House of Commons Hansard Debates for 16 Jul 1991

Mr. Cranley Onslow (Woking) : On a point of order, Mr. Speaker. When you consider, as you no doubt will, the stunt that we have just witnessed, I suggest that there are two points that you might like to bear in mind. The first is the time at which the television cameras stop showing the proceedings in the Chamber. There is a definite interest for those who do not wish good news to be announced in the House to prolong the proceedings so that there is no longer live coverage of them.

Secondly, bearing in mind what you said before the Division in relation to points of order, may I ask you to consider the rumours that have come to my ears at least that there might have been a statement this afternoon about the matter had the Labour party wished to have one--[ Hon. Members :-- "Not true."] Will you consider the matter, Mr. Speaker, remembering that if there is shown to be substance in it, that would shed an entirely new light on the behaviour of the Opposition?

Several Hon. Members rose --

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Mr. Speaker : Order. With respect, I cannot deal with rumours.

Mr. O'Neill : Further to that point of order, Mr. Speaker. Are you aware, following that time-wasting smear from the right hon. Member for Woking (Mr. Onslow), that had the Government wished, they could have made a statement in the House at 3.30 and announced what they would regard as good news in prime television time? We requested through the usual channels that such a statement be made, but that was declined. That is the truth of the matter.

The four-page answer to the question is of such complexity that it requires the House to give it its considered opinion and concern. So it is important that the Government business managers should come to the House and explain what they propose to do about this state of affairs.

From a rough reading of the answer, I am led to believe that there will be in excess of 2,000 redundancies, with a sizeable number of people having to be moved across the United Kingdom. This is a major issue of security, defence and economic significance and the Government cannot escape that fact.

The Parliamentary Secretary to the Treasury (Mr. Richard Ryder) : In the absence of the Leader of the House, may I clarify two points? First, it may be for the benefit of the House if the usual channels had discussions following the exchanges that have taken place in the last few minutes. Secondly, I shall report those exchanges to the Secretary of State for Defence. I must emphasise that discussions took place this morning and that it was understood that a statement would be required only if Rosyth was closed. Rosyth is not closed.

Mr. Douglas : On a point of order, Mr. Speaker. With your permission, I should like to read the letter that I have received from the Minister of State. Without going into all of it, I wish to record how insulting the procedure adopted by the Government has been to the House. They held a press conference at 3.30 and the letter was put on the Letter Board for myself and other hon. Members. The letter, which partially explains the situation, says at the end : "I would be grateful if you would treat this as in confidence until the announcement has been made."

We are asked to treat in confidence matters that are in the public domain. That is an insult to the House and to all our procedures. We should receive from the Government a promise that a statement on the subject will be made this evening.

Mr. David Winnick (Walsall, North) : Further to that point of order, Mr. Speaker. The right hon. Member for Woking (Mr. Onslow) referred to a stunt. I did not take part in the vote because, like several hon. Members, I hesitated to vote for a motion that would make people leave the Strangers' Gallery. Such motions and points of order--to which you have listened, Mr. Speaker, very courteously--would not have arisen had not the House been treated with utter contempt. If we are not to have the necessary statement, as a last resort hon. Members have a duty and responsibility to their constituents to ensure that their voice is heard by means of motions, points of order, or any other means.

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Sir David Steel (Tweeddale, Ettrick and Lauderdale) : Further to the point or order, Mr. Speaker. In the absence of the Leader of the House, the Government Chief Whip told us something about the past. Will he say what the Government propose to do and whether there will be a statement tomorrow, as the House wishes?

Mr. Wilson : Further to the point of order, Mr. Speaker. My question arises from the smears of the right hon. Member for Woking (Mr. Onslow). The rules of the House state that we should not refer to the Press Gallery or the Strangers' Gallery. Is it within the rules that, in such a serious matter, an hon. Gentleman can suggest that concern about thousands of jobs being at stake is expressed simply to play to the cameras in television prime time? That is an outrageous and offensive suggestion, especially by a right hon. Gentleman who is supposed to hold a position of prestige within his party. Can the rules relating to Galleries and the media be extended to television cameras?

