The full text of SNP Leader Alex Salmond's final speech to the House of Commons as MP for Banff and Buchan:

It is a pleasure to follow the right hon. Member for Oldham, West and Royton (Mr. Meacher). As he probably knows, I would always have voted for him in internal Labour party elections if only I had had a vote in those contests. I agree with much of what he said, and I shall return to it shortly.

I have been taking part in Budget debates in this Chamber for 23 years. I know that that is a mere smidgen of time compared to the hon. Member for South Staffordshire (Sir Patrick Cormack), but it is a fair spell none the less. I warmly congratulate the Chancellor of the Exchequer, not on the direction of his Budget and still less on its content but certainly on its timing. He is one of the few Chancellors in recent times-over those 23 years-who have resisted the temptation to hold Budgets in the middle of the Cheltenham National Hunt festival. For that, and that alone, I am profoundly grateful, together with many other people in the country, and in that spirit of generosity I warmly congratulate him.

I said that I had participated in 23 Budget debates, but that is not entirely true. During the first, I was unfortunately and, of course, entirely unjustly suspended from the Chamber by a narrow vote of 354 to 19. It was, obviously, a close-run thing. Any of the 354 who are present now-certainly the hon. Member for South Staffordshire-will recognise the error of their ways. Checking the record today, however, I noted that one of the 19 was the Minister for Children, Young People and Families, the right hon. Member for Bristol, South (Dawn Primarolo). I do not forget these things. Let me assure the right hon. Lady that if-perish the thought-the Portillo effect were to overcome her in the coming election, a warm ministerial welcome would await her north of the border. However, I am sure that no such unfortunate circumstance will befall her in the coming campaign.

The Chief Secretary to the Treasury was unfortunate to miss the start of the debate today. Had he been present, he would have been treated to a fascinating vignette featuring the Secretary of State for Children, Schools and Families-the next Chancellor but one-and  the right hon. and learned Member for Rushcliffe (Mr. Clarke), the shadow Business Secretary, who were discussing whether the cuts proposed by the Government would indeed be deeper and tougher than those made by Margaret Thatcher. I do not think there is much doubt about the Chancellor's view. I have consulted Nick Robinson's Newslog, which has clearly overtaken Hansard as the main record of such matters. Last Thursday's edition reads as follows:

"I asked Alistair Darling to spell out how tough spending cuts could be:

Robinson: 'The Treasury's own figures suggest deeper, tougher than Thatcher's-do you accept that?'

Darling: 'They will be deeper and tougher'."

As far as the Chancellor was concerned, that seemed to be a pretty direct answer to a direct question, but as far as the Secretary of State was concerned earlier in today's debate, that was not the position as he understood it-initially, I thought, just for his Department, but it then emerged that, as he understood it, it was not the position for the entire Government. We went through a range of possible explanations, one of which was incredible. The Schools Secretary actually suggested that Margaret Thatcher had not been engaged in cutting education funding in real terms. I think he should tell Baron Hattersley, who on 12 July 1988 said that the then Prime Minister was planning "massive cuts" in education spending. Clearly, however, the passing of time has altered the Schools Secretary's memory of such occasions. Perhaps he was not advising Baron Hattersley at that particular time.

[Intervention Mr. Edward Leigh (Gainsbourgh)]: I cannot help but ask the right hon. Gentleman this question: would he prefer to have a Labour or a Conservative Chancellor after the next election?]

Mr. Salmond: Although I concede it may not be the likeliest circumstance to arise from the campaign and election, with balanced Parliaments a possibility, perhaps the hon. Member for Dundee, East (Stewart Hosie) will be taking up that role-or I understand that it might be the sainted presence on the Liberal Benches, the hon. Member for Twickenham (Dr. Cable). Unfortunately, it will not be my old friend the hon. Member for Thurrock (Andrew Mackinlay) since he, tragically in my view, has decided to forsake the House just when it needs him most to step in to that role. Any of these people, however, would be infinitely preferable to Tweedledum or Tweedledee, whom we might well get.

