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nothing in the Budget for those thousands of people, and they will wreak their revenge on the Government on 9 April if that is to be the date of the general election. They will ensure that the growing campaign to drive out the Tories from Scotland--largely inspired by the campaign for a Scottish assembly--reaches fruition on 9 April. Yesterday the Secretary of State for Scotland published a document in which he claimed that there were many financial benefits accruing to Scotland from the Union. There are few in the Budget. The Secretary of State chose to ignore the fact that Scotland's gross domestic product has now fallen to 93.2 per cent. of the United Kingdom average, having risen to 97.4 per cent. in 1984. This morning's edition of The Herald --it is no longer called The Glasgow Herald --stated :"Mr. Lang cannot have it both ways. Are we doing as well as he likes to tell us? Or are we a poor country which would be much poorer without English bounty?"
Scotland's GDP is slipping behind. There is a great deal of poverty in Scotland and the Government, who are known increasingly as the English or the London Government
Mr. Peter Hardy (Wentworth) : The south-east Government.
Dr. Godman : Behind their stockade in the south-east the Government are generating a great deal of disenchantment and alienation in Scotland, but it does not appear to concern them greatly. Let us be honest and acknowledge that we are in a desperately tight race for the election. Anyone who says that his or her party will win by 30 or 40 seats is appallingly disingenuous, dishonest or stupid. I believe that it will be a very tight race.
My constituents have to tolerate dilapidated schools such as the Roman Catholic school that I visited yesterday just over the border in Gourock. My wife and I met some very fine, intelligent young people there but, walking up the stairs from the ground floor to the first floor, we had to dodge the pails and buckets that were gathering water from leaks in the roof. It was a characteristically wet day in western Scotland.
Dr. Godman : Not always ; we sometimes have very fine weather in the west of Scotland. The youngsters have come to accept that their education takes place in such disgraceful conditions. What help is given in the Budget by way of a new build programme or a programme of repairs for such decaying, deteriorating schools?
The crime figures in my constituency seem to be going through the roof. Only the other day, three men were gaoled for a total of 24 years for an armed robbery in Greenock. Much more violent crime is committed these days. I suspect that one of the reasons is the deadening influence of endemic unemployment in the area. However, another reason is that there are too few police officers on the streets of Greenock and Port Glasgow.
Chief Superintendent Laurence Macintyre, the divisional commander of X division of Strathclyde police, tells me that he is at least 10 officers short of the minimum requirement. The overtime requirement has been chopped by 4,000 hours, so there are fewer police officers on the streets. Therefore, street crime in particular and crime involving drugs is on the increase. What support are the Government giving in the Budget for dealing with the deeply worrying increase in the crime statistics?
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I told the Minister that thousands of my constituents are on social security. That is inevitably the case with a 13 per cent. unemployment rate. Many are on income support because they have exhausted their unemployment benefit. There are many pensioners because it is an aging population--the young people have been driven away by unemployment. Much more needs to be done for such people, especially those on income support and the unemployed.It is not so long ago that 300 to 400 male school leavers in my constituency were given apprenticeships in the local shipyards and in the marine engineering works. That figure is now down to between 12 and 16. That is a scandalous decrease.
I mentioned earlier that I had spoken to schoolchildren aged 16 or 17 who told me that to them the Government had betrayed them and their families in failing to provide employment and decent houses in the district. For many of them the only answer was nationalism and independence. They felt that an independent Scottish Government would provide the right sort of Budgets for them and their families. I naturally sought to dissuade them from that fantastic belief. When I see homelessness, visit people who live in damp homes, and speak to unemployed people and people on social security incomes --a sizeable number in my constituency--I can well understand why there is growing alienation from the London Government. If anything, today's Budget will strengthen that alienation. I look forward to a Labour Government who, among other things, will create a Scottish Parliament in the capital city of my country.
8.20 pm
Mr. Gary Waller (Keighley) : Whatever the electoral considerations referred to by the hon. Member for Greenock and Port Glasgow (Dr. Godman), I assume that you, Madam Deputy Speaker, will still be a Member of this House in the new Parliament. For me there cannot be too many Yorkshiremen and Yorkshirewomen in the House. Therefore, regardless of any party differences, I look in that sense to your return.
