House of Commons Hansard Debates for 10 Mar 1992

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spending statement is to be combined with the tax-raising Budget. The present system has always seemed to me absurd and it is not understood by the public. The long lapse between announcing what will be spent and how it will be raised has meant that by the time we get to the Budget people have forgotten the enormous commitments that the Government made the previous autumn to expenditure on health, education and other desirable things. At the time of the Budget people ask why we are lowering taxes and why we do not spend more on health and education, forgetting entirely that tax-raising and spending are quite separate exercises. Bringing them together in this way is thoroughly sensible.

I should like to respond to a point made by the hon. Member for Middlesbrough about taxation. Before the Government came to office I believed and argued that there should be a shift from direct to indirect taxation, because direct taxation is a tax on work, which is largely involuntary, whereas indirect taxation is a tax on spending, which is, to a much greater degreee, voluntary. That is what the Government have done, and they have no reason to be ashamed of it. It is in line with the policies on which they were originally elected. I am glad--contrary to what the Opposition hoped--that there is to be no increase in VAT, and that the Chancellor still managed to reduce direct taxation. A philosophical word about taxation : one comes across an extraordinary number of simple souls who say that they would not mind paying a little more tax to have a better health service or a better education service. Such people are usually talking about other people's taxes, not their own. When I attend meetings of teachers or health service workers in my constituency, they ask why we cannot pay our nurses and teachers more. I ask how that is to be done--by increased taxation? That seems a simple solution, but these people do not want the money taken from their taxation, because if it is they will need yet more money to pay the higher taxes, and so the crazy circle continues.

This is a dilemma with which the Opposition must wrestle, and it is clear from their proposed £37 billion extra expenditure that they have not thought it through properly. They must consider who will bear the burden. They appear unwilling to consider that, so I am afraid that the chickens will come home to roost.

Mr. Chris Smith (Islington, South and Finsbury) : Talking about chickens coming home to roost, the hon. Gentleman will have observed from the Red Book published concurrently with the Budget that the overall burden of taxation in 1978-79, the last year of Labour government, was 34.75 per cent. and that for the year 1991-92 it is 36.75 per cent., clearly a higher figure than the Government inherited. The hon. Gentleman will also have observed that the projection for 1996 is a burden of 38 per cent. taxation, a dramatic increase. It is this Government who are putting up taxation.

Sir Anthony Grant : I assure the hon. Gentleman that I shall read the Red Book avidly. I have not yet read all of it, but I accept what he says. However, he has missed my point, which was that I sought a change from direct to indirect taxation. That change has come about. I do not dispute the hon. Gentleman's figures. I maintain that it is vital to reduce the burden of direct taxation because it is

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a tax on people's work. That is what the Government have done, and I am glad that the Chancellor has continued the process today. And he shot the Opposition's fox by providing the benefit at the bottom end and helping the less fortunate people, not the well-heeled. As a result, 21 million people will be an average of £142 better off, with those at the bottom of the scale doing best. That is probably what has annoyed the Opposition.

This has rightly been described as a Budget for recovery. When the recovery comes, as it will, East Anglia in general and Cambridgeshire in particular will be among the first to recover. The Budget creates the right framework for that recovery, because our area is full of small firms and of people anxious to work and to assist the economy. All we need now is that spark of confidence. The Budget provides the right climate. The spark of confidence will come when my right hon. Friend the Prime Minister is re-elected as Prime Minister. 7.6 pm

Mr. Derek Enright (Hemsworth) : I made my maiden speech when you, Mr. Deputy Speaker, were in the Chair, and this will probably be my last speech when you are in it. May I take this opportunity to wish you a happy retirement and to thank you for your courtesy and great tolerance of much of what I have done? You have been an excellent mentor.

This has been my first Budget since I became a Member of the House. Budget day is supposed to be a great and exciting day--it has a certain charisma. Those of us who have been outside hitherto looking in on the Budget have imagined keen minds working through every full stop and comma. We have supposed there to be great interest among Government Front-Bench spokesmen, and a crowded House until the late hours.

Of course it is not quite like that. There has been yawning on the Government Front Bench and little real examination of what the Budget does. The hon. Member for Wycombe (Mr. Whitney) put his finger on it when he asked whose hand was on the tiller. He got it wrong ; he should have asked whose hand was in the till. This Chancellor has put his hand in the till and, instead of paying the bills, he has taken the money for a night out.

I suggest that this Budget is irrelevant to people's real needs. That is certainly true of Hemsworth, where we have suffered from a great barrage of Tory propaganda recently. Tories claim that 17 million days were lost through strikes in the last year of the Labour Government. In the past three days of this Tory Government 17 million days have been lost through unemployment. That puts it in perspective. This Budget will do nothing for the record number of people who are unemployed in my consituency.