Enough of this frippery, however; let us move on to the substance-if I can find it-of the Budget. When Members make their final speech in the House, it is traditional for them to refer back to their maiden speech-after all, it often contains the best lines we ever deliver here. In my maiden speech, I said-and I meant it-that my constituency of Banff and Buchan has

"robust characters who work with their hands and get their faces dirty. They are involved in producing, making and catching things. They are people engaged in the manufacturing and primary sectors who are the real creators of wealth. If Government policy was orientated more to the primary and manufacturing sectors of industry, rather than to the rentier economy produced by the Conservative party, the long-term health and welfare of this country would be better served."-[ Official Report, 29 June 1987; Vol. 118, c. 321.]

I believed that then and I believe it now, and I am astonished that the process over recent years has managed to make the rentier economy of Thatcher's Britain of the 1980s look like small beer, because it is clear that this Prime Minister, who once claimed to have abolished boom and bust, had pinned the foundations of that in a totally unsustainable fashion, and now we have landed in the largest bust since the great depression.

When I was elected as a Member of Parliament back in 1987, the public sector's net worth-the value of public assets minus liabilities-stood at 74 per cent. of national income. By 1997, it had fallen to 15 per cent., and if we are to believe the forecasts in the Red Book-I should stress that "if"-in 2014-15 it will reach minus 5 per cent., which is the lowest level since records began. I suppose that boom and bust was abolished, therefore: certainly the boom bit has been abolished, and we have been left with the bust.

What I cannot understand in this process is that in the equivalent debate last year, when I suggested that the detail of the Red Book would, indeed, show that there would be greater cuts than those of Margaret Thatcher in the early 1980s, there was a huge amount of irritation from those on the Labour Benches. Now, however, the Chancellor-if not the Schools Secretary-admits that, and when the Chief Secretary appeared on "Question Time" last Thursday night with me, he immediately confirmed the Chancellor's view when that direct question was put to him. This is a serious situation.

I argued in the debate 12 months ago that until there is enough strength in the private sector, it is vital that fiscal stimulus is maintained. I am not alone in arguing that case. It is not only the right hon. Member for Oldham, West and Royton who agrees, but so too does the International Monetary Fund. We can both quote it in our favour, although that is not something we have done regularly over the years. None the less, the IMF argues that

"one of the key lessons from experiences of similar crises is that a premature withdrawal of policy stimulus can be very costly, particularly if the financial system is weak."

We believed that that was the Prime Minister's position for much of the last year with his warnings that "recklessly and rapidly" withdrawing Government support would

"risk driving our economy back into recession."

Also, the Chancellor argued in his Budget statement of this year:

"To start cutting now risks derailing the recovery".-[ Official Report, 24 March 2010; Vol. 508, c. 235.]

Therefore, just as I looked at the Red Book last year and identified a trend of public spending cuts greater than that of Margaret Thatcher in the early 1980s, chart 2.5 of this year's Red Book clearly shows that the UK's fiscal stance for 2010-11 is negative. Discretionary fiscal policy will act to tighten public spending and taxation relative to 2009-10. One analyst states that

"despite all the warnings about withdrawal" of "support too early, the fiscal stance is being tightened in 2010/11 by 1.1 per cent. of GDP."

[Intervention by Mr. Ken Purchase (Wolverhampton, North-East) (Lab/Co-op)]: Does the right hon. Gentleman accept, however, that although the Chancellor's remarks may be seized upon and used for great merriment or other purposes, the truth of the matter is that during the years of the Thatcher curse we were not cutting away fat or meat; we were sawing at bones? Given that there has been a fourfold increase in vital services since Labour came to power, does the right hon. Gentleman accept that however deep the cuts, they will never match the damage done by the cuts under Thatcher?

Mr. Salmond: I advise the hon. Gentleman to look again at the projections in the Red Book, because if they are followed through they will wipe out all the expenditure and public spending gains in the previous 13 years. Although I do not want just to reiterate this single quote from the Chancellor, which will hang around Labour's neck in the coming campaign like an albatross, please let us remember that the Chancellor did not only say that the cuts would be "deeper"; he also said that they would be "tougher", by which he presumably meant he was going to cut deeply where no one had cut before.