I had hoped that I might be called while your colleague the right hon. Member for Woodspring (Sir P. Dean) was in the Chair, if only so that I could refer to the great friendship, kindness and courtesy with which he has always treated me and other hon. Members. Of course, similar considerations apply to Mr. Speaker, whom we shall also greatly miss. I hope that you will be able to pass on to your colleagues, Mr. Deputy Speaker and Mr. Speaker, our feelings of regret at their departure from the House and our good wishes for their future retirement.
A highlight of the debate so far was the speech by the right hon. Member for Plymouth, Devonport (Dr. Owen). As always, his comments were extremely thoughtful. His departure will also be a considerable loss to the House. He spoke of the need for prudence at this time. Judging by what he said, the Budget as presented this afternoon complied with the requirement that he set out. It was certainly an imaginative Budget. It dealt with the short- and medium-term problems of recession, but at the same
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time it did not introduce short-term measures or gimmicks to give an artificial stimulus to the economy. I am sure that the Budget is all the better for that.When I listened to the speech of the Leader of the Opposition, which followed that of my right hon. Friend the Chancellor, it seemed that the right hon. Gentleman found himself in some difficulty. We asked whether he supported or opposed the measures in the Budget. I have to say that when he sat down I did not know whether he supported them or not. But perhaps we shall find out more in the days to come. The Budget was certainly a Budget for recovery. Therefore, inevitably it had to be a Budget for business and industry and especially for small businesses. It is worth remembering that since the present Government came into office in 1979 more than 1 million people have become self-employed. I am sure that there will be considerable relief among many who saw or heard the contents of the Budget as they became apparent today.
The fairer treatment of value added tax will be counted as a great advance by many. The penalty regime was resented by many small business people. They felt that any minor error was treated on the same basis as a major breach. I hope that in future that will no longer be the case. I know of many small shopkeepers and other small business men who have had sleepless nights because they made a minor error and felt that they were treated as criminals. They, too, will welcome the change in inheritance tax and the increase in the relief for business assets from 50 to 100 per cent. I am sure that they, too, hope for the return of a Conservative Administration.
No one should underestimate the importance of the announcement on the uniform business rate. The change to the UBR that came about recently is often confused with the effects of the revaluation that occurred simultaneously. Listening to the hon. Member for Hemsworth (Mr. Enright), it was clear that he was confused about those two factors. He decried the impact of the uniform business rate on small businesses. Of course, there can be no doubt that the UBR as such was a great benefit to small businesses because by statute any increases are linked to inflation.
The revaluation caused enormous anxiety and was a great blow to many firms simply because it had been postponed for up to 17 years after the previous revaluation. When the increases came about they were an enormous shock. When my right hon. Friend the Chancellor announced his cap on increases in 1993 I was worried for a moment because people in manufacturing industry in the north of England have felt for a long time that they had already suffered a comparative disadvantage for far too long as a result of the delayed revaluation. But my right hon. Friend the Chancellor quickly demonstrated that he had taken that point on board by announcing that the gainers would receive their full benefit more quickly. Many retail and commercial premises in West Yorkshire, which lost out as a result of the revaluation, will also benefit from the UBR cap. So they will share in the benefits implied by my right hon. Friend's announcement. The dramatic reduction in the special car tax was by any account a bold step. I hoped that there would be a reduction but had not anticipated that it would be so large. I am delighted that my right hon. Friend the Member for Birmingham, Northfield (Mr. King) has come into the Chamber. Only recently he became chairman of the all-party motor industry group. It is a remarkable tribute
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to his leadership that after only a few weeks he has prevailed on my right hon. Friend the Chancellor to make such a dramatic reduction, which will reduce the average price of new cars by about £450. I have no doubt that that will provide a great stimulus to the British motor industry and that the benefits will percolate through to the many firms that are linked with that industry.For instance, the machine tool sector, which is well represented in my constituency, and the component industry will certainly welcome the change and the stimulus that it will give to the British motor car industry. There will undoubtedly be enormous benefits in future. Environmentally, it is an extremely beneficial move because it will encourage the replacement of old cars by new environmentally green vehicles. I am sure that that point was not far from my right hon. Friend's thoughts, bearing in mind the great importance which the Government attach to environmental issues.
