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Howard: The vote now, pay later Budget

Speech in the House of Commons responding to the Budget

"Mr Deputy Speaker. Can I begin by welcoming the return of the Chancellor to the election campaign?

Earlier this week the Prime Minister's Official Spokesman was asked whether the Prime Minister and the Chancellor had discussed the Budget. The spokesman said: 'as you would expect, normal communications exist'.

So that's confirmed it. The Prime Minister, like the rest of us, has just heard what's in the Budget for the very first time.

This is a Vote Now, Pay Later Budget. The simple fact is that if Labour get in again, taxes go up again. This Budget is not about what's good for our country it's all about the interests of the Labour Party.

But I can agree with the Prime Minister on one thing. This Budget is the last Budget that this Chancellor will ever deliver.

When he promised to increase the stamp duty threshold to help first time buyers, why didn't he admit that he's the one who raised stamp duty in his first four Budgets and froze the stamp duty thresholds in his first eight Budgets - making the property ladder a step too far for so many first time buyers?

When he raised the thresholds for inheritance tax, why didn't he admit that he's the one who's dragged millions of people into the net of death duties?

When he talks about helping savers, why didn't he admit that he was the one who hit savers with his £5 billion a year raid on pension funds?

When he offers help to pensioners to pay their council tax bills, why didn't he admit that while he offers £200 off their council tax bills we offer a discount of up to £500?

When he re-announced more spending on business support, why didn't he admit that his extra spending never achieves value for money and always leads to more bureaucracy and more waste?

What the Chancellor gives with one hand he takes with the other.

But there is one item of Whitehall expenditure which the Chancellor and I agree is a total waste of money. That is the £130,347 a year the taxpayer spends paying for the Chancellor of the Duchy of Lancaster to run the Labour Party's election campaign. But unlike the Chancellor of the Exchequer, I appreciate the efforts of the Chancellor of the Duchy. From my point of view, he couldn't be doing better. Carry on, Alan, carry on.

Labour's faltering campaign will not be helped by this Vote Now, Pay Later Budget.

We can all see the sweetners.

But let me tell you what they hide.

They hide the crippling tax rises for hard-working families that are inevitable if Labour wins.

They hide the massive waste of taxpayers' money that defines this Government.

They hide the huge burden of regulation that under this Government has increased, is increasing and will continue to increase.

This Government and this Chancellor have run out of solutions to the problems that Britain faces. Their only answer is to tax, to spend and to waste. To get people to Vote Now and to Pay Later.

Mr Deputy Speaker, this Chancellor has got form.

2001 was vote now.

2002 was pay later.

The Chancellor's a fan of all things American. The famous American baseball coach Yogi Berra must have been thinking of the Chancellor when he remarked "It's déjà vu all over again".

In his 2001 pre-election budget the Chancellor cut taxes by £1 billion.

In his 2002 post-election Budget he raised taxes by £8 billion - his biggest ever tax raising Budget.

He gives with one hand and then he takes with the other.

The dodgy Government that brought us the dodgy dossier is now publishing the dodgy Budget based on dodgy numbers.

The Chancellor likes to rattle off a series of numbers, magical balances conjured out of thin air, intended to convince people he doesn't have a black hole and he won't have to raise taxes after the election. These figures are like mirages in the desert. You get closer and closer and then you discover they don't exist.

We've heard it all before. Look what happened with the pre-election budget of 2001.

Gripping the Dispatch Box as though it were the Chancellor of the Duchy's windpipe, barking out numbers like a bingo caller, he said: 'in successive years the current surpluses are projected to be 17, 15, 8, 9 and 9.'

Now we know what actually happened in these years.

Instead of all these surpluses we had deficits.

A deficit of 14, a deficit of 21, a deficit of 13 and a deficit of 7.

The £58 billion surplus turned into a £45 billion deficit.

Today he has confirmed a current deficit of £6 billion higher than he forecast at the last Budget a year ago. He proposes to borrow over the next 6 years no less than £168 billion. So much for prudence. Borrowing for each of the next five years is more than he forecast a year ago.

The Chancellor's forecasts of surpluses are no better than the Prime Minister's forecasts of Weapons of Mass Destruction.

The fact is that this Chancellor's pre-election numbers today are about one thing and one thing only - Votes.

But there was something missing from the Chancellor's Budget today. I have listened in vain for the endorsement from his old friends the International Monetary Fund. I listened but there was nothing there.

Could it be that they're thinking what we're thinking?

They said last week that Britain's national accounts have "deteriorated sharply over the last 5 years".

And today the Chancellor confirmed they're absolutely right. They're not the only ones thinking what we're thinking.

The IMF's damning judgement is reinforced by a chorus of disapproval from almost every independent economist and international organisation that has looked at his figures.

The Institute of Fiscal Studies says that "the Chancellor would need … fresh tax increases worth at least £11 billion to pay for his spending plans and to get the public finances back on… track…".

But the most astonishing reaction of all to the Chancellor's stewardship of the nation's finances came from the Chief Secretary to the Treasury. He's resigning. He's planning to leave the country.

The question is not whether taxes would go up under Labour. The question is not when taxes would go up under Labour. The only question is which taxes would go up?

