Budget Resolutions and Economic Situation

Edward Miliband Excerpts

Thursday 24th June 2010 Commons Chamber

[Chris Huhne]

Thank you, Mr Speaker. Let me merely assert, until the hon. Member for Rhondda (Chris Bryant) has had the opportunity to check this for himself, that the distributional analysis of changing the main VAT rate produced by the IFS today shows that there is not a regressive pattern to that when looked at by decile of expenditure.

I am very happy to defend this Budget, not least on the basis that, astonishingly, it is the first Budget in which we have a serious distributional analysis of the impact of its measures. We had 13 years of a Labour Government producing Budget after Budget, and on not one occasion in one Red Book was there a section devoted in this way to distributional analysis.

[Edward Miliband (Doncaster North) (Lab)]

Why did the leader of the Liberal Democrats, now the Deputy Prime Minister, say on 7 April 2010 that we should remember that VAT is a regressive tax? How does the Secretary of State square that with the fact that he is seeking to claim from the Dispatch Box today that it is not a regressive tax?

[Chris Huhne]

If VAT is raised right across without the exemptions that we have for food, children’s clothes and books, for example, and without the lower rate on fuel, then it is a regressive tax. It is a standard feature of basic micro-economics that indirect taxes are more regressive than direct taxes, but I ask that Members please look at the IFS analysis, because it seems to me to undermine directly the case that the Opposition are attempting to make.

--- Later in debate ---

[Chris Huhne]

I shall give way a bit more, but let me make a little progress. I have been making the argument that the need to replace our ageing energy infrastructure will give enormous impetus to growth in coming years. The other part of the argument has to be about looking at the centrepiece of the Bill that my Department will bring forward later in the year and at what we are proposing on the green deal. That, too, is an enormously significant package that will have genuine macro-economic consequences for the transformation of the economy and the creation of a whole new industry.

[Edward Miliband]

That was not mentioned in the Budget speech.

[Chris Huhne]

The right hon. Gentleman mutters from a sedentary position that that was not mentioned in the Budget speech, but the Budget documents contain a clear commitment in that regard. It is very clearly something that we are proceeding with rather dramatically.

The point that I want to make is that this will be the first genuinely comprehensive attempt to make sure that all of our housing stock is retrofitted. We know that most of the homes that we will be using in 2050 have been built already, so we need a comprehensive way to get carbon emissions from our residential housing sector way down if we are to meet our 80% overall reduction targets.

--- Later in debate ---

[Edward Miliband (Doncaster North) (Lab)]

May I start by congratulating the Secretary of State? He is by my reckoning the first Liberal to open a Budget debate in peacetime since 1914. That is a remarkable honour, which we should note today.

[Chris Huhne]

I am delighted to accept the right hon. Gentleman’s commendation, but I should remind him that my right hon. Friend the Secretary of State for Business, Innovation and Skills opened the debate.

[Edward Miliband]

I do not want to be a pedant about this, but he was not the first speaker in the day’s debate. That was the only point that I was making. The Secretary of State can accept my congratulations or not. I also want to congratulate him on something else. Today we have seen the completion of a remarkable political journey by the right hon. Gentleman. Remember the Liberal Democrat leadership election, Mr Deputy Speaker? He was the tribune of the left. He ran to the left of the current leader of the Liberal Democrat party. Today we heard the most remarkable political transformation from left-wing Liberal to Thatcherite. He could be the Reg Prentice of 2010. He could easily qualify as a Conservative candidate at the next election on the basis of the speech that we heard today.

There is a proud tradition here—Reg Prentice, Hartley Shawcross; maybe soon he will join those predecessors. But the problem for the right hon. Gentleman is that in order to complete this political journey, he has to engage in the most remarkable amount of doublespeak, which speaks to the heart of the traditions of liberalism. I come to this House today to praise the traditions of liberalism; he comes to bury them. What is the legacy of John Maynard Keynes? [Interruption.] I know that the right hon. Gentleman does not want to hear it. John Maynard Keynes taught us about the dangers of fiscal austerity at a time of global downturn. This Budget pays no heed to those warnings.

