Budget Resolutions and Economic Situation

I am grateful to be called so early in the debate, and to follow the right hon. Member for Hitchin and Harpenden (Mr. Lilley). He was talking about the imbalance between services and manufacturing in our economy, which developed over many years. In fact, I believe it has developed over about 30 years. We must not underrate what manufacturing industry does for our country, employing about 2.6 million people in the UK. In 2007 it accounted for 12.5 per cent., or £154.9 billion, of our national economic output. I was very pleased to hear from the Chancellor today about a number of measures to help our industry and to help the small and medium-sized business sector. I think that even the right hon. Member for Hitchin and Harpenden would agree that we are living, and have lived, through a worldwide recession. Although it is perfectly normal and natural for him to blame that on the Government, all Governments in the industrialised western world of whatever colour or political persuasion followed the same route. That applies to Germany, France, Spain, Italy and any other such country. It was the only route to save the nation. Everyone knows that. The Leader of the Opposition talked about the worst recession since 1945. He had to be reminded, as he was by the Chancellor, that the recession did not become a depression. When we talk about unemployment, we recall all the forecasts and statistics suggesting that it would rise to 3 million, but that never happened. The measures that we took to reach the economic situation today have kept this nation on an even keel. The right hon. Member for Hitchin and Harpenden made a fuss about the debt standing at £167 billion. The Chancellor said, however, that revenues from Her Majesty's Revenue and Customs have brought it down to £163 billion. It is very high; we accept that. It is, to use a phrase used by a Conservative Chancellor in another context, a "price well worth paying" to save the nation from what would have been a very serious depression. The right hon. Gentleman also mentioned cutting public expenditure. We fully understand that this is a basic element of Conservative policy. Margaret Thatcher—now Lady Thatcher—did precisely that in 1979: she reduced public expenditure and she reduced the public services. The right hon. Gentleman needs to explain to me how he can cut public expenditure without cutting services. Of course, he draws a distinction in respect of front-line services, but the fact is that the Conservative party policy is to cut public expenditure and to balance the books. We understand that; it is the philosophy that Conservatives have. If we really want to understand Conservative party philosophy, we can look across to the United States and the Republican party, which has fought tooth and nail to prevent a national health service of some description from taking its place in their country and economy. That is a remarkable fact; it is what the Republican party stands for. In our country, it is the Conservative party that stands for balancing the books. The phrase is often used; it is perfectly normal and natural, but it is also a policy, and it will have consequences. I agree with the right hon. Gentleman when he says that his party will not go down the route of the savage cuts suggested by the Liberal party—the £15 billion-worth of cuts they have promised us if they were in government, which would have an extraordinary impact on the British economy.