: the liquidity crisis that took hold of financial markets from August 2007 is just a blip; central banks having to step in to provide extra liquidity from there on is a minor detail; and the collapse of Lehman Brothers in September 2008 is insignificant. In adopting that stance, they utterly fail, as my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne) has pointed out, to acknowledge the huge role that the international banking crisis played in relation to the state of the public finances and our economy at large.