What is the lesson of William Beveridge? It is the principles of social insurance and protecting the most needy. What is the legacy of David Lloyd George? In 1909, 101 years ago, David Lloyd George delivered the people’s Budget. The people’s Budget—I say this as a Labour Member of Parliament—was a remarkable example of showing that one could be fair at a time of fiscal challenge. Nobody could claim that Tuesday’s Budget was anything like a people’s Budget. So I am afraid I give up on the right hon. Gentleman, but there are some Liberal Democrats in the Chamber today, and of course the new tribune of the left is the hon. Member for Bermondsey and Old Southwark (Simon Hughes). I am afraid that we have to put our faith in him as far as this Budget is concerned, because we have to give up on the Secretary of State. [Interruption.] My hon. Friends say he is conning me. I think that we should give him a chance during this debate.

The Conservatives will vote for this Budget at the completion of the Budget debates on Tuesday because they vote for unfair, unjust, unequal Budgets. I say to Liberal Democrats in all candour that they have to make a judgment. If the Budget is akin to the people’s Budget of 1909 and if it shows fairness at a time of fiscal austerity, they should by all means vote for it. But if it is a rerun of Lord Howe’s Budget of 1981, they have a duty to vote against it. I know that power is tempting. The Secretary of State is in power and has been tempted by office, but there are Liberal Democrat Members who are not in office, and they need to examine their consciences between now and next Tuesday. They should ask themselves, “Is this what I came into politics for?” That is the argument that I shall develop in my speech.

[Chris Huhne]

I wish to nip in the bud any temptation for the right hon. Gentleman to make parallels between what my right hon. Friend the Chancellor has announced and what Lord Howe announced in the early 1980s. The right hon. Gentleman says that this Budget is worse, but if he looks at the fiscal tightening set out in the cyclically adjusted budget deficit in the Red Book, it is 0.5% of GDP. The right hon. Gentleman is too young to remember, but the Howe Budget was more than 2%. So this is a very different Budget. We are talking about something that allows growth to continue, and indeed safeguards growth, precisely because it takes us out of the firing line of the southern European crisis.

[Edward Miliband]

I am afraid I disagree with the right hon. Gentleman. The fiscal tightening may be less than the Howe Budget, but he has to look at overall conditions in the world economy. There is a reason why President Obama has written to G20 leaders ahead of the meeting this weekend to warn about the dangers of early exit from fiscal stimulus. President Obama is worried about the world economy. Of course one has to look at fiscal tightening, but one also has to look at conditions in the world economy.

Let me develop my argument. First, let us look at economic growth. There was an honest difference of opinion at the election about economic growth and how we could ensure that growth, which is the surest way of reducing the deficit, could be maintained. The Labour party was on one side of the argument. We said that growth should be maintained by maintaining spending this year. The Liberal Democrats—the Secretary of State admitted this—were also on our side of the argument, and the Conservatives were on the other side of the argument.

The Secretary of State made much play in his speech about Greece—the Greek defence as I called it last time. He said that everything had changed because of Greece. Has the right hon. Gentleman changed his position because he is now in power and must defend a Conservative Budget, or is his change of position genuine? If it is genuine, we should give him credit for that, but I am afraid I have to say to him in all candour that it cannot be a genuine change. Look at the facts. He made great play of the fact that Greek bond yields had gone up from 7% at the beginning of the election campaign to 12% on the day of the election. The question is not whether Greek bond yields went up but what was the impact on the UK. What happened to UK 10-year bond yields between those two dates? Ten-year bond yields went down during that time, so there is no evidence for his claim about contagion.

The right hon. Gentleman must face a hard and uncomfortable truth. I do not blame him for taking the chance of office that he was offered, but he must come clean with us and admit that he has had to accept a macro-economic strategy totally at odds with the one that he went into the election defending.

[Chris Huhne]

rose—

[Edward Miliband]

I will give way to the right hon. Gentleman. Perhaps he will say that because he wants to do good things at the Department of Energy and Climate Change—I do not doubt his good intentions—it was worth paying the price of supporting a Budget that he would have opposed before the election. That is the reality of the situation.

[Chris Huhne]

rose—

[Chris Huhne]

May I remind the right hon. Gentleman that the former Chancellor of the Exchequer said that the ice always looks most solid just before it cracks? The contagion affected other countries in Europe including, as I cited, Spain, which had a lower central Government debt to GDP ratio than ours, and it is irresponsible to suggest otherwise.

[Edward Miliband]

I would give the right hon. Gentleman more credit if he had been more explicit about all these dangers before the election.

