House of Commons Hansard Debates for 16 Mar 1989

Column 610

It is not only Opposition Members who are concerned about workplace nurseries. A survey in the Sunday Mirror in which 300 Members of Parliament took part showed that a large majority of Members of Parliament not only wanted tax relief on workplace nurseries and some incentive to employers but were in favour of a creche here. That would be an advantage to woman and men Members of Parliament. I have it on good authority that even the Prime Minister wished to see that introduced, but certain individuals in the Treasury were not so keen and managed to avoid including such provision in the Budget. Hon. Members on both sides of the House support it, and the thousands of letters to the Sunday Mirror since that poll was published show how many working parents would appreciate such a change.

If women are to enter the labour market and achieve their full potential in the workplace, Britain must have comprehensive nursery provision. Yet Britain lags behind the majority of European countries. Italy and France have a higher proportion of three to five-year-olds entering full or part- time nursery education. Opposition Members would like that to be changed.

We should be encouraging nursery education. Parents with children in nurseries provided by their employers have the imputed value of that service added to their taxable income if they earn more than £8, 500. The tax raises only £1 million, so what is its purpose? I asked that question during last year's Budget debate and I ask it again tonight. Why are company cars taxed more favourably than workplace nurseries? Does the Chancellor believe that cars are more important than kids? The Government offer tax incentives for cars, sports facilities and canteens, but the Chancellor seems to have some mental block on providing workplace nurseries as a facility for working parents. That would be the one way to get women back into employment and allow them to work and look after their families at the same time.

It is not just a matter of workplace nurseries ; there is a necessity for adequate state provision. An examination of local authority nursery provision shows the Labour party's commitment in contrast to that of the Conservative party. The 24 authorities that have the highest proportion of three to four-year-olds in pre-school nursery places are all Labour. The bottom 24 are all Conservative authorities.

This year the Chancellor had the opportunity to bring more women into the work force on the grounds of equality and efficiency. He could have offered incentives to employers to set up more nurseries, but he has not. Far from showing that he wants to help women and children, he has done exactly the opposite.

8.43 pm

Mr. Tam Dalyell (Linlithgow) : Before making a very gentle speech, I must say that I agree with my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) and my hon. Friend the Member for Livingston (Mr. Cook) in their assessments. In Scotland the debate is against the background of the poll tax, which is causing endless trouble in all Scottish constituencies. I do not think that Ministers or anyone else really understands the amount of difficulty that the poll tax will cause.

My first question refers to taxpayer confidentiality. The Chancellor said :

"In particular, it does not cover information in the possession of either the Inland Revenue or Customs and

Column 611

Excise concerning the private affairs of specific taxpayers I therfore propose to introduce provisions in this year's Finance Bill to ensure that it will continue to be a criminal offence for officials or former officials of either of the Revenue Departments to reveal information about the private affairs of a specific taxpayer."--[ Official Report, 14 March 1989 ; Vol. 149, c. 298.] I do not understand why that was not included in the official secrets legislation, as was requested by a former Home Secretary my right hon. Friend the Member for Morley and Leeds, South (Mr. Rees), at business questions this afternoon. Nor am I clear as to whether that is really necessary. I could be persuaded, but I should like to know whether it has been agreed with Tony Christopher of the Inland Revenue Staff Association. Is it not rather like using a hammer for cracking a nut?

I have great admiration for the Inland Revenue, and I think that the tax inspectors deserve the praise of the House. I do not particularly wish to single out any office, and as far as I know I have no constituents who work at East Kilbride, but I should like, as a constituency Member of Parliament with the tax problems that we all experience, to register the fact that the Inland Revenue gives extremely good service to Members of Parliament. I am also aware that there is a tremendous temptation for many tax inspectors to leave the Inland Revenue after a few years and work for private solicitors' firms for a markedly greater salary. Is it not a tinge offensive to change the criminal law to deal with a problem that, as far as most of us know, is non-existent? I have never heard of any revelation of private individual affairs. The Minister should tell us whether there is a problem. If it is not a problem, why tinker with the criminal law?

