House of Commons Hansard Debates for 25 Mar 1991

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Dunfermline, East (Mr. Brown) opened the debate. They were given a lesson on how a Government should help industry with a view to investment so that industry can make the profits necessary in the interests of the workers, instead of laying them off, as this lot do. The Conservatives do it all the time. They did it back in the 1930s. I am old enough to remember. I was 65 three weeks ago. I am old enough to know what happened previously and before the war. I know, and the people in my age group know, how the Conservative party treats people when it gets into office.

At long last the people are waking up to what is going on. The hon. Member for Northfield can take the grin off his face because he will be looking for a job elsewhere after the next election and he knows it. I have listened to some of the things that he has said since he has been in the House. There is no doubt that the does not know how ordinary folk go on. He has his head in the clouds like many more in the Conservative party.

We have had it all before and, while the Conservatives are in office, we shall get it again. They talk about a 4 per cent. inflation rate. They have promised it all before, but they have never achieved it. Up it went, and the workers paid out of their pockets to dig the Tories out of a hole, but people are now seeing through that con trick.

I remember the Secretary of State for the Environment when he sat on this side of the House--pre-1979--just before he waved that Mace around the Chamber. He said that under a Labour Administration, there was far too much central control. So what is happening now? The Government are introducing more and more central control which is hitting local authorities and the way they implement their policies. Ordinary folk are getting a real bashing because of the 2.5 per cent. on value added tax to pay for the £140 poll tax reduction. Many people in my constituency get relief on the poll tax, but no one will get relief on the 2.5 per cent. increase in VAT. Everyone has to pay that, so the increase hits people on lower incomes. The hon. Member for Canterbury may well yawn--he will have plenty of time for yawning after the next election. I want to see a Labour Member for Canterbury. We shall be in Government so there will be some fair rations then.

The Government talk about what they have done for the people. They have certainly done something for some people. [Interruption.] The hon. Member for Brigg and Cleethorpes (Mr. Brown) should shut up while I am on my feet. I am surprised that you have not stopped him yacking, Mr. Deputy Speaker. I always listen to other hon. Members, so the hon. Gentleman should listen to me. I was rather surprised that, when Brigg town came to play Sutton town in my constituency last Saturday, the hon. Gentleman did not turn up to support his own club. I mentioned it to all the management, so he has lost their votes.

Where has all the money gone? The Government have sold off nearly all public industry. With the proceeds, they could have helped people who are really in need, but they have had to put 2.5 per cent. on VAT to pay for the £140 poll tax reduction. That is a shocking state of affairs but, slowly and surely, the electorate are learning. The Government have failed miserably with their training programme. When Labour is in office, there will be a proper training programme so that we have skilled workers with jobs at the end of their course. At the moment, people go on some training scheme for a couple

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of years because the Government assure them that there will be a job at the end of it, but there are already 2 million unemployed and there will soon be 3 million.

On Saturday night, I spoke to some people from the Confederation of British Industry at a reception during a concert. There was a break of about 20 minutes for a drink. I drank orange juice because I had my car. The people from the CBI said that the Government had failed industry, and indeed they have. They are trying to duck their responsibility by using a con trick on the nation.

David Puttnam and Richard Attenborough went to see the previous Prime Minister, the right hon. Member for Finchley (Mrs. Thatcher) to try to get help for the film industry. She guaranteed them £5 million over about three years. The Conservative party sacked its leader and also the £5 million--the film industry has not seen a penny of it, although the industry is an important exporter. We train the finest actors in the world- -there is no doubt about that. They used to make films in this country before the Conservatives came to power in 1979. Since then, the industry has gone down.

