The Economy — 4 Nov 1998

I beg to move,

That this House notes that there is now a black hole in the public finances; that the increased burdens on business since the General Election now account for £1,500 more per employee; that the UK will be the first major European economy to suffer a serious downturn and the worst affected; further notes that the Government is squandering the last Government's golden economic legacy by its four basic blunders of increased taxes, attacks on savings, particularly pensions, excessive regulation of business and irresponsible public spending; and deplores the Government's complacent attitude to the handling of the economy and public finances.

I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:

"notes that the Government inherited an economy set to repeat the same cycle of boom and bust seen over the past 20 years, that inflation was heading way above target because of the previous Government's failure to accept the Bank of England's advice and the public finances were in large structural deficit; recalls that under the previous Government inflation rose to 10 per cent, interest rates remained in double figures for four years and one million manufacturing jobs were lost, while net borrowing increased to £50 billion and the national debt doubled in just four years; notes that the previous Government's policies increased inequality and failed to tackle the structural weaknesses in the economy; commends this Government for its decisive action to build a stable economy, introducing a new framework for monetary policy under which inflation is now at target and set to remain there and interest rates are less than half their previous peak, reducing government borrowing by £20 billion last year and, because of prudent management of the public finances, remaining on track to meet its tough fiscal rules and invest an additional £40 billion in education and health, with an extra £250 million for the National Health Service this year, addressing structural weaknesses by tackling unemployment and poverty with the New Deals and tax and benefit reform, supporting British business by cutting corporation tax, doubling public investment to improve Britain's infrastructure and addressing Britain's productivity gap; and notes that there are now 400,000 more people in employment than at the General Election and that Britain is better placed to steer a course of stability in an uncertain and unstable world.".

My forecast for 1999 of 1 to 1½ per cent. growth in our economy will see Britain steering a stable course, even when one quarter of the world is in recession."--[ Official Report , 3 November 1998; Vol. 318, c. 682.]

Question put, That the original words stand part of the Question:--

The House divided: Ayes 135, Noes 303.

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