Mine also happens to be a constituency with many medium and small-sized firms. Some of them pay good wages, but some pay truly appalling wages, with the result that a large number of people in work will not even earn enough to benefit from the tax changes made by the Chancellor. Other people will have any advantage from these changes clawed back through means testing on a variety of benefits. In other words, poor people at the bottom of the scale will be hit every time by what the Government do.

One thing that the Government could have done to give a bit of equity, fairness, justice and even mercy to the people at the bottom of the scale would have been to

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examine what happens with invalidity benefit. It is a scandal that those on invalidity benefit--heaven knows, it is not generous--have to pay for their many prescriptions and cannot invest in the future and get cheap prescriptions. The Chancellor did nothing about that. What did the Chancellor do to get job creation going? At one point, he boasted about the Government's splendid training programme. It is about time that the Government looked at some of those programmes, because they are not training for real jobs. The training programme is producing cheap labour for people making a handsome profit, and whom the Government help further with their tax policies. Remarkably little real training is going on and that is a scandal and a disgrace.

How has the Chancellor helped people on occupational pensions? He claimed to have done great things for them, but let me tell him about miners' pensions. Every Christmas, miners' pensions are updated by perhaps £1 or £1.5. That is then clawed back. In one case a miner not only had his £1.5 clawed back but had another 6p taken off him. Why does not the Chancellor do something about such anomalies? Perhaps it is because he does not care about them, so he does not care about defending the people whom he is hurting.

The right hon. Member for Plymouth, Devonport (Dr. Owen) said that the Government should not be ashamed to say, "If it's not hurting, it's not working." That may be the case, but if one knows that one is hurting people, it is a normal human instinct to protect the most vulnerable. There was no sign of that in the Chancellor's speech. He did nothing to help them.

The right hon. Member for Devonport spoke about the European Community and how he had stood by his principles rather than stay within the Labour party. His narcissistic tour of what happened made me rather sick, because some of us have had principles about the European Community and were consistent about them for a long time but stayed in the party and had the guts to fight instead of ratting on those who supported us. I yield to none in my consistency of approach to policy on the European Community.

The right hon. Member for Devonport rightly said that the exchange rate mechanism would impose a discipline, and that is important. When it comes to economic and monetary union, that discipline will be even tighter. What is meant by imposing a discipline? What action do we have to take afterwards? That is what we should be considering. There is no easy way out and we need thinking policies. The Government think only of interest rates. They are incapable of seeing things three dimensionally. Within economic and monetary union that truly accepts the European Community, we have to work out our salvation, on many fronts, alongside our partners. The Chancellor did not mention collaboration with Europe.

The Chancellor uttered some throw-away lines about the minimum wage. I am not ashamed of the minimum wage which is a just wage. Like the hon. Member for Eltham (Mr. Bottomley), who mentioned this in his speech, I was brought up in a Christian household which believed in the just wage. We believed that a person who did a decent day's work deserved enough to look after his family and have a home and a reasonable standard of living--nothing extravagant. That is all that the minimum wage is based on. I doubt whether our modest proposal will even achieve that basic requirement, but it will be a move in the right direction. I have no doubt that, by

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talking to our European partners, we shall be able to get the level playing field that is required and, as a result of our willingness to co-operate, we shall have co-operation from them to assist us in our fight, and that is also important.

Although there have been a couple of derogatory references to it since the statement, the Chancellor made no mention of the social charter. What is wrong with it? What are the Government so frightened about? The charter does not mention trade unions, so it does not give them any priorities. It says that workers should be treated decently. If I go to IBM or ICI, they will tell me that they want to treat their workers decently. My hon. Friend the Member for Middlesbrough (Mr. Bell) will confirm that ICI treats its workers decently. It is already fulfilling the social charter and that is why it is a successful firm.

The firms which are not successful are using cheap and slave labour, and they do not have a co-operative work force. They have people who work for them because they are compelled to, but they do not have people who are proud of the work that they are doing, who are keen to make their firm do better and who are willing to put every effort into ensuring that their firm is the best in the area. The Government are opposed to that. Everything the Chancellor said was irrelevant to such a system.

Small businesses need help. Conservative Members have spoken as though the Chancellor had said something wondrous about small businesses. He did not go as far as the Prime Minister went when he signed an early-day motion-- way back in the halcyon days of the 1980s when Margaret was queen--that spoke of "compulsory" interest being levied on late payments. That is the only way to help small businesses. One cannot rely on the integrity of the big boys, despite what the hon. Member for Halesowen and Stourbridge (Sir J. Stokes) said.

If we are to help small businesses, we must do something about the business rate. I do not know why Conservative Members think that southern businesses are assisting northern businesses. Businesses in my area, the Wakefield metropolitan district council area--my hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse) will bear this out--have been hammered by the uniform business rate much more than ever they were by the sensitive local authority. The Budget epitomises what is wrong with the Government's entire philosophy. They are a centrist and Stalinist Government who believe that the centre rules. They do not believe in devolution and trust, except in so far as they send civil servants--the viceroys of the United Kingdom, or at least of Whitehall--to tell elected Members what to do. The Government have no idea of how to make things tick at the bottom, and the Budget totally ignores that.