The right hon. Member for Finchley recognised that we should pick it up, and she guaranteed the industry £5 million. She set up a committee with a view to putting the matter right, but under their new leader and with new Secretaries of State the Government have failed the industry. I am interested in that industry and always have been, like many other hon. Members. We want it to be successful. The Minister is not listening--he is yacking to the Chief Whip--but I want him to listen because I want the Government to do something about that industry, as the right hon. Member for Finchley promised before she was sacked. I want the Minister to tell the Chancellor, who has nipped out of the Chamber, that an appeal has been made on behalf of the film industry.

The Government have been a complete failure for the nation. I am pleased that the Chancellor has now come back. He knows that what I have said is true. The sooner we get rid of this Government, the better.

8.56 pm

Mr. Roger King (Birmingham, Northfield) : It is always a privilege to hear a speech by the hon. Member for Ashfield (Mr. Haynes). I observed that my right hon. Friend the Chancellor made good his escape at the start of the hon. Gentleman's peroration. I have to say that he did not miss very much. I enjoy the hon. Gentleman's neanderthal approach to socialism--he will be sadly missed when he leaves the House at the next election. Those of us who will be back will have to look on the Opposition's serried ranks of grey socialism which, so far during this debate, have failed to come up with any policies to help our economy develop.

I consider the Budget to be rather like a wine that has matured over the weekend as the salient points have been digested. They seem all the better for examination.

We are moving through difficult economic times, for a catalogue of reasons which go back many years before the Conservative Goverment came to power in 1979. Business people in the west midlands in particular want economic stability. They are fed up with brief periods of raging economic growth being followed by periods of recession. If they are to be sure of sustained, programmed growth, businesses--certainly those in the west midlands, and, I

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believe, those in the rest of the country-- need a period of controlled interest rate reduction, fair exchange rates and general financial stability.

I was particularly struck by certain items in the Budget. One was the important but largely unsung incentive provided by profit-related pay, which I hope will be welcomed throughout the country. When the economy picks up, we do not want roaring demand for wages which will not be paid for either by productivity agreements or by the profitability of the business or service concerned. The scheme should be popular not only with businesses but with trade unions, whose objective is to further their members' interests.

The sale of stocks and shares in high street shops is, I think, an excellent way of carrying the torch of capitalism even further than has been managed by our privatisation programme. Lingerie was once sold behind screens in department stores, away from the public gaze--certainly out of the sight of men. Over the past few years, however, there has been a transformation of retailing practice. It is now possible to purchase lingerie from Knickerbox on the concourse at Epsom station. I look forward to the time when there is a Stockbox alongside Knickerbox. The more shares are brought into the public marketplace--the high streets, for instance-- the more people will embrace the aims of capitalism, and appreciate the importance of taking a fair share in the value of British industry.

I am sorry that I was not here for the speech of my hon. Friend the Member for Bromsgrove (Sir H. Miller), because I believe that he mentioned the car industry--as did the hon. Member for Carlisle (Mr. Martlew). That industry is especially important to the west midlands, and I hope to say something about it myself.

We have heard a good deal today about the problems of local government finance, about the obvious move towards more central funding, and about a local levy to replace the poll tax. Some hon. Members have spoken of the desirability of transferring all local funding to central Government. There is, of course, some merit in such a system--the money would be raised through income tax, VAT or both--but the cost to the taxpayer would preclude any reduction in income tax in the foreseeable future.

Attractive though that panacea may be, I fear that it would lead us into the quagmire of central funding for all local authority services. I am reminded of the problems that we encounter in seeking a fair and equitable system of funding for the National Health Service. Whenever operations are cancelled or wards are closed, for whatever reason--irrespective of the way in which the local administration conducts its affairs--the finger is always pointed at the Government. They are invariably accused of having underfunded the service, although they can prove that they have financed it more than adequately. When money is short, the Government get the brickbats. Representing as I do such a great city as Birmingham, I would not like to be faced with a constant procession of people telling me that education, housing and social services are inadequately funded because central Government have not got the formula right. Unless we can devise a block grant formula that is wholly fair--a task that has defied Governments for generations--central funding will not be an acceptable alternative. We need a mixture of the two types of funding.

