The Budget reaction speech by Conservative Leader Iain Duncan Smith
On behalf of the whole House, I congratulate the Chancellor on his happy announcement last weekend. I can assure him . children are a great blessing.
Mr Deputy Speaker, over the past six years we have come to learn that the Chancellor's Budget speeches are characterised as much by what they conceal as what they disclose.
He prefers to let the damaging detail, the fine print, leak out over the days and weeks that follow.
Today, nonetheless, despite all the Chancellor's bombast and bravado, we learnt a lot.
We learnt that the Chancellor has got his forecasts wrong. Again.
We learnt that borrowing is up. Again.
We learnt that taxes are up. And will stay up - from this week, a typical family is another £568 a year worse off.
And we learnt that the Chancellor has no intention of being candid with this House or with the British people.
Just look at today's Red Book.
1. On page 235 we see the savings ratio this year is forecast to be even lower than it was last year.
2. On page 241 - we see that manufacturing output fell last year by 4 per cent, and that the Chancellor's forecast for this year has been slashed.
3. And on page 238 - we see that business investment, forecast last April to grow this year by up to 6 per cent, is now forecast to fall.
We didn't hear any of those details from the Chancellor today.
The Chancellor who promised us prudence has now given us higher borrowing and higher taxes at the same time.
His Budget message to the British people is. Higher taxes - that's pain today.
Higher borrowing - that's more pain tomorrow.
This is the Chancellor who has put up taxes...on pay and on jobs..on homes and on homeowners..on mortgages and on marriages..on petrol and on pensions.
The Government is taking an extra five and a half thousand pounds per household per year.. an extra £44 a week in tax for every man, woman and child.
The Chancellor's excuse was that this money would make our public services world class.
Instead. .we have a million people on hospital waiting lists. .a crime is committed every five seconds..and thousands of children are leaving school without a single GCSE.
More tax, more spend, more waste - that is the sum of the Chancellor's approach.
This was the Government that promised: "We have no plans to increase tax at all."
And: "Our proposals do not involve raising taxes."
And even: "We want people to pay lower taxes."
And now, 53 tax rises later.This week, when people receive their pay packets, they will find that their take home pay has fallen for the first time in twenty years.
Now they know what this Chancellor really stands for.
Promises, promises, promises.
Every year he makes them and every year he breaks them.
And just as he has broken his promises to individuals, so has he broken his promises to business.
In 1998, the Chancellor promised "major changes" to help business.
In '99, he promised tax cuts for business.
In 2000, he promised incentives for business.
In 2001, he promised more good news for business.
Today we see what his promises are worth.
An £8 billion tax on jobs.
That's the cost of his National Insurance hike.
It's hitting business. And it's hitting them hard!
So hard, say the British Chambers of Commerce, that one in five firms may cut jobs as a result.
In fact, this Chancellor has been so hard on business that, since 1997, he has taken an extra £47 billion from them in tax.
No wonder he didn't tell the House today about the real cost of his policies.
He didn't say insolvencies are at their worst level for a decade.
Or that analysts say that another 70,000 firms will go bust over the next three years.
And he didn't say that manufacturing has lost 300 jobs every single day since Labour came to power.
And he didn't say that manufacturing output and investment are both now lower than when he delivered his first Budget.
And just as he has broken his promises to business, so he has broken his promises to hard-working families.
Since 1997 council tax has gone up by 60 per cent, adding more than £400 to a typical bill.
Just look at the Red Book - council tax up by £8 billion since Labour came to power.
Stamp duty increases have added over £5000 to the cost of the average detached home in the South East.
The abolition of mortgage tax relief has cost homeowners over £200 a year.
The abolition of the Married Couples' Allowance has cost families £300 a year.
Higher petrol taxes have cost the average motorist another £300 a year.
In short, the Government's tax take has now risen by 50 per cent since he became Chancellor.
Mr Deputy Speaker, of all those who have been hit by the Chancellor, there is one group who will be hurt more than most.
The savers of today are the pensioners of tomorrow.
And he has blighted their old age, their retirement . . . what should have been their golden years.
In 1997, he promised, "to encourage personal savings".
In 2001, he promised, "to reward savers, pensioners and hard working families".
Promises, promises, promises.
But under him, saving has halved.
When Labour took office in 1997 the savings ratio was 10 per cent.
Today it is 4.75 per cent. It's there in the Red Book.
So he's destroyed savings.
And his so-called "reform" to the pensions system has hit future pensioners with a £5 billion a year tax. .it has created a pensions crisis..and, perhaps most damaging of all.someone retiring today will do so on half the income they would have received in 1997 - - Half.
And he hasn't just let down future pensioners.
Because this was the man who promised to end the means test for pensioners.
But under him, the proportion of pensioner households subject to a means test is up by 50 per cent.