I am not simply nitpicking. The Budget shows a dereliction of duty and it has no vision for a Britain of the future. It displays the incredible tiredness of a Government who are clearly ready to go and who must go to be replaced by people of vigour and strength. 7.20 pm

Sir Alan Glyn (Windsor and Maidenhead) : This is probably my last performance in the House. My first was over 30 years ago. I thank you, Mr. Deputy Speaker, all the staff of the House and my constituents for their co -operation and help.

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One of the most important proposals in the Budget is the one for budgetary reform. As my hon. Friend the Member for Cambridgeshire, South-West (Sir A. Grant) said, for years we have had two financial statements which the public did not understand. It is right that they should be presented as one Budget in December.

I commend the Budget, which has been presented against a background of great difficulty and a world recession. I agree with my hon. Friend the Member for Cambridgeshire, South-West that, eventually, we must move from direct to indirect taxation, which allows the individual control over how he spends his money. The Budget will help the lower paid and the small business man. That is desirable, because for years we have been trying to encourage small businesses. The VAT payments on account have caused great trouble for small businesses which are hard hit by having to pay it and by being kept waiting for a long time for payment by the big companies. We should go further than the Budget suggests so that not only payment for Government contracts but for all contracts should be subject to a time limit of, say, 30 days. Firms similar in size to ICI are guilty of keeping small companies waiting for payment, although ICI is not guilty of that.

I welcome the tax cuts on British cars because they will help our motor manufacturers to build up sales in Europe where they have done well this year. The cuts will help not only car manufacturers but car component makers and the steel industry.

I welcome the separation in the incomes of husband and wife. It was a great scandal that, even though a wife was earning £10,000 and the husband only £200, he was responsible for his wife's tax. That system has gradually been broken down and the proposal in the Budget will end it altogether. The proposals on inheritance tax are also welcome and will help small business men who save to set up a small business only to see it smashed by inheritance tax. Small companies seem to be neglected by the Opposition even though they are the backbone of the country.

I, and I am sure many other hon. Members, have been approached by many pensioners who have suffered through no fault of their own. I hope that the Government will accept the Social Security Select Committee's recommendations on pensions because they could help people who put their money into a pension fund which was transferred to a Maxwell-controlled fund only to find that the money had disappeared and they had nothing to fall back on.

I regret the defence cuts. They are not part of the Budget but they have been mentioned by my hon. Friend the Member for Halesowen and Stourbridge (Sir J. Stokes). Our forces must be such that they can cope with any eventuality. We never know when they may be required to serve with the United Nations. The Budget is not a vote catcher. It shows the right way forward.

I shall be sorry to leave the House after 30 years. I hope that in the near future more will be spent on staff accommodation and on the facilities provided for those who stay and rest here and have to change and wash. The facilities are ghastly and should be improved in the next Parliament.

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Many other matters have been mentioned, including GATT negotiations which will have to be settled. The Budget represents a major reform, a change in the whole financial structure. I welcome the proposal to have a co-ordinated Budget in December. I wish all hon. Members well.

7.28 pm

Mr. Geoffrey Lofthouse (Pontefract and Castleford) : It is always a pleasure to have the opportunity to follow the hon. Member for Windsor and Maidenhead (Sir A. Glyn). I have always held him in great esteem and affection. The House will certainly miss his presence. I understand that he has been in the House for about 30 years, an extremely long time to be in any one place. During the time that I have been here he has always played his part in the debates in which he has had an interest. I, and I am sure all of his colleagues, will be sad to see him leave the House. I wish him a happy and healthy retirement.

Dr. Norman A. Godman (Greenock and Port Glasgow) : The hon. Member for Windsor and Maidenhead (Sir A. Glyn) was the first Conservative Member to cross the Chamber on Thursday last when my hon. Friend the Member for Leicester, South (Mr. Marshall) was taken ill. That was an example of the hon. Gentleman's extremely courteous and caring conduct in the House, both to his political opponents and his hon. Friends.

Mr. Lofthouse : I have seen the hon. Gentleman do that on many occasions.

I understand, Mr. Deputy Speaker, that you, too, will soon be leaving the House. You will certainly be missed. I have known you, too, for many years. I first met you when you visited Pontefract, for a stay of three weeks. That was some years ago, but I remember the occasion extremely well. You have always been held in high esteem in the House and your presence in the Chair will be greatly missed. I wish you a happy and healthy retirement.