Mr. Speaker : I think that I shall now close the debate by saying that this may serve as a lesson to the whole House and that, in future, important statements should be made in the House.

STATUTORY INSTRUMENTS, &c.

Motion made, and Question put forthwith pursuant to Standing Order No. 101(3) (Standing Committees on Statutory Instruments, &c.), That the Food Protection (Emergency Prohibitions) (Paralytic Shellfish Poisoning) (No. 5) Order 1991 (S.I., 1991, No. 1608) be referred to a Standing Committee on Statutory Instruments, &c-- [Mr. Wood.]

Question agreed to.

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Helicopters and Heliports

4.7 pm

Ms. Kate Hoey (Vauxhall) : I beg to move,

That leave be given to bring in a Bill to make further provision with respect to helicopter safety and air traffic control ; to amend the law relating to planning controls on heliports ; to protect the environment by restricting noise levels and controlling the use of helicopters ; to assign responsibilities and duties in relation to helicopters ; and for connected purposes.

It is widely acknowledged that the law relating to helicopter movements and landing sites is unsatisfactory. Under the General Development Order, operators can use temporary or ad hoc sites for landing and take off for up to 28 days a year without planning permission, or consent from the Civil Aviation Authority. The days can be consecutive and there is no restriction on the number of movements. Helicopters can land on and take off from any site, so long as the pilot regards it as safe. They can use gardens, car parks, roofs of buildings, and so on. Planning permission may be required for the construction of hangars or landing pads, but it is not required when landing or taking off is incidental to the main use of the land--for example, when it is from an office building or a private house.

No one is responsible for monitoring that ad hoc use of helicopters and it is easy for the 28-day rule to be breached. The noise review working party of the Department of the Environment stated that the use of helicopters at private landing sites had greatly increased in recent years and was expected to increase further. However, because there is no requirement for the CAA to monitor helicopter overflights, especially in the central London zone, there is no record of landings, movements or routes flown.

For safety reasons, the CAA restricts single-engined helicopters in London to defined routes, especially following the River Thames. However, twin- engined helicopters are not restricted to routes and can fly anywhere over London in accordance with air traffic control instructions. Both the London Boroughs Association and the Association of London Authorities have been pressing the Government for licensing controls on commercial services to be given to a representative Londonwide control authority, which would consult local authorities.

Although a London helicopter advisory committee has recently been set up, its terms of reference do not include drawing up a Londonwide policy on helicopters. There is clearly a weakness with regard to strategic planning policy on the location and control of heliport and helipad facilities in London. The London planning advisory committee, set up after the abolition of the Greater London council, did not include a policy on heliports in its 1988 strategic planning advice for London ; nor did the Secretary of State's planning guidance for London.

Helicopters create a particularly unpleasant and disturbing noise because of the volume, pitch and type of sound produced--the characteristic blade slap. The effect is that helicopters generate greater fears of crashing, induce feelings of visual intrusion and are generally perceived as more annoying than fixed-wing aircraft. In addition, there are problems in relation to measuring the noise because there is no consensus on a formula. According to the Airfields Advisory Federation, a widely

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respected independent organisation, the current Government standards are widely regarded as outdated, and were not originally developed for helicopters.

Objection to helicopters on the basis of noise goes far beyond the simple syndrome of "not in my back yard", or nimbyism. The effects can be psychologically damaging and stressful for those living and working in close proximity to where the helicopters are used. The length of the Thames riverside is plagued by helicopters as it is considered the most suitable location for heliports and helipads. However, in its planning guidance to boroughs, the Department of the Environment specifically draws attention to the river being one of London's greatest assets and asks boroughs to give particular attention to the character of any development proposed on or near the river. That is precisely what boroughs from Richmond to Tower Hamlets want to do, but they do not have the powers to control the increasing environmental pollution from helicopters.

The River Thames is being allowed to become the noise sewer of London. A public inquiry into the plans for Cannon street heliport last autumn showed how strong the opposition to an increase in helicopter use in London was among people who live and work there. Any day now we expect the Secretary of State's decision on that proposed heliport. I hope that he refuses permission. A couple of weeks ago, the London Docklands development corporation applied for a helipad facility on Trinity Buoy wharf in docklands. As it is its own planning authority, it will be seeking permission from itself. I urge the Secretary of State to call in that application as a matter of urgency.