My second question is equally interrogatory. It refers to the Chancellor's statement :

"I have been particularly concerned about the impact of the European Court's ruling on charities. Unfortunately, charities' business activities cannot lawfully be shielded from the effects of the ruling."--[ Official Report , 14 March 1989 ; Vol. 149, c. 305.] That raises the wider question whether we can amend or change European law on such matters. I do not wish to quote him out of context, but I have discussed this with David Edward, a distinguished Queen's counsel, whom the Government have appointed as one of the judges at the European Court. It was certainly his opinion that changes can be made, and perhaps our partners are not inflexible but have never been asked to make those changes. Has the Treasury really tried to persuade other European Finance Ministers to change the law on charities?

My third question arises out of the undoubted fact that an enormous amount of what the Chancellor has been able to do has resulted from privatisation. Without privatisation and North sea oil, the Government certainly would be in no position to produce such a Budget. Therefore, it is very unfair to refer to what the Labour Government did in the 1970s in totally different circumstances relating to oil and privatisation.

I shall home in on one particular aspect of privatisation--the curious statement from the Secretary of State for Employment on Monday. Apparently, on the advice of Deloitte Haskins and Sells, it was agreed that the skill agencies and skill centres should be the subject of a management buy-out. What estimate exists in the Treasury of the amount of money that will accrue to the Treasury and to those who will undertake the management buy- out? A great deal of money is involved. There are considerable properties, often in prime sites. Those of us

Column 612

who have visited skill centres have high regard for them. Certainly in the north they are doing a very good job. The skill centres that I have visited have much valuable modern equipment. To whom do the profits from this transfer go? What volume of profits are we talking about? This is a profoundly unwise policy.

I should like now to ask a rather different set of questions. This afternoon I interrupted the Chancellor of the Duchy of Lancaster to ask about debt, especially south American debt, and how it fitted in with the Budget strategy. There was some ill-informed laughter from the Under- Secretary of State for Trade and Industry. A Minister is very unwise to laugh at this subject. If the Financial Secretary laughs, I shall tell him that the chairman of Midland bank certainly does not laugh. I have spoken recently to Kit McMahon about his problems. If one inherited the difficulties of the Midland bank, or even those of Jeremy Morse at Lloyds bank, one would think it was no laughing matter.

Third world debt is a very dangerous matter. If we press south America too strongly on debt, the political consequences will be destabilising and harmful to many British and American banks. This is not the place to repeat my long contribution to the Consolidated Fund Bill debate last Tuesday morning, reported in Hansard at columns 157 to 165, but I ask the Treasury for some reflections on how they fit into decision-making.

Has any consideration been given to measures to encourage British banks with large exposures to Third-world countries, especially in Latin America and in Brazil, to reduce those countries' indebtedness in exchange for measures to protect and conserve their natural resources, especially tropical forests? I believe that the Minister for Overseas Development and the Under-Secretary of State for Foreign and Commonwealth Affairs are very sincere about the matter, but if we are to be serious about the rain forests, we must also be serious about debt.

Secondly, has any consideration been given to provisions that could be made to encourage commercial banks to exchange Third-world debt for nature? What steps will the Treasury take to encourage the progressive reduction of Third-world indebtedness to British banks? May I say to the Economic Secretary that it is very unsatisfactory for the House to be denied any information about the instructions that our Government give to the British director of the World bank? I am not blaming Mr. Cassell, who occupies that position as minister in Washington, and our executive director of the World bank--this complaint is not made personally about him--but I do not understand why we cannot have as full information as the Americans.

On 13 March, the Under-Secretary said :

"Environmental issues are being given much greater attention in the World bank, in part due to the efforts of the United Kingdom and several other members."

Could the Treasury write to me saying exactly what it has done in that regard? The Minister continued :

"The reorganisation of the World bank in 1987 strengthened its capacity to ensure that environmental costs and benefits are systematically addressed in projects appraisal. It is clear that the bank is aware of the sensitivities surrounding the proposal, but I repeat that we will need to look at the precise terms of any proposal."

