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Column 752

Evennett, David

Favell, Tony

Fox, Sir Marcus

Fry, Peter

Gale, Roger

Glyn, Dr Sir Alan

Goodhart, Sir Philip

Grant, Sir Anthony (CambsSW)

Greenway, Harry (Ealing N)

Gregory, Conal

Grylls, Michael

Hargreaves, A. (B'ham H'll Gr')

Hicks, Mrs Maureen (Wolv' NE)

Janman, Tim

Jessel, Toby

Johnson Smith, Sir Geoffrey

King, Roger (B'ham N'thfield)

Knapman, Roger

Knight, Dame Jill (Edgbaston)

Lawrence, Ivan

Marshall, John (Hendon S)

Maxwell-Hyslop, Robin

Mitchell, Andrew (Gedling)

Morris, M (N'hampton S)

Mudd, David

Neale, Sir Gerrard

Nelson, Anthony

Neubert, Sir Michael

Nicholls, Patrick

Porter, David (Waveney)

Powell, William (Corby)

Riddick, Graham

Ross, William (Londonderry E)

Shaw, Sir Giles (Pudsey)

Smith, Tim (Beaconsfield)

Speed, Keith

Stewart, Rt Hon Ian (Herts N)

Taylor, Ian (Esher)

Thompson, D. (Calder Valley)

Thornton, Malcolm

Townend, John (Bridlington)

Vaughan, Sir Gerard

Walden, George

Watts, John

Wells, Bowen

Wheeler, Sir John

Wiggin, Jerry

Tellers for the Noes :

Mr. Gerald Howarth and

Sir John Stokes.

Question accordingly agreed to.

Bill ordered to be brought in by Mr. Jeremy Corbyn, Mr. Max Madden, Mr. Dave Nellist, Ms. Diane Abbott, Mr. Chris Smith, Mr. Tony Banks, Mr. Harry Cohen, Mr. Andrew F. Bennett, Mr. Bernie Grant, Ms. Mildred Gordon, Mr. Keith Vaz, and Mr. Brian Sedgemore.

ASYLUM SEEKERS AND REFUGEES BILL

Mr. Jeremy Corbyn accordingly presented a Bill to amend the law to facilitate the safe entry into the United Kingdom of asylum seekers and their families ; to provide a right of appeal against refusal of entry, and a right of independent representation ; to make administrative provision for the resettlement of asylum seekers, refugees and their families ; and for connected purposes : And the same was read the First time ; and ordered to be read a Second time upon Friday 17 May and to be printed. [Bill154.]

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Orders of the Day

Finance Bill

(Clauses 14, 21, 22, 23, 24, 31, 77 and Schedule 14) Considered in Committee [Progress 7 May.]

[Miss Betty Boothroyd

in the Chair ]

5.20 pm

Sir William Clark (Croydon, South) : On a point of order, Miss Boothroyd. I want to raise a matter that I believe affects the constitutional behaviour of the House. It is obvious from the events surrounding the presentation just now of a private Member's Bill that anything that occurs outside this Chamber is not within the purview of the Chair. We have seen today a violation of the procedure of the House, whereby an hon. Member stood outside either the Ayes or the Noes Lobby, exhorting right hon. and hon. Members to vote this way or that way in a very offensive manner. Something should be done to prevent right hon. and hon. Members from being subjected to that kind of behaviour by someone who does not really believe in democracy. Several Hon. Members rose--

The Second Deputy Chairman of Ways and Means (Miss Betty Boothroyd) : Order. I will take no further points of order on that matter. A number were raised earlier. Mr. Speaker will be made fully aware of what took place, and if he has anything to report to the House, he will do so tomorrow.

Clause 31

Relief

5.22 pm

Mr. Nicholas Brown (Newcastle upon Tyne, East) : I beg to move amendment No. 14, in page 21, line 14, leave out 1992' and insert 1991'.

Unemployment is rising, the economy is in recession and our trading relationships with our European partners require our economy to be as strong and competitive as theirs. In those circumstances, it is right for us to discuss education and training. It may be commonplace to say that this country's greatest single asset is the skills and abilities of its people, but I predict that over the next decade that will become even more self-evident.