I want to turn now, Mr Deputy Speaker, to the financial impact of war in Iraq.
We support the Government in their waging of this war and we naturally support its full and proper funding.
But the Chancellor should be warned. He cannot get away with using this war to get him off the hook for his long-term mismanagement of the economy.
And he can't get away with blaming Europe for his problems.
He simply cannot blame his flawed and missed forecasts solely on world events.
Last April, the Chancellor delivered his forecasts for the coming year to the House.
And he got them wrong.
He got his forecasts for growth wrong.
His excuse, in other words.
He got his forecasts for tax revenues - wrong.
And he got his forecasts for borrowing - wrong.
In November, the Chancellor admitted that his central growth forecast for 2002 - two and a quarter per cent - was wrong.
He conceded that tax revenues had failed to meet his projections.
He announced that borrowing would have to rise - by £20 billion in just two years.
And then he blamed everything on the fact that world trade and world GDP growth had not been as fast as he had forecast..was not that the Chancellor had failed Britain....but that the World had failed the Chancellor.
Now, that's a serious charge, Mr Deputy Speaker.
So I went back to last year's Red Book.
And when you look at it, you see that.
At the time he delivered his Pre-Budget Report in November.
The only forecasts that were right were his forecasts for world trade and his forecasts for world growth.
So, he blamed the world for getting it wrong, but actually that was the only forecast he got right.
Today, the Chancellor had to admit he has got his growth forecast wrong yet again.
So his growth forecasts were wrong and his assumptions for tax revenues were wrong as well.
The result is that his projections for borrowing are wrong.
Now, the Chancellor sprinted through his borrowing figures, so let me recap.
Last April, the Chancellor predicted that he would have to borrow £13 billion this financial year.
Today, he admitted he would actually have to borrow £27 billion.
And that only takes us to the end of this financial year.
Look at the longer term picture.
Just two Budgets ago, the Chancellor told the House that he would need to borrow £35 billion between 2002 and 2006.
Today, he admitted that the true figure for total borrowing over that period is actually £98 billion.
So in just two years, his medium term borrowing requirements have risen by £63 billion.
That's an extra £2600 per household.
But borrowing is not something the Chancellor can do indefinitely.
More and more borrowing will mean higher and higher taxes.
Throughout, independent forecasters have long been warning him that he was far too optimistic.
They questioned his revised predictions.
Some called them, "overly optimistic" and "rose-tinted".
And we know what the independent experts think now.
78 per cent of them think that, by 2006, the Chancellor will have to raise taxes by between five and eight billion pounds.
And these are the experts on the Treasury's own panel.
But you won't hear this from the Chancellor.
Mr Deputy Speaker, the Chancellor's broken promises and missed forecasts might be more palatable if we were seeing real reform of our public services.
But the facts speak for themselves.
Take health: A million people on NHS waiting lists. Hospital admissions down, not up. And, last year, three hundred thousand people forced to pay for their own operations - a figure that has trebled since 1997.
Or education. 50,000 children play truant every day one in four leaves primary school unable to read, write and count properly and more than 30,000 children leave school each year without a single GCSE.
Mr Deputy Speaker, this Government has tested to destruction the theory that more and more money alone can transform our public services.
They have talked about reform, but they have delivered none.
Today, he could have delivered.
Six years of spin and spending can't hide the fact that our public services are just not good enough.
They don't simply need more money, they need a new approach.
An approach based on giving power back to people, so they feel in control of their lives - whether they are nurses and teachers or patients and parents.
Mr Deputy Speaker, the Chancellor has just delivered his seventh Budget.
Promises, promises, promises.
He promised . . .
Prudent Budgets . . Fair Budgets. . . Budgets for enterprise. . . Budgets for the public services.
And he hasn't delivered any of it.
He has got it wrong because he puts systems and initiatives, targets and schemes, before real people and real results.
He has got it wrong because he thinks he knows better than the people of this country how they should be living their lives.
He has got it wrong because he is driven not by the facts - which are staring him in the face - but by an ideology that has gripped his mind and will not let it go.
His sole mission is to prove that the old ways still work.
Never mind the evidence, never mind the consequences.
So it's just more failing policies and more downgraded forecasts from a discredited Chancellor.
Last week, before it was too late, he could have scrapped his tax on jobs and pay.
He could have stopped punishing people who work hard and save hard. Security and independence, for the young and the old, for hard-working families and individuals, for those who create jobs and those who need them, for those who pay for our public services and for those who rely on them.
He could have delivered a fair deal for all of them.
But he didn't.
He never will.
And it's the British people, Mr Deputy Speaker, who will pay the price.
More taxes, more spending and public services that simply aren't good enough.
The message of this Budget is clear.
For the British people - it's pain today. And as borrowing spirals while the Chancellor blocks real reform, today's Budget means more pain tomorrow.