Interestingly, the right hon. Gentleman has been sufficiently concerned about the public finances to put pen to paper. We should take at face value the concern that he expressed at the start of the financial crisis in an interesting article in The Guardian titled “Cameron and Osborne are peddling skewed facts and scaremongering on public finances”. He felt moved to open his article by writing:

“You do not normally expect opposition politicians to leap to the defence of the government of the day, but there is an important national interest in doing so on the key issue of public finances. If David Cameron’s view that the ‘cupboard is bare’ gains ground, not only will policymakers feel more constrained, but we will risk thinking and talking ourselves into a worse downturn.”

He does not even have a blank record to defend, because his record is one of defending us on the public finances—[Interruption.] I do not want to take up too much time, but if he wants to explain away his article, I shall give way to him.

[Chris Huhne]

The right hon. Gentleman really has to take on board my case that while there was no evidence of contagion at the beginning of the election campaign, there was massive evidence by the end of it. I changed my mind when the facts changed. He has not done so, but he should not be proud of that.

[Edward Miliband]

No, at the end of the election campaign the right hon. Gentleman was offered the chance of office—and that is the sad truth of why he changed his mind.

[Chris Huhne]

The right hon. Gentleman recently accused me of not changing my mind because I wanted office when he suggested in a newspaper interview that our negotiating sessions with the Labour party showed that we had somehow become right wing because we were insisting on cuts in this financial year. He cannot have it both ways: either we accepted the cuts for opportunistic reasons because we wanted office; or we are saying that the facts have changed and we need to move the economy away from the risks of contagion from southern Europe.

[Edward Miliband]

The right hon. Gentleman’s defence is becoming even more contorted—I am not sure that even I understand it now. I shall make some progress.

The real problem with the Budget in respect of economic growth is that it ignores the lessons of Keynes. The right hon. Gentleman is defending a Budget that, on the Chancellor’s own figures, will reduce growth by 0.3% next year and lead to 100,000 fewer people in work not just this year, but next year, the year after and the year after that. Even that scenario is optimistic according to independent forecasters such as the Chartered Institute of Personnel and Development, which says that unemployment will go on rising, so there are real dangers in the Budget strategy.

A further problem with the Budget is that it has no plan for growth. The right hon. Gentleman waxed lyrical about green industries, but he can point to nothing in the Budget that will support the green industries of the future. The Liberal Democrats said at the election that they opposed cuts this year, but they are making not only the efficiency savings that the Conservative party promised at the election, but real cuts to regional development agencies, university places and Government support for industries of the future, the most outrageous example of which is the case of Sheffield Forgemasters.

During the debate on the Gracious Speech, I told the right hon. Gentleman that we would hold him to account on the Sheffield Forgemasters decision—and he will be held to account for it. I have to say to him in all honesty that the decision is short-sighted, damaging and wrong. The Labour Government approved a loan to Sheffield Forgemasters—not a grant, a loan. We had money from the European Investment Bank—those people do not throw money at problems when it is not required—and Westinghouse, which was going to order parts for the nuclear power stations that it wants to build in the UK, which will involve one of the only two reactor designs that we are going to have in the UK. The decision was therefore central not only to our economic strategy but to our green strategy. I know that the right hon. Gentleman does not like nuclear power, but prejudice against it will get us nowhere, either economically or in relation to the green industries of the future.

The grant to Sheffield Forgemasters would have given us the ability to make key components for the nuclear industry that currently have to be sourced from outside Britain, but the Government have turned their back on it. The Minister of State, Department of Energy and Climate Change, the hon. Member for Wealden (Charles Hendry), who is in the Chamber, is an honourable guy whom I respect, because he supports nuclear power—that is slightly complicated given his Secretary of State—but during a debate on Tuesday, he said about Sheffield Forgemasters:

“If one went to a bank and said, ‘I need an overdraft because I want to give more money to charity,’ the bank would question the wisdom of that approach.”—[Official Report, 22 June 2010; Vol. 512, c. 26WH.]

Sheffield Forgemasters is not a charity. It has the potential to be at the centre of the green industrial revolution that our country needs. I have spoken to the management of Sheffield Forgemasters, the unions and people in Sheffield, so I know that they are bemused by the Government’s decision.

I was the Minister who, along with Lord Mandelson, signed off the loan—it is not a grant—after we had looked at the arrangements over 18 months in government. It passed a whole set of value-for-money considerations, yet the Government have cut it off. I hope that the Secretary of State can force a reconsideration of the decision—

[Chris Huhne]

rose—

[Edward Miliband]

I have given way to the right hon. Gentleman a number of times, but if he is going to say at the Dispatch Box that he will reconsider the decision, I shall give way, albeit more in hope than expectation.