In a timid but nevertheless welcome way, the clause acknowledges the need for education and training. It will allow people to claim tax relief for course fees, assessment, and regulation costs for properly accredited vocational training. It requires a claimant to be a United Kingdom resident who is undertaking a course without any public financial assistance or other type of tax relief to help with its cost. Companies have always been able to obtain tax relief for providing training, and the clause is designed to allow individuals who incur expenses to do the same.

I shall leave to one side for the moment the issues that we want to explore with the Government on other amendments. As far as it goes, clause 31 is welcome--so welcome that our amendment is intended to make the tax

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relief begin this tax year rather than in 1992, as the Government intend. I understand that the cost of the change that we propose would be about £15 million, although I suspect that it might turn out to be less.

I can think of only three possible objections to our proposal. First, it might be argued that the MIRAS-type arrangements that are supposed to accompany the tax relief cannot be put in place in time. That does not seem to be an insuperable reason for not granting the relief now. It would be possible, by deduction or set-off, to give taxpayers the relief at the end of the tax year.

Secondly, it might be suggested that the regulations for those not liable for tax, but who would nevertheless be able to take some advantage of the scheme, would not be in place in time, so that the arrangement could not start in 1991. That does not seem to be an insuperable difficulty, either. I do not think that many people would come into that category. It may be possible to think of examples of people without a charge to tax who would still be able to pay for their own vocational training, but it is hardly likely that there will be many. I am sure that the Inland Revenue would be able to deal with the small number involved.

The third possible Government objection is that the public expenditure implications of starting the scheme in this financial year rather than the next would be beyond their resources. They may say that they could not possibly spend up to an extra £15 million on training. Such a sum would be slightly more than a quarter of the publicity budget of the Department of Employment, which puts the matter in perspective. We could forgo a little publicity and encourage more training instead.

The real disagreement between the Government and ourselves is whether, in the present economic climate--with rising unemployment and industry complaining of skill shortages--it is necessary for the future well-being of the economy to make training a priority use of public expenditure. Of course, the costs of the scheme are important, but so is the price of unemployment. It costs the state about £8,000 per annum if a person who could be economically productive is kept unemployed.

The costs of our declining international competitiveness are important, too. I welcome the present direction of trade agreements, but they mean that over the next decade our ability to compete internationally is bound to become even more important. To forgo training in those circumstances seems foolish.

Other important costs are those that skill shortages cause British employers, who will rightly argue that skill shortages are not easily met in the short term. It is a privilege of speaking from the Opposition Front Bench to be able to draw on examples from one's own community. There could be no more pertinent example than that offered by Tyneside, where my constituency lies. It is an area noted for its skilled work force. The skills there have been accumulated over generations because of the presence of the shipbuilding and heavy engineering industries. Those industries have endured an enormous, and probably permanent, shake-out, in employment terms, in the past decade. Alongside that, no region has suffered more from persistently higher than average levels of unemployment. Yet, in spite of that residue of highly skilled manual workers on Tyneside, employers are complaining of skill shortages. The high unemployment rates that the Tyneside community is still enduring are composed of unskilled workers more than any other single element.

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The Swan Hunter shipyard is a good example, as it is not always easy for that major employer on Tyneside to find people to fill skilled vacancies. That might surprise Conservative Members, in view of the shake-out in the shipbuilding and engineering industries, but it is the case. There is a waiting list of about 2,000 people for the occasional unskilled job at that workplace. Those circumstances will be mirrored throughout Tyneside and if they are mirrored there, where there is a residue of skilled labour, how much more likely are they to be reflected in other parts of the country?

5.30 pm

The Government have got their priorities wrong. They are estimating negative growth in the economy for the next year. By implication at least, the Government are saying that, given the country's growth rate, unemployment will be a problem. Therefore the Government should be in a position to do something about it.

The something that they have done is to cut expenditure on training. That is not a minor point of detail which divides us, but an issue of principle. The Labour party's view is that expenditure on education and training will be crucial to our position in the international trading community in the next decade and will be a necessary element in pulling this country through the recession.