My right hon. Friend the Chancellor has increased the levy on personal use of company cars. I remind my right hon. Friend that the company car forms the basis of the

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British motor industry's production requirement : the bedrock of the annual sale of 600,000 has attracted such overseas manufacturers as Toyota, Nissan and Honda to this country, and provided a springboard for entry into the world market. The motor industry is on course to export half a million cars this year ; that is an outstanding achievement, on which a substantial home market has been built. If we jeopardise that home market by persuading the company car fleet owner to ask his employees to buy their own cars, there is a danger that they will buy foreign cars. I think that my right hon. Friend may have gone a bit too far.

Having expressed that reservation, however, I congratulate my right hon. Friend on an excellent Budget.

9.3 pm

Mrs. Margaret Beckett (Derby, South) : My hon. Friend the Member for Halifax (Mrs. Mahon) summed up the Budget last week when she said that it would be remembered as the "poll tax Budget".

Midland Montagu, in its analysis of the Budget, said :

"The budget has been dictated by the over-riding need to cut poll tax bills for the coming year".

I agree with my hon. Friend the Member for Durham, North (Mr. Radice) that the Chancellor's speech was almost as striking for what he did not say as for what he did. With forecasts that show the economy to be in an appalling state, but with little indication of how the Government plan to deal with that, I was surprised to see the Chancellor's speech referred to as "bold" and "courageous". He was not courageous enough to mention the two worst indicators found in the Red Book--the fall of 5 per cent. in output and the fall of 10 per cent. in fixed investment. The latter figure is particularly striking when we recall that the fall in economywide fixed investment is the biggest year-on-year fall in such investment since the great depression of 1931 to 1932.

It is no wonder that S. G. Warburg says in its response to the Budget :

"Not only does the gloomy period come first, but the longer term optimism is rather suspect"

The Chancellor, however, had the courage to mention rising unemployment. Unfortunately, that was all he did--mention it. He spoke sternly about inflation, although whether it was courage or foolhardiness that he showed by gambling with inflation is another matter. The Chancellor, through the increase in VAT and the increase in prescription charges announced a few days before the Budget, has inflicted yet another inflation own goal. That is just what the Government did all last year, and it has brought us to our present pass.

I know that the increase in VAT will not show in the same way in the headline figures or the retail prices index, but it will show up in prices. That gamble on VAT is a poll tax surcharge, imposed in an attempt to save the Government's neck. The Financial Times called it

"a tax to save the Conservatives from the just consequences of their own folly."

I notice that it was The Times which said that this was the nearest any British Government had come to handing out fivers on the street corner. On the basis of the cut in the poll tax figures, the Financial Times predicted that next year we shall see luncheon vouchers handed out in return

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for voting Conservative at the next election -- [Interruption.] That is not my joke, but that of the Financial Times .

Better forecasts for inflation were made in the Red Book and in the Chancellor's speech, although the gross domestic product deflator, in common with the most recent inflation figures, suggest that there are still problems. We have been given better forecasts for the balance of payments, but we believe that that is the least that we should expect from a flattened economy. Kleinwort Benson has said in its commentary :

"The Treasury's forecast that inflation falls further"

in the subsequent year

"to 3.75 per cent. is too optimistic there are too many special items that worked to reduce the rate of the UK RPI in 1991, and are unlikely to be repeated in 1992"

We have all along predicted that there will. be improvements in inflation and other indicators because of the way in which the economy has been flattened, but what about the longer-term perspective? Once again, the Budget shows that there is none. The Government seem to be looking not one day further than the day of the next general election.

The predictions of falling interest rates, inflation and balance of payments--at least for a period--is what we used to call the window of opportunity in which the Government were hoping to hold the election. We should now re-identify that anticipated period as the eye of the hurricane. It has long been predicted that there would be some deterioration in the economy when the squeeze was lifted. But what is now crystal clear, just as we feared, is that the Government plan not to learn from the past mistakes but to repeat them--at least partly for electoral reasons.