The centrepiece of the Budget is the new lower rate income tax band. There was some opposition to an income tax cut from many of my constituents who made representations about the Budget. They said that there should not be a straight cut because it would benefit wealthier people. In response, I pointed out that it depended on how any reduction in income tax was distributed. Of course, I am delighted that the formula that my right hon. Friend the Chancellor has adopted will direct the most assistance to low- earners. That measure has left the Opposition hypnotised. They do not know whether to support or oppose it. Certainly, if they oppose it, it will demonstrate to all that Labour is the party of high taxation. I greatly welcome the improvement in the rules for personal equity plans. From April, people will be able to invest up to the full £6, 000 in qualifying investment and unit trusts. Like my hon. Friend the Member for Cambridgeshire, South-West (Sir A. Grant), I have long had a great interest in the wider share ownership movement and the Wider Share Ownership Council in particular. One of the most significant changes that have taken place under the Government is the great increase in the number of shareholders. I am delighted that the Wider Share Ownership Council has been given a new lease of life as the Share Ownership Movement with considerably enhanced resources. Although the ideal must be a wider share-owning democracy, whether people own shares in their own companies--one hopes that in future Budgets one will see even more encouragement for share ownership in the companies for which people work, as I have no doubt that that produces great benefits for such companies and for the economy generally--or whether people own shares in British industry generally, for many people investment in unit trusts and investment trusts represents a first step into share holding ; it is a better vehicle for many small savers. Therefore, I hope that my right hon. Friend's announcement on PEPs will provide a stimulus to savings and encourage the wider share-owning democracy that we wish to see.
The Budget will also help charities and voluntary giving. There were many representations about the need for VAT reliefs to help charities. It is difficult for my right hon. Friend the Chancellor to take big steps in that direction, but some extensions to VAT reliefs have been
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announced. That the minimum gift to attract tax relief will be reduced will also be of benefit in stimulating charitable giving. My right hon. Friend the Chancellor also spoke of the importance of GATT. I share his concern to the utmost. Many industries, not least the textile industry, which employs many people in my constituency, have great anxiety that a failure to bring about an early agreement on GATT could lead to a stultification of trade and to increased protectionism. Of course, that threat is greater when electoral considerations in the United States are so significant.The Budget will be of great value to the country. As I left the Chamber earlier, I overheard an Opposition Member say to another, "We've lost." Who knows? He was a northern Member and he recognised the impact of the Budget in the north of England. The Budget is good not only for the country but for the Chancellor and for the Government. I look forward to supporting it in the next Parliament. 8.35 pm
Mr. John Browne (Winchester) : I pay tribute to my hon. Friend the Member for Windsor and Maidenhead (Sir A. Glyn). Since I have been in the House, for just under 13 years, he has always been a marvellous character and certainly a great and friendly adviser to me. I know his constituency reasonably well and I am very sure that his constituents will miss him greatly. I would also like to echo the feelings of other hon. Members who have expressed their kind sentiments of thanks and a fond farewell to Mr. Speaker and to Mr. Deputy Speaker. I should be grateful, Madam Deputy Speaker, if you would convey those thoughts for me, and wish them great happiness in their retirement from this House.
I declare an interest, as detailed in the registry.
Today, it is almost trite to say that we are in difficult economic times. It is a very difficult situation for any Chancellor in which to construct a Budget. My right hon. Friend the Chancellor has constructed an extremely clever Budget--so clever that, if I were a Labour Member or a Liberal Democrat Member, I frankly would find it very difficult to do anything but vote for the Budget. I certainly would find it impossible to vote against the Budget. We have yet to see when the Divisions take place, but I would be not too amazed if, for the first time for many decades, we had a Budget that was not voted against. It is a Budget for the country as a whole, and is particularly targeted towards those in need.
As I said, it is a clever Budget. I think that it is also a very prudent Budget. My only criticism of it is that I think that it is perhaps too prudent in the circumstances.
May I welcome the bringing together of the Budget and the autumn statement? This is a structural matter of procedures. I believe that it is long overdue and very welcome, and I thank my right hon. Friend the Chancellor for that initiative.
In the short term, the Budget will be greatly to the benefit of many of my constituents in Winchester, and in Alton, as it is to the constituents of almost every Member of this House.
The 20p tax band was brilliant. Many Members on both sides of the House have been pressing my right hon. Friend for a 1p cut in the basic rate of tax, which would
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have amounted to a loss of revenue of very nearly the same as the revenue that we will lose through the creation of the 20p band. This effectively targeted tax cuts towards the lower paid, towards the young, towards those people in their first job and towards women in work. It is a brilliant initiative. From where I was sitting, I thought that I could see the wind vanish from Opposition Members' chests. I really think that the wind was taken out of their sails. It was a tremendous coup. It was a great thing to do, and I congratulate very warmly my right hon. Friend the Chancellor. As the effects flow through, I urge my right hon. Friend to ensure that the benefits targeted to the lower paid are not clawed back by the rules on income support regarding net income.The extra help targeted on pensioners is very welcome and worthwhile.
