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Member for Norfolk, South-West (Mrs. Shephard) after 9 April--one group of people will still be in the House, and they are those who sit here. Nobody will be able to call "Labour gain" as we walk out to supper this evening because there ain't going to be any Labour gains from the Ulster Unionist party or any gains for any other party from the Ulster Unionist party.

8.15 pm

Mr. Alan Haselhurst (Saffron Walden) : There have been so many metaphorical handkerchiefs on display this afternoon that one almost feels that one must apologise to the House if one is seeking to be a Member of the next Parliament. However, I associate myself with the comments already made about right hon. and hon. Members who are leaving us after distinguished service. Without being unduly discriminatory, may I remark especially on my right hon. Friend the Member for Hertfordshire, North (Sir I. Stewart), who is a neighbour of mine and who, during his time here, has been a model of the efficient, courteous, effective and highly capable Minister and Member of the House. He will be missed, especially as he is leaving prematurely because of ill health. He has been a very good Member of Parliament and a good neighbour.

Most of us can feel at ease with the general tone of the Budget. It seems to have hit the right spot in terms of national needs. I begin by commenting favourably on the Budget's green tinges. I follow in part what the hon. Member for Londonderry, East (Mr. Ross) said. I was pleased that the Chancellor widened the gap between the duty on leaded and unleaded petrol. It was entirely right to give a further push to unleaded petrol, although I know that that causes problems for some people. However, if people are encouraged by the difference in duty and by the reduction in the car tax to buy new cars, most of which are now fitted with catalytic converters--in parenthesis, I declare an interest--that must be good for the environment. Although it did not please everyone, I also welcome the extra duty on cigarettes. I listened to a number of people commenting on the radio last night about how that would offset any gains from the cut in taxation. One must emphasise that it is their choice to smoke. The evidence is now conclusive that they are not doing themselves any good. They do not have to spend that money and should make more of an effort not to spend it in that way.

There is a whole raft of measures that are helpful to business. I am delighted that many people in the business community have expressed their satisfaction at what the Chancellor has done. It seems that the totality of those measures will sustain and create jobs in the business and commercial sector. Taken with the boost to consumer spending, they should also help the economy.

An especially welcome feature of the tax changes was that they have been tilted to those on low incomes. Surely the rationale is that people on low incomes are more likely to spend any extra money that comes their way. I therefore found it strange--for two reasons--that the Leader of the Opposition said that much of what he is pleased to call the borrowing giveaway would be spent on imports.

One reason is that the Opposition have already justified their intention to increase pensions and child benefit on the

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precise ground that they believe that the money would be recycled in the economy, through extra purchasing power, and would therefore be used. Do they think that that money would be used on imports? It is rather improbable, is it not?

My second comment on the Leader of the Opposition's criticism is that it seems rather fanciful to say that lots of grey-haired members of our community, when extra money is available to them, will be responsible for a surge in imports of video recorders, CD players or karaoke machines. The fact is that, as any sensible person must recognise, extra money in the hands of the elderly and low paid is likely to be spent on many of the routine, ordinary necessities of life, providing a helpful boost to the economy.

The debate is a tale of two Budgets--the actual Budget so capably placed before us by my right hon. Friend yesterday, and the shadow Budget, which is haunting the debate. We occasionally see glimpses of the shadow Budget, but it has never materialised before us. As my right hon. and learned Friend the Chief Secretary said, it is not here to be debated and scrutinised.

Because of the evanescent nature of the alternative Budget, I cannot help feeling that the right hon. and learned Member for Monklands, East (Mr. Smith) may be termed not so much the shadow Chancellor as the phantom of the Treasury, in whose mouth the words of the theme song, "All I ask of you", might take on a note of menace rather than endearment, if he ever got the chance to control our finances.

The Leader of the Opposition told us yesterday that the shadow Budget--or the alternative Budget, or the phantom Budget--has not appeared because the Opposition need more time. They have had every bit as long to prepare their measures as my right hon. Friend the Chancellor has had to prepare his. The Leader of the Opposition says that they need another six days. As far as I am concerned--I am sure that my right hon. and hon. Friends would agree-- they can have another six years, if they want, to mull over what they might do.

Mr. Oppenheim : As long as they need.

Mr. Haselhurst : As my hon. Friend says, they can have as long as they need.

