Budget Resolutions and Economic Situation

I smile at what the hon. Gentleman has said, because I really could not see my right hon. Friend lining up with those who wish to relive clause IV. I think that he was saying that there was a time and a place for rebuilding their value, but also a time and a place for their ultimate disposal, whereas the hon. Member for Elmet may have been thinking on a more long-term basis—well, perhaps for ever—as regards retaining those assets in state ownership. It is obvious from the brief messages that I have managed to garner about how the Budget is seen outwith this House that bodies such as the CBI and the Institute for Fiscal Studies are raising questions over its assumptions about growth and reductions in public expenditure. The Budget may have painted part of the picture, but it is a bit like painting pictures by numbers when some of the numbers are missing. We do not know precisely what the colours will be, or what the final form of the economy will look like in years to come, because the Chancellor neatly skated over that point of detail. It was interesting to hear the Chancellor's analysis when he was talking about the efficiency savings that had been made and the reductions in public expenditure that would result. As soon as he got past where we are now, there was no detail about the future. It was interesting to see the rate of the pound against the euro, for example, within minutes of his sitting down; there had effectively been no change. As far as I can see, there has been no outbreak of improved confidence in the current Government's management of the economy. If we are realistic, we have to say that until we have had our general election and the mist of political battle has cleared from the field, when whoever wins can say with certainty what their policies for the future will be, the markets, which have a fundamental role to play in enabling us to fund ourselves out of recession, will still say that the jury is out, and there will still be large question marks against the value of the economy. Like the Financial Secretary to the Treasury, I have sat on the Government Benches through a few Budgets, and I believe that the first thing any Treasury Minister asks himself is, "How did it go down?" I thought it was interesting that there was a subdued response from the Labour Benches. Sometimes in the past that has been said to be a good sign, because when there is too much cheering the Government can find that they have bitten off too much, only to discover that like a large meal, the cheering rapidly dissipates at the end of the debate. However, just at the end, the Chancellor announced that he had got three effective double taxation and income tax information agreements, one of which was with Belize. There was stunning cheering, and I wonder how that is going to play on the doorstep. The elector will look at the hapless Labour canvasser and ask, "Why did you cheer so loudly about Belize, when I am worried about the factories down the road, jobs for my young people and the tax bill I am going to have to pay? Should you not have been talking about those issues, instead of cheering the fact that Belize will be able to exchange information once inquiries about individuals are put in train?" It may be of some interest, but it is an absolute irrelevance to the needs of this country's economy. Yet that was what Labour Members cheered when the Chancellor came to the conclusion of his Budget. There were no economic rabbits to be pulled out of the hat. In fact, I felt that the Chancellor had been involved in either some kind of fantasy economic activity, or the economics of the ostrich. Not looking to the future and telling us what was in the forthcoming attractions column was a damaging way to present a Budget. It was interesting that there was a lot of discussion in the Budget about help for businesses. I do not believe anybody in the House would disagree with the concept of helping small and medium-sized enterprises in particular that have suffered, especially in their ability to raise money. Yet while the Chancellor stood at the Dispatch Box with what he said was a positive message, we have learned that the budget of the Department for Business, Innovation and Skills is going to be cut by in excess of £400 million. That makes one wonder where the funding will come from for some of the schemes to help business that the Chancellor outlined. I will be interested to see that matter digested in the newspapers tomorrow, and to see whether they have found out how that trick will be pulled. There is sometimes a danger—I suppose that I am going to fall into this trap—that we talk about what we have heard in the Chamber and provide our own analysis without remembering that the messages about the economy affect everybody in this country. Judging by the interviews that I have seen on television and listened to on the radio, I believe that the public are further down the road than we sometimes wish to admit to ourselves. They recognise the severity of the economic situation that the country faces, and I should think every household in the country has had its own conversation around the breakfast table about what the unemployment situation in its part of the world will be and when the tax axe will fall. People realise that, whatever anybody says, there is a bill to be paid, and it is quite clear from what the IFS has said about the Budget that, however much we might get upset about "cuts", the economic squeeze on public spending is coming. The Chancellor has said that it is coming; there are only two things that public spending goes on—capital and people. I am afraid that, hard as it is, both will be affected by any reduction in the public sector. I shall pick up on the point that the hon. Member for Elmet made. Public sector employment has been growing, and recent figures confirm that it has even grown in the past few months, but if, as a result of improving the operating efficiency of the economy, the job-creating ability of the private sector improves, there will be a transfer of people into private sector jobs, which may be secure and well paid, as the economy restructures. To suggest that "squeezing", "cutting" or—whatever word one chooses to use—reducing public expenditure means that someone will be without work for ever and a day is to create a false impression. We all want a vibrant economy, but reallocating resources from public to private is a good idea, because the private sector may well create better jobs for individuals in the long term. Indeed, the economy will have to face such restructuring if we are to make progress. It is always correct for a Member to declare their interests at the beginning of their contribution, so I apologise to the House for the slight delay. I am a non-executive director of a retail company called Topps Tiles. We are Britain's largest seller of tiles and wood flooring. [Interruption.] With declarations, people sometimes look quizzically and ask, "What is actually being declared?" However, it has been very interesting to sit on the board of a retail company and watch not only what happened during the recession, but where we are going now. I talk generally, not specifically about my company, but in the run-up to Christmas people could see that VAT would rise in January and there were some really good bargains to be had. They were going to make certain that what money they had to spend was spent as wisely as possible. So expenditure was therefore pulled forward from 2010 to 2009, and for the Chancellor to stand at the Dispatch Box and signal the increase in revenues that resulted from that pulling forward of consumer expenditure as the dawn of some great new era just flies in the face of hard reality. One has only to read the statement that Carpetright, which is at the front end of economic spending on the home, issued the day before yesterday to see how difficult the marketplace has become. Until the uncertainty of the general election is out of the way and more certainty is created about the future, consumers will be in very strong precautionary mode. People protect their summer holidays and Christmas, and they will think very hard indeed about spending. If consumption is level-pegging throughout the year, as I believe it will be, consumption-led growth will be difficult to achieve. That is why I query the Chancellor's growth figures—justified, he said, by the Bank of England. He is right to revise down his growth forecasts for the next financial year, but he says that, effectively, the economy could grow at 1 per cent. above trend. Consumption, however, is under considerable pressure; investment in the private sector, as the hon. Member for Elmet pointed out, has been under enormous pressure—and as the Opposition have said so many times, there have been difficulties with raising capital from the banks for that investment. That problem has still not gone away, so it is not immediately evident to me where that growth will come from.