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Ms Claire Ward (Watford): Will the right hon. and learned Gentleman give way?

Mr. Clarke: Just a second.

Such growth as we get from now on will be driven by the public sector--by public consumption. It will be driven by the big increase in Government expenditure. If there is any slowdown, there must be some corresponding cuts in private consumption and private sector activity to make room for it, and that is not a healthy background against which to face the real issue, from which the Government keep running away. Given that their policy now is a massive increase in public spending, what will happen if the growth upon which it is wholly dependent does not materialise over the next three years?

As they do when we discuss so many other things, the Government just dumb down the argument. We raise this fear, and we are told, "Oh, they are talking about cuts, cuts, cuts." Big scissors appear, with fictitious figures for what we are supposedly saying that we would cut, just because we are raising the question. What if the economy cannot afford it between now and 2004? We are told that it means going back to boom and bust. I cannot for the life of me see how our proposals have anything to do with boom and bust.

I have already said that I do not believe that the Chancellor has given us any stability or predictability in his economic performance. A lot of things could go wrong, not only the slowdown in the economy. If the economy slows down at all, the Treasury's estimates of revenue are likely to prove overestimates. History shows that the Treasury tends always to underestimate its revenues when the economy is going up. That is why, every year, the Chancellor comes along with billions more than he expected to have. History also shows that when the economy suddenly goes down, the Treasury always overestimates the revenues that it has coming in.

Labour Members would be wise to recall what happened under Nigel Lawson, in 1988--it is a great pity that they pretend that nothing happened after 1988, and that the only Conservative record that they contrast themselves with is that of 13 years ago. What they discovered then, as we discovered then, is that the big numbers change very rapidly indeed.

On their own plans and estimates of growth, the Government already predict a deficit three years out. That deficit could be very large and unsupportable. I have no time to go into all the other things that are becoming unsupportable, such as the huge current account deficit that they are running as long as the pound remains overvalued.

When we talk about restraining growth in spending, it is no good rejecting our criticisms by saying that it simply means that we intend to cut public spending. It is also no

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good rejecting criticism from the International Monetary Fund. I introduced openness in respect of producing IMF reports. The IMF points out that the golden rule is a slightly dodgy approach, and the Government dismiss it.

The fact that the European Commission's doubts about all this are rejected may be more popular among Conservative Members, but the Commissioner, Pedro Solbes, was an extremely good Minister of Finance in Spain and he had his head screwed on the right way. Despite that, he is wrong, apparently, when he raises queries about all this. He was a socialist; he was not when he was appointed, but he joined the PSOE just as it was defeated. The other Finance Ministers also have doubts.

The golden rule is not a golden rule at all. The golden rule allows borrowing for investment only, but, as has been pointed out, it all depends what is meant by investment--and as far as I can see, any form of public expenditure known to man can be described as investment by the present Government. Unfortunately, like all other public expenditure, it must be paid for eventually. The criticism is rejected as though that were not true.

The previous Government did have rules. A balanced Budget over the cycle was our rule. We set an inflation target. My predecessor, Norman Lamont, set an inflation target of 2½ per cent. We were aiming to keep spending down below 40 per cent. of gross domestic product. We introduced rule-based economic management; this Chancellor replaced it with dodgy rules, such as the golden rule, which is infinitely flexible, and he altered the definition of half the public expenditure figures that we now have to try to stop people following what was happening. Therefore he should not reduce the queries about his spending to a silly level of argument to prepare for the election. The figures are there before us.

According to the Government, we need not worry, whatever happens between now and 2004, if departmental estimates go up by 8.4 per cent.--6 per cent. in real terms--each year, come what may, to April 2004. They get the total spending down by making some dubious assumptions about cutting social security expenditure, but even so, total spending is anticipated to be 3 per cent. per annum overall above the trend growth of the economy. If the world economy slows down, it will be well above the likely growth of our economy, and it is difficult to see how it can be afforded. That is our valid argument.

My right hon. Friend the Member for Kensington and Chelsea addresses that valid argument, and it is foolish for Labour Members to reject it, not least because if they were to win the election their biggest nightmare would be how to get out of that obligation, having told everyone that anything else involves great cuts. Fortunately, the expenditure is not on health and education--we can match that spending--but the Government will not return to their current position in respect of GDP for some considerable time. The Home Office and transport are the big beneficiaries of this year's largesse. Lots of bus lanes, cycle paths and tramways in cities throughout the country are promised, but expenditure of every kind can be found across Whitehall.

If the Government are re-elected, we warn that they will raise taxes or abandon their plans, which are not supportable if economic growth falls back to trend or below. Theirs is an extraordinary approach, and that is the note on which the Chancellor will go out. I hope that he

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goes by handing over to a Conservative successor, but if the Prime Minister has his way, I suspect that he will hand over to a Labour successor--if the Prime Minister can win the election and get himself back in for a second term. The Chancellor had an excellent inheritance when he took office. It is my opinion that he will hand over a much dodgier and poorer inheritance to whoever has the opportunity to take over, which I trust will be my right hon. Friend the Member for Kensington and Chelsea.

6.11 pm

Mr. John Home Robertson (East Lothian): It seems likely that this will be my last speech in the House of Commons, so I hope that you, Mr. Deputy Speaker, and the House will be tolerant.