The Leader of the Opposition majored heavily--no pun intended--on the size of the public sector borrowing requirement. Apparently £28 billion was too much for him. He held it up as an example of irresponsible finances. If he deprecates the tax reduction, which amounts to about £2 billion, and would cancel it, the PSBR would come down to £26 billion. We should like to know whether £26 billion would be acceptable to him, or whether he considers it too high. If he thinks that the PSBR should be lower, what does he think should happen ? Should there be a commensurate increase in tax to bring the PSBR down to the level that he finds acceptable ? Yesterday he said :

"if there is to be borrowed money available, it must be invested in industry, construction, capital works, transport and other essential services."

What on earth does the right hon. Gentleman think that the bulk of the PSBR is being spent on ? It is being spent on precisely such developments as those for which he calls.

If the Leader of the Opposition says that the PSBR should be reduced, there could certainly be no tax cuts. There would have to be either substantial tax increases or substantial cuts in the very public services which he says

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should be expanded. What he says does not make sense. Yesterday the right hon. Gentleman sought to contrast the "borrowed giveaway", which he said might be spent on imports, with borrowing for investment.

The right hon. and learned Member for Monklands, East also referred, in a critical tone, to the fact that the trade deficit next year might be as much as £9 billion. We should all recognise that if there is to be a recovery in this country, with a recovery in investment, that, too, would have implications for imports. If substantial extra investments are made, more raw materials will come into the country, and so will more machine tools and capital goods. That will be a necessary part of a recovery in investment. Whatever course we take, be it further investment or an increase in consumer spending, there will be balance of payments implications.

The Leader of the Opposition said that all that would have to be paid for in the end, and that it was a

"basic truth that money borrowed for tax cutting would soon have to be repaid by tax raising".--[ Official Report, 10 March 1992 ; Vol. 205, c. 767.]

He insisted that that must be true, and Hansard records that my right hon. Friend the Chancellor shook his head. Well he might. The Leader of the Opposition continually makes the mistake of failing to understand that there is a difference between tax rates and tax revenues. As was repeatedly demonstrated in the 1980s, lower tax rates can, in the right conditions, succeed in producing higher revenue. In the end, the way in which the budget will be balanced is that if the policies are right the economy will expand, and that is how the extra resources will be produced.

There is a much greater chance of that happening under the formula employed by my right hon. Friend than by using some of the Opposition's strategy and those of their ideas that we have glimpsed. The mechanism for recovery is now largely in place. The question is whether that recovery will be assisted more by my right hon. Friend's Budget or by the Opposition's phantom Budget, which has not yet been fully substantiated before us. For all that we can tell, that will be a cocktail of high borrowing and high taxes. If the Opposition wish to deny that, it is incumbent on them to be much more specific about their spending promises, both explicit and implicit.

The Labour party has placed an advertisement about the NHS in the national press today, in which they imply the tragic death of one child would not have happened if they were in power. That would have huge cost implications, and if they say that they will fund the NHS so that not one single person's life will ever be lost unnecessarily they should tell us how much that would cost, and how they would fund it. If they cannot put up the funds and tell us how they would raise them, they should give up that nauseating line in tear-jerking advertising, which seems wholly hypocritical.

I believe that Labour's plans would snuff out rather than encourage recovery. Probably the only blockage to recovery, now that the right mechanistic steps have been taken to enable it to take place, is the worry that a Labour Government might be elected. On 9 April the electorate can remove that doubt from everyone's mind. For their own sake, and for the sake of the country, I hope that the electorate will clearly do their duty.

Mr. Deputy Speaker : Order. Unless speeches are briefer I am afraid that one or two hon. Members who wish to speak may be disappointed.

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8.28 pm

Mr. Michael J. Martin (Glasgow, Springburn) : I shall try to be brief, Mr. Deputy Speaker.

The hon. Member for Saffron Walden (Mr. Haselhurst) talked about how the Government had helped the health service. I do not know how they can have done that, when they have put up prescription charges. Yesterday, in the Budget debate, the Minister of State and her right hon. Friend the Chancellor of the Exchequer claimed that they were giving working people and the lower-paid a better deal. How can they say that when, only a few weeks ago, they increased prescription charges? Conservative Members know that nowadays a doctor may specify not one but several items on a prescription, and they all have to be paid for separately.

No one in my community or in my hon. Friends' communities will be kidded by the Budget yesterday.