I then asked a question of the Minister about the Americans and he replied :

"There is possibly a difference in approach between us and the Americans on this matter. It relates to our reluctance to

Column 613

use our voting in the World bank as any kind of political lever or pressure--a reluctance which the Americans certainly do not go along with to the extent that we do."--[ Official Report, 13 March 1989, Vol. 149, c. 172-3.]

I ask the Treasury Ministers whether they are sure that we are right and that the Americans are wrong. There is a very powerful case for adopting the American practice.

What environmental controls do we have in relation to the European development fund? Are we sure that a sufficient period of consultation for the British representatives in the World bank is provided to give a considered opinion, given that instructions seem to be given at the shortest notice?

I tabled a question recently asking the Chancellor of the Exchequer if he will make a statement on recent progress by the International Monetary Fund and the World bank on development loans to Brazil, relating to the power sector and rain forests. I received the usual courteous reply--that it was a matter for the Foreign Office. May I ask the Minister, even at short notice, to write to me formally saying precisely what is the role of the Treasury as opposed to the Overseas Development Administration with regard to ecological impact assessments in World bank and International Monetary Fund policy? As another hon. Member has come in to speak, I shall end my remarks there.

8.56 pm

Mr. William Cash (Stafford) : It strikes me, on occasions like this when the clock is moving towards 9 o'clock, that it is better just to take a brief snapshot, so to speak, of the philosophy and attitudes that underpin the Budget. In particular, I feel strongly that this Budget builds on previous Budgets under our very successful Chancellor, although that has not been said so much in the media. We have had a succession of tax cuts together with incentives that have led people perhaps to expect that that would go on indefinitely. There is no doubt, as my hon. Friend the Member for Esher (Mr. Taylor) said, and as has been said in the press, that this is a cautious and clever Budget.

We have heard much talk of ESOP. I was reminded of Aesop's fable of the tortoise and the hare. Not for a moment would I refer to my right hon. Friend the Chancellor of the Exchequer as a tortoise, but there are times for caution and prudence, and he who adopts that philosophy is most likely to succeed in the longer term.

The Budget fulfils three main criteria. I had an opportunity before the Budget to discuss this with some colleagues. I was asked what I would say if I was in a position to make proposals in a Budget. Bearing in mind that it is unlikely that I would be asked to do so, I said that I would choose three criteria. First, there would be savings. Secondly, there would be quality, by which I mean quality in performance of British industry and services. Finally, there would be care. It is my judgment that the Budget carries with it all three of those ingredients in equal measure.

Just briefly, as time is short, I remind hon. Members of what happened in Japan in the 1950s, when it re-geared its tax policy to put the emphasis on savings. In a nutshell, that has led to the yen being the most powerful currency in the world. There is much in this Budget that goes to the very heart of this question.

Column 614

With regard to quality, one fact that we know is that we are consistently being outdone by imported foreign goods. The question is not whether we have a trade deficit, but why. On closer examination, it is invariably because British goods do not match the quality that imported goods succeed in achieving. I thoroughly applaud the provisions in the Budget that place emphasis on profit-related savings mechanisms, because people will have an incentive to produce higher quality goods. Essentially, this is a self-help Budget, combined with a practical opportunity for people to use their labour to improve the quality of the goods that they produce.

Everyone must admit that the provisions relating to the elderly are a significant step in the right direction to ensure that those who wish to remain in work, for perhaps only two or three years, may do so. The psychology of this measure is important because people can remain in work rather than feeling that at a given date there is a shut-off point and that they will be regarded as redundant and irrelevant, when they are not. The provisions in the Budget enable them to make choices. Choice and freedom of choice will give those people dignity and self-respect. I applaud the Budget for the reasons that I have given.

9.1 pm

Dr. John Marek (Wrexham) : We have had a deliberately low-key Budget. It blames the people for high interest rates, and the Chancellor cheekily said that high interest rates were here to stay for the time being. Ordinary people, who borrow money to buy a car or home, will have to cough up ; they will pay through the nose. The rich, who depend on unearned income for their life styles, will laugh all the way to the bank.

