House of Commons Hansard Debates for 13 Mar 1992

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House of Commons

Friday 13 March 1992

The House met at half-past Nine o'clock

PRAYERS

[Mr. Speaker-- in the Chair ]

Orders of the Day

CONSOLIDATED FUND (No. 3) BILL

Order for Second Reading read.

Question, That the Bill be now read a Second time, put forthwith pursuant to Standing Order No. 54 (Consolidated Fund Bills), and agreed to.

Bill accordingly read a Second time.

Question, That the Bill be now read the Third time, put and agreed to.

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Finance Bill and Further and Higher Education (Scotland) Bill(Allocation of Time)

9.35 am

The Lord President of the Council and Leader of the House of Commons (Mr. John MacGregor) : I beg to move

That the following provisions shall apply to the proceedings on the Finance Bill and the Further and Higher Education (Scotland) Bill :--

Second Reading, Committee, Report and Third Reading : Finance Bill 1.--(1) The proceedings on Second Reading, in Committee and on consideration and Third Reading of the Finance Bill shall be completed at this day's sitting and, if not previously brought to a conclusion, shall be brought to a conclusion four hours after the commencement of the proceedings on this Order.

(2) Any stage of the Finance Bill may be proceeded with at the conclusion of the preceding stage, notwithstanding the practice of the House as to the interval between stages of a Bill brought in on Ways and Means resolutions.

(3) On completion of Second Reading of the Finance Bill any Question necessary for the House immediately to resolve itself into a Committee of the whole House shall be put forthwith.

(4) On the conclusion of the proceedings in Committee on the Finance Bill the Chairman shall report the Bill to the House without putting any Question and, if he reports the Bill with amendments, the House shall proceed to consider the Bill as amended without any Question being put.

(5) No Motion shall be made to alter the order in which proceedings in Committee or on consideration of the Finance Bill are taken. (6) Standing Order No. 80 (Business Committee) shall not apply to this Order.

Lords Amendments : Further and Higher Education (Scotland) Bill 2. The proceedings on Consideration of Lords Amendments to the Further and Higher Education (Scotland) Bill shall be completed at this day's sitting and, if not previously brought to a conclusion, shall be brought to a conclusion one hour after the commencement of those proceedings.

Conclusion of proceedings 3.--(1) This paragraph applies in relation to any proceedings on the Finance Bill which are to be broughtto a conclusion at this day's sitting in accordance with paragraph 1.

(2) For the purpose of bringing to a conclusion any proceedings which have not previously been brought to a conclusion, the Chairman or Mr. Speaker shall forthwith put the following Questions (but no others)--

(a) any Question already proposed from the Chair ;

(b) any Question necessary to bring to a decision a Question so proposed ;

(d) any other Question necessary for the disposal of the business to be concluded.

(3) Proceedings under sub-paragraph (2) shall not be interrupted under any Standing Order relating to the sittings of the House. 4.--(1) This paragraph applies in relation to any proceedings on the Further and Higher Education (Scotland) Bill which are to be brought to a conclusion at this day's sitting in accordance with paragraph 2.

(2) For the purpose of bringing to a conclusion any proceedings which have not previously been brought to a conclusion--

(a) Mr. Speaker shall first put forthwith any Question which has already been proposed from the Chair and not yet decided and, if that Question is for the amendment of a Lords Amendment, shall then put

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forthwith the Question on any further Amendment of the Lords Amendment made by a Minister of the Crown and on any Motion made by a Minister of the Crown, That this House doth agree or disagree with the Lords in the Lords Amendment or, as the case may be, in the Lords Amendment as amended ;

if Mr. Speaker is satisfied that any remaining Lords Amendment imposes a charge upon the public revenue such as is required to be authorised by resolution of the House under Standing Order No. 47 (Certain proceedings relating to public money) and that the charge has not been so authorised, he shall in accordance with Standing Order No. 76(3) (Lords Amendments deemed to be disagreed to) declare he is so satisfied and shall put forthwith a separate Question on any other Amendment moved by a Minister of the Crown relevant to that Lords Amendment ;

Mr. Speaker shall then designate such of the remaining Lords Amendments as appear to him to involve questions of Privilege and shall--

put forthwith the Question on any Amendment moved by a Minister of the Crown to a Lords Amendment and then put forthwith the Question on any Motion made by a Minister of the Crown, That this House doth agree or disagree with the Lords in their Amendment, or as the case may be, in their Amendment as amended ;

(ii

put forthwith the Question on any Motion made by a Minister of the Crown, That this House doth disagree with the Lords in a Lords Amendment ;

(iii

put forthwith with respect to the Amendments designated by Mr. Speaker which have not been disposed of, the Question, That this House doth agree with the Lords in the said Amendments ; and ()

(iv

put forthwith the Question, That this House doth agree with the Lords in all the remaining Lords Amendments ;

as soon as the House has agreed or disagreed with the Lords in any of their Amendments Mr. Speaker shall put forthwith a separate Question on any other Amendment moved by a Minister of the Crown relevant to the Lords Amendment.