Unfortunately, the hon. Member for Cambridgeshire, South-West (Sir A. Grant) has left the Chamber. I shall refer to him none the less because my remarks will not be controversial. The hon. Gentleman referred to my hon. Friend the Member for Middlesbrough (Mr. Bell), who is recognised within the House as one who understands finance. I cannot claim to be a financial wizard, but I wonder whether there are any financial wizards on the Government Benches. If there are, why is the economy in such a mess? We have the Chancellor of the Exchequer and his predecessors, not least the Prime Minister and the right hon. Member for Blaby (Mr. Lawson). The economy, as I say, has been getting into a mess and surely it is reasonable to ask, "Where does the fault lie?"

It is no good the Chancellor of the Exchequer and others saying, "It is a world crisis" or, "It is a European crisis." Of course there are problems throughout the world, but we appear to be in a much worse position than other countries in the European Community, for example, apart from Greece and Portugal. Why is that?

The Budget is an attempt--I do not think that anyone can put his hand on his heart and contradict what I am about to say--to convince the British public that things are not quite as bad as they appear to be. The British public will take some convincing. They are not familiar with the

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procedures of the House or with national finance, but they are familiar with the consequences of recessions, for example. No one can deny that there has been great suffering within various sections of the nation over the past few years. Any Government who have been in office for 13 years cannot escape responsibility and blame for what has happened. Whether it rests with the right hon. Member for Blaby, as some Secretaries of State have seemed to suggest recently during television appearances or in the press and publications generally, I do not know, but responsibility must lie with the Government.

My constituents will want to know what the Budget does for them. In the short time that we have had to study the Chancellor of the Exchequer's proposals, there seem to be only two main features within his statement. The first is a public sector borrowing requirement of £28 billion. That will be a millstone around somebody's neck ; it will bear upon this Government or the next one. At some stage, it will be a millstone. It is perhaps an attempt to alleviate the burdens of the people including, as the Chancellor of the Exchequer told us today, the lower paid. If the lower paid receive tax reliefs, many of them will lose current benefits. If that happens, they will not be helped too much.

How does the Budget help the unemployed? The Chancellor admitted this afternoon that there was not much hope for them. There are many unemployed people in my constituency. About 20,000 have been thrown out of work since 1985, and since then there have been few employment opportunities. The unemployed want to know how the Budget will help them. In fact, the Chancellor told them : it will not help them at all. The right hon. Gentleman sees no hope at present, in the near future or the medium future for the unemployed in my constituency and in other areas.

Young miners in my constituency--men in their 30s and 40s--have been thrown on the scrap heap. Many of them have had their homes repossessed. What will the Budget do for them? Nothing. What will it do for old miners who are chronically sick? Right hon. and hon. Members have heard me refer on many occasions to miners with chest diseases. I visited some of them only a few weeks ago. There are old miners suffering from emphysema who receive no industrial injury benefit. Many of them cannot breathe without the aid of oxygen. There are men who cannot lift a cup of tea to their lips. I repeat : how does the Budget help them? It does not help them at all.

How will the Budget help local authorities or the fire service? The fire service in west Yorkshire has to cut services year after year. Next year, the West Yorkshire fire authority will have to take decisions that will involve cuts to its emergency service. At the Pontefract fire station there is an emergency service unit that is specially equipped to deal with motorway accidents. The House will know that the M62 and the A1 cross are in the area. There are major chemical factories and there are still one or two pits. The special equipment is essential for the saving of life, and men have been specially trained to use it. First-class equipment will be put in storage because the authority will be unable to afford to employ staff to use it. What will the Budget do for the authority? What will the Budget do for the West Yorkshire police? I have a report from that force that next year it anticipates that there will be a shortage of 150 uniformed officers and 130 civilian staff. Crime increased in the area by 27 per

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cent. last year. How will the Budget help to prevent crime? None of us condones the increase in crime ; indeed, we all condemn it. What do we do when hundreds of youngsters between 16 and 20 years are unable to find employment? They get up in the morning, they have no money, and there is nowhere for them to go. They can see no future. I think back sometimes and wonder what I would have done in their position. I used to think when I was their age--I started work at 14--that I was hard done by. We used to leave the classroom on Friday and meet one another down the hole in the ground on the Monday. It was slavery, but my friends and I did not get into mischief. That is because we were not idle. We had a job. The kids who now leave school at 16 do not have employment. What will the Budget do for them? According to the Chancellor, it does nothing. There is no hope at all for those youngsters.

How does the Budget help the health service in my area? How does it help the hospital at Pontefract? An old miner who had been in ward 7 there telephoned me to say that he had had to use his dressing gown for a pillow. That is the truth, not some trumped-up story seeking to appeal to the emotions. I thought that it was a rather outlandish story, so I went to see the chairman of the health authority and told him what the old miner had told me. He made inquiries and he confirmed that there was a pillow shortage, but it was decided to send a few--about five to each ward. How does the Budget help the health authority that is having to put up with such problems? This afternoon the Chancellor told us that there would probably be a 1p increase in the price of a pint of beer. One might say that that is not much, but for the retired miner and the unemployed miner it is another increase for them to bear. It decreases their spending power. The same applies to the increase in the price of cigarettes. I have no objection to that. It is a step in the right direction because it discourages people from smoking. Nevertheless, those who like to smoke have not been helped by the Budget.