We have had a typically mid-term Budget, which gave nothing away, but which the Chancellor hopes will allow for a better Budget just before the next election. We have had a Budget that shows that the Chancellor is scared about the economic position, and that inflation will continue to rise higher. We have had a Budget that helps those who drink much alcohol and heavy smokers. It will cost the nation dearly when our hospitals and National Health Service have to treat the increases in drink-related disease and cancer of the lungs. The debate has been well informed, and my hon. Friends clearly showed why the Budget strategy is wrong. My hon. Friend the Member for Ashfield (Mr. Haynes) made some pertinent remarks about the National Health Service. The hon. Member for Caernarfon (Mr. Wigley), who is not present but no doubt will be soon, should not will taxation to provide services for our constituents, who desperately need them ; the Chancellor has £15 billion at his disposal, but dare not spend it. The problem is, even if he did, he would not spend it on services for our people.

My hon. Friend the Member for Stalybridge and Hyde (Mr. Pendry) spoke eloquently about the plight of pensioners. My hon. Friend the Member for Newham, North-East (Mr. Leighton) detailed the problems with training schemes and the lack of training. Our next generation will pay dearly for the Government's lack of care in training. I agree with my hon. Friend the Member for Liverpool, Walton (Mr. Heffer), who dwelt on the handouts given to the rich and the super-rich in last year's Budget.

My hon. Friend the Member for Easington, (Mr. Cummings) spoke movingly of his elderly constituents,

Column 615

and my hon. Friend the Member for Redcar (Ms. Mowlam) spoke of workplace nurseries, the problems of women and the Government's apparent lack of concern about them. My hon. Friend the Member for Linlithgow (Mr. Dalyell), in his own way, asked not one or two but four or five questions. The Minister has half an hour to sort out some answers to his interesting questions, which the House will wait with bated breath to hear. My hon. Friend made an important point about the oil crisis with which the Labour Government of the 1970s had to deal, whereas this Government have had the revenues from North sea oil and the sale of the family silver at their disposal. That important distinction must always be remembered, and I thank my hon. Friend for making it.

I have two main themes to my remarks. First, the Government are showing a lack of care and irresponsible recklessness in not giving proper consideration to our infrastructure, public spending on roads, schools, houses, railways and services such as the National Health Service. The second theme is that the Government are economical with the truth when it suits them. As my hon. Friend the Member for Livingston (Mr. Cook) said, they spend many hours on news management and disinformation. My hon. Friend dealt with news management and exposed the glib phrases used by the Chancellor of the Duchy of Lancaster for what they were--shallow, glib phrases that added nothing to the debate.

In his Budget statement, the Chancellor said that Inland Revenue consultative documents would be issued. When I visited the Vote Office, I was told that it did not have them and to try the Library. I went to the Library, which said that it had some documents but that I had to read them there. There are three consultative documents--the tax treatment of swap fees, the tax treatment of foreign exchange gains and losses and the sub- contractor scheme reducing paper work. Will the Economic Secretary ensure that they are available in the Vote Office? If he is unable to do so, I hope that he will at least provide Opposition Front Bench spokesmen with copies. Preferably, they should be available to all hon. Members.

Mr. Kirkwood : And to the hon. Member for Linlithgow (Mr. Dalyell).

Dr. Marek : Yes, indeed--and to my hon. Friend the Member for Linlithgow.

I would not be allowed to say, too baldly, that the Chancellor of the Duchy of Lancaster was dishonest, but it is true that he was economical with the truth when he said that the index of manufacturing production was lower when the Labour Government left office in 1979 than when they took office in 1974. That statement is true, but it does not give the full picture. There is no mention of the oil crisis of 1974-75 or of the fact that the index of manufacturing production for the Labour Administration was always higher than under the Conservative Administration between 1980 and 1986. It is only now returning to its level under the last Conservative Government of the 1970s led by the right hon. Member for Old Bexley and Sidcup (Mr. Heath).

The contribution of the Chancellor of the Duchy of Lancaster was an example of news management, was glib and made no contribution to the debate.