That is the wrong approach. Among the G20 nations, only Argentina and the UK stand apart in choosing to provide no further fiscal stimulus. That might have been justifiable if the rate of recovery had exceeded the Chancellor's predictions, but that is not the case. The Red Book revised the growth forecast for coming years downwards, not upwards, yet despite that the fiscal response remains roughly as it was in the 2008 pre-Budget report.

With the honourable exception of the previous two speakers from the Labour Benches, especially the right hon. Member for Oldham, West and Royton, our debate has centred on how deeply the cuts in public spending must slice and how quickly they must happen. Therefore, it is right and proper that a different approach is suggested. I believe that the best way forward is to grow the economy out of recession for the very reasons the right hon. Gentleman spelled out: growth in the economy is the single greatest determinant of closing a budget deficit, just as a reduction-a loss of capacity in the economy, such as the 6 per cent. we have lost over the past two years-is the dominating and overwhelming reason for the £167 billion public sector deficit. The fiscal stimulus is not the cause of this record borrowing, therefore. The stimulus we have had over the last year is one of the reasons why the borrowing has not been even greater and why the economy has not gone totally off a cliff over the last 12 months. Therefore, it is all the more puzzling that the Red Book does not contain a stimulus for this year.

In the introduction to today's debate we were treated to a discussion of economic history from the shadow Business Secretary and the Schools Secretary. I was reminded that Denis Healey said that Margaret Thatcher had given us "sado-monetarism", but, of course, Joe Stiglitz has called the stance of this Government "fiscal fetishism" whereby

"cutting back means the economy goes into a downturn and the markets lose even more confidence, triggering another recession or depression."

We should learn the lessons of other countries' experiences. In the 1990s, the Japanese Government's debt was 65 per cent. of GDP. Following a prolonged economic downturn and slowdown, they withdrew fiscal support too soon, and that debt is now approaching 200 per cent. of GDP.

There is a strong case for a directed capital acceleration or fiscal stimulus this coming year to do the very thing to which the right hon. Member for Oldham, West and Royton drew our attention: getting the economy moving into a growth cycle, which would have more effect than anything else in reducing the budget deficit. We cannot cut our way out of a recession, but we could cut our way into a double-dip recession. Yet the Red Book proposes no further fiscal stimulus, so that is precisely what those on the Treasury Bench are proposing.

These are difficult times for public finances and it is proper that we identify not only general efficiency savings, as the other parties have done, but projects that could be cut altogether and rendered null and void, thus saving the country billions of pounds. I am thinking of the £100 billion over the next generation that is proposed to be spent on Trident missiles. The right hon. Member for Maidstone and The Weald (Miss Widdecombe), who is leaving the House, said that one of her great delights during her time in this place was seeing both parties move to support the Trident missile. Let me forecast that both Labour and the Tories will have to move in the opposite direction over the next few years, because the missile system is now not only totally unjustifiable and immoral, but totally unaffordable under any sensible projection of the UK's finances.

As we ditch the Trident system, so let us ditch the remnants of the identity cards system, the underground repository for nuclear waste and, as the climax of this identifiable cuts agenda, which contrasts with the vagueness of the efficiency savings proposed by the Government and the Opposition, we could abolish an entire Government Department in the form of the Scotland Office in Dover house. That would save only £10 million, but I am sure that when the Conservative party looks into its innermost soul it will acknowledge that it has always wanted to abolish an entire Department and will see the sense and logic of getting rid of the Scotland Office, which has managed to overrun its budget by 15 per cent. over the past year. That has been done under the nose of the Chief Secretary to the Treasury.

I have enjoyed and relished this Chamber for all of my 23 years here. The rest of the Palace of Westminster I can take or leave, but this is a fantastic Chamber and a fantastic place for debate to be joined. It has a great atmosphere and at its best it is second only to the Scottish parliamentary Chamber, which looks better on telly. None the less, this is a fine place to have enjoyed debating. I have met and clashed with a number of formidable debaters and speakers from both sides of the House, and I have enjoyed every minute of doing that. I wish well the individual Members-if not necessarily their parties.

 

However, I should say that what has happened over the past 23 years has strengthened my absolute conviction that the case for our having full determination over Scotland's finances and resources has never been more urgent and has never required to be better made than it is now.