I was concerned by the talk at Question Time today about Britain being a trading nation. I am the son of a merchant seaman who, like my hon. Friend the Member for Liverpool, Garston (Mr. Loyden), had a career in the merchant navy during the war. Many of his friends were lost in shipwrecks then. My late father always hoped that there would always be work for seafarers in the fleet. As a result of the taxation system and the lack of incentive, shipowners have been forced to go abroad to find foreign seamen to man our navy, and they are sometimes badly trained.

Hon. Members have referred to our bad industrial relations and strikes. My father was a seaman all his life, as were many men in the community in Glasgow in which I was brought up. There were few strikes by the National Union of Seamen. A strike was planned in 1938, but because war was imminent, the seafarers did not go on strike for better conditions. They put aside their demands on conditions and wages because they knew that the country needed them. It is a pity that the Budget did nothing for our seafarers.

Something could have been done about the building industry. Any hon. Member who was served in local government knows that, the minute a housing contract goes into the system, bricklayers, plumbers and joiners are taken off the dole. I know that the Government say that bricklayers, plumbers, joiners and electricians should be self-employed. Many of them are. They have severe difficulties when big companies do not pay them for six or seven months after the contracts are completed. A self-employed journeyman cannot stand that, because it means that he has to go to the banks, which charge rates that could put him out of business.

The Chancellor said yesterday that the increase in duty on beer was small and was in line with inflation. The Minister knows that the brewing industry is an excellent employer of labour. The Tennants Caledonian brewery is in my constituency. The men and women employed in the industry enjoy reasonable rates of pay and a good pension scheme. If we keep putting up the price and the duty on such commodities, we are in danger of losing. The Treasury gets a great deal of money. The Minister must know that people are moving away from beer to wine because of the duty. We are in danger of overkill. We could have done more for the whisky industry. The hon. Member for Londonderry, East (Mr. Ross), who has now left the Chamber, talked about farming. It is not widely appreciated that farmers in the north-east of

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Scotland depend greatly on the whisky industry because they sell barley to that industry. It takes good farmers to produce barley for the whisky industry. If the industry is damaged, there is a knock-on effect, not only for people in constituencies such as mine, but for farmers in the rural areas. Farming communities in England also depend on the whisky industry. The industry buys at home rather than abroad.

We face the prospect of harmonisation. The French do not care too much about cognac, because the cognac owners also own the vineyards. As long as they do all right in terms of taxation on wine, they are prepared to throw the cognac industry away. We cannot do that in Scotland, because we produce a distilled product. Other Community countries, such as Spain, Italy and France, will gang up against the whisky industry if the Minister of State does not watch out. I think that she is well aware of that.

I have been in the House for almost 13 years. I have served in opposition, so I hope that after 9 April I will sit on the Government Benches as a Back -Bench Member supporting Labour Ministers. It looks good. I have seen many sad faces among Conservative Members. I do not mean hon. Members who are retiring, some of whom I am sorry to see going because I have had a good relationship with them through the British-Italian group and through the Christian Parliamentary group. There are some long faces : Tory Members know that they will lose because they have taken the people of Britain for granted for too long. Many issues will come home to roost on 9 April. I shall be pleased to sit on the other side of the Chamber next month ; it will make a change.

Mr. Oppenheim : Don't hold your breath.

Mr. Martin : Despite what the hon. Gentleman says, I am willing to put a bet on it, although I am not a gambling man.

In 13 years of Tory Government, I have seen terrible unemployment in my constituency. I cannot remember the great depression, but I was brought up in a home in which my father was forced to be a seaman because he could not get work in Glasgow. My mother brought us up to appreciate what happened with the means test during the great depression. In my constituency, I see men and women who are now married and have never had decent jobs. The Chancellor could have done something for them.

The Chancellor could have given incentives to employers to take on adult apprentices. I have never heard Tory Members mention adult apprenticeships. A young man who has missed out because he has never been able to get an apprenticeship as a carpenter or as an electrician must still want an apprenticeship. They must want a trade. I had the chance of a trade when I left school in 1960. Why did not the Government bring in incentives and say to employers, "Take on a man or woman of 30 or 32 as well as a youngster-- give them a decent wage and we will subsidise you to get skilled labour into the market"?