I might have generalised and I might not have dealt with matters of high finance, but I have touched on how the Budget affects people most. The Government can no longer continue to make excuses, saying that they have had only 13 years and that if they have a bit longer they might put matters right. The British public will not swallow that. The sooner the election comes the better for the return of a Labour Government.

7.42 pm

Sir Nicholas Bonsor (Upminster) : It is a pleasure to follow the speech of the hon. Member for Pontefract and Castleford (Mr. Lofthouse). I am grateful to him for the nice things that he said about my hon. Friend the Member for Windsor and Maidenhead (Sir A. Glyn). I think that his tribute was one which all hon. Members would wish to share with him. I very much regret the departure of my hon. Friend. He has been extremely good to me during the 13 years that I have shared with him in the House. I wish him every success in his retirement.

The debate has been a great mixture of speeches made by those who are about to leave the House, those on the Opposition Benches who have been practising their own adoption addresses, covering a range of wholly irrelevant issues in order to fax the speeches to their constituencies,

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probably in the near future, and those on the Conservative Benches who have properly addressed the Budget. I hope to join the latter category and to do so extremely shortly.

This was a first class Budget which avoided all the pitfalls which many members of the press saw faced my right hon. Friend the Chancellor and on which there has been great speculation during the past few weeks. I am particularly pleased that my right hon. Friend did not take 1p in the pound off income tax. Those who said that that would have been seen as a bribe were right. It would have been ineffective and it would have done nothing to improve the state of our economy. I am delighted that the Government avoided going down that path.

Instead, the Government have adopted the dual main thrust for the Budget of helping the elderly who need help, particularly pensioners, and adjusting the threshold to help those in the lower earnings categories. The Government have also succeeded in helping small businesses. Those achievements are extremely relevant to the state of our economy and to Britain's needs.

There is no doubt that the recession is biting hard and causing great hardship. It is a pity that much of the debate on that issue takes place with a kind of myopia. It does not appear that any Opposition Member is prepared to look beyond the channel to see what is happening in the rest of the world. It is not possible to take just the British economy to lay at the feet of successive Chancellors of the Exchequer the blame for the fact that we are in recession. The blunt truth is that the world is in recession. All our major trading partners and all the major export markets into which we hope to sell our goods are in recession.

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

Sir Nicholas Bonsor : It is true that most of our export markets, if not all of them, are either in or going into recession. I shall be happy to hear the hon. Gentleman give a list of those countries that he does not think fall into that category. Germany is going into recession. France, Spain, Greece, Australia, Canada and the United States are all in recession. I could give the hon. Gentleman an endless list of countries that are in recession. I look forward to hearing from him a much shorter list of those that are not.

Mr. Enright : Does the hon. Gentleman agree that the task that Germany has performed--first, in taking into its currency that of another country and, secondly, in taking into its confines a backward country while remaining successful--is remarkable and that it is to Germany that we should look rather than to Greece and Portugal?

Sir Nicholas Bonsor : I am happy to join the hon. Gentleman in his tribute to the way in which Germany has dealt with its unification problems. I agree that it is doing a remarkable job. The fact remains, however, that since the Conservatives took office Britain's inflation rate has gone down from being four times the inflation in Germany to being on a par with the inflation in that country, and that is a great achievement which I hope that the hon. Gentleman will have the good grace to approve and acknowledge.

Mr. Enright : Inflation is still higher than it was in the last year of the last Labour Government.

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Sir Nicholas Bonsor : I suggest that the hon. Gentleman looks to his books because that is not true. Under the last Labour Government, inflation went up to 27 per cent. If I remember rightly, at the end of 1978 it was around 19 per cent. The hon. Gentleman can check the figures.

Mr. Enright rose --

Sir Nicholas Bonsor : I am sorry, but I shall not continue to give way.

There are two or three matters in the Budget of which I approve. The freezing of increases in the unified business rate will be of great value to small businesses and to businesses generally. I hope that those commercial landlords who seem to be increasing their rents in an unacceptable way in the current economic climate will take a leaf out of the Government's book and follow suit in freezing the rents that they charge.

A business in my constituency has a large insurance company as its landlord and its rent is to increase by about 400 per cent. over a three or four- year period. I sent the insurance company's chairman a copy of the company's accounts to show that if he were to increase the rent in that way it would wipe out the small profit that the business was making, leaving it in grave financial difficulties. I received no satisfactory response and the company insists on putting up the rent. I have no doubt that, as a consequence, the company will go out of business and the insurance company will find itself with empty premises that it cannot let.