Capital gains tax on homes? - a devastating tax on home ownership

Or Council Tax? - now the stealthiest tax of all

Or National Insurance? - Labour's tax of choice. To fill the Chancellor's black hole, he would have to tax your income by an extra 3 pence in the pound. 3% on national insurance.

That's £1,000 a year more for a typical working couple. That's on top of the 66 tax rises we've already had from this Chancellor. That's the scale of tax rises that will come after the election if Labour wins.

And we all know what would happen to the extra money raised from the tax bills of hard-working families and pensioners. It would be wasted. Just as they've wasted most of the extra money they've raised in the last eight years.

"people will say 'we've paid a lot of taxes but what has really been achieved with all that money?' … Too often a lot of money has been spent but very little seems to have been achieved". Not my words, but the words of the Financial Secretary to the Treasury.

At last, there's someone at the Treasury who tells the truth. But he's not going to last long. The Chief Secretary wants to go to South Africa. The Financial Secretary's more likely to be sent to Mongolia.

What happened to the Prime Minister's promise three years ago that if the NHS is not "basically fixed by the next election, then I am quite happy to suffer the consequences"?

Let's look at the facts. Average waiting times up. Cancelled operations up. Superbug deaths more than doubled since 1997.

The Chancellor used to praise the wisdom of Derek Wanless and his report on the NHS. We now know what he actually told the Chancellor. He said: "Your policies since [1997] have made [the NHS] worse".

And what did the Chancellor reply? According to reports: `there was an uncomfortable silence… Brown was no longer interested in the conversation'.

Poor Sir Derek. He committed one of New Labour's cardinal sins. He told the truth. So he never became Lord Wanless after all.

Nothing in today's Budget will give people the cleaner hospitals and 21st century health service they deserve.

And what about education? They promised to cut truancy by a third and it's up by a third. Nothing in today's Budget will give parents and teachers the school discipline and higher standards they want.

They promised "Tough on crime, tough on the causes of crime". The Chancellor must remember that. He dreamt it up only to see it nicked by the Prime Minister.

For the first time ever, more than a million violent crimes were committed last year. And the Chief Constable of Nottinghamshire says this week that the police can't cope anymore.

Nothing in today's Budget will get extra police onto the streets or deal with the growing lawlessness in our society.

"We will do our… best by [pensioners]" the Prime Minister claimed. Now his Turner Report says millions more will retire without adequate pensions.

And the Rt Hon Gentleman the Member for Birkenhead, the Prime Minister's first Pensions Minister, says: "when Labour came to office we had one of the strongest pension provisions in Europe and now probably we have some of the weakest".

Hon Members opposite ought to listen to him. The present Secretary of State for Work and Pensions only yesterday said: "We would be absolutely foolish if we didn't listen to people with the wisdom and experience of Frank Field"

But nothing in this Budget will restore confidence in pensions and savings.

So where's the money gone? It's gone on bureaucracy and red tape.

Today, he tells us he'll curb bureaucracy and red tape. But we've heard all this before. In 1998, he launched a Better Regulation Guide. In 1999, it was a Regulatory Reform Bill. By 2002, it had turned into a red tape check list. And all the while he was piling £40 billion of regulation on British business.

Asking the Chancellor of the Exchequer to cut red tape is like asking the Chancellor of the Duchy of Lancaster to run a decent election campaign. It's just not going to happen.

Has he learnt nothing from his recent study trips abroad?

This country does face major economic challenges in the years ahead -from emerging economic power-houses like China and India.

But as a result of this Government's policies we are much less well placed to meet those challenges today.

The Chancellor repeats his claims about the economy - the claims the Economist Magazine described as `all… in varying degrees, dodgy'.

And now we know what happened when he took office. We know what Treasury officials told him. They said: `"These are fantastically good figures… The state of the economy is much better than predicted". Eyes swivelled to Brown. "What am I supposed to do with this?" he snarled. "Write a thank-you letter?"'

Since then, we've fallen from 4th to 11th in the world competitiveness league.

Our trade has gone from a surplus to a record deficit.

We've lost a million manufacturing jobs.

Our productivity growth rate is down by a third.

While other European countries are cutting taxes to improve their competitiveness, Britain's tax burden under Labour is set to be the highest for 25 years.

The Chancellor should listen to the Prime Minister's former Chief Economic Adviser. He says: "Britain's economic arteries are slowly being furred up by a higher and more complicated tax system, excessive regulation and endless micro-management".

Only in this dysfunctional government would the Chancellor not talk to the Prime Minister, and the Prime Minister not listen to his chief adviser on the economy.

Britain needs a Government that gets a grip on spending. Not a Labour Party that has let spending get out of control.

Britain needs a Government that delivers value for money. Not a Labour Party that wastes taxpayers' money.

Britain needs a Government that invests in frontline services. Not a Labour Party that hires more bureaucrats and sets up more quangos.

People will face a clear choice at the election: more waste and higher taxes under Labour or lower taxes and value for money with the Conservatives.

That's the battleground at this election.

That's what this election is going to be all about.

And I say: bring it on."

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