One problem is that, if we ever have an upturn in the economy, the scream will go up that there are no skilled workers. I was a trained sheet metal worker. Many of my colleagues who have jobs tell me that the average age of those skilled men is getting higher, because no youngsters

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are coming in to take their place. I could not do heavy plating or climb as high as I did when I was 22. No incentive has been given. I watched the Kilroy-Silk programme this morning and saw that the Minister had a rough time. It is all credit to her that she handled herself well. She must have done it for Lent ; her penance must have been to go on "Kilroy". Hardly a friendly voice spoke in favour of the Budget

Mr. Graham Riddick (Colne Valley) : BBC bias.

Mr. Martin : The hon. Gentleman talks about BBC bias. The BBC is not noted for being friendly towards the Labour party.

There has been much tub thumping about how the extra money will help the poor. The Minister knows that there are many hidden costs that people in our communities must bear. Scotland has had an extra year of the poll tax. VAT is up to 17 per cent. The hon. Lady says, "You cannot have it every way. We have cut the poll tax, and that is why VAT had to go up to 17 per cent." But it was her fault that we had the poll tax. She went into the Division Lobby to vote for the poll tax, which, in the end, brought down the right hon. Member for Finchley (Mrs. Thatcher). Conservative Members blamed her, yet they cheered her when she brought the poll tax into Scotland.

Now there are rent rises. The Government will say that Labour-controlled authorities are bringing in rent rises. They cannot say that about Scottish Homes. One of my constituents is to pay £25 a month extra in rent. By the way, she lives in a tenement. Seven of her neighbours will not suffer that rise because of special legislation. Those who came late into local housing associations are in the same situation as the previous deregulated tenants. Is the Minister telling me that that lady is better off with this Budget when she gets a bit of a tax cut working in a local hospital but will be hit for £25 a month more than her neighbours?

It will not stop there. The housing association has told her that her rent will go up another £25 a month next year. That is Tory control. Hand- picked Tory lackeys have been put into Scottish Homes. I hope that I receive a commitment from the Government that the placemen and women who have been put into quangos will be dumped.

Mr. Bob Cryer (Bradford, South) : I heard the Minister's rather quiet remark about the BBC packing the "Kilroy" show this morning. That is entirely mistaken. The "PM" radio programme has not had a single letter or telephone message of support for the Budget. If Ministers try to get around that, they are saying that the BBC is trying to pack the nation, which is hardly the case--the nation rejects the Budget.

Mr. Martin : I agree with my hon. Friend.

What about the hidden costs for the elderly? Conservative Members have tears in their eyes when they talk about the elderly. One could not find a more responsible local authority than Strathclyde regional council. It is not packed with lunatic left nutcases--it has traditional Labour party men and women such as those who are present this evening. They have been screwed into the ground so hard that they have been forced to take away warden schemes and the sheltered housing complex. The Secretary of State for Scotland has done nothing to ease the situation. Those are the hidden costs that nobody beats a drum about when we talk about the Budget.

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When there was a decline in traditional Scottish industries, Tory Ministers said, "We cannot interfere in business." However, they give ammunition to the nationalists to say to the people of Scotland, "Break away." That is the last thing that I want. I want constitutional change, but I do not want to break away from the men and women--my brothers and sisters--in England and in Wales. Scottish nationalist Members appear to be respectable men and women, but there is a fascist element within the nationalist movement. I have seen them at polling stations during by-elections bullying old men and women who are handing out leaflets for other parties. I have seen them let down tyres. I have heard of them putting bricks through shop windows and those of opposition parties.

I am proud of my heritage and of my roots in Scotland, and I am ashamed when people behave in that manner. The Conservatives give them ammunition when they denude our railway industry and places such as Ravenscraig, acting like Pontius Pilate and washing their hands of them.

I look forward to a Labour victory and to a more caring society than we have had in the past 13 years. I want to be on the Government side of the Chamber.

8.45 pm

Mr. Phillip Oppenheim (Amber Valley) : It is always a pleasure to follow the hon. Member for Glasgow, Springburn (Mr. Martin). He mentioned that Conservative Members do not have a policy of intervening to save old and dying industries. He should address his remarks to his own Front Bench because Opposition Front-Bench Members have had many opportunities in the past two months to commit themselves unequivocally to save Ravenscraig if Labour comes to power, but they have never once committed themselves to doing that. It saddens me that two of my colleagues from Derbyshire have decided to stand down at the election. One is my hon. Friend the Member for Erewash (Mr. Rost). He has always been a very kind and decent neighbour. I inherited part of his previous constituency. The other is my hon. Friend the Member for High Peak (Mr. Hawkins) whose trenchant economic views in the Tea Room and Smoking Room I have enjoyed over the past nine years. Over that period, my hon. Friend has moved from what has sometimes misleadingly been called the wet wing of the party to the rather drier wing of the party. I welcome that move. Perhaps it is a good thing that he is standing down because he might be tempted to go the full circle in the next Parliament. I regret that he is standing down. I shall miss his company and his fine economic mind.