The signal that the Government gave in 1988--I am pleased to see the right hon. Member for Blaby (Mr. Lawson) in his place, because it was his signal- -fostered the credit boom and added to the tax cuts all those words about the economic miracle and our problems being at an end. One mistake that the Government are now threatening to repeat is giving the same signal.

Mr. Lawson : Will the hon. Lady quote the statement to which she referred?

Mrs. Beckett : Does the former Chancellor disown the phrase "economic miracle'?

Mr. Lawson : Yes, I do. Will the hon. Lady quote the statement to which she referred?

Mrs. Beckett : I apologise if I have done the right hon. Gentleman an injustice. I recall the phrase being used. I recall it being used by the present Prime Minister. If the right hon. Gentleman is shifting the blame from himself on to the Prime Minister, that is fine by me.

Mr. Lawson : The hon. Lady will find that I quoted a number of other people who had referred to an "economic miracle".

Mrs. Beckett : I am grateful to the right hon. Gentleman for putting the record straight with such commendable accurancy. I am afraid that I do not recall his strong denials, his dissociation from those words of his suggestion that there might be anything flawed in those remarks.

There is no doubt that the Government are giving a similar signal today. When we went into the exchange rate mechanism, the then Chancellor, now Prime Minister,

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talked about the adjustment that we would have to make and the sacrifices that would be required. As we feared, the present Chancellor is trying to tell the electorate that those hard times and sacrifices are already behind them. The Government are saying that there is no alternative to their proposals, that no one could run the economy better than them--an example of hubris which no doubt will shortly be followed by nemesis.

Why are the Government facing these problems? The Chancellor said--this is probably just one explanation which he wants to give--that recession in a market economy was "inescapable". That is a new line in Tory propaganda. Will the right hon. Gentleman put that in the election manifesto? I do not remember it being in the 1987 manifesto. The other usual suspect is, to quote my hon. Friend the Member for Brent, South (Mr. Boateng), that "little mistake" in 1987 to which the Government admit--interest rates cuts. I notice that increasingly, when the Government mention that "little mistake", it seems that even that was our fault, not theirs.

What other slings and arrows have beset the Government? Under what harsh strokes of fate have they reeled? What terrible ill luck has beset them?

Mr. Ian Taylor (Esher) : Will the hon. Lady give way?

Mrs. Beckett : I should like to continue.

Apart from the Government's mistakes and misjudgments, I can see only one piece of ill luck. The tragedy for this country is that the Government have had £100 billion of income from the North sea, money that they used to keep the electorate sweet while they made the economy the test bed for theories which even they have now abandoned. The oil provided a cushion which allowed them to win three elections in a manner that convinced them that they were invincible. Because they were so sure that they could not lose, no matter what they did, they dared not only to run risks with the economy but to introduce the poll tax--an awful warning of the dangers of a fourth term.

Mr. Ian Taylor : Will the hon. Lady give way?

Mrs. Beckett : I should like to get a little further on, if the hon. Gentleman does not mind.

The same arrogance as the Government displayed then leads them to become increasingly erratic in their own defence. All this week, they have triumphantly announced that they have shot people's foxes and stolen Labour's clothes--I think that they have a little machine in central office that turns out those lines.

The Chancellor of the Duchy of Lancaster, who sadly is not with us this evening, got his lines correct, but evidently he came in on the wrong cue. He was reported this week as saying that inflation was falling "like a stone". If a 0.1 per cent. decrease in the headline rate of inflation is "falling like a stone", what is a 0.1 per cent. increase in the underlying rate of inflation? Is that rising, like the Government's blood pressure? We know what the right hon. Gentleman probably meant to say--under a Government who claim such sweeping success, it is investment, output and employment that are falling "like a stone".