Let me give another example of news management. The Chief Secretary to the Treasury said yesterday :

"we are enjoying the longest period of growth since the war."-- [Official Report, 15 March 1989 ; Vol. 149, c. 435.]

Column 616

Today, that was almost parroted by the Chancellor of the Duchy of Lancaster when he said :

"We are in our eighth year of growth."

If the average person were to hear that without giving it a great deal of thought, he might think that the economy was actually a success. The right hon. Member for Chesham and Amersham (Sir I. Gilmour) had it right yesterday when he said :

"in the whole period from 1979, the growth rate has been unusually slow. The growth of manufacturing output since 1979 has been the slowest of the post-war period--that is, slower than any nine-year period before 1979."-- [ Official Report, 15 March 1989 ; Vol. 149, c. 440-41.]

That is the fact of the matter. It is all very well to use glib words such as

"We are in our eighth year of growth",

but they are meaningless and add nothing to the debate. Indeed, it demeans Members on the Treasury Bench when they make statements like that without any thought as to what they mean and the impression that they may give. Such remarks are simply facile, and I hope that Treasury Ministers will turn over a new leaf.

Let me give another example of news management. At 10.30 pm on Tuesday, the day of the Budget, the Chancellor was giving his forecast on Radio 4. I am not sure that I have got it right, but he said something like this : "There has been a massive break-away from the policies of the past of high taxation"--the implication being that Labour is the party of high taxation and that he has broken away from that. [ Hon. Members :-- "Hear, hear".] I hope that those hon. Members who are saying "Hear, hear" will explain carefully what they mean. I will give them every opportunity to do so.

Again, the Chief Secretary parroted in the House what the Chancellor had said on radio :

"Labour is the party of high taxation. We are the party of low taxation."

But he gave the game away earlier when he said :

"The right hon. and learned Member for Monklands, East (Mr. Smith) said, correctly, that the tax burden has gone up".--[ Official Report, 15 March 1989 ; Vol. 149, c. 425-29]

The tax burden has indeed gone up, and in the Red Book, page 18, there is a very telling table. Table 2.5 deals with non-oil taxes and national insurance contributions as a percentage of non-oil money GDP. From this table it can be seen that under the last Labour Government from 1974 to 1979 that percentage was never above 36 per cent., yet under the Conservative Administration from 1979 until 1989 it has never been below 36 per cent. Where now are all those Tory Members who were saying "Hear, hear", meaning that Labour is the party of high taxation?

Mr. Cash : A married man on average earnings who has two children is now earning more than £45 a week more in real terms than he was in 1978 to 1979, whereas real take-home pay under Labour increased by only £1.

Dr. Marek : That is exactly what one gets from Members of the Tory party. [Hon. Members :-- "Answer."] I will give the answer in a minute. Tory Members are talking only about taxes on income. What about taxes on expenditure? Who raised VAT from 8 per cent. to 15 per cent.? It was not the Labour party. That is why I say that it is the Conservative party that is the party of high taxation, whereas Labour is the party of low taxation. We have no intention of increasing the burdens on the people of this country that have been placed on them by the Tory Administration not just over the last one or two years but over the last eight or nine years.

Column 617

The Government have been paying back the national debt. It is a latter-day conversion. They cannot do anything else. It is simply a matter of expediency. They cannot use the Budget surplus for anything else. Certainly they do not want to spend it on services, and they cannot give any more handouts to the rich and the super-rich because problems of inflation have begun to come to the fore. So, what do they do? They fall back on the expedient of repaying the national debt. In fact, they are now frightening people with scare stories about Labour increasing national insurance contributions if they were ever to come to office.

Mr. Nigel Forman (Carshalton and Wallington) indicated assent.

Dr. Marek : The hon. Member nods his head. One has only to read the reports of the debates of yesterday and the day before to see a number of references by the Financial Secretary and others to this matter. Labour Members think that it is unfair that the person earning £15,000 a year should be paying 9 per cent. in national insurance contributions, whereas a person earning £100,000 a year is paying in effect a little less than 1.5 per cent. in national insurance. We think that national insurance contributions should be raised for the person who is getting £100,000 a year. That would allow a reduction for the person earning £15,000 a year.