Surely no one sees the increase in helicopter facilities as an answer to London's traffic problems. Everybody, including the Department of the Environment, puts it way down the list of priorities in transport policies. But slowly and steadily, by stealth, more and more private individuals and businesses are making use of the helicopter to fly their way out of congestion.

I believe that the benefits, in terms of the numbers of users and time savings, can be argued as being small compared with the costs of the noise impact and environmental concerns. Overflying helicopters represent a noisy, intrusive assault on quality of life. Each flight disrupts and disturbs literally thousands of people. The economic growth that that flight would have to generate in

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order to lead to a net increase in quality of life would have to be massive. However, challenged to demonstrate overriding need, the applicant in the Cannon street case last year said that the heliport was necessary, for example, to speed a London architect's trip to examine brick samples in Wales.

In 1984, the then Secretary of State for Transport announced that he was terminating the helicopter link between Heathrow and Gatwick. He said :

"Noise can be a potent destroyer of the quality of life Helicopters seem to have a special vibrating noise in the light of the environmental disturbance caused by the service we could not justify allowing it to continue in operation".

If that was true of flights between Heathrow and Gatwick, it must be no less true of flights over the much more densely populated centres of our cities.

The final part of my Bill would clarify the registering of complaints, a process which at the moment is complex, confusing and unpublished. Time after time, the buck is passed between the CAA and the Department of Transport. A constituent of mine from the Waterloo area had her complaint passed backwards and forwards only to be referred to the British Helicopter Advisory Board, a company representing helicopter manufacturers and operators. Helicopter operators routinely and flagrantly ignore the routing and other regulations. Only the most persistent members of the public are likely to have their complaint registered. They need to sort that out.

I hope that hon. Members will support the Bill and take a step towards recognition that helicopter use in urban areas needs to be reduced and that helicopters and cities are not compatible. Question put and agreed to.

Bill ordered to be brought in by Ms. Kate Hoey, Mr. Peter Shore, Mr. Tony Banks, Mr. John Cartwright, Mr. Harry Cohen, Mr. Toby Jessel, Mr. James Lamond, Mr. D. N. Campbell-Savours and Mr. Nigel Spearing.

Helicopters and Heliports

Ms. Kate Hoey accordingly presented a Bill to make further provision with respect to helicopter safety and air traffic control ; to amend the law relating to planning controls on heliports ; to protect the environment by restricting noise levels and controlling the use of helicopters ; to assign responsibilities and duties in relation to helicopters ; and for connected purposes : And the same was read the First time ; and ordered to be read a Second time upon Friday 18 October and to be printed. [Bill 215.]

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Orders of the Day

Finance Bill

Order for Third Reading read.

4.17 pm

The Financial Secretary to the Treasury (Mr. Francis Maude) : I beg to move, That the Bill be now read the Third time.

This is my first Finance Bill. Previously, the attractions of serving on the Finance Bill Committee seemed somewhat abstruse, but I knew that many hon. Members returned, their enthusiasm unabated, year after year to serve on it. Therefore, it was with some interest that I engaged in the exercise to see what was so entrancing. Now that I have joined that happy band, I have been initiated into all sorts of obscure and riveting mysteries such as stock lending, manufactured dividends and approved share option trusts. We have had an occasional insight into the Opposition's taxation policies, although the insight was generally provided by the Government rather than the Opposition. It has been a useful exercise.

Those of us who have seen the Bill through from the beginning to the end have, by and large, seen serious debate undertaken in a serious spirit. There have been disagreements on important matters, but that is inevitable. The debate has, however, been conducted in a spirit of good humour from both sides of the House. I now begin to see the attractions of these proceedings, which provoke so much devotion among their followers.

My hon. Friends the Economic Secretary and the Minister of State are veterans of Finance Bills, but for them, as for me, this is the first occasion on the Treasury Bench, and I pay a warm tribute to the hard work that they have put in, both upstairs in Committee and in the still watches of last night on Report.