Mr. Nigel Forman (Carshalton and Wallington) : I am most grateful to the hon. Gentleman, whose speeches I always enjoy--especially the witty parts. Could he enlighten the House still further on his party's policy in this matter? He has just begun to talk about it. I seem to recall that his right hon. and learned Friend the Member for Monklands, East (Mr. Smith) said that the increased expenditure on education and training which the Labour party hopes for would essentially be financed by borrowing rather than by taxation. Is that still the case? Has the hon. Gentleman made any estimates of the effect on interest rates, were that to happen?

Mr. Brown : Investment in training has to be a priority for the economy. Before the last Budget we did something that Oppositions do not normally do. I am sure that the hon. Gentleman is aware that we set out our own proposals for the Budget. They included the expenditure of about £800 million--if my memory is correct--on training, as well as the training levy ; we proposed a 0.5 per cent. levy on the payroll, which we believed would generate more than £1.4 billion. We added the two figures together and said that that amount would be spent on training. Those measures were part of a package presented before the Budget.

When we come to office we shall have to measure our objectives against the changes that have been made in this year's Budget. We shall not come into office with the tax system that we endured last year or the year before. We shall certainly not be able to go back to where we were in 1979. Therefore, I cannot tell the hon. Gentleman that we will definitely spend X amount and that, whatever the position of the economy, so much must be spent on training ; nor can I say that rates of income tax will be Y rather than Z. As the hon. Gentleman knows, it is not my prerogative to do so.

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The Financial Secretary to the Treasury (Mr. Francis Maude) : Come clean.

Mr. Brown : The hon. Gentleman says come clean, but, assuming that there will not be a general election before the next Budget day, which does not seem to be a very safe assumption, will he stand up and say what the basic rate of income tax will be after the next Budget?

Mr. Maude : I can certainly assure the hon. Member for Newcastle upon Tyne, East (Mr. Brown) that it is our intention to reduce the basic rate of income tax. I take issue with the hon. Gentleman over the fact that he is proposing to spend all that money without giving the slightest indication of where it will come from. The only conclusion we can draw from that is that if the Opposition were elected to government they would increase the basic rate of income tax, as all other Labour Governments have done.

Mr. Brown : I have this in common with the Financial Secretary--we both have good intentions and we are setting out the direction in which our tax policies intend to travel.

Mr. Maude : Yours are up and ours are down.

Mr. Brown : The Financial Secretary says that ours are up and theirs are down and he does not mistake the position, as we see it. We have made it very clear--it is one of the matters that are to be firmly established-- that the top rate of income tax under a Labour Government would be 50 per cent. and not 40 per cent. We have said that we intend to introduce a banded system, although we have not said where the bands will sit. Clearly that would impinge upon the prerogative of a Chancellor. We regard the 50 per cent. rate as a firm pledge. Conservative Members argue that that is too much, but Opposition Members view it as trying to arrive at a consensus with top-rate earners. That figure would be the norm, would not move about from year to year, would endure and, in time, would probably be accepted by both Labour and Conservative Governments as a consensus. The Financial Secretary has put his finger on the heart of the disagreement between us. Even this Government have benefited from economic growth, and if there are extra fruits to be distributed as a result of such growth, it is our view that the money should be invested in the economy in ways which stimulate further economic growth, especially on training the people of this nation. It should be invested in the work force. As the Financial Secretary has spelt out perfectly fairly, it is the Government's belief that the money should be spent on further direct tax cuts for high-rate and indeed basic- rate taxpayers.

I hope that the Financial Secretary does not disagree with that explanation, because it is at the heart of the disagreement between us. We think that the position of the British economy requires Government incentives to invest in the supply side. We regard training as a special priority.

I am surprised that that is thought to be controversial. It can only be thought so in the context in which the Financial Secretary puts it. There is such a breadth of disagreement between us on that matter that I think it will be a fundamental issue on which the next general election will be fought. We believe that a failure to invest could underpin the existing lack of skills and exacerbate the present situation. As a protest, I shall ask my hon. Friends

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to join me in voting--if the Financial Secretary does not accept this amendment--to bring the starting date for this modest little relief forward to 1991. The Financial Secretary may well say that it cannot be afforded. However, if he says that even that expenditure cannot be afforded he is saying something very heavy about the Government's commitment to training and to expenditure on training.