Such occurrences are not simply in my constituency--they are much more widespread. It is a matter of profound regret that in many instances commercial landlords are not acting with proper consideration for their tenants and for the economy as a whole but are acting in a way that is greedy and stupid, and that will backfire on them and their revenue in due course.

The VAT threshold is to go up in line with inflation and that is welcome, as is the cutting of the penalties. The penalties for what were quite minor VAT misdemeanours were unacceptably high and I am glad that my right hon. Friend the Chancellor addressed that matter. I am pleased also that my right hon. Friend dealt with the inheritance tax burden on small businesses. The proposal has been referred to several times and it will be a great comfort to those who have built up small businesses over the years. I declare an interest because I am the non-executive chairman and a smallish shareholder in a small business. I am glad to say that it was one of the 20 fastest-growing companies in this country from 1987 to 1991. The largest shareholder has put an enormous amount of his life's work into the business and I am delighted that my right hon. Friend has made it possible for his family and his children to share in the results of that labour when he retires and, ultimately, dies. Our policy is in stark contrast to that of the Labour party.

I wish to suggest four ways in which I think that my right hon. Friend the Chancellor might go further in his next Budget. The inheritance provisions will be of great benefit to farmers, but while our agriculture is still part of the common agricultural policy and is in an abysmal state not many small farmers will be in a position to benefit from the remission of inheritance tax. Agriculture is dreadfully short of money and most small farmers will go out of business in the near future if nothing is done to assist them. We can do that only by coming out of the CAP

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or by persuading our European partners to take a more sensible view of the way in which agricultural returns are structured.

I should like to see the Chancellor's proposals to make Government-owned companies pay their small subcontractors promptly extended to other large companies. It is undoubtedly one of the great burdens to any small company's cash flow that large companies use their clout in order not to pay their bills punctually to help their own position. That threatens the future of many small businesses. I hope that the Government will consider following the German example where it is compulsory in a contract to add interest to a bill if an invoice is not settled within 30 days. Firms in Germany cannot contract out of that obligation and large firms cannot use their industrial muscle to wriggle out of paying promptly as they do in this country.

I welcome the proposals on the car tax. As the right hon. Member for Plymouth, Devonport (Dr. Owen) said, a 5 per cent. reduction will cost £600 million, which is expensive. However, it will be of great help to our car industry, which is in grave difficulty, although it is doing remarkably well in the European context. I hope that another 5 per cent. reduction will be announced in the next Budget, if not before.

I am delighted to see that £15 million is to be taken off the betting levy and redirected back into racing.

Mr. David Davis (Boothferry) : Hear, hear.

Sir Nicholas Bonsor : I note what my hon. Friend says and I know that that proposal will be widely welcomed. However, the Government could go further. Value added tax, which is payable on the sale of race horses, is another threat to racing. At 17.5 per cent., it is a crippling burden and neither Ireland nor France--our major competitors--charges as much VAT. In France, it is not charged at all and in Ireland it is charged at 2.5 per cent. That being the case, we are not able to compete and I fear for the auctions at Newmarket and our entire racing community, unless the Government act. I hope that they can take some action on VAT on race horses before long. On the level of the public sector borrowing requirement, the Opposition are trying to have their cake and eat it. They have accused us of having a PSBR which is too high, yet they also accuse us of not spending enough on public services. We will have a PSBR of £28 billion in 1992- 93 because of the amount that we spend on public services. The hon. Member for Pontefract and Castleford referred to the hospital which he visited. The Government may not be doing anything in the Budget for the health service but, as the hon. Gentleman knows, the Government increased expenditure on it from £8.5 billion in 1978 to £32.9 billion in 1992--a staggering increase in real terms.

Furthermore, the Government have taken steps to make sure that the money that they provide for the health service is properly and efficiently spent. I visited Harold Wood hospital in my constituency last Friday and was impressed by the way in which the hospital is operating. I asked the same question that I had asked five years ago : "Can you tell me how many blankets and syringes the hospital uses in a year?" The answer was yes and that the hospital had the figures available. Five years ago, the answer was no because the figures were not available and there were no mechanism or auditing controls to enable

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the hospital to find out the answer. I suspect that the health authority to which the hon Member for Pontefract and Castleford referred is probably Labour controlled and that the hospital does not have enough pillows because it has no proper controls within its structure to ensure that the money allocated to it is spent efficiently.

Mr. Lofthouse : I cannot follow what the hon. Gentleman says about the health authority being Labour controlled. Health authorities are not Labour controlled, nor should they be Conservative controlled. The non- executive directors who run my health authority were appointed by the Secretary of State. They have no affiliation with the area and include a former solicitor from Wetherby and someone who runs a factory 50 miles away. The authority is run by people appointed by the Secretary of State and not by the Labour party.

Sir Nicholas Bonsor : Yes, the hon. Gentleman is quite right. I was out of date, but my point about management administration is valid and I stick by what I said.