We had the ill-timed recitation about the Government having stolen the Labour party's clothes. I detect some inconsistency. Until about two or three weeks ago the Government were complaining that the Labour party had

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no policies. As recently as the autumn statement debate, the Chancellor said of my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) :

"The right hon. and learned Gentleman has no policy."--[ Official Report, 13 February 1991 ; Vol. 185, c. 866.]

That accusation having failed to serve, the Government decided to steal the policies which they had recently detected. Tragically for the country, they have not stolen our policies. There is nothing in the Budget to assist long -term investment in training, but it contains cuts in real terms of over £200 million.

My hon. Friend the Member for Newham, North-East (Mr. Leighton) quoted the chairman of a group of TECs who gave evidence to his Select Committee on Employment. He said that the TECs had had an overall reduction in their funding and that it has resulted in a major problem. He referred to a draconian average 45 per cent. cut in real terms in their budgets and he called on the Chancellor to reinstate the training and enterprise budgets at last year's level--a call which has gone unheeded.

There was little in the Budget to promote investment in manufacturing, although what was there was welcome. If the CBI's prediction of a 16 per cent. fall in manufacturing investment proves correct, manufacturing fixed investment, including lease assets in the coming year, will be below the level that the Government inherited in 1979. Before the Budget, a House of Lords Select Committee said :

"The Government no longer has any view of the strategic importance to the nation of certain industries, or indeed of any industries at all. All the evidence shows that the present lack of Government commitment, support and assistance is deeply damaging to industry and to our national interest."

The Government's response was to cut the rate of corporation tax. On 7 March the Financial Times said that the cut in the corporation tax rate

"would merely deliver windfall gains to those companies that manage to survive the recession."

In its response to the Budget, the Engineering Employers Federation said that cutting interest rates would have done far more and that what the Chancellor did

"was not an adequate response to the problems of the UK industry and does not address the problems of UK industry and doesn't address the problems of companies not having enough cash to invest for the future."

In its commentary on the Budget, Phillips and Drew observed that the Chancellor's measures

"amount to no more than a teaspoon with which to hold back the recessionary tide."

Those are the measures so highly praised by Conservative Members. The other measure to which the Government gave too little was child benefit. I draw a distinction between our proposals for the Budget and the general shape of our public expenditure proposals. We have clearly said that we have clear and specific commitments to pensions. We will increase the pension for a single person by £5 and for a married couple by £8. We have also said that we will restore child benefit to the level that it would be if it have been index-linked since 1987. We have said that we wish to make other proposals, but that they would be made as resources allowed, and that we would give priority to education and training and investment in manufacturing industry. As the election drew nearer and we had a better idea of what we were likely to inherit, we would be more specific about some of our proposals.

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Mr. George Walden (Buckingham) : Will the hon. Lady give way?

Mrs. Beckett : I want to put this on the record, but if I have time I shall give way later.

Mr. Walden : I should like to get on to the record.

Mrs. Beckett : As my hon. Friend the Member for Blackburn (Mr. Straw), who is the shadow Secretary of State for Education and Science made clear earlier in the debate, we have committed ourselves to a steady increase in education spending as a proportion of our gross domestic product. That will be done as resources allow, but at present we are not in a position to put a timescale on it. That is more of a commitment than anything that we have heard from the Conservative party. All that we have heard is that education is dear to the Prime Minister's heart, and one cannot get much less specific than that.

The Chief Secretary and the Secretary of State for Social Security get very excited about this, so for their benefit I shall set the record straight. The main proposals made in what has been described as our shadow Budget were meant for the present Chancellor, for the latest Budget, in this year of expenditure. We made that plain from the beginning. I know that the right hon. Gentleman sent someone from Central Office to our press conference, so that person will be able to tell him precisely what was said there--at least someone from Central Office attended it. Who sent him is not my problem. Those proposals included changes relating to training and revenue. Not hypothecated, of course--perish the thought. On revenue, we presented an illustrative package. I will be open with the House, and admit that it was designed for one purpose only, which it achieved. That package was designed to show clearly that the Chancellor had the capacity and room for manoeuvre to make programme changes of the kind, and on the scale, that we proposed without having to increase the basic rate of income tax.