Over the past day or so, there has been much comment that somehow the Budget signals the end of monetarism or Thatcherism. Some pundits and journalists sometimes confuse monetary policy with fiscal policy. There can seldom have been any time in recent history when monetary policy, which controls the supply of money--which, of course, is monetarism--has been so tight. In fact, supposedly in the heyday of Thatcherism or monetarism between 1983 and 1989, broad money in Britain rose by a massive 150 per cent. At the same time, the rise in broad money in France was only a third of that. There is a little irony there. Under the nominally socialist Government of President Mitterrand, monetary policy

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was far tighter in France in the mid-1980s than it was under the nominally monetarist Government of my right hon. Friend the Member for Finchley (Mrs. Thatcher) in Britain. As a leader in the Financial Times pointed out a couple of years ago, Mitterrandism was perhaps more Thatcherite than Thatcherism. I do not accept that the Budget represents a retreat from monetarism, for the very reason that monetary policy is extremely tight at the moment. Of course, fiscal policy is looser.

Once again, let us cast our minds back to 1981, to the previous recession, and consider the PSBR then. Public borrowing in 1981 was higher as a proportion of GDP than it is projected to be next year. Certainly, next year's projected PSBR is far lower than it ever was on average under Labour in the 1970s. Another important point to remember is that public sector debt has been halved over the past 13 years, which puts us in a far stronger position to borrow when necessary during a recession, which we are doing at the moment. However, we must remind ourselves of the disadvantages of too much dependence on state borrowing. For one thing, the state is competing with private industry in the capital market and has a tendency to push up interest rates at the expense of private industry in raising capital. That is the crowding-out effect. It is important that my hon. Friends should remember that. So long as we have a firm commitment to bringing the budget back into balance over the economic cycle, state borrowing should not be detrimental to the economy. It is obviously right and proper that we should borrow during a recession.

Opposition Members have a cheek to criticise the Government for the public sector borrowing requirement, not only because their record in government was one of massively greater PSBRs in real terms than we have now or will have under the projected PSBR next year, but because every time in the past few years a Labour spokesman has gone on tour around the country and has been asked what might be the spending commitments of a future Labour Government, he or she has committed the party to extra spending, whether on overseas aid, education, health, the railways, or whatever, and, when pressed, have stated that that extra spending would be the priority of a future Labour Government. So Opposition Members have no right whatever to criticise the PSBR projected for next year by the Government.

As my hon. Friend the Member for Saffron Walden (Mr. Haselhurst) said, there is a deep dishonesty in Labour's current advertising campaign. It says that a child died as a result of lack of funding in the national health service. Under no Government ever has the NHS been able to guarantee immediate help or medical aid on the spot for everyone who has ever required it. If Opposition Members suggest that a future Labour Government could guarantee that, they are leading the electorate up the garden path in an unpleasant and irresponsible way. They are taking advantage of the sick and vulnerable for political ends.

In their heart of hearts, Opposition Members know that no Government can fund the NHS up to the level where it can guarantee immediate and full medical treatment for any condition that anyone might have. They should admit it. If any Opposition Member wants to challenge that and say that a future Labour Government would commit themselves to a policy of treating everyone absolutely on demand, regardless, I will happily give way. Will the Front

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Bench spokesman commit himself to that? If not, the Labour party should drop its demeaning and sick advertising campaign.

I also find Labour's position on tax somewhat odd and unsatisfactory. For one thing, Labour was in favour of a low base rate. It originally had a lower base rate. All its policy documents speak of the need for a lower 20p band for the low paid. In the past 24 hours, several Opposition Members of Parliament have expressed their support for a lower tax band. Yet the Opposition Front Bench spokesman said today that the Labour party would vote against that in the Lobby.