The Labour party does not like the Budget. The Leader of the Opposition, when challenged by my right hon. and learned Friend the Chief Secretary to the Treasury, refused to say whether he would reverse the 20p in the pound tax level. However, he promised that we would have the Labour party's alternative budget shortly. I look forward to that with great interest, although we already know much of the detail. The Labour party is committed to putting direct taxation up so that the top level, taken with national insurance, will go up to 59 per cent.

Mr. Nicholas Brown : The hon. Gentleman is misrepresenting our policy. The top rate of taxation will not go up from the present 40 per cent. band. We intend to introduce a new 50 per cent. band that will affect those earning substantially more than £30,000. The hon. Gentleman should not misrepresent our policy.

Sir Nicholas Bonsor : I am grateful for that clarification, but I did not notice that differential in any of the Labour party documents that I read. Perhaps it is a recent change, because I understand that when the changes to direct taxation were first announced, they were set to affect those on £20,500. No doubt the hon. Gentleman will correct me if I am wrong and will tell us about the proposed level later.

The fact remains that the top rate of tax will be 59 per cent. and on top of that investment income will, yet again, suffer another surcharge of a further 9 per cent. Therefore, the top rate of tax on investment income will be 68 per cent. That is what the Labour party would introduce as soon as it came to power. Heaven knows what the top rate would be if it were in power for four years ; we could even go back to the level reached in 1977 under the previous Labour Government when the top rate of tax payable reached 98 per cent. We all know about the budgetary aims of the Labour party. It is determined to kill wealth. It does not like the idea of accumulated wealth and of family businesses being passed on from one generation to another. That is why it intends to increase inheritance tax and to bring back capital transfer tax. The hon. Member for Newcastle upon Tyne, East (Mr. Brown) may make a face and I certainly agree with the sentiment that he expresses. I am merely repeating exactly what was said in published Labour party documents.

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Are we to believe that the hon. Gentleman agrees with the Conservative Government's policy of cutting inheritance tax on small businesses? If so, will he please give us his support so that we can go ahead on an all-party basis? I am sure that small businesses would be mightily relieved were that to happen. Given the fact that the Labour party has adopted such an idiotic line and we are close to an election, there is, perhaps, the faint possibility that we shall be able to squeeze some sensible accommodation out of it.

Conservative Members believe in enterprise. We believe in people being able to work for their living and to keep as much of the money that they make as is compatible with proper funding of the state's economy. On the Opposition Benches, there is a dogmatic socialism that should have died years ago : Opposition Members wish to stifle industry and enterprise and to take money from everyone who manages to accumulate it, without letting them spend that money on their families or build something for future generations.

That is the difference between the two parties. That is why the country will vote for the Conservatives, and why the present Government will remain in power after the next election.

8.8 pm

Dr. Norman A. Godman (Greenock and Port Glasgow) : I profoundly disagree with what has been said by the hon. Member for Upminster (Sir N. Bonsor), except in one important respect. He mentioned his hon. Friend the Member for Windsor and Maidenhead (Sir A. Glyn). I share his affection and respect for the hon. Gentleman, who, in my experience, has always been a fair-minded adversary of the most courteous kind.

Earlier, the hon. Member for Halesowen and Stourbridge (Sir J. Stokes)-- that splendid English patriot--claimed that he was speaking for England, and, more particularly, for his constituency. That claim seems reasonable enough, on the basis of the speeches that the hon. Gentleman has made over the past nine years. I listened closely, as I always do, to his unashamedly patriotic speech. He was followed by my old and hon. Friend the Member for Newport, East (Mr. Hughes), who said that he was speaking for Wales. I should like to speak for the people of Scotland--and, more particularly, for those whom I represent in Greenock and Port Glasgow.

I see that the Parliamentary Under-Secretary for Social Security is present. I wish to say something about the social fund later, but I should be enormously grateful if--with her characteristic courtesy--she responded promptly to the following question. How much of the increase in the social fund will reach the two local offices in my constituency? As the hon. Lady knows, about a third of the people whom I represent are in receipt, directly or indirectly, of social security incomes. This is not a joke ; I am not being facetious, but making an important point. Today's Budget has nothing to offer my constituents. Perhaps, however, the Minister's reply-- which, as always, will be expeditious and courteous--will answer my question about the social fund.

The Parliamentary Under-Secretary of State for Social Security (Miss Ann Widdecombe) : Obviously, I cannot answer the detailed question about the proportion of the

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social fund, but I shall certainly undertake that either my right hon. Friend the Minister of State or I will write to the hon. Gentleman.

The hon. Gentleman says that this is not a Budget for his constituents. What about the help that it will give his poorer pensioners?