Mr. Maude : In moving the amendment, the hon. Member for Newcastle upon Tyne, East (Mr. Brown) has talked as if this measure, in the Budget and now in the Finance Bill, to introduce tax relief for people who pay for their training were the only thing that the Government are doing about training. Clearly that is not so. He has used the debate on this amendment to talk in general terms about training and about what the Government are doing or should be doing and what he believes could be done.

I shall deal first with the specific issue raised in the amendment--whether the relief could be brought forward a year to the 1991-92 tax year. The date has nothing to do with constraints on public spending. I see no need to apologise for exercising tough discipline on public spending, but that is not the concern in this case. There are overwhelming considerations of practicality. One of the most important features of the relief is its delivery at source, which will allow it to extend not only to those who are working and could benefit from a conventional tax relief, but to those who do not have current taxable income. That feature will give the relief greater impact and flexibility. For a variety of reasons, relief at source requires a long run-in period. The regulations will need to be drafted and brought into force. Administrative systems will have to be designed and put in place. Those in colleges and institutions running the scheme will need to know precisely what to do. We are conscious that the providers of training will have some extra administrative work. We intend to consult widely on what would be the best and simplest scheme for them. We are already working hard on that.

The provision will take time to implement and it would be unrealistic to expect the new relief to begin before April of next year. Even that will impose a strict timetable, but I believe that it can and will be delivered. The delay will allow the accreditation process for the national vocational qualifications and the Scottish vocational qualifications to get further ahead, so that a more comprehensive coverage is available when the relief begins next year. Therefore, the Government are unable to accept the amendment. The hon. Gentleman talks as though this were the only measure that we were taking on training.

Mr. Forman : Is it true that relief at source--which is the method that the Government have sensibly chosen--has the benefit of not discriminating against the self-employed if they wish to take advantage of the arrangements?

Mr. Maude : Certainly. A person who is self-employed will receive the tax relief at the time of making the payment for training, rather than waiting to obtain it when the final calculation of his tax is made.

The hon. Member for Newcastle upon Tyne, East talked rather grudgingly about the measure, apparently because it encourages individuals. I do not take issue with what he said about the need to stimulate investment in training, to encourage it and to give incentives. That is precisely what we are doing. The measure provides an

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incentive for investment in training, including a direct incentive for individuals to provide training for themselves.

I freely confess that the measure does not form part of a great national scheme. There will not be a huge bureaucratic organisation or a national body to decide who should have what training. It will be for individuals to decide for themselves. That makes the hon. Gentleman uncomfortable. The Labour party's approach to training is based on compulsion. Why else would it propose a payroll levy in which every employer is forced to pay a levy for everyone who is employed, with all the bureaucratic paraphernalia that that would inevitably involve?

Mr. Brown : The Minister has a right to indulge in attacks on our payroll levy scheme--that is a matter of contention between the parties. He is entitled to make those points, but many employers have welcomed the scheme. Many employers who invest heavily in training will be beneficiaries under the scheme.

However, the hon. Gentleman is not entitled to say that we have given the substance of the clause a grudging welcome. We have not, but we believe that it is no substitute for a proper commitment to training from the Government. In its own little timid context, the proposal is welcome. It is so welcome that we are trying to introduce it a year earlier. We are not against it, because it helps the individual ; I have no quarrel with that.

5.45 pm

Mr. Maude : I did not say that the hon. Gentleman was against the measure : I said that he was grudging about it. If describing it as a "little timid" measure is not being grudging, it would be interesting to know what is. That is hardly fulsome, whole-hearted praise. The hon. Gentleman hardly speaks like a man full of enthusiasm for the measure. I stand by what I said, and stand by my view that the Labour party is only interested in compulsion. It is only interested in training if people are made to do things. That is a sort of puritan ethic : it is good only if it is not enjoyable--if it is not what people want to do.

My mind goes back to the old days of compulsory levies and industrial training boards. There were many bodies, committees and national boards and, in theory anyway, much training was taking place. At the end of it, however, there was no great addition to the nation's stock of skills. We should be considering not how much is put into training, but what extra skills are acquired.

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