The Bill has received a thorough consideration. We have not always accepted the arguments made for amendments, but that is hardly surprising. Frequently, we have accepted arguments and have responded constructively to many of the amendments. All these issues have been properly ventilated and explored in a useful exercise.

We have introduced several new clauses and amendments since Second Reading. A number of those were foreshadowed in the Budget statement, but were not ready for the original publication of the Bill. For example, clause 5 provides for a reduction in the rate of pool betting duties from 40 to 37er cent. That follows proposals for a Foundation for Sport and the Arts, which was announced by the Pools Promoters Association. That subject was discussed, shortly before we pulled stumps last night, by my right hon. Friend the Chief Secretary to the Treasury and the right hon. Member for Birmingham, Small Heath (Mr. Howell). My memory of what took place at that hour is somewhat hazy, but I seem to remember that they were the protagonists in that discussion.

Clause 65 gives effect to the Budget announcement of a new relief from income and corporation tax to encourage business gifts of equipment to schools and other educational establishments. This is a practical measure intended to give help to business and to help education and business work in partnership.

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Since Second Reading, the Bill has gained an entirely new part IV, dealing with stamp duty. Clauses 105 to 110 abolish a raft of minor stamp duties. Last year we announced our intention to abolish stamp duty on securities to coincide with the introduction of paperless trading and the TAURUS system. Part IV means that stamp duties will be abolished on all property except land and buildings. That continues the splendid tradition in recent years whereby in each Finance Bill the Government abolish at least one tax. We have exceeded expectations on this occasion by abolishing not one or two taxes but a multitude of stamp duties, and I am proud to be the begetter of that measure.

Mr. Christopher Gill (Ludlow) : Does not my hon. Friend think that there is something rather quaint about our tax system which has no fewer than 88 reliefs and allowances against the six main taxes which, in the current year, cost about £87 billion, while the six main taxes in themselves raised only £82 billion? To my simple mind, that shows that either all taxes are twice as high as they need be, or we have twice as many taxes as we truly need.

Mr. Maude : My hon. Friend makes a fair point. For the first time we have set out in the Red Book the effective value of the various tax reliefs so that exactly the sort of comparison that my hon. Friend has made can be made. That does not involve a judgment on whether it is right or wrong to have such tax reliefs, but it does at least enable there to be informed discussion on the relative merits. I make no secret of our view that, in general, it is better to reduce reliefs and reduce the rates of tax. [Interruption.] That is a general proposition. I do not know whether the hon. Member for Newcastle upon Tyne, East (Mr. Brown) agrees with it.

Mr. Nicholas Brown (Newcastle upon Tyne, East) indicated assent.

Mr. Maude : That is splendid. We now have full consensus on the matter and that enables us to proceed with renewed confidence. My hon. Friend is right to draw attention to that point and it is also right that every Chancellor of the Exchequer should have in his mind when he frames his Budget the balance between overall rates of taxation and the reliefs that are given against taxation.

Mr. Tony Favell (Stockport) : This is a good point at which to ask my hon. Friend about the framing of future Budgets. It was announced last week that, in future, budgetary plans for taxation and expenditure will be submitted to a European Commission star chamber. Can my hon. Friend say when that will be done? Will it be done before the Budget statement is made to the House? If there is a conflict between the House and the Commission, whose view will prevail?

Mr. Maude : I do not recognise from my hon. Friend's description the exact proposition to which he is referring. I am not aware of any intention by the Government to submit their processes to such a procedure. Perhaps my hon. Friend will elucidate.

Mr. Favell : The Daily Telegraph of 10 July said :

"Mr. Lamont, Chancellor, yesterday agreed to submit Budget plans for taxation and expenditure to an annual EC star chamber' of Finance Ministers responsible for bringing the 12 disparate national economies into line."

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Mr. Maude : There is no proposition that we should submit what we put in our Budget for anyone's scrutiny before we present it to Parliament. That would be a wholly intolerable proposition. I reassure my hon. Friend that we have no intention of doing such a thing. It has been agreed that, after the event, we will send the Commission a version of our medium-term financial strategy, which is a broad part of the Red Book, to help the Commission in reaching a judgment on how convergence is progressing. However, I unequivocally assure the House that we have no intention of submitting our Budget, with all its detailed fiscal measures, for scrutiny other than by the House.