In a rational world, it should not be necessary to bother making such distinctions, but in this irrational world, in the House, and confronted by an increasingly desperate Government, it is impossible to advance any proposal of any kind that the Government have not themselves advocated without some idiot saying that it will mean an increase in the basic rate of income tax of 10p or 20p--as the Financial Secretary claimed the other day. Our central contention has been proved beyond doubt because the Chancellor himself raised sums similar to those that we proposed, although mostly from a different range of sources.

I turn to the specific criticisms that have been made of the figures we gave. The Chief Secretary sought to imply--although, as always with the Government, it is necessary to read the small print--that our figures were in some way incorrect. To be blunt, that is untrue.

I refer to the figure for child benefit and to the Chief Secretary's speech at Southport last weekend. He said :

"John Smith said that the increase could cost £775 million. And so it would if no changes were made to income support levels." But we did not propose any changes to income support levels. That proposal related to the Government's Budget and concentrated on the minimum that we thought that they should provide. We were confident that the Government would not both reverse the cuts in the value

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of child benefit and increase the level of income support payments. We were right, because they were not prepared to do so-- [Interruption.] The Government fed their increase through to income support--Conservative Members should listen before they try to nit- pick about accuracy. They acted in accordance with our predictions, so we called on them to make a commitment that we thought was important.

There was another reason why the Government did not feed through their increase to income support. The Government froze child benefit from 1987, when the Prime Minister said it would be paid "as now". They gave a £1 increase for the eldest child in April, but that was not added to income support. The Government intend to claw back maintenance payments from the fathers of single parent families, and they will not be fed through to income support. We were perfectly right to expect the Government to be consistent in that respect. In Southport, the Chief Secretary said that the Government were proposing on this occasion to feed that increase through. Good. It is about time. It is practically the first time in living memory that they have done so. However, not all the money raised from freezing the married couple's allowance is being fed through to income support or child benefit. In the same way, in the past, the Government froze child benefit and claimed that they were giving money to low-income families--but they did not give it all to them.

There is another reason why we prefer the full increase in child benefit to the Government's proposals. Some 25 per cent. of those entitled to income support do not claim it. Half the families entitled to family credit do not claim it. The only way of ensuring that the increase in child benefit goes to the 98 per cent. of families who claim it is to implement the balance of the increase there.

The Chief Secretary spoke of our costing as "a piece of incompetence" when it is correct and mentioned an error of £300 million. It is not our error ; it is the Chief Secretary's distortion--a distortion that comes precious near to deceit. In the case of offshore trusts, until we see the Government's proposals in the Finance Bill we shall not know whether what the Chief Secretary said about that was more accurate than what he said about child benefit. I do not know how many hon. Members saw the story in The Observer yesterday written by a group of tax planners who say that the Chancellor

"proposes to leave intact many of the tax advantages of trusts established offshore prior to March 1991."

Of course that was not our proposal.

That brings me to the £619 million that the Chancellor could raise from personal pensions. One would never think from all the fuss that the Government are to stop paying for them in a year or two. That particular payment and that source are analagous to the money that the Chancellor will raise from 1992 from national insurance contributions on company cars. There is absolutely no doubt that the cessation of the 2 per cent. incentive, as the Government prefer to call it, will mean extra revenue for the next Government on the scale that we identified. There is no doubt either that the Chancellor could bring that payment forward. Just as they did over child benefit, the Government profess shock that we dare to suggest that they might engage in any element of retrospection, and

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implied that there had been some breach of contract. In Southport, the Chief Secretary called it a disgraceful suggestion.

