Sir: Everybody expected a political Budget from Kenneth Clarke - and he did not disappoint us. He was bullish about Britain's economic prospects, but be did not remind us that, because of the Government's economic mismanagement, Britain entered recession long before other countries, suffering 10 quarters of falling output - a setback from which we are only just recovering.
He also failed to acknowledge that our 'home-grown' recession, combined with pre-election spending sprees and tax bribes, is the main reason for the pounds 50bn public sector borrowing requirement, which the Chancellor has promised to eliminate by the end of the decade.
In his Budget speech, Mr Clarke also did not tell the nation that, combined with the Lamont tax increases in the pipeline from last year, the total tax burden is going to rise by at least pounds 16bn, the biggest tax increase since the war. The Institute of Fiscal Studies estimates that, on average, households will have to find an unprecedented extra pounds 9 a week or pounds 460 a year more. The Government's Red Book reveals that the share of tax and contributions as a percentage of GDP is estimated to rise from 34 per cent to 38 per cent by 1997- 98. So much for the Chancellor's 'long-term tax-cutting agenda'.
There are also going to be substantial cuts in public spending for many years to come. Our infrastructure will continue to deteriorate and the numbers of homeless will increase. Tragically, the unemployed, the sick and the poor will pay disproportionately for the Government's mistakes. As John Smith said in his reply to the Chancellor, to cut the qualifying time for unemployment benefit from one year to six months when unemployment remains so high ought to be unacceptable in a civilised country.
When all the media hype has died away, the test of Kenneth Clarke's Budget will be how far it will strengthen output, increase investment, create jobs - and make life better for all our constituents. If it achieves those objectives then it really will be, as Mr Clarke claims, a 'no-nonsense Budget'. I remain sceptical.
MP for Durham North (Lab)
House of Commons
1 DecemberReuse content