Mr. Denzil Davies (Llanelli) : Perhaps the Financial Secretary has not studied the draft treaty on European economic and monetary union, but one of its articles clearly states that the budget balances of all member states will have to be examined by the Commission which, after observing certain procedures, can then make recommendations regarding those budget balances. That represents a transfer of power over fiscal policy to the Commission, which will be empowered to make recommendations.

Mr. Maude : I am reluctant to disagree with the right hon. Gentleman, who is very knowledgeable in such matters. He referred accurately to the draft treaty, which is the previous presidency's working document. At this stage, not a single word of it is agreed. It is a working document, and, as I told the Treasury and Civil Service Select Committee a week or two ago, nothing is agreed until everything is agreed. Therefore, nothing in the draft treaty is taken as having the agreement of any member state.

Even if the draft treaty were agreed, it is a different proposition to suggest that a member state's overall budget balance should be subject to scrutiny and examination by institutions of the European Community after the event. If there is to be economic and monetary union--and I am not in a position to judge whether there will be--the convergence of budget deficits will be important. Everyone taking part in the negotiations agrees that monetary union could not be sustained if excessive budget deficits existed among member states.

Mr. Denzil Davies : The draft treaty makes reference to excessive budget deficits and, if the United Kingdom's deficit proved excessive, is it not the case that the Commission could consider that situation, make recommendations and, at the end of the day, bring a stop to that excessive deficit?

Mr. Maude : Such a provision may be contained in the draft treaty, but it is not agreed. It is agreed that if there were to be full currency union, it could not be sustained if excessive budget deficits existed among member states. We have argued consistently, as have other Community members, that the best sanction against excessive deficits is not binding limits and rigid, centrist, prescriptive rules but the market. Provided such a deficit is transparent, a member state would have considerable difficulty in financing it, so the market will provide its own remedy. That argument remains to be resolved. Some member states believe that binding limits and prescriptive centrist rules will be necessary, but we disagree. We will continue to discuss that aspect, but I assure the right hon.

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Gentleman and the House that the text of the draft treaty has not yet been agreed by the United Kingdom or by any other member state. Clause 69 and schedule 15, which were added in Committee, extend the period over which companies can carry back trading losses and set them against profits from one year to three years. We believe that that will be particularly welcome to companies which, although fundamentally sound and with healthy profit records, are experiencing losses during the recession. That measure alone will be worth a quarter of a billion pounds to companies in 1992-93.

That brings me to the core of the Bill, which remains the same as it was on Second Reading. My right hon. Friend the Chancellor described his Budget as a Budget for business, and the Bill reflects that priority, easing the burden of taxation across the whole spectrum of industry.

Clause 23 cuts the main rate of corporation tax for 1990 from 35 to 34 per cent., reducing this year's tax bills by £380 million. Clause 15 halves the rating period for reclaiming VAT on bad debts, reducing it to one year. That means bad debt relief, which will give traders a cash flow boost of £340 million this year.

We are also providing help for next year, when the recovery will be under way. Clause 24, one of the shortest and simplest--but most splendid and significant--provisions in the Bill, sets the main rate of corporation tax for 1991 at 33 per cent. That gives the United Kingdom the lowest rate of corporation tax in the European Community, and among G7 countries. It means that, next year, companies will have an extra £83 million at their disposal to invest as they choose. That was one of the issues on which the Government had an amicable but frank disagreement with Opposition Members. They wanted to give increased allowances to some forms of investment, which would, in our view, have taken investment choices out of the hands of business, where they belong. As we discovered when we examined the Opposition's amendment, it would have meant a higher rate of corporation tax overall--which was not heavily advertised by Opposition Members when the amendment was moved.

Mr. Nicholas Brown : The hon. Gentleman knows perfectly well that we cannot increase any taxation by means of the Finance Bill ; we are prevented from doing so by the money resolution.

Mr. Maude : The House will have heard that explanation, and can decide for itself how much weight to attach to it.