Almost every type of farm is experiencing, not just difficult times, but horrific times, often through no fault of the farmers involved. When we were down to eight days of food in the second world war, we pushed farming. Farmers became the darlings of our nation. They were encouraged to produce and produce, and to borrow to obtain more from the land. They did so in a fantastic, entrepreneurial way and were highly successful. Due to our membership of the European Community and the resulting structural change of our agriculture, the farmers were asked to rein back, and experienced great difficulties. Farmers in my constituency are particularly worried now at some of the proposals of Commissioner MacSharry. I think that they will greatly welcome my right hon. Friend's announcements on inheritance tax. My right hon. Friend's proposals for small businesses were welcome. I speak as a past chairman of the Conservative Back-Bench committee on smaller businesses. The proposals on inheritance tax are important for small businesses, entrepreneurship and venture capital. The announcements on the uniform business rate were welcome, and will greatly benefit small businesses and shops. The new rules for the late payment of bills by big companies, which are the customers of small businesses, are an excellent initiative. My right hon. Friend used just the right sort of clout to support the proposal. He did not put it in legal terms, from which there are ways out, but said that if a company wins a Government contract it must ensure that it pays its bills to small businesses on time, which is excellent. The raising of the VAT thresholds will benefit small businesses. I welcome the fact that there is no change in the VAT rate, and the cutting of severe penalties for those guilty of minor misdemeanours. The film industry of our country used to be a great industry. It is because we have not been sensitive enough to that industry's needs that we have seen it flow back to Hollywood and many other countries. It is a culturally important industry as British films are seen throughout the world. The explosion in television and television software and the huge increase in film making make my right hon. Friend's proposals even more important and most welcome. It is realistic to have tax relief on pre-production costs, which are incurred many months or even years before the earnings from released films arrive. The delay in
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earnings should be taken into account and should be tax deductible as costs are incurred. I welcome my right hon. Friend's initiative. Cider makers, certainly those in the west country, will be relieved that they have escaped from the proposed threat of the European Community to impose greatly increased duty on cider.Whisky makers will be upset at the rise in duty, but 70 per cent. of their production and, I should imagine, a larger percentage of their profits derive from exports. Consequently, the rise in whisky duty will not affect the earnings of that industry too much. I welcome the 50 per cent. cut in the discriminatory tax on motor cars. I would have supported a 100 per cent. abolition of the tax, which I think is totally discriminatory, but I welcome the 50 per cent. that we have been given. It will help the economy as the motor industry is an important multiplier industry with various supporting industries such as rubber tyre, battery, electrical, plastics and paint. All will benefit from the reduction.
One factor that I would have liked to have been included in the Budget, and which I was upset not to see, was tax deductibility for childminders. If a company is allowed a tax deduction for a creche for children, individuals who pay for childminders--particularly those who are unable to get their children to their place of work on crowded trains and undergrounds--should be given tax deductions. That was a reasonable request and I am sorry that it was not included in the Budget.
All those measures will help my constituents and those of almost every hon. Member. Therefore, I thank my right hon. Friend the Chancellor.
The economy in general affects us all. Quite rightly, inflation has been seen as the number one economic priority of the Government during the past 12 years or more. It is stil a most important priority, but it is falling fast and is, to some extent, yesterday's problem. I know that there is an inherent risk of a resurgence, but I believe that it is yesterday's problem and that today's number one priority for the Government should be the recession.
We are undergoing a severe recession--the worst in living memory. If it had not been a rolling recession, affecting one industry after another, instead of happening to all industries at once, as happened in the 1920s and 1930s, I think that it would be much worse than it is now. However, I believe that it is bad, very bad, and have urged my opinion on the Government for the past 18 months. I urge my hon. Friend the Minister to convey to my right hon. Friend the Chancellor that the recession is today's problem. If we do not solve it, tomorrow's problem will be an economic depression, and Germany, our main competitor, will be the country best placed to pick up the pieces.