(2) Proceedings under sub-paragraph (1) shall not be interrupted under any Standing Order relating to the sittings of the House. Dilatory Motions5. No dilatory Motion with respect to, or in the course of, the proceedings at this day's sitting on either of the Bills to which this Order applies shall be made except by a Minister of the Crown, and the Question on any such Motion shall be put forthwith.

Extra time6.--(1) Paragraph (1) of Standing Order No. 14 (Exempted business) shall apply to proceedings at this day's sitting on both of the Bills to which this Order applies.

(2) If the proceedings on the Motion for this Order were interrupted, or the proceedings on the Finance Bill are interrupted, under paragraph (4) of Standing Order No. 11 (Questions of an urgent character which relate to matters of public importance etc.), the time at which proceedings on that Bill would otherwise be brought to a conclusion in accordance with paragraph 1 shall be extended by a period equal to the duration of the interruption.

(3) If the proceedings of the Further and Higher Education (Scotland) Bill are interrupted under paragraph (4) of Standing Order No. 11, the time at which proceedings on that Bill would otherwise be brought to a conclusion in accordance with paragraph 2 shall be extended by a period equal to the duration of the interruption. Supplemental orders7. (1) The proceedings on any Motion made by a Minister

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of the Crown for varying or supplementing the provisions of this Order shall, if not previously concluded, be brought to a conclusion one hour after they have been commenced.

(2) If at this day's sitting the House is adjourned, or if this day's sitting is suspended, before the time at which any proceedings are to be brought to a conclusion under this Order, no notice shall be required of a Motion moved at the next sitting by a Minister of the Crown for varying or supplementing the provisions of this Order. Saving8. Nothing in this Order shall prevent any proceedings to which this Order applies from being taken or completed earlier than is required by this Order.

Recommittal9.--(1) References in this Order to proceedings on consideration or proceedings on Third Reading include references to proceedings at those stages respectively, for, on or in consequence of, recommittal.

(2) No debate shall be permitted on any Motion to recommit either of the Bills to which this Order applies (whether as a whole or otherwise), and Mr. Speaker shall put forthwith any Question necessary to dispose of the Motion, including the Question on any amendment moved to the Question.

Further and Higher Education (Scotland) Bill Stages subsequent to first Consideration of Lords Amendments 10. Mr. Speaker shall put forthwith the Question on any Motion made by a Minister of the Crown for the consideration forthwith of any further Message from the Lords on the Further and Higher Education (Scotland) Bill. 11. The Proceedings on any such further Message from the Lords shall, if not previously brought to a conclusion, be brought to a conclusion one hour after the commencement of those proceedings. 12. For the purpose of bringing those proceedings to a conclusion-- (

(a) Mr. Speaker shall first put forthwith any Question which has already been proposed from the Chair and not yet decided, and shall then put forthwith the Question on any Motion made by a Minister of the Crown which is related to the Question already proposed from the Chair ;

(b) Mr. Speaker shall then designate such of the remaining items in the Lords Message as appear to him to involve questions of Privilege and shall

(i) put forthwith the Question on any Motion made by a Minister of the Crown on any item ;

(ii) in the case of each remaining item designated by Mr. Speaker, put forthwith the Question, That this House doth agree with the Lords in their Proposal ; and

(iii) put forthwith the Question, That this House doth agree with the Lords in all the remaining Lords Proposals.

Supplemental 13.--(1) Mr. Speaker shall put forthwith the Question on any Motion made by a Minister of the Crown for the appointment and quorum of a Committee to draw up Reasons.

(2) A Committee appointed to draw up Reasons shall report before the conclusion of the sitting at which it is appointed.

14. In this Order "the proceedings", in relation to the Further and Higher Education (Scotland) Bill includes proceedings on any further Message from the Lords on the Bill, on the appointment and quorum of a Committee to draw up Reasons and on the Report of such a Committee.