[Chris Huhne]

Does the right hon. Gentleman really think that an appropriate use of public money would be to ensure that the major shareholders in Sheffield Forgemasters do not have to reduce their equity holdings below 51%? I do not think that it would be.

[Edward Miliband]

That is an extraordinary statement to make on the Floor of the House. A set of commercial negotiations was carried out with Sheffield Forgemasters. The decision was signed off by the permanent secretaries of DECC and the Department for Business, Innovation and Skills as a value-for-money loan, but now the right hon. Gentleman questions that.

The right hon. Gentleman’s explanation is different from that offered by the Chief Secretary to the Treasury, who said that the loan represented value for money, but the Government did not have the money. The Secretary of State is not only wrong to oppose the loan, but confused about the reason why it is not being offered. I am afraid that the Government are hampering the green revolution that we need.

[Toby Perkins]

Does my right hon. Friend agree that the fact that a Liberal Democrat Chief Secretary to the Treasury came to the House to tell us the decision about Sheffield Forgemasters, and that a Liberal Democrat Secretary of State is supporting that decision today, is just another sign of how the Conservative Government are using the Liberal Democrats as a fig leaf, which will shame the leader of the Liberal Democrats in his Sheffield constituency?

[Edward Miliband]

My hon. Friend is completely right. He has experience of booting out Liberal Democrats locally—something that will happen in many constituencies at the next general election. It is blinkered short termism: that is the only way to describe what they have done.

What is the assessment of the Budget from a green point of view? Friends of the Earth says that the

“June Budget does little to suggest”

that the coalition will keep the

“promise to be the greenest Government ever.”

That is not a very good start, but I want to reassure the Secretary of State by telling him that there is praise for the Budget from an unlikely quarter. Roger Helmer, a Conservative MEP and a well known climate change denier, quite likes the Budget and says:

“Green lobbyists are whingeing that ‘this is the least green Budget for years’. Brilliant! Well done George. Maybe we’ve come to our senses”.

I have to tell the Secretary of State that for the first Budget in which he was involved to have congratulations from Roger Helmer and condemnation from Friends of the Earth is not a very good start.

The second test we should apply to the Budget is that of fairness. Is it a fair Budget or not? Let us be clear: as well as going beyond the decisions that the Liberal Democrats advocated for the first year, the Budget goes well beyond the pace of deficit reduction that they recommended. To sustain the Secretary of State’s argument, we are talking about not only cuts now, but a much faster timetable. He shakes his head, but the Institute for Fiscal Studies analysis published at the time of the election shows that the Liberal Democrats had set out exactly the same pace of deficit reduction in 2014-15 as we had, but this Budget goes beyond that, with £30 billion of extra cuts in spending and the rise in value added tax.

The question at the heart of the Budget debate over the past 48 hours is where do the cuts fall? Who bears the burden? That is the question that Lloyd George asked in this House years ago. The truth is becoming clearer: this is a regressive Budget, not a fair one. The Chancellor claimed in his speech that the Budget was fair, and I think it important to quote him exactly. These are not my words, but those of the Chancellor of the Exchequer. He said:

“Overall, everyone will pay something, but the people at the bottom of the income scale will pay proportionally less than the people at the top. It is a progressive Budget.”—[Official Report, 22 June 2010; Vol. 512, c. 180.]

That is simply not the case. That was exposed yesterday by the IFS. When one looks at the Budget measures, one sees that it is regressive, not progressive. According to the IFS, as my hon. Friend the Member for Leeds West (Rachel Reeves) said, as a result of the measures in the Budget the poorest 10% will pay four times more as a proportion of their income than the richest. I repeat: four times more.

[Matthew Hancock]

Will the right hon. Gentleman give way?

[Edward Miliband]

I will give way to the hon. Gentleman in a minute, because as a former adviser to the Chancellor, he might be able to explain what is going on—but let me offer an explanation first.

What the Chancellor did was an extraordinary sleight of hand. He published in the Red Book figures that take credit for Labour’s last Budget, which was progressive, and he combined the impact with that of his regressive Budget. Remember, this is a guy who claimed in his Budget speech that there was a renewed transparency and honesty in the Budget process. What he had done was exposed within hours by the IFS. I give way to his former adviser.