We are in a deep recession, for which the classic remedy is to lower, not just interest rates, but the most important interest rates : real interest rates--nominal interest rates less inflation. Nominal interest rates are coming down, but inflation is coming down faster. Therefore, real interest rates are not only high but rising. We tolerate not only high, but rising, real interest rates. We have a serious economic problem, and risk turning severe recession into economic depression. We are doing so by placing yesterday's top priority--inflation, which is falling fast--ahead of today's top priority--recession.
How does that happen? It stems from our membership of the exchange rate mechanism, which I voted against. I
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believe that we joined the exchange rate mechanism for the wrong reasons, and at the wrong time--too soon. We joined it before the economies that underlie all those paper currencies had converged sufficiently. Therefore, we have an exchange rate mechanism that is not for gold, silver, or currencies of intrinsic value, but paper currencies with no intrinsic value, which merely represent a collection of economies.The exchange rate mechanism for those paper economies represents economies that were out of phase with each other and had not converged. If they had, we could have built an exchange rate mechanism and perhaps allowed a single currency to evolve. We entered the mechanism too soon and for the wrong reasons, and, as a result, United Kingdom interest rates do not respond to the cries of the British economy. Our economy is crying out for lower real interest rates, not just lower nominal rates, which are peripheral. Our interest rates are not responding as they are dictated through the exchange rate mechanism, by the needs of the German economy. Unfortunately, the outlook for the German economy is for continued high, and even rising, real rates of interest. The Germans have to deal with the understandable inflation that is the consequence of absorbing East Germany. But it is not merely a temporary but a structural problem.
Historically, the United Kingdom economy has been based on internally generated growth--on low or even negative rates of real interest, and on a tolerance of inflation to protect jobs. Today, through the exchange rate mechanism, we are trying to change our structure to meet the requirements of an entirely different economy. The pattern of growth in the German economy was almost the exact opposite. It was externally generated. The German economy had high real rates of interest, and inflation was not tolerated on any account.
The United Kingdom is confronted by a major structural problem at a time of national and international recession. The exchange rate mechanism magnifies that economic agony.
I accept that it is good for the United Kingdom economy to have the economic discipline that goes with the ERM, but our economy is still in a state of economic convalescence after some 35 years of socialism. When applying what might be good economic medicine, we must be careful not to kill the patient by giving him too much medicine at once.
We must avoid allowing the ERM to drive us from recession into economic depression. That is why I voted against the ERM, and why I am still against it. That is why I was saddened to hear that my right hon. Friend the Chancellor is getting even further into the ERM by announcing that he intends in future to move from the broad to the narrow band.
The Budget serves as a prudent incentive. It offers tax cuts that are sustainable in the long term, which is very laudable. It is like pressing lightly and prudently on the accelerator of a stationary car. Some may feel that the accelerator is not that prudent, given a borrowing requirement of £28 billion, but that is open to argument. Let us give my right hon. Friend the Chancellor the benefit of the doubt and say that he is prudently pressing on the accelerator. The problem is that the brake of high and rising real rates of interest is still on. The risk is that the car will stall. In economic terms, that stall means changing from severe recession to economic depression.
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I congratulate my right hon. Friend the Chancellor on what I truly believe to be a very clever Budget. It is so clever that I would find it hard to vote against it. One might even find right hon. and hon. Members in all parts of the House voting for my right hon. Friend's Budget ; that would be a real political achievement. However, I am not alone among my right hon. and hon. Friends in fearing the effects of the ERM and of rising real rates of interest on the United Kingdom economy. I urge my right hon. Friend, even at this late stage, to re- examine that aspect in the hope that our economic car will not stall.8.52 pm
Mr. Peter Hardy (Wentworth) : I have tried for some weeks to catch Mr. Speaker's eye during Prime Minister's Question Time, because I wanted to ask the right hon. Gentleman something of fundamental importance. Unfortunately, I did not succeed, so I might as well put my question to the House now.
When the Government first took office in 1979, the United Kingdom was-- according to its gross national product, and to the Organisation for Economic Co-operation and Development and other reputable authorities--the fifth richest nation in the world. When the Conservatives leave office next month, the United Kingdom will be the 10th richest country in the world. It has fallen five places because it has experienced comparative decline. That ought to transcend party political differences. The severity of the situation can be seen in all our constituencies. It can be seen in the young people who are without skills and opportunities. It can be seen in the rising crime rate, the problems of the health service, and the difficulties facing our schools.