The Tory party, besotted with its huge majority in this House, thinks that it can indulge in any misrepresentations it likes and manage the news in any way it sees fit.

Let me turn now to the Chancellor's wish to doctor the retail prices index- -another example of news management. It was a bit inconvenient for the Chancellor recently that, because of mortgage interest relief being included in the RPI, inflation was a bit high. It is a little bit high for the country--we all agree with that. But what does the Chancellor do? He does not want to do something about inflation. No. Instead he wants to doctor the RPI by taking mortgage interest relief out of it. He never mentions that the housing market in the United Kingdom is very different from those of other countries in the Common Market and for that reason we, with Ireland, have mortgage interest included in the RPI and in other countries, where the housing market is different there is an imputed rent, a rent that the property would attract on the open market.

Let me quote what the Chancellor said in his statement on 12 January 1989 :

"So far as the recorded RPI is concerned, the position is complicated by the fact that, of all 12 nations of the European Community, we are one of the only two--the other one being Ireland--that is daft enough to include mortgage interest payments in its retail price index It is again my task to seek to educate the Leader of the Opposition"--

the Leader of the Opposition came in--

"Of the other 10 countries of the European Community that do not include mortgage interest payments, there is a minority, it is true, that do have as a proxy for the cost of owner-occupied housing--it is a minority-- imputed rents."

Well, if the figure were 10, four would be a minority at most. The Chancellor went on to say :

"The majority have nothing at all. So the Leader of the Opposition was trying to mislead the House, no doubt through his own ignorance."--[ Official Report, 12 January 1989, Vol. 144, c. 1007-1008.]

Column 618

I went and got hold of the OECD main economic indicators. I must say that these figures relate to 1980 so there may have been a change. I looked down the lists and found, for example, that the following countries, in making up their RPI, have some form of rent or mortgage included in the figure with some weighting : Canada, United States of America, Japan, Australia, New Zealand, Austria, Finland, Iceland, Norway, Switzerland, Turkey and Yugoslavia. Luxembourg does not. Greece and Portugal, I think, have. The OECD document does not say that they do not but the amount of detail is not sufficient. But it does say that the following EEC countries have a component for housing or rent : Belgium, Denmark, France, Germany, Italy, the Netherlands, Spain, Ireland, and the United Kingdom. Who is right? Are the 1980 OECD main economic indicators wrong? Have several countries stopped including rent? Is the Chancellor badly advised, or is he trying to pull the wool over our eyes? The matter should be cleared up. Following the lead given by my hon. Friend the Member for Linlithgow, I should be grateful if the Economic Secretary would write to me with full details about the truth of the matter. It would certainly help the House. There would be much less news management and misinformation in this place, which is all to the good.

The Government are also obsessed with saving money on public services. Let us examine the railways. Ministers like to boast about high levels of investment in British Rail. We need only refer to any Transport Question Time to note the Minister and the Secretary of State for Transport boasting that investment in British Rail is at an all-time high, and comparing it with the position under the last Labour Government. I got the Central Statistical Office database figures relating to railway gross domestic fixed capital formation at 1985 prices. In 1974, it was £409 million, and in 1975 it was £517 million. The figure remains around that level until--surprise, surprise--we get to the Tory Administration, when it dropped to £370 million in 1980. In 1982, it was £283 million. The lowest point was in 1984, when it was £274 million. It has since gone up a little. To provide an average, under the Government of the right hon. Member for Bexley and Sidcup it was approximately £350 million a year. Under the last Labour Administration it was £472 million a year. Under the first Conservative Administration led by the present Prime Minister it was about £307.5 million, and under the second Administration in 1983-87 it was £353 million a year. It is still less than the amount invested under the last Labour Government. It has gone up a little. I should like to see a record figure for this year--I do not have the 1988 figure--but one swallow does not make a summer.