The timetable motion provides for debates on the Finance Bill to be concluded within four hours from now. We have already had three full days of debate. Indeed, we finished early on Tuesday night. Four hours should give sufficient further time for us to demolish the Opposition's criticisms of the Budget and to demonstrate, yet again, that Labour is a party with a fundamental belief in high

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taxation for everyone. It will also enable the House to get on the statute book some of the key points of my right hon. Friend the Chancellor's Budget.

The motion also provides for the consideration of Lords amendments to the Further and Higher Education (Scotland) Bill within one hour immediately following the proceedings on the Finance Bill. Again, I believe that that arrangement is right for the country. Just as with the Bill relating to England and Wales, the Scottish Bill is already widely welcomed by further and higher education institutions. It will continue the Government's reforms in further and higher education, which have brought about a vigorous expansion in the places in higher education being taken up by our young people.

We heard yesterday from the hon. Member for Copeland (Dr. Cunningham) the predictable dirge about the use of the guillotine. I wholly reject his charge that we are ending this Session with our legislative programme in disorder. The truth is quite the opposite, as the facts show. The hon. Gentleman is never very good with facts, but I shall give them to him. We are, in fact, ending this Session as we began it, with our legislative programme under firm control and in excellent order. It is yet another example of good, effective and successful Government.

Mr. A. J. Beith (Berwick-upon-Tweed) : Will the right hon. Gentleman give way?

Mr. MacGregor : I was about to give the facts, but I shall give way to the hon. Gentleman.

Mr. Beith : I invite the right hon. Gentleman to give the philosophy behind the facts. If, as he claims, the Government's legislative programme is in good order, is not that because he applied guillotines to so many Bills, as he is now doing again? Are there any circumstances in which he thinks it inappropriate to put a timetable on a Bill from the beginning and without consultation?

Mr. MacGregor : I have already made it clear--and it is a personal view--that I believe it right to timetable Bills. I have said that the way in which that is done is still a matter for discussion. The principle of timetabling is good because it enables us to have effective consideration of legislation. No one could argue that the way in which we conducted our practices on some Bills in the past, where there has been filibustering, has been effective in ensuring proper scrutiny. I am glad that the Select Committee under my right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling) has followed that through.

I shall explain how that has worked in this Session. The Gracious Speech mentioned 12 Bills. I hope that, by the conclusion of business on Monday, 21 Government Bills will have been enacted. Very few Bills will not reach the statute book. If the Asylum Bill is one of those, it will be because the opposition parties have opposed various parts of that important piece of legislation, which I believe the country wants on the statute book.

Mr. John Greenway (Ryedale) : I think that my right hon. Friend is interrupting what I was about to ask him. He is very perceptive. Does he agree that whatever the result of the general election--and we are buoyant by the prospect of another Conservative victory--and whichever Government come to the House, the Asylum Bill will have to be one of the first measures to be reintroduced?

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Mr. MacGregor : Mind reading is one of my hobbies, but my skill does not extend to interrupting something that my hon. Friend had not yet said. I agree with him about the importance of having the Asylum Bill on the statute book. If that cannot be by Monday, I trust that it will be done soon thereafter. I hope that at least 21 Government Bills and a number of private Members' Bills will be enacted by the close of business on Monday. The Government are full of new ideas, and our first programme in the new Parliament will include many measures to build on our achievements since 1979.

There are two main reasons why we must proceed with speed, so that the Finance Bill receives Royal Assent before the House rises. First, the Bill contains a number of measures that it is essential to have in place on the statute book. The changes in excise duties contained in resolutions that the House approved last night must be enacted in a Finance Bill, otherwise the extra tax collected would have to be repaid.

The Finance Bill provides also for the renewal of income tax and for the continuation of tax relief on mortgage interest, which are also essential. If the powers to collect income tax are not renewed by 5 May, no income tax could be collected for the financial year ahead.-- [Laughter.] That might be attractive to some of my hon. Friends and to many in the country. We have been working to ensure throughout our period of government that taxpayers pay less income tax, but I do not imagine that any right hon. or hon. Member expects no income tax at all to be collected. Also, mortgage payers would not thank us if we could not continue interest relief.

The Finance Bill makes provision for value added tax monthly payments on account, to put beyond doubt the legal position on VAT monthly returns that are currently subject to judicial review. The Finance Bill provides also for the introduction of the new lower rate of income tax of 20p for the first £2,000 of taxable income, and for the halving of car tax--both highly desirable measures that the country wants implemented and operating as soon as possible.

Mr. Bruce Grocott (The Wrekin) : Four weeks today.

Mr. MacGregor : I hope that the whole country notes that--as I understand last night's vote and that which we expect today--the Opposition oppose the 20p reduced income tax band. That will be an important issue during the forthcoming election.