[Matthew Hancock]

I can certainly be more proud of having been an adviser to the current Chancellor than if I had been an adviser to the one who said that he had abolished boom and bust.

Following on from the right hon. Gentleman’s misleading use of statistics, which are described by the OBR on page 93 of the Red Book as “misleading”, does he agree with me that the IFS said that when all the Budget measures are taken into account, the impact is greatest on the richest 10%, not the poorest 10%, and that he is quoting partially?

[Edward Miliband]

I want to be generous to the hon. Gentleman, as a new Member of Parliament, but I fear that he has walked into the most enormous elephant trap. Let me read from the last page of the IFS handout:

“Treasury said that reforms to be implemented between now and 2012-13 progressive, but

—This is mainly because of reforms announced by the previous government

—They only look at reforms to 2012-13—benefit cuts announced yesterday for subsequent years hit the poorest hardest”.

The IFS concludes:

“So likely that overall impact of yesterday’s measures was regressive”.

If the Chancellor wants to bring a new transparency and honesty to the debate, he cannot take credit for measures announced by my right hon. Friend the former Chancellor and say that they are somehow part of his Budget.

[Chris Huhne]

rose—

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[Edward Miliband]

The right hon. Gentleman is itching to get back in, but let us be clear. The Chancellor’s words—the words a Chancellor uses in his Budget speech are a grave matter—were:

“It is a progressive Budget.”—[Official Report, 22 June 2010; Vol. 512, c. 180.]

I cannot see how that can possibly be the case, but perhaps the right hon. Gentleman, in his newfound role of defending the Conservative party, can.

[Chris Huhne]

The reality is that it is perfectly legitimate for the Treasury to analyse pre-announced measures as well as the measures that are announced, because a new Government reverse measures that they do not like and confirm measures that they agree with. Look at, for example, the decision to freeze the threshold at which the higher rate of tax begins to be paid. Does the right hon. Gentleman support that measure? It will increase the progressive element by taking more tax from the best-off.

[Edward Miliband]

The doublespeak just gets worse. The Conservatives spend the election attacking the Labour Government for putting up national insurance contributions on employees, then they produce their own Budget which is regressive and unfair, then they realise that that will be pretty damaging for them, so they take credit for a measure that they used to attack. That cannot possibly make sense. The truth is that the Chancellor made a claim in his Budget speech that the Budget was progressive. The Institute for Fiscal Studies, to which the Chancellor referred in his Budget speech, has said clearly that if one looks at the measures announced in the Budget one sees that it is a regressive Budget—and not just regressive, but deeply regressive, because the poorest 10% pay three and a half times more than the richest 10%. However much they may twist and turn with the help of their new friend, the Secretary of State for Energy and Climate Change, who is auditioning to be a member of the Conservative party, it will not help them. People can smell it. People can see through the doublespeak.

[Mr Mark Field (Cities of London and Westminster) (Con)]

The right hon. Gentleman has made a statement about national insurance that he knows does not tell anything like half the truth. Our objection always was to the employer’s element—the jobs tax element—of the national insurance rises. It is that element that we have been very glad to put to one side, rather than the employee’s element, to which he gives such undue prominence.

[Edward Miliband]

I have enormous respect for the hon. Gentleman, but he will have to do better than that.

[Rachel Reeves]

Can my right hon. Friend confirm that, in addition to what I said earlier about this Budget affecting the top decile by just 0.7% and the bottom decile by 2.6%, Labour’s March Budget had an impact on the top decile of 7% and absolutely no impact at all on the income of the poorest decile? There is a different way of doing a Budget, and that was a progressive Budget.

[Edward Miliband]

My hon. Friend is right, of course. That is the difference between a Labour Budget and a Conservative Budget—

[Joan Ruddock (Lewisham, Deptford) (Lab)]

And the Lib Dems.

[Edward Miliband]

I am coming to them in a minute. That has been the case historically, but the difference this time is that the Liberal Democrats are faced with a choice. The hon. Member for Bermondsey and Old Southwark—someone I respect; a person of good conscience who came into politics to make our country fairer—has a big decision to make. He is not going to fall for the stuff we have heard from the Secretary of State for Energy and Climate Change, trying to explain away the Budget.