I hope that any politician and any British citizen would judge a Budget on whether or not it arrests the decline that has been inflicted on this country for the last 12 or 13 years. Unfortunately, today's Budget will do very little to stem that decline.
I was surprised that a Yorkshire Member of Parliament, the hon. Member for Keighley (Mr. Waller), could perceive advantages in the Budget. The City might perceive its advantages, but in those areas where there is a need to create wealth the Budget is largely irrelevant. It scatters concessions about like confetti at a shotgun wedding, and they are of little significance.
Despite the Budget's welcome concessions to pensioners, it does not address basic problems. What have the Government done for youth, the nation's future, and investment? What does the Budget do to remedy the grievous economic conditions that exist in Britain today? Whatever the Government may say before the general election, the Chancellor admits that the public sector borrowing requirement will total £29 billion. The Government do not have that money. Over the past 13 years, they have demonstrated beyond all doubt that they are unfit to exercise stewardship of the nation's economy.
Since the Government took office, they have received £111,000 million in offshore oil revenue, and scores of billions of pounds from privatisation. What is there to show for that money? Fiddled employment statistics.
Yesterday, I gave my local press a story about a 12 year-old-child whose whole education and social life is blighted because she cannot have an operation. Her mother, who is a very decent lone parent, does not have
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£900 to pay for that operation. The Government had all that loot from privatisation--all that wealth from North sea oil--and yet still injustices of that kind arise.I have been drawing another problem in my constituency to the Government's attention for months. I refer to the future of one of Britain's most important industries. The hon. Member for Keighley fought my constituency some time ago, and will be aware of the vital importance and achievements of its engineering steel industry. It is capable of competing with any similar industrial establishment in the world. It holds world production records and can knock Germany, France, Italy, the United States and even Japan into a cocked hat in producing high-quality engineering steels.
As a result of Government policy, it cannot work full time because the privatised electricity industry has put extra premiums on evening use, for under the Conservatives the values of the television soap opera are more important than the creation of wealth. This industry in my constituency in the last two years has faced huge increases in electricity charges.
The Government say that the industry has the power of the consumer. But it is the biggest consumer of electricity in the Yorkshire region. That does not seem to weigh heavily on a Government and a supply industry that are no longer concerned about exports, about the creation of wealth and about the preservation of the industrial base. The Government have given industry no priority, and there is no priority in the Budget.
When the Government were giving out revenue support for local authorities, I did not think they were being fair and, about 18 months ago, I made speeches in the House on the subject. Since then, I have analysed the position in my local authority and compared it with the two, well trumpeted Tory favourites of Westminster and Wandsworth. In this financial year, the borough of Westminster received £911 per head by way of revenue support. The borough of Rotherham received £211.
The most expensive item for local authorities is education, and in my part of the world the school population is nearly twice that of Westminster, yet the latter received five times as much as Rotherham in revenue support. Had Rotherham been treated on the same basis, not only would we have had no poll tax to pay, but every man, woman and child in the Rotherham Westworth and Rother Valley constituencies could have received £750. That would have been stupid, of course, because the money would have been better invested.
We in Britain are not investing in the creation of wealth. There is nothing in the Budget, for example, about one of the most serious problems facing Britain. In the late 1970s, my area had virtually beaten the housing problem. Now, because of the sale of council houses and particularly because of the enormous reduction in local authority house building, we are in a sorry state. Local authority housing is the only hope for half the population of the country who cannot afford to buy.
Since the late 1970s, 20,000 names have gone on to the waiting lists in my area. The only hope for those people is for the local authority to get on with building. It has the capital to do that, but the receipts from council house sales have been frozen. Had the Government really wanted to stimulate the economy in an area such as mine--which, in
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housing, is suffering enormous problems ; the people generally have suffered economic devastation as a result of Conservative de-industrialisation policy--they would have allowed that stimulus, brought hope, and thereby reduced the queues of people attending the surgeries of councillors and Members of Parliament.Mr. Lofthouse : Is my hon. Friend aware that in parts of Wakefield metropolitan district council in 1979 people were waiting only a fortnight for council tenancies? Since then, no bricks have been laid by the local authority and half the council houses have been sold. Day after day I hear at my surgery, and receive in the post, heartbreaking stories of people, including young couples with babes in arms, with nowhere to live. In many cases couples are having to live apart with parents and relatives. As my hon. Friend says, millions of pounds are being held in capital receipts as a result of council house sales. If councils could use that money, much of the problem would be solved.