Mr. Grocott : The Leader of the House must be disappointed with the public's reception of the Budget, as shown by opinion polls and City reaction.

Mr. MacGregor : Not at all. Like all good things, people will come to appreciate the Budget's provisions better the more that they study them.

Mr. Patrick Cormack (Staffordshire, South) : I can give my hon. Friend some interesting information. In a by-election in my constituency yesterday, the Conservative candidate came top of the poll, 400 votes ahead of the runner up, and neither Labour nor the Liberals bothered to contest the seat.

Mr. MacGregor : The longer that we debate the Finance Bill and our tax and expenditure policies, the more support we will gain during the general election campaign.

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Mr. Dennis Skinner (Bolsover) : If a 20p tax band is such a good idea, why did the right hon. and learrned Member for Surrey, East (Sir G. Howe), as Tory Chancellor of the Exchequer, get rid of it in 1980? Is it not the case that the Government are reintroducing it as a bribe? The electorate understand that a 20p tax band is being reintroduced just prior to a general election to give the impression that the Tories are helping them out. If that tax band had been any good, we would have had it for the past 11 years.

Mr. MacGregor : At the beginning of this Government's first term, we faced a need to reduce a truly horrendous public sector borrowing requirement. I will make very clear later in my speech the relative position of the PSBR now. Today, the position is wholly different. The 20p band continues our policy of bringing down direct tax rates and of achieving the long-term target of a basic rate of income tax of 20p in the pound. The reference by the hon. Member for Bolsover (Mr. Skinner) to a bribe is very revealing of Labour's philosophy. The suggestion that one can bribe people by enabling them to keep more of their earnings demonstrates Labour's thinking, which is, "We can spend your money better than you." That is why Labour is a party of high taxation, and why it will never understand that the electorate do not believe that they can be bribed by being allowed to keep more of their own money.

The debate of the past three days has clearly shown how wide of the mark are Labour's criticisms of the Budget. The Opposition attempt to give the impression that because the Budget contains nothing specific about capital spending and training, nothing is being done about them, but they know very well that under the present system--which my right hon. Friend the Chancellor has indicated will be changed anyway--decisions on capital expenditure and training for the year ahead were announced earlier. It is not the case that those decisions--and they are substantial--are announced in a Budget. We plan capital expenditure of about £30 billion next year, on top of steadily increasing capital programmes. We will take no lessons from the Opposition on capital expenditure. We have steadily increased it, whereas Labour cut that expenditure during its period in office.

Since 1988, capital spending on roads and transport increased by more than one third. British Rail's capital expenditure has nearly doubled, and London Transport's has trebled. Expenditure on training is in real terms two and a half times more than when we took office, which is additional to the high levels of training expenditure undertaken by industry, totalling some £20 billion. Next year's public expenditure programmes include a substantial proportion devoted to capital spending.

Dame Elaine Kellett-Bowman (Lancaster) : Lancastrians have not forgotten that the last Labour Government cut all hospital and school building in the county. It has been catching up steadily under a Conservative Government, but Lancastrians will not forget in a hurry the policies of the right hon. Member for Leeds, East (Mr. Healey).

Mr. MacGregor : My hon. Friend is right. We plan for the country as a whole a programme of more than 600 new hospital buildings. Schools capital expenditure has risen by 35 per cent. in the last two years. It is nonsense for Labour to claim that the PSBR is being devoted to income tax cuts. One can split the expenditure programme whichever way one likes.

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Labour claims also that we are doing nothing for business and investment--ignoring the fact that commerce and manufacturing industry are encouraged to invest by the right economic framework, confidence in Government policies and long-term strategy, low corporation tax and good profitability. Those are the policies which ensure a good level of business investment.

We have provided all these and that is why we have seen an unparalleled investment boom. Investment in plant and machinery increased by almost 50 per cent. from 1979 to 1991 and business investment increased by almost 45 per cent. from 1986 to 1989, the fastest three-year growth since the war. Business investment in 1992 is forecast to be a third higher than in 1979. There is substantial business investment and it has been brought about by the policies that we have created.

The Labour party has ignored the fact that about £6 billion in cash flow is coming into business as a result of interest rate reductions over the past 18 months. There is a further £1 billion as a result of last year's corporation tax reduction. There is also a significant improvement in business cash flow as a result of action already taken. That is why it is right to claim that the Budget, as a Budget for business, adds to what has already been done.