It is a special pleasure to follow the right hon. and learned Member for Rushcliffe (Mr. Clarke), partly because many of us are looking forward to campaigning shoulder to shoulder with him for a yes vote for British participation in the single European currency in the not-so-distant future. I am afraid that his declaration of undying support for the shadow Chancellor was not altogether convincing. I suspect that, like the right hon. Members for Henley (Mr. Heseltine) and for Old Bexley and Sidcup (Sir E. Heath), he is deeply unhappy and worried about the direction that the Conservative party is taking.

As I recall some of the awful Budgets that I have heard proposed by forgettable Chancellors like Nigel Lawson and Norman Lamont, I take great satisfaction in registering my support for a Budget that cuts the burden on taxpayers while increasing provision for families, education, the NHS and other services.

The Chancellor of the Exchequer, my right hon. Friend the Member for Dunfermline, East (Mr. Brown), is the ultimate canny Scot, and he has demonstrated conclusively that prudence pays. This is not a giveaway Budget for an election; it is a business-like Budget for businesses, a friendly Budget for families and a constructive Budget for communities.

Last weekend, I spent a minute or two looking at my notes for my maiden speech, which I made on 9 November 1978 in the debate on the Queen's Speech. Much has changed in the past 22 years. When I was first elected, my constituency's economy depended largely on the National Coal Board and the farming industry, whereas now the biggest employers in East Lothian are based on science, services and nuclear power. In my maiden speech, I supported Denis Healey's valiant efforts to control inflation in very difficult times. I referred to the fact that the right hon. Member for Old Bexley and Sidcup was unhappy about what was happening to the Tory party--so some things do not change. However, there is absolutely no risk of inflation with the present Chancellor.

Communities in my constituency suffered cruelly during the Tory years from 1979 to 1997. That might account for the fact that the Labour majority in my constituency increased from 1,673 in 1979 to 14,221 in 1997. Indeed, I find myself worrying about what is happening to the Tory party in Scotland. I never thought that I would have such anxieties, but it is not that long ago since the right hon. Member for Devizes (Mr. Ancram) represented my constituency as a Tory Member. At the Scottish Parliament election in 1999, the Tory candidate came third.

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One of the reasons why the Tory party has been rejected is that local unemployment statistics ran into thousands during those years. With this Chancellor, unemployment in the county of East Lothian has fallen by 55 per cent. since 1997, to just 897 people, as more and more opportunities are created and as people build up their skills. Happily, we can take pride in the fact that everyone is protected by the new statutory minimum wage.

We are getting a lot of public investment, too. Thanks to the success of the Chancellor's strategy, our neighbourhood has new hospitals--either under construction, or planned shortly--improvements to schools and, at last, the commitment of £32 million to dual the A1 from Haddington to Dunbar. I sincerely hope that that road project will not have to be delayed by a public inquiry into a small number of outstanding objections.

The Budget will increase the resources provided to the Scottish Executive by £200 million. I must advise the Opposition that there is no evidence of support for the shadow Chancellor's plan to cut public expenditure in each and every constituency by £24 million or so.

I am grateful to my constituents for electing me to the House six times. I have done my best for them through some difficult times, but, happily, unlike some of the hon. Members who are leaving the House, I shall have the privilege of continuing to represent my constituents for some time yet as their Member of the new Scottish Parliament, which has responsibility for Scottish legislation and the functions of the Scottish Executive. After the long struggle to achieve devolution, I want to do my little bit to make it work. We all know that that will take time; we are going through some difficult times, but it is an experiment that can work, and we are determined to ensure that it does so.

I shall miss a lot of good friends in the House, but, with respect, Mr. Deputy Speaker, I shall not miss some of the Ways and Means and procedures of the Palace of Westminster. We saw some of them in action last night, with three votes after 2 am. There is a lot to be said for the timetabled debates and electronic voting--if it can be made to work reliably--that we have in the Scottish Parliament.

I want to make two quick points about the Scottish Parliament, which is now responsible for Scotland's devolved share of the Budget. First, it is a completely new Parliament, with new procedures, elected by a new electoral system. We should not, therefore, be surprised by what occurs in those circumstances, such as last Thursday's vote on subsidies for the fishing industry. As someone who has been committed to the principle of a Scottish Parliament for a long time, I say with feeling that the Scottish Executive cannot be allowed to sidestep its accountability to the Parliament. However, the Parliament has an obligation to make coherent decisions. I trust that the Parliament will now have a proper opportunity to make a clear choice between a quick fix and long-term sustainability for fisheries with, I hope, all Labour Members of the Scottish Parliament present and with our Liberal Democrat partners focused on the responsibilities of government. That may be a forlorn hope, but we never know.

Secondly, I must emphasise the crucial importance of mutual understanding and confidence between Westminster and Holyrood to the integrity of the United

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Kingdom. The overwhelming majority of Scots and their MSPs--with the possible exception of the hon. Member for North Tayside (Mr. Swinney), who is in his place--are determined to remain part of the British family, because we understand the shared value of the United Kingdom and the strength that we all derive from the historic and successful partnership of the United Kingdom.

For example, my Scottish constituents are proud of Britain's contributions towards overseas aid, debt relief and peacekeeping, and there is more of that in the Budget. We all understand the need to work together on shared problems, such as the current foot and mouth crisis. We will never regard the English as foreigners, with the possible exception of the Leader of the Opposition and one or two of his more alarming acolytes.

Before I conclude, I wish to make two quick points as a rural Member of Parliament, with a farming background.

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