The Labour party's argument for voting against the lower tax band is that public spending is more important than tax cuts and we must use public borrowing to fund improvements in the infrastructure. To an extent, I agree. But what do Labour Members think the autumn statement last year was all about? It signalled massive increases in public investment and public spending. That was part of a long line of significant increases in public spending under the Conservative Government. We have seen huge rises in funding for the NHS, education and, particularly in the past year, the railways.

The amount of money that has gone into public investment as a result of the autumn statement outweighs by a factor of about 10 to one the amount of money that has gone into tax cuts. It is astonishing that Opposition Members should begrudge tax cuts to the lower paid. It shows a strange attitude. Labour Members seem to believe that somehow people owe their money to the state and if the state allows them to keep a little, that is very nice. Tax cuts for the lower paid and increases in support for pensioners have been widely welcomed in my constituency.

Time and again, Opposition Members call for investment in industry. I agree with them. We need more investment in industry. But they know that savings and investment are closely linked. To have people saving large amounts of money in an economy not only makes a pool of capital available to industry but tends to bear down on both inflation and interest rates. Everyone knows that savings rates and investment are closely linked.

So the best that one can do is to lower taxes for savers. That is what the Government have done. The worst that one can do is to clobber savers with an investment income surcharge. Above all, Labour's proposal to return to the investment income surcharge of the 1970s shows how little it has learnt in the past 13 years and how shallow is its commitment to getting investment going in Britain. It is worth reminding Labour Members that, under the Conservative Government in the past 13 years, investment in manufacturing industry has been significantly higher in real terms. Manufacturing output is significantly higher. It fell under the last Labour Government. Productivity in manufacturing industry is 50 per cent. higher that it was in 1979--it rose faster than in any other major economy during the 1980s--and our exports of manufactures have increased by about a quarter during the past three years.

I would be the first to admit that we have problems in my constituency of Amber Valley. Certainly, the recession has caused problems. But it is worth hon. Members casting their minds back to the 1970s, when areas such as mine were dependent on largely low-paid jobs in the coal industry. Now the constituency enjoys a diverse

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manufacturing base. There are many companies in my constituency, covering a wide range of manufacturing activities from repairing turbine blades and making chemicals used in the manufacture of semi-conductors to making carpets, making chocolates and engineering. Many of those companies are flourishing despite the recession, and many have done very well indeed.

To flourish further, however, the companies in my constituency need, first, steady non-inflationary conditions. Our monetary policy is delivering and will deliver that. Secondly, they need ready availability of capital. The economy is going through a fundamental shift from over-consumption as a result of a reduction in tax breaks on consumption. Less tax on savings will also increase the availability of capital for industry.

Thirdly, companies need pro-business attitudes. Conservative Members have such attitudes, but I am afraid that great hostility to business, enterprise and industry still manifests itself among Opposition Members.

Fourthly--and perhaps most importantly--industry needs a well-educated population to provide the skilled, sophisticated work force required in a modern economy. Our reforms are delivering that. Fifthly, industry needs incentives in the form of lower taxation. Labour would tax savings, it would tax business, it would tax individuals, and it would end our education reforms. All those policies would do tremendous harm to business and would mean that our industry would be less likely to create the wealth required to pay for the higher living standards and improved public services that we all want, regardless of party.

At a time when socialism is being rejected all over the world, in virtually every country except Cuba and North Korea, I find it extraordinary that Opposition Members are proposing the policies of renationalisation and higher taxation which have been so resoundingly rejected. I admit that mistakes have been made, but they should not obscure the significant progress made by our economy since 1979. In my area industry, and especially manufacturing, is far better off than it was in 1979. The Budget will help the lower-paid, it will help business and it will help us to resume the growth that we enjoyed in the 1980s.

8.59 pm

Mr. William O'Brien (Normanton) : I noted the length of time that the hon. Member for Amber Valley (Mr. Oppenheim) took over his speech. He has denied his hon. Friend the Member for Lancashire, West (Mr. Hind) the opportunity to make a contribution. If I spoke for the same amount of time as the hon. Member for Amber Valley, we would be into the winding-up speeches. He has demonstrated the way in which the Conservative party works and the selfishness in its make-up. The hon. Member for Amber Valley referred to income tax reductions. Someone has already asked, "Who gains most from the reduction to a 20p tax band, a Member of Parliament or a person earning £70 a week?" That is the crux of the issue of tax reductions. It is not the poorest members of society who will gain most from the Budget, but the wealthiest. That is typical of what Tory Chancellors do at Budget time, but it is significant because this is a Budget for the general election and not for the general well-being of the country. Neither the Chancellor nor any Conservative Member has referred to the need for housing. The housing situation

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has created a social problem and further resources must be used to build affordable houses for people to rent, especially in rural areas where there is a massive shortage of such housing, yet little has been done in the Budget to provide facilities for building those houses.