The Labour party does not understand that business men's confidence to press the button to implement new investment plans depends in part on their sales forecasts. Labour behaves as if there is something deeply wrong in giving a modest boost to consumer expenditure through the tax cuts that we propose. There is no black-and-white choice between encouraging investment and encouraging sales. It is not either/or. We need a balance.

I shall use the example of the motor industry, an industry in which there is no shortage of capital investment. Indeed, over recent years it has been massive. That is why there has been a greatly improved export record over the past few years. However, the industry needs a boost to its sales. The halving of the car tax will help business and business investment, not the reverse.

Mr. Martin M. Brandon-Bravo (Nottingham, South) : I shall illustrate the public's reaction to the Budget and in so doing take up some of my right hon. Friend's remarks. Yesterday, there was a by-election in my constituency, one ninth of which was involved. In the ward there is almost exactly a 50-50 split between what might be described as private property and the public sector property. We, the Conservative party, took 50 per cent. of the vote and won the seat comfortably. Councillor Tim Bowler will be a great addition to the city council. That was the public's verdict yesterday in my Nottingham constituency.

Mr. MacGregor : My hon. Friend's return to the House will be of great benefit to his constituents, as his presence has been in the past.

The result of the by-election in Nottingham illustrates that the Labour party's approach--that a tax cut does nothing to help the economy or to help business confidence--reflects a complete misunderstanding of business investment. It is important to have increased sales and that was illustrated recently in the results of a survey that was undertaken by Goldman Sachs International Ltd. The likelihood is that between £2.5 billion and £3 billion of potential extra spending power will come into the economy between the end of December 1991 and April of this year as a result of the reduction in mortgage interest

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rates. The fact that about 40 per cent. of mortgages are based on annual interest rate adjustments will have a considerable impact and the adjustments are taking place now. As a result of the measures that we have taken, there has been a considerable boost to business confidence within the economy.

Because of our policies, the results of many surveys, including that of the Anglo-German chamber of commerce, which is composed mainly of German companies that are investing in the United Kingdom and of those who have invested in the United Kingdom--inward investors--demonstrate that investors believe that the United Kingdom is an attractive place in which to do business. That is the result of the Government's policies. That is also the answer to the Labour party's charge that the Budget is not one for business and that we have not been pursuing policies that are attractive to business. The Confederation of British Industry and many other organisations have supported the approach that we have taken throughout. I noted the other day the result of a survey of the top 200 companies that was undertaken by James Capel and Co. When the companies were asked whether they thought that a Labour victory would be good or bad for the economy, 86 per cent. said that it would be bad. That is the reaction and judgment of business on the alternative policies that will be put to the country in the general election.

Criticisms about the public sector borrowing requirement come ill from the Labour party when we recall both its record in government and its published spending commitments. It is worth reminding the country, as we shall be doing constantly, that when the last Labour Government were in office, the equivalent PSBR as a proportion of gross domestic product--this is an average--was £40 billion. In the Labour Government's worst year it was the equivalent of £55 billion. Our PSBR still remains, as a proportion of GDP, the lowest within the European Community, apart from that of Luxembourg. That is why we can rightly claim to be the party which has pursued sound finances. We have heard little from the Labour party about how well the Budget is targeted on other groups, such as the small business group in which I take a particular interest. I regret that it has not been possible to include some of the very welcome measures in the Finance Bill that were proposed by my right hon. Friend the Chancellor of the Exchequer in his Budget statement. We shall certainly be including them in legislation as soon as we return after the election. The targeting on pensioners helps to increase spending and is important for pensioners on income support who, from October, will see an increase in their incomes of at least £5.70 a week. In some instances, it will be as much as £10.70.

I come to the crucial element of the debate, which is the shrillness of the Opposition's reaction to the proposed 20p rate for the first £2,000 of taxable income. The reaction

Madam Deputy Speaker (Miss Betty Boothroyd) : Order. There is a disturbance coming from the Opposition Front Bench, but the debate has hardly been about the guillotine motion since it began ; it has been wider than that. I have been rather tolerant this morning.

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Mr. MacGregor : I am grateful, Madam Deputy Speaker. To judge from the interventions in my speech, the House wants to debate the motion.

The Opposition's reaction to the 20p proposal reveals them in their true colours. The proposal is worth £100 a year to almost 21 million taxpayers. It is skilfully targeted to give the most assistance proportionately to the lower paid. Seventy five per cent. of the benefit will go to those on below average earnings. The marginal tax rate will be reduced for nearly 4 million taxpayers.

Mr. Beith : The right hon. Gentleman has made a rather important point. He said that 75 per cent. of the benefit will go to people on below average earnings. Is that now the Government's definition of the lower paid?

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