The Bill also helps smaller businesses. Clause 25 raises the profits limit for the small companies rate, and for marginal relief, by 25 per cent. That will benefit 30,000 smaller companies, and means that the limits have been raised by 150 per cent. since 1988. Clause 68 allows unincorporated businesses to set any trading losses against capital gains of the same or the following year.

Those are the highlights of the business measures in the Bill. To them must be added a number of deregulatory measures, announced in the Budget, which do not require legislation--such as the raising of the VAT threshold to its highest-ever level in real terms and the introduction of quarterly payments of PAYE and national insurance contributions for some 600,000 small employers.

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Together, those measures fully justify my right hon. Friend's description of his Budget as a Budget for business.

Mr. James Wallace (Orkney and Shetland) : As I recall, the amount of relief that those measures would give businesses, in particular small businesses--according to the figures given at the time of the Budget--was exceeded by the amount that businesses would have to spend because of the Government's decision to impose a 10.9 per cent. uniform business rate increase in England and Wales. How does the Financial Secretary justify that extra imposition?

Mr. Maude : A great many taxes are--to use the technical phrase-- buoyant : they increase their burden year by year to reflect inflation, with no need for positive Government decisions. Those taxes, which are levied on a percentage basis, have the effect to which the hon. Gentleman has referred, without the Government's making any positive decision.

It has always been understood, since the introduction of the uniform business rate, that it could not be increased by more than the rate of inflation. That is a much better deal for business than the deal offered by the old business rating system, under which businesses in some parts of the country were penalised by swingeing increases levied by hopelessly irresponsible councils with a malevolent approach to business. Some of our great cities have been devastated : swathes of land have been laid bare by councils that have levied such high rates that business has simply moved away. Businesses that suffered under such appalling regimes will have regarded last year's increase, which was limited to the rate of inflation, as relatively benign.

I have referred to the measures on business taxation and I should refer briefly to other measures, particularly on the themes of reform and fairness. Clauses 29 to 31 tackle different sorts of benefits in kind and, quite properly, they have generated a good deal of debate and careful examination. However, in all that debate, I do not think that anyone has sought to challenge the basic principle underlying our approach which is that, as far as possible, payments in benefits in kind should bear the same taxation as equivalent payments in cash. That is the only fair approach and I believe that it is widely accepted as the right approach.

Another matter of fairness is the taxation of non-resident trusts. Clauses 78 to 87 and schedules 16 to 18 are designed to counter avoidance of capital gains tax through the use of non-resident trusts. It is one of the technical areas in the Bill where the Government have benefited from helpful comments from some of the representative bodies. As a result of that, we introduced a number of amendments in Committee and on Report.

The Budget process is about deciding what the Government should spend and how they should raise the money to do it. That means that the Government have to cost every one of their proposals. They have to do so publicly and openly and then, openly and honestly, levy taxation to pay for that spending. The results are there for Parliament to scrutinise and for the public to judge. Curiously, the Opposition have been more reticent about their proposals. Nothing has been costed, nothing has been added up, but everything is a priority. So, as a service to the public, we costed the Opposition's proposals for

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them. We did so very modestly, with no fee charged and no exaggeration. We concluded that Labour's spending programme amounts to no less than an extra £35 billion--equivalent to an extra 15p--

Mr. Nicholas Brown : On a point of order, Mr. Deputy Speaker. What has Government speculation about Labour's public spending programme got to do with the Third Reading of the Finance Bill?

Mr. Deputy Speaker (Mr. Harold Walker) : The hon. Member for Newcastle upon Tyne, East (Mr. Brown) is quite right. I hope that the Minister will set a good example by sticking to the content of the Bill.

Mr. Maude : I was endeavouring--

Mr. James Arbuthnot (Wanstead and Woodford) : Further to that point of order, Mr. Deputy Speaker. Surely it is relevant to the rate of taxation that is to be applied by the Finance Bill. If the policies that were--

Mr. Deputy Speaker : Order. Our practice on Third Reading of any Bill is to confine the debate to the provisions in the Bill.

