Finance Bill

My Lords, there is at least one joy in summing up for the Opposition in a debate that has ranged so widely over such an important issue, and that is to congratulate our two maiden speakers, the noble Lord, Lord Spicer, and the noble Baroness, Lady Browning, on their contributions. I noticed that on this occasion they both eschewed controversy and therefore must feel left out of a great dimension of this debate. However, we know that they will bring their experience of the other place to bear in future debates on these and other issues, and we welcome them to this House. It is a somewhat invidious role to sum up for the Opposition when everything that can be said and presented as a challenge to the Government has been done so ably from the Benches behind me. However, I want to identify one or two points, which I hope the Minister will address. I noticed from his opening statement that he covered with great thoroughness a good deal of what was in the Budget, and I have no doubt at all that he will address the specific points that his noble friends Lord Northbrook, Lord Blackwell, Lord Higgins and Lord Bates put to him. After all, they have given their full support to his Budget, so he owes them a response to their particular points. I am rather more interested in the narrowness of the presentation that the Minister brought to the Budget, and I want a context. It is from our side—the Benches behind me, and exceptionally from the Cross Benches—that we have had a presentation of the context in which this Budget needs to be placed. First, I shall respond to the noble Lord, Lord Razzall, the only Liberal Democrat who has contributed to this debate from his lonely eminence. I recognise that there was bound to be a parting shot at VAT and the position of the shadow Chancellor and former Chancellor, Alistair Darling, to cover up the obvious continued embarrassment in the Liberal Democrat ranks at that great poster in which their leader condemned VAT as the unfair, regressive tax that a Conservative Government would bring in if elected. However, the noble Lord, Lord Razzall, was a little more constructive than that. He emphasised that we needed context for this Budget. In particular, he referred to process and the rate at which cuts should be introduced. Some cuts are necessary—no one on this side of the House will deny that—but the extent and pace at which they will be introduced worried the noble Lord, Lord Razzall, and by heavens, they worry a great number of distinguished contributors to the debate. The noble Lord, Lord Stern, raised the issue in the broader context. How can the Minister persist in this position, as the Government continually do, of addressing the economic problem as just a UK issue? It palpably is not just a UK issue. Debt plagues all the significant economies in the world, as the noble Lord, Lord Stern, identified in his thoughtful contribution. What is more, because debt plagues these countries, the Government have to address themselves to that issue as well. If they are to put all their trust in the private sector and insist that manufacture and services delivered by the private sector will bring the United Kingdom rapidly out of the difficulties that we are in, we want to know in which markets we will flourish. Have the Government not recognised that the German economy is in difficulties, and so too the United States economy? Indeed, the United States is pursuing a strategy that is very different from that of our Government. If there is one ray of hope in the present position, it is that there may be some engine of demand from the United States, which may bring benefits to Europe and the United Kingdom to give us a chance but not because of the Government’s philosophy on this matter. My noble friend Lord Myners is absolutely right. This is not just a question of identifying a problem and applying a possible solution; it is an opportunity for the Conservative Party, which it is seeking to seize with both hands. It gives the party the chance to elevate the nebulous concept of the big society and to seek to decimate the contribution of the public sector. That is what these cuts are really about. Of course, the noble Lord, Lord Ryder, is absolutely right when he says that the Budget is merely an hors d’oeuvre. It may be hard to swallow, but think of the digestion we have to produce when the comprehensive spending review is revealed in the autumn. That is the ghastly feast that will be laid before the nation, and it will lead to exactly the anxieties that the noble Lord, Lord Stern, first articulated and which were brilliantly developed by the noble Lord, Lord Skidelsky, with all his understanding of these issues. As the noble Lord, Lord Skidelsky, rightly said, the challenge is not the deficit; the challenge is the problem in the economy. Of course, cuts have their role to play, but investment and building up our capacity is of equal, if not greater, importance. We cannot trust a Government to invest who are, on ideological grounds, hell-bent on reducing the role of the state. The only professional economist, the noble Lord, Lord Desai—I think the noble Lord, Lord Skidelsky, probably rates himself as a professional economic historian, but if he wants to be included with my noble friend Lord Desai in this nomenclature, I am quite happy to include him—indicated that cuts are necessary but also indicated that, in fact, they will not have the immediate impact that could otherwise bring disaster upon the British economy. Are we to rely upon inadvertency or inefficiency by the Government, or a bad selection of targets, for a delay in the savage proposals they have for the cuts? It will not do. My noble friends Lord McFall and Lord Rosser and other noble friends set out to establish the context in which this Budget is being presented to the British people. It is not a Budget that will solve the problems. It will certainly address itself to aspects of the deficit. None of us is against addressing aspects of the deficit, but that one should put as the sole priority the speed with which one can reduce that deficit is to rate the real economy lowly and to rate the concern of the noble Lord, Lord Bates—the irrationality of the markets—as the only driving force of government policy. If that is the only driving force, we do not need a Government, but we do need a Minister to respond to the challenges of this debate.