The hon. Member for Bermondsey and Old Southwark knows an unfair Budget when he sees one, so he has a decision to make in the coming days. He has an honourable path to take. He can say, “Up with this I will not put.” That is what Liberal Democrats throughout the country will expect him to do. Maybe he will defeat the Budget, maybe he will get the Government to rethink parts of it, but he could lead a movement, not just of Liberal Democrats in the House but of Liberal Democrats outside the House who will join him. He did not come into politics to put up VAT or to freeze child benefit. He campaigned against the freeze in child benefit in the 1980s under Mrs Thatcher. He did not come into politics to abolish the health in pregnancy grant. He did not come into politics to do those things, and he is not in office. He does not face the choice of resignation: he faces the choice of how to vote. In all candour I say to him that he wanted a Lib-Lab alliance after the last general election because he knew what would happen otherwise. He saw it in the runes. He saw where things would go, and he was proved right. But now he faces the ultimate choice in politics, which is between principle and expediency—and he should follow principle.

[Ian Swales]

Yesterday The Independent described the Budget as a social democratic Budget. I came into politics via the Social Democratic party, and I am very happy with the Budget.

[Edward Miliband]

The hon. Gentleman should not believe everything that he reads in The Independent. I say in all seriousness to him that, as we saw, the presentation from the Chancellor was that this was a fair Budget, and for a few hours it fooled some people, who thought that perhaps it was fair. But that has been completely exposed and blown apart by the Institute for Fiscal Studies. The Secretary of State shakes his head, but we all know what he would be doing if the Budget had been presented and he was not in government. He would be railing against it with his great eloquence. He would be talking about what he came into politics for: his belief in fairness.

One of the central arguments of the leader of the Liberal Democrats at the election was that the poorest people in our society paid too much in tax and the richest paid too little in tax. That was the central and powerful claim made by the Liberal Democrats at the election. The question one must ask is: what happens as a result of the Budget? It makes the situation worse. How can the hon. Member for Bermondsey and Old Southwark possibly vote for that? This is not a Budget that he can in all conscience support.

The Budget does not help to lay the foundations for economic growth and it is not fair. It also attacks some of the most important things that we have in this country to help the poorest families, such as tax credits. The Chancellor said in his Budget speech that he would reduce payments to families earning over £40,000 next year, but we learn from the Red Book that the cuts are for those earning over £25,000 a year—not well-off families.

What about fairness? How have the banks fared as a result of the Budget? The banks were a big target for the Liberal Democrats during the election campaign. [Interruption.] The hon. Gentleman shouts “Bank levy”. Perhaps this is the saving grace for the hon. Gentleman. Perhaps that is something that he can cling on to. It is interesting, because that is starting to unravel too. There was much trumpeting of the bank levy in the Budget as a fairness measure. But the reality is that the corporation tax cut from 28% to 24% will help every bank in the country. HSBC’s banking analysts say:

“We’d expect most domestically-orientated banks…to be better off after four years than they were pre-Budget.”

When the measures are taken together, the banks are not worse off but better off—another shred of credibility for the Budget destroyed. Deutsche Bank says that it is a good outcome for the banks. It is plain to see who bears the burden. This is not a Lloyd George Budget; it is a repeat of the unfair, unequal, unjust Tory Budgets of the past.

I end on a point about trust and credibility. The Liberal Democrats said that there should be no spending cuts this year; now they support them. They said that they supported our four-year deficit reduction plan; now they do not. They said that there should be no VAT rise; now they support it. They said that there should be protection for young people through the future jobs fund; now they support its abolition.

It takes a long time to establish an honourable political tradition, but it takes a very short time to destroy it. This is a week of judgment for the Government, but in particular it is a week of judgment for the Liberal Democrats. I say to them very clearly that they should exercise their conscience and be willing to oppose the Budget. The question that the hon. Gentleman and his colleagues need to consider this weekend is whether they are still the party of Keynes, Beveridge and Lloyd George. We all know that those three men would turn in their graves at the idea that the inheritors of the liberal tradition were supporting this Budget.

Today, Liberal Democrats face the ultimate choice between power and principle. They did not come into politics to raise VAT, freeze child benefit or do all those other things. No doubt they think that voting against the Budget would truly make them turkeys voting for Christmas. The opposite is true. If they vote for the Budget it will bring unfairness and injustice to the people whom they claim to represent. It will go against everything that they have claimed to stand for, and it will destroy for ever their claim to be a progressive alternative. That is why they should vote down this unfair, unjust Tory Budget that will damage our economy and divide our society. That is why they should join us in the No Lobby to vote down the Budget next week.