Mr. Maude : I am endeavouring to do that. I am endeavouring to give to the House an account of the deliberations in Committee when we spent a good deal of time discussing the standard rate of income tax. We had an interesting and illuminating debate on the clauses dealing with income tax which enabled us to draw attention to the fact that Labour's spending proposals would mean, unless they are wrongly costed, that there would be a 15p increase in income tax.

Mr. Deputy Speaker : Order. I hope that the Minister realises that if I allow him to discuss these matters, I have to allow other hon. Members to rebut his arguments. We would then start a debate not about Third Reading but about entirely different matters. I hope that the Minister will recognise what I have said and will observe it.

Mr. Maude : I submit myself fully to your ruling, Mr. Deputy Speaker, and accept entirely what you have said. The House might welcome the opportunity to allow Opposition Members to try to rebut what I have said, but I think that there will be sighs of relief from Opposition Members that they have been prevented from commenting on the costings.

Dr. John Marek (Wrexham) rose--

Mr. Maude : I see that the hon. Member for Wrexham (Dr. Marek) is straining at the leash to leap to his feet and tell us in what particulars our costings of the Labour party's proposals are wrong.

Dr. Marek : I want to help the Financial Secretary. Clearly, it has escaped him that the clause to increase value added tax from 15 to 17.5 per cent. is contained in the Bill, so I invite him to discuss that. It would certainly not be out of order for us to know why the Government increased VAT.

Mr. Maude : I shall be glad to discuss that if the hon. Gentleman is keen to do so. We have already debated it and a further debate will not illuminate any dark secrets which have not been properly discussed.

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Mr. Jonathan Sayeed (Bristol, East) : Will my hon. Friend give way?

Mr. Maude : I shall give way in a moment.

We increased VAT to raise £3.9 billion--if my recollection is correct- -and to ensure that the books balanced when we reduced the headline figure of the community charge by £140 for every charge payer. It was an open policy which we have fully justified. We have had amusing debates about it and it is now on the statute book. It was especially interesting that when we announced that step in the Budget, the immediate response of the Leader of the Opposition was to huff and puff, to say that it was outrageous and monstrous and some such farrago of nonsense about how awful it was to tax children's sweets. A Labour Government introduced VAT 15 years ago--a fact which appeared to have escaped him at the time. However, when we had discussed the increase in VAT we waited with bated breath for the Opposition to vote against us and to try to vote down the outrageous measure to increase VAT from 15 to 17.5 per cent. on, among other things, children's sweets. But what did they do? They did nothing--one might almost say that they dithered. I am happy to renew the debate at this stage for the hon. Member for Wrexham, but I fancy that we shall have the better of the argument now as then.

Mr. Sayeed : May I ask my hon. Friend to deal with two matters? First, the Labour party did not vote against the change in the rate of VAT and, secondly, whatever promises Labour Governments have made prior to elections, every one of them has increased the basic rate of income tax.

Mr. Maude : On the first point, I confirm that my hon. Friend is right. The Labour party failed to oppose the measure to increase the standard rate of VAT. However, I must correct him on the second point, because there are two exceptions to his proposition. The Attlee Government of 1945-51 reduced income tax by 5 per cent. before increasing it again by 2 per cent. thus making it 47 per cent. The other exception involves the Ramsay MacDonald Government in 1924 who were in office for nine months and did not get round to increasing the rate. I am sure that they would have done so if they had had the chance, but, happily for the nation, they were routed out of office before they had the opportunity. However, my hon. Friend is right--in every other case Labour Governments have increased the standard rate of income tax.

Research discloses that in their manifestos to the British public Labour Governments oddly enough made no mention of such proposals. They were silent about them and, indeed, the impression given by the then leaders of the Labour party was that there would be no general increases in the rate of income tax. Indeed, the statements made by former leaders of the Labour party bear an uncanny resemblance to those made by the present leader : "There will be no increase in the basic rate of income tax, honest, guv. Nothing like that--we've never done that before. Not the sort of thing we do." However, they have done it every time.

We argue that under Labour's spending plans as they have been costed by us- -and they have not been disputed by the Labour party--it is absolutely inevitable-- [Interruption.] I issue a challenge to the hon. Member for Islington, South and Finsbury (Mr. Smith). Let him

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