If local authorities were given the opportunity to use their resources to provide council houses, it would resolve a social need and generate employment in areas where there is massive unemployment in the construction industry. If the Chancellor had made any suggestions in the Budget to help areas with housing shortages, it would have helped those communities in many other ways. No provision is made in the Budget to solve that social problem--the housing problem.

When I hear Conservative Members talking about the necessity of resolving the economic problem facing this country, I wonder who created that problem. For 13 years we have been hearing about what the Government intend to do to put the country right. Yet tonight we are being told of the necessity for certain action to arrest the decline in the economy. That decline has been brought about by Conservative Members pursuing and voting for policies which have created the slump and the decline of manufacturing and other major industries in this country. Those problems have been created by the Conservatives.

When Conservatives talk about what the Labour party is offering to the nation, they should hang their heads in shame because they have made such a mess of the economy. They have created greater hardship for people. The policies of the Government and of Conservative Members have created 3 million unemployed.

We have been advised that there will be a reduction in car tax, and that that will help to stimulate the car industry. I welcome the fact that there has been some suggestion that manufacturing industry should be helped, but it stops there. That reduction will not do a great deal for other industries that depend upon the car industry to generate employment. It will not do much for a factory in my constituency, Woodhead, which manufactures hydraulics for the car industry. A great deal of money and energy have been spent trying to defend jobs at the factory and to keep it together. The reduction will not offer much help to those workers. The Government could have announced greater investment and more schemes designed to help industries, such as Woodhead, in my constituency. In turn, that would generate further wealth for the local community in particular as well as for the country.

The Chancellor would prefer to give money in tax handouts to Members of Parliament and other wealthy earners than to channel available national resources into the provision of employment in engineering and other manufacturing industries. That demonstrates the difference between the Labour party and the Conservative party. We want resources to be channeled into generating wealth, which, in turn, could generate more resources to provide better facilities to help people.

The VAT increases imposed by the Government have not helped engineering industries and factories such as Woodhead. The constant increases in VAT have not helped to generate employment. Yesterday the Chancellor said that the Government had no plans to increase VAT. He was asked for how long we could be assured of no such increase--he refused to answer.

I put the same question to the Financial Secretary to the Treasury, because there is a fear and suspicion that a further increase in VAT will soon be announced. We all

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remember how, in 1982, the right hon. and learned Member for Surrey, East (Sir G. Howe) said that the Government had no plans to increase VAT. However, it was then increased from 8 to 15 per cent. Therefore, the people cannot trust the Tories when they make such promises. Perhaps we can have some suggestion about what the Chancellor means when he says that the Government have no plans to increase VAT. I welcome the fact that the uniform business rate has been frozen. After all, for the past 18 months the Labour party has said that something must be done to help businesses, particularly small ones. The Chancellor has taken some action, but it is too little, too late. If the general election had not been arranged for 9 April I wonder whether such a freeze would have been introduced.

The local authorities have already set their budgets for next year. They have set the uniform business rate and the bills have been sent out. If changes have to be made as a result of the Chancellor's announcement, will local authorities be reimbursed the full cost of those changes? Will the Minister assure me that there will be no loss to local authorities because of the Government's lame declaration that action had to be taken to help small businesses? I welcome such action. Indeed, I wrote to the Prime Minister saying that something should be done in the interest of small businesses. But I want an assurance that local authorities that have notified businesses of their charges for rates under the uniform business rate for the coming year will be reimbursed fully. I am afraid that local authorities will have to find additional resources to meet the late changes which the Government have made.

Other people also rely on local services and many people want their local authorities to provide a better quality service, but the Budget gives no assistance for that. Why did not the Chancellor take the opportunity to abolish the 20 per cent. contribution paid by old-age pensioners, people on income support and those on low incomes? Opposition Members have often pushed for action to be taken to reduce the problems faced by local authorities in collecting the poll tax from people who are charged that 20 per cent. Will the Minister think about that matter carefully, because it has a bearing on local authorities' activities and work?