Dr. Godman : I am grateful to the Minister for responding in such a way. Yes, I will state the ways in which the Budget will help ; but, in overall terms, it does nothing for the people of Scotland--at a time when the Minister's party is in a minority there, and faces elimination in terms of representation in the House. I believe that the Secretary of State will go at the general election, and that the hon. Member for Stirling (Mr. Forsyth)--the Minister of State, Scottish Office--may go as well. That may cause all kinds of problems for the governance of Scotland, but the Budget has been introduced at what is already a time of considerable political turbulence there. I welcome the assistance that is to be given to small firms, especially in regard to the disgraceful companies that take their time in paying bills to smaller companies. If the proposed sanctions sorted out those miscreants, I should be delighted. On a number of occasions, representatives of small businesses have come to my surgeries to complain about the slowness of large companies in paying their bills. That has created all sorts of cash-flow problems. I have always recognised and acknowledged the importance of small businesses, particularly in my constituency. I am a cinema buff : I was brought up on American-type films, with Doris Day singing "Blue Moon" and what have you. Given that background, I welcome the financial assistance that is to be given-- belatedly--to the film industry. I refer to paragraph 4.15 of the Budget report, on page 46.

The United Kingdom film industry includes in its ranks some very fine, talented writers, producers, directors and actors, and we in Scotland have more than our fair share of talented film makers. As a cinema buff, I welcome the support that is to be given to the industry, although it has come so late in the day.

There are no car factories within hundreds of miles of my constituency ; nevertheless, I welcome the measures in paragraph 4.19. None of my constituents now work in the car industry : Chrysler disappeared from Renfrew a long time ago. All the same, I am sure that this is an important measure for the United Kingdom's economy. In one respect, however, my view differs sharply from that of the Government--and, perhaps, even from that of some of my hon. Friends. I refer to the increase in alcohol duties. According to paragraph 4.21, that increase is about 4.5 per cent. and I think that it should be much higher.

We talk about drug addiction in the United Kingdom. I can tell the House that one of the major forms of drug addiction in my part of Scotland is alcohol addiction. I hope that I do not sound too much like a whinger, but I feel that alcohol is much too cheap, and I think that the duty on it should have been increased by a much larger amount. Alcohol-related crime is on the increase in Strathclyde--and elsewhere in the United Kingdom ; there is nothing special about Strathclyde in that regard. Many violent crimes are alcohol-related, especially those committed at weekends and involving the use of knives

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and other weapons. I do not think that enough is being done to deal with that form of addiction, and I think that the prices of drink should be much higher.

I also think that the increase in duty on cigarettes is not enough, at 10 per cent. Cigarettes should be more expensive, given the problems that affect those who are addicted to them. We need only visit hospitals to see those problems : emphysema, lung cancer and other smoking-related illnesses. A savage increase in duty may not be the whole answer, but a dramatic increase in the price of both alcohol and cigarettes would help.

I said that the Budget has been introduced largely as a way of saving the Government's neck, but it will certainly not be saved in Scotland. There, the Conservative party is a declining minority party--it is now the third party in Scotland, coming after the Liberal Democrats. This is indeed a politically turbulent moment in Scotland, and despite some of the kind things that I have said about it and despite the intervention by the Under- Secretary of State for Social Security, the hon. Member for Maidstone (Miss Widdecombe), the Budget will not help the Conservative party in Scotland. I shall spell out the reasons in a moment.

One element of the turbulence in Scotland is that the power of this place is suffering a continuing diminution vis-a-vis the extraordinarily powerful central institutions of the European Community, the Council of Ministers and the Commission. Its power has also been diminished by the over-powerful Executive, but let us bring the debate back to Scotland.

As a Member of Parliament for Scotland, I know that we are experiencing growing disenchantment with the Government and the Westminster Parliament. It is fair to say that the Scottish Tory party has lost the place. The Budget will strengthen the growing alienation from what is known as the London Government.

Yesterday I discussed the Budget--among other things--with youngsters at a school in Gourock just over the border from my constituency. The school is in fact in the constituency of my hon. Friend the Member for Renfrew, West and Inverclyde (Mr. Graham) but most of its pupils are constituents of mine. My wife and I spent a couple of hours at the school and discussed the Budget with youngsters who asked me what would be done for the unemployed people in my constituency and for those living in appalling housing conditions. The answer is nothing. There is nothing in the Budget for the thousands of my constituents caught up in those terrible circumstances.

What is to happen to the unemployed in my constituency where the unemployment rate is now just under 13 per cent.? What comfort can they take from the Budget? I have to say, very little. People in my constituency are implementing the traditional Scottish solution to unemployment which is migration. Some highly skilled constituents are now working on sites in Spain, in shipyards in Holland and even further afield. They have been driven away from their homes, and there is nothing in the Budget to bring them back.

What about people living in appalling housing conditions? What do they gain from the Budget? Why have not the Government given any help to the construction industry by encouraging district councils in Scotland and local councils south of the border to build the houses that are desperately needed not only by the many thousands of homeless people in Scotland but by the scores of thousands living in disgraceful conditions? There is

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