Hon. Members should remember that it is no good the Secretary of State for Transport saying that, in 1988, we had the highest level of investment in British Rail since 1970. That is what he tried to do during Transport Questions last October. It is meaningless. It is a glib, empty and shallow phrase which conveys nothing and adds nothing to the debate. It does not fool any Opposition Member or the press. The lack of investment in British Rail in recent years has had to be compensated for by revenue generated by British Rail's operations. These are higher fares and lower wages. In the past three years the increase in fares has been wel above the RPI. Let us remember that the basic rate for railway employees is now lower than that for agricultural workers. I do not say anything derogatory about

Column 619

agricultural workers, but relativities have been upset. The lack of Government investment has caused British Rail to cut jobs. Since 1979, 50,000 jobs in British Rail have been lost.

There have also been improper maintenance, checking and control procedures. It is no use blaming the driver or the technician for the Clapham accident. If the old track layout had still existed, the Glasgow accident would have been impossible. The new layout allowed human error, perhaps, to cause that accident. An article in the London Evening Standard of 13 March stated :

"Signalling equipment in the Waterloo area of Southern Region has been deteriorating so badly that there have been three major failsafe errors in the past two years."

That is directly attributable to the lack of public expenditure on our railway infrastructure. Yet again in the Budget, the Chancellor has seen fit not to provide any more money for the public services that the country desperately needs.

British Rail is doing other things such as abandoning the systematic maintenance of lineside telephones. On the west coast main line, it has produced cars called pacers. They are too light, they leak and they will not go uphill. There are problems at open level crossings because there have been signalling failures, but the Government are trying to export the model. They did not get a single order at the Vancouver exhibition. I am not surprised. Every country knows exactly what we produce under the present Government. In their search for public expenditure cuts, the Government relaxed conditions on open level crossings, which culminated in 10 deaths at Lockington, north of Hull, and resulted in Professor Stott's report. The Government have now put back barriers on about half the number of level crossings. Any hon. Member could mention other examples in other spheres of Government policy.

Mr. Don Dixon (Jarrow) : The Prime Minister would not go on a train.

Dr. Marek : The Prime Minister does not like trains at all. The Government are besotted with their huge majority in the House. They know that, whatever happens in the country, they have a secure majority in the Chamber. They have power over the media and news management.

Last year's Budget was notorious for its unfairness. The unearned income of the richest 1 per cent. has nearly doubled--there was an 89 per cent. increase--and last year's tax cuts have brought them about £400 a week extra. This year, there is no talk of putting that right. Conservative Members talk about balanced, fair Budgets. There is some sense in that, but hon. Members must remember that this Budget succeeds one of the most unfair Budgets this century.

In contrast, since the last Budget the poorest 2.5 million taxpayers--not the unemployed--got tax cuts of about 92p a week. Of course, those cuts have been wiped out by price rises, mortgage and rate increases and utility price increases. I do not have to spell out the figures. Any home owner with a mortgage knows the extra amount that they have to pay. The Government will not put up child benefits. That is scandalous. The figure is £7.25, and it should be £8.35. Above all, the Government have

Column 620

produced the highest balance of payments deficit ever and the highest interest rates and inflation rate of all the G7 countries except Greece and Portugal.

We have a Government who, on the other hand, are happy to throw away £40 million on the Chancellor's estimate, on the estimate of the Chief Secretary to the Treasury--and perhaps it will be over £100 million-- as a tax subsidy to the wealthy retired for private medical insurance. It has been said before, but I think it should be said again, that the Prime Minister will no doubt benefit, but there will not be many pensioners in my constituency or my hon. Friend's constituencies who will benefit from this. There is no targeting or testing in this proposal, except in one respect. One has to be rich to take account of the concession.

The Chancellor could have expanded our training progrmme to develop our skills, because skills shortages are appearing everywhere. The Chancellor could have provided finance for more teachers. He could have cut National Health Service waiting lists. He could at least have valorised excise duties on drink and tobacco because of the nation's health. The Chancellor did nothing of the sort. I received a letter from the Privy Council Office signed by the Leader of the House saying ;

"As Chairman of the Ministerial Group on Alcohol Misuse, I am writing to let you know that the first ever National Drinkwise Day will be held on 20 June 1989."