Had the decision on the uniform business rate been taken a year ago, 50,000 businesses that have gone bankrupt in the past year would have had an opportunity to take advantage of the proposals. Some of them might have been in business today if the Government had heeded our request that more should be done to help small businesses. Had action been taken a year ago, some 100,000 families who have now lost their homes because of the Government's policies would still be in their homes. Conservative Members say that something must be done to get the country out of that mess, but they created the mess. A further issue that is causing great concern, in Yorkshire and Humberside in particular but in the country in general, is the increase in crime, yet the Budget provides nothing to help stop that increase and the suffering that it causes to communities. The resources for preventing and combating crime--funding to the police authorities--have been capped, but the means for committing crime are left to free market forces, which is the Government's philosophy. Again, the Government have missed an opportunity.

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West Yorkshire police have made it abundantly clear what they want in their area to combat crime. All they need are the resources to be able to do that. But Conservative Members and Ministers restrict police forces' ability to combat crime. There is the issue of reducing taxes to be considered before they allow those services to be provided.

With reference to the increase in pensions of people on income support, can we be assured that, as income support is means tested, people who receive housing benefit or poll tax refunds, or people from the mining districts of West Yorkshire who receive fuel allowances because they or their husbands have worked in the mining industry, will not lose out? When the Minister winds up, will he address that issue, as it means a great deal to many people in coal mining districts? Housing benefit and poll tax rebate apply to every community in the country. Therefore, we make a plea for some assurance that those people will not lose out due to the hidden agenda within the Budget.

The Budget contains no provision for new housing, new hospitals, new schools, new sheltered schemes and all the facilities that people need. Consequently, people cannot wait for 9 April, when they can change the Government and ensure that some of the social provisions necessary to sustain a reasonable standard of life are introduced. 9.16 pm

Mr. Chris Smith (Islington, South and Finsbury) : Today's debate has been marked by a number of speeches from retiring Members. My hon. Friend the Member for Sheffield, Attercliffe (Sir P. Duffy), the right hon. Member for Hertfordshire, North (Sir I. Stewart) and the hon. Member for Somerton and Frome (Mr. Boscawen) gave gentle and considered speeches, and we shall miss them greatly.

The most abiding memory that I shall take away from this debate is that of the moving contribution of my right hon. Friend the Member for Morley and Leeds, South (Mr. Rees), who spoke of the impact of unemployment on his constituency. He described how his district had been devastated and was no longer a proud manufacturing area. The concern with which he spoke rang true to many Labour Members. He has had a distinguished career in the House, and has contributed greatly to the business, both of the House and of the Government. We shall sorely miss his wise counsels.

Speaking as he did about the scale of manufacturing decline in his constituency, my right hon. Friend the Member for Morley and Leeds, South highlighted the background against which we must examine the Budget. When the Chancellor stood up on 19 March last year to deliver his Budget speech, he said :

"To sum up, the prospect for the year ahead is for an end to the recession, growth of about 2 per cent. in the 12 months to the first half of 1992 This does not seem to me an unpromising outlook."--[ Official Report, 19 March 1991 ; Vol. 188, c. 166.]

What has happened since? We now know--the Chancellor confirmed it in his speech yesterday--that in the past calendar year, growth fell by 2.5 percentage points. We are still deeply enmeshed in the recession. Indeed, the hon. Member for Southampton, Test (Mr. Hill) gave the game away. In recent weeks and months, we have heard a great deal from the Government about how we are in a world

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recession and about why the Government should not be blamed for it. The hon. Member for Test gave the lie to that when he said--when challenged, he repeated it--that we had been the first country into recession and were likely to be the last country out.

Unemployment is still rising steeply, and it has risen for 22 consecutive months, during which there has been a cumulative increase of 1 million people out of jobs. Growth has been poor. Not only did our economy shrink last year by 2.5 percentage points, but between 1979 and 1991 the average annual growth rate was 1.7 per cent., the lowest achieved by any post-war Government.

Britain is the only European Community country in which manufacturing investment is lower than it was in 1979. The average interest rate under the Tories has been 12.4 per cent. ; under Labour in the 1970s, it was 10.7 per cent. We have the highest number of business failures on record. In 1991, there were 47,800 of them. There were 75,000 house reposssessions in 1991. Those figures show the scale of the difficulties facing our economy.

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