Mr. Hardy : My hon. Friend is right. The Government have done virtually nothing to tackle the real problems of Britain. If they were prepared to tackle them, we would have had a different Budget today. Indeed, had we had more sensible Budgets during the years of Tory rule, the national economy would be much healthier. Whatever the Chancellor may say or do, and irrespective of any sensible little concessions that he may introduce, Britain's economy is unhealthy and may even be dismissed, and the Government's policies are fundamentally flawed and irrelevant.
I am sorry that my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) is no longer here but he has another important engagement. In his speech he referred to several matters that he would have liked the Chancellor to have approached more severely. I am not particularly severe on those matters. For example, I recognise that old men who have smoked from the age of 12 or 13 and may not be particularly rich may find it difficult to pay the extra charge on tobacco and cigarettes. It is not up to a well-heeled Tory Chancellor to try to make it impossible for people who have smoked since boyhood to give up whether they want to or not, simply because they cannot pay. That is a brutal approach, and it is not a question which the Chancellor should determine. Moreover, an important establishment in my constituency provides 130 jobs and I should not like those to disappear because my constituency has lost too many jobs already since the Government have been in office.
Some Conservative Members have said that the price of drink should be increased. I am not a drinker--I am not teetotal but I do not drink at work. I have been in the House for 22 years and the only drink that I have consumed here has been when I have had guests for meals, so I am not an ardent advocate for the cause of drink. If the Government wanted to do something sensible about drink, they would not price it out of the market but would have challenged and changed the unsatisfactory character of the British drinks industry. They will not do that, however, because they depend too much on the brewers' donations to fight elections on their behalf.
My hon. Friend the Member for Greenock and Port Glasgow and the hon. Member for Keighley mentioned the Government's wonderful decision to promote green motor cars and have us all buying new cars that burn unleaded petrol. The problem is that vast numbers of my
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constituents cannot afford to buy a new car and are stuck with their four-star-consuming cars. The assumption that millions of our constituents can join every fashion that the Government espouse is nonsense. My constituents cannot afford to change their cars or buy private medicine. They have to put up with run-down public services and an economy that has been badly brought down by a Government who have failed to perceive the real necessities of Britain's present economic condition, who have failed to secure investment to guarantee the future of young people, and who now believe that, by scattering a few bits of confetti here and there, Britain will feel that it is having a happy marriage.We are about to see a change. That has become necessary because the Government have failed the country. They have led and created an appalling and serious decline--the worst that this nation has experienced in recorded history. We talk heatedly about the problem of the enormous increase in crime. But the biggest crime of all has been the Government's incompetent failures and inadequate leadership in the past 13 years. The fact that the days of their domination are rapidly drawing to a close is much to be welcomed.
9.7 pm
Mr. Mark Wolfson (Sevenoaks) : The hon. Member for Wentworth (Mr. Hardy) will not be surprised to hear that I do not share his feelings of doom and gloom about the condition of Britain today--quite the reverse.
May I take up two points that the hon. Gentleman raised? First, what steps has his local authority taken to involve and encourage the development of housing for rent through housing associations? That has happened successfully in many parts of the country and I am surprised that it has not happened in his constituency. That may be due to the baleful influence of his local authority, which does not consider that housing associations are a way forward. Secondly, although I appreciate the hon. Gentleman's eloquent concern for those who have smoked all their lives and the higher prices that they may have to pay for tobacco, I thought that there was a consensus in the House that it was right to use the tax regime to discourage smoking. The health hazards of smoking are well-known, so the hon. Gentleman's argument does not stand up. He seemed to be strongly opposing the cross-party consensus on smoking and health.
Mr. Hardy : I would not dissent from the view that we should discourage young people from smoking. My point was--at the risk of being a little chauvinist--that older men who may have smoked from the age of 14 and who are now in their 70s and 80s think that a pipe of baccy is rather important, and it would be cruel of the Government if they told a poor man that he had to stop smoking simply because he could no longer afford the tobacco on which he had come to depend.
Mr. Wolfson : Be that as it may, I should like to speak about the Budget now.