That day will be drinkwise all right. Drink will be cheaper and we shall be able to drink more of it for the same amount of money. I wonder what the Leader of the House thinks about the Treasury's action this year, which was taken because the Treasury was scared of adding 0.1 per cent. or 0.2 per cent. to the level of inflation, so it did not valorise, or even attempt to valorise, increases for alcohol or tobacco.

The Chancellor could have avoided increases in charges for water, electricity, public transport and prescriptions. That would have kept inflation down. Why did he not do that? He could have cancelled charges for eye tests, but he has not and instead we shall have a two-tier system of eye tests under which a person can go to an optician and have a quick test which would not detect cancer, diabetes or many other diseases.

The Chancellor could have produced a programme for public spending on essential services. The Government could have spent a little more to ensure that airlines--and in particular Pam Am--received the bomb warning immediately, rather than sending it by post at Christmas [ Hon. Members :-- "No."] The Government send letters by second-class post at Christmas. If the Government provided a different policy for the Post Office, I am sure that it would take on many more people, but I do not want to take up time on that. The Government send letters by second-class post to Members of Parliament. I shall not name a Department because it would be unfair, but Departments are doing that. It is time that the Government got rid of their dogmatic obsession about saving public money and expenditure-- [ Hon. Members :-- "Why?"] It would have saved 200 lives at Lockerbie for a start ; we should be clear on that.

People demand a proper level of service and a proper level of care from the Government. They are not getting it, and the Budget stands condemned because of that.

Column 621

9.31 pm

The Economic Secretary to The Treasury (Mr. Peter Lilley) : This has been an interesting debate, reaching a high point of the several days of Budget debate so far. It has been interesting, above all, because it has demonstrated the wide measure of support for the Budget not just among Conservative Members, among whom whole-hearted support has been manifest, but among a range of Opposition Members, among whom partial support has been apparent for individual measures.

There have been some notable contributions, especially from my right hon. and hon. Friends, beginning with a cogent speech from my right hon. Friend the Member for Guildford (Mr. Howell), who has long been an advocate of popular capitalism and wider share ownership. He urged greater incentives for that and for savings. I am not wholly convinced of the necessity for any front-end relief for the savings that he favours, if only because it would, of necessity, have to be accompanied by considerable complications to prevent abuse. Above all, we want to keep matters such as personal equity plans as simple and usable as possible.

My right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling) continued the debate with a pithy description of the Budget as one with something for everyone. That was confirmed by the debate as a whole. He pointed out that the Opposition parties were largely unable to criticise the Budget because of its many popular features, which he enumerated.

My hon. Friend and neighbour, the Member for Hertfordshire, South-West (Mr. Page) eloquently expressed his concern about the health of manufacturing industry, and he sought an even more rapid recovery than it is manifestly enjoying at present. I confess that I remain unconvinced that his remedy of the Government setting priorities and targets and picking winners would be more successful than relying on greater enterprise and competition. However, I noted his speech with interest.

My hon. Friend the Member for Ludlow (Mr. Gill) made a forceful plea to encourage savings by a shift to indirect taxation. He will have seen that this is not the year in which we felt it right to increase the burden of indirect taxation--for obvious reasons. The hon. Member for Stalybridge and Hyde (Mr. Pendry) welcomed the abolition of the earnings rule. That feeling was echoed by hon. Members of all parties. Nobody opposed what my right hon. Friend the Chancellor described as that "long overdue" measure.

The hon. Member for Newham, North-East (Mr. Leighton) rightly analysed the effect of the extra spending in the economy being the result not of the Budget changes last year but of increased borrowing. However, he was wrong to say that none of the extra money in the economy has gone into investment. Indeed, it is extraordinary that he should say that in a year in which we have seen a marked investment boom and business investment reaching the highest proportion of national income that it has been since records were first kept.

My hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) made a lucid speech, saying that we must get our priorities right and put inflation first. That is precisely where our priorities lie, and that is what we intend to do. I thought his speech in many ways the best of the debate. It was marred by only one thing--his compulsive cynicism, which requires him always to find

Next Section

Home Page