Why do we think that the Government would engage in retrospection? Let us look at the Government's record ; let us look at the cost. The cost of the benefit was predicted at £60 million a year when it was first proposed, and it now costs more than £600 million. When single payments reached £400 million, the Secretary of State told the House that the expenditure was out of control and single payments were abolished. Incidentally, the biggest losers were the families on income support about whom we were seeing so many crocodile tears a few moments ago. It is not the case that those getting the 2 per cent. extra rebate are in some way paying more and therefore being deprived of something to which they are contributing. It is the rest of us, all the other national insurance contributors, who are paying for that rebate. The people who signed up initially were promised a rebate for five years, and the Government backdated it to 1987, so by next April those people will have had their full five years' worth of promised rebates.

That brings me to my third point. The Secretary of State, in cahoots with the Prime Minister, has a long track record of removing benefits for which people have paid, despite the fact that their contributions have increased under this Government while the benefits have been removed. The current Secretary of State and the Prime Minister removed from the disabled the right to receive invalidity allowance, as well as earnings-related pensions for which they had paid. They stopped people with industrial injuries getting any benefit if they were assessed at less than 14 per cent. They brought in the changes to the reduced earnings allowances, depriving some people of £20 a week, and halved the help to mothers on income support through maternity grants. Their record is littered with examples of retrospective taxation.

Let me now turn to the breach of contract. The occupational pension scheme for the police and the fire service calls for those in the ranks to retire from those occupations at 55 in the public interest. When they do so, most of them take other jobs and have a duty to pay their national insurance contribution. That duty remains, but their right to draw unemployment benefit should the need arise was in effect extinguished by the Government in 1989. So they still have to pay contributions, but they do not get any benefit. What was that about breach of contract?

Let me return to the Government's charge and summarise. The figures that we gave were correct and it is indicative of the Government's desperation that they go to such lengths to seek to discredit us. This week, there has been a lot of talk about shot foxes. All that I can say is, "Bang." Incidentally, the Government make a great deal of fuss about personal pensions--about the extent to which this 2 per cent. rebate is intended to encourage people ; about how wrong it is not to offer choice ; about how there should be extra encouragement-- [Interruption.] Hon. Members should listen carefully.

I understand from the Fees Office that the choice that Conservatives urge so earnestly on their constituents has been exercised by precisely one Member of this House. I wonder who it is who urges this choice on his constituents and is himself the only Member of the House who is foolish enough to take it out? Is it the hon. Member for Sutton Coldield (Sir N. Fowler), the once begetter of this plan? Is it the Chancellor? Is it the Prime Minister? Is it the

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Secretary of State for Social Security? It appears that those people have more sense than to take out the benefits that they urge on their constituents. This gamble is for other people, but not for themselves.

Finally, I turn to the Government's fiscal rectitude and their policy stance. It is not our policies, but theirs, that have a gaping hole. We say that one cannot have income tax cuts and increased investment ; the Government say that one can. We say that it is an uphill struggle to become competitive within the exchange rate mechanism ; the Government say that the struggle is nearly over. We are willing to tell the British people the truth ; the Government are not. The Red Book continues to promise income tax cuts ; Ministers promise increased investment. Today's Financial Times says : "Labour is frank about its intention to increase taxation, and the Liberal Democrats".

Of the Conservatives, the newspaper says :

"You cannot promise better services, raise value added tax to fund local spending, forecast a series of Budget deficits for three years ahead, maintain sterling within the exchange rate mechanism and, at the same time, swear that you will cut the standard rate of income tax to 20p. It does not add up, and the public will perceive that it does not."

As in the case of the poll tax, the Government are seeking to be all things to all people. They tell those who like the poll tax that they are keeping it ; they tell those who do not like it that they are abolishing it. They tell those who want income tax cuts that they can have them ; they tell those who want increased investment that they can have that instead. Confusion reigns. There is a phrase that many people use when they describe confusion. They say that someone does not know whether he is coming or going. The Government are going--and the sooner the better.

9.32 pm

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