I welcome the general thrust of my right hon. Friend the Chancellor's statement, and I fully support the Government's continuing central objective of defeating inflation and achieving a sustainable growth rate in the economy. This ingenious Budget is consistent with Government policies over many years. Not surprisingly,
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my hon. Friend the Member for Winchester (Mr. Browne) spoke strongly against our membership of the ERM, but I find such opposition to membership odd.For a long time, Governments of various political complexions have been too ready to pump up or to depress the economy for domestic reasons instead of paying attention to the underlying strength of the economy and the importance of a sustainable and consistent interest rate policy. The ERM certainly provides an additional limitation within which Governments have to work, but it is a necessary discipline if we are ever to make our industrial base stronger-- [Interruption.] I am glad to see some assent to that view among Opposition Members.
I welcome the way in which income tax has been cut ; that will help the less well-off. More attention should be paid to them, not just because we are running up to an election but because they are the people who deserve special encouragement. They are the key to the future effectiveness of the British economy.
Interestingly, the Budget has been unequivocally welcomed by Sir John Banham of the CBI, who has been critical of other aspects of Government policy in the past. He sees this Budget as contributing to the competitiveness of British industry.
Mr. Campbell-Savours : That is remarkable. I understand that a spokesman of the CBI in my part of the country, Cumbria, said on Radio Cumbria tonight that the Budget will do nothing for our area. Could it be that those on the ground have a different experience from that of those who sit in ivory towers?
Mr. Wolfson : It is up to the CBI to decide whether its director general lives in an ivory tower. He may live in a tall tower, but it is not made of ivory. He is usually well in touch with the views of his members.
I welcome the Budget, too, because it will encourage those working in the middle and skilled ranks of industry on whose performance at work, contributing constructively to the wealth of their companies, the economic health of the country depends. If that is effective and efficient, we have the wealth to pay for the social and education services that we wish to continue to increase and to improve. I welcome the approach to income tax because it is fundamental to Conservative philosophy. In contrast to all the Opposition parties, we believe that it is right that individuals and families should keep as much as they can of their own money to spend as they choose. As hon. Members have emphasised in the debate today, it is not an either/or choice. A low personal tax regime over at least eight out of the 12 years that the Conservatives have been in power has resulted in a growing economy, because it works with the grain of what people feel--that proper and natural desire to keep more of what they earn for themselves, which makes their efforts at work worth while to them and their families. A regime that does not pay attention to that is not working with the grain of the people and will not be successful.
Mr. Lofthouse : Does the hon. Gentleman appreciate that some of the lower-paid families who he claims may benefit slightly from the tax concessions may find themselves worse off because they receive means-tested benefits that are decreased by more than the amount that they gain from the tax changes?
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Mr. Wolfson : I am afraid that I cannot agree with the hon. Gentleman on that point.Let me move on to the benefits that will accrue to pensioners, and the 5 million poorer pensioners who will gain from higher benefits. The fact that, for those on income support, a single person will receive an extra £2 and a married couple an extra £3 a week is a clear sign of the Government's concern for the less-well-off.
Mr. Wolfson : I am delighted that my hon. Friend is on the Front Bench to agree with my point.
The changes to car tax will be of particular benefit to the hard-pressed car retailers in my constituency, but I would not have been pleased to see my right hon. Friend the Chancellor move away from the policy which the Government have been following for several years of bearing down on the benefit of a company car. I am delighted that he has not let up on the regular and steady movement towards making that a less clear benefit to individuals and has brought it more into line with other tax regimes. Nevertheless, he has found a perfectly straightforward and sensible way to give some stimulus to the car industry, which is a key factor in the health of the economy.
In my experience, small businesses have suffered worst from the recession. Therefore, I strongly welcome the package of various measures for them announced today.
Mr. Campbell-Savours : Will the hon. Gentleman give way?
Mr. Wolfson : No, I should like to continue.
A number of hon. Members have expressed concern about the size of the PSBR. I have always been something of a Keynesian. I was less happy than some on the Conservative Benches when we followed a strict policy on borrowing during earlier recessions. In the present situation it is perfectly proper for Government borrowing to rise to deal with the budgetary problems caused by recession. Structurally, there is no budget deficit. The Government have taken a sensible way forward and, as a result of the good measures that are now in place and the competitive position of British industry, we shall be able to capitalise on that and return to growth at the end of the recession. Over the medium term we shall return to a balanced budget. During their term of office the Government have been able to repay a large part of the national debt. The borrowing requirement now is different from that which existed in 1979 when the Labour Government left office. The economy is set for recovery.
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