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to keep more of their money? The Leader of the Opposition talked about borrowing for a day at the races, as if putting more money into the pockets of those who are at the bottom of the income scale is giving them money for a day at the races. I was enchanted. The more that we see of the right hon. Gentleman during the election, the better.When I returned home last night I wished quietly as a consenting adult to turn on BBC2 to get my nightly dose of Jeremy Paxman. It is something that I cannot go to bed without. I found that "Newsnight" had disinterred the right hon. Member for Leeds, East (Mr. Healey). I hope that the right hon. Gentleman appears a great deal during the election, too. No one more typifies the abject failure of the Labour Government than he. He was asked about the 20p rate and he said, from the position of the quite comfortable old age that I dare say he is now enjoying, that he was against it because
"it would be spent on imports."
He then said that it might not be spent at all.
What do the Opposition think that they will gain by making these offensive and patronising remarks about ordinary people making normal spending decisions? Those people are entitled to have a little more money in their pockets. If they work hard, they are entitled to earn money and to spend it in ways that they choose to enhance their lives. They are not to be patronised by failed retired Labour politicians because they might choose to buy a radio made somewhere other than in the United Kingdom rather than, according to the Labour party, pursuing some allegedly socially more desirable objective. It reminds me of the old attitude, "Don't give them a bath because they will put coal in it." It seems that the Labour party is saying, "Don't let people keep money in their pocket because they might do something with it that we do not approve of." That is astonishing. It is the attitude of an aristocratic elite. The Labour party is the "people's party". Labour Members are the people whose sole purpose in this place is, allegedly, to represent the interests of the very people whose faces they propose to grind down by increasing the marginal rate of taxation by 25 per cent.
I support the tax changes because they represent a further step on a road that has brought about so many benefits to our country in the past decade or longer. That can be summed up with one statistic ; the average family, even when we knock out the effect of the ravages of inflation, is £70 a week better off--it has £70 more spending power in its pockets--than it was in 1979. We know that that same family's living standards barely grew between 1974 and 1979. Money wages may have increased by 100 per cent., but the tide of rising prices meant that there was no real benefit at the end.
What has this meant in terms of the enlargement of the lives of those in all sections of our community? I am thinking about the way in which wealth has been created throughout society. There are now 10 million share- holders, 65 per cent. of whom are not in the professional and managerial classes. That is a real revolution in popular capitalism. Nearly 70 per cent. of the public are now home-owners. In this decade 4 million families have become home owners. This has come about because of the Conservative party's instinctive understanding of the basic beliefs of the British people. How many people go to the surgeries of my hon. Friends and say, "My great ambition
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for me and my children is to be a tenant"? If we had not rescued council tenants from perpetual tenanthood under the Labour party, that would have been their prospect.We know that 76 per cent. of homes have central heating, that 90 per cent. have colour televisions and that two thirds, from a standing start in 1979, when the technology was barely known, have videos. The number of people taking foreign holidays has doubled since--
Mr. David Winnick (Walsall, North) : Will the Minister give way?
Mr. Mellor : I shall carry on for a while.
The number of people taking foreign holidays has doubled since 1981. That is the revolution in which my right hon. and hon. Friends and I will have so much confidence during the next three weeks. Whatever the ups and downs of the economic cycle, people realise that we have managed to improve the wealth and prosperity of the nation. We have done so by running a successful and dynamic economy. That has been achieved partly by-- [Interruption.] I have now emptied the Strangers Gallery. It is one of those days when I should have stayed in bed. I was sorely tempted to do so. Perhaps it would have been the best decision. Usually it is necessary for the doors of the Strangers Gallery to be locked when I am speaking.
Madam Deputy Speaker : Order. I have been told by the Serjeant at Arms that fumes in the area of the Strangers Gallery are causing discomfort and that the Gallery has been evacuated for the time being.
Mr. Mellor : Would that that opportunity had been offered to us on the Floor of the House. The least that I can do at this stage is to give way to the hon. Member for Walsall, North (Mr. Winnick).
Mr. Winnick : A short time ago, the Minister said that no one tells his Member that he wishes to be a tenant. Perhaps the right hon. and learned Gentleman's surgeries are different from mine and those of my right hon. and hon. Friends. In most instances, people come to see us because they have housing problems. At my surgeries and in correspondence, 70 per cent. of the matters with which I am asked to deal are housing problems. The people who come to see me cannot afford to buy. They would be unable to do so even if interest rates were lower. They are desperate for somewhere to live. These are single people and families with one child or even two children. They have to wait years because since 1979 there has been a sharp decline in the number of council dwellings. If it is right to sell council dwellings--we are not in dispute about that--why should not those dwellings be replaced so that the people whom I have been describing are not punished and can be housed?
Mr. Mellor : I am glad that the hon. Gentleman made that point. He has allowed me to make it clear that no one comes to my advice centre--I suspect that this is true of his--saying that his ambition is to be a tenant. I accept entirely, however, that there are people who will be tenants. I accept also that there is a need for tenanted accommodation. There is an argument about how that should be produced.
The conversion of the hon. Gentleman to accepting the selling of council houses would not have occurred, I think, if it had not been for the success of the Government's policy. He would certainly not have thought of the idea.
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The atmosphere in the Chamber, Madam Deputy Speaker, is pretty awful. I am finding the fumes irritating. I know that I should be the last one to want to resume my seat, but--Madam Deputy Speaker : Order. On that basis, I shall suspend the sitting for 10 minutes.
12.18 pm
Sitting suspended.
12.28 pm
On resuming --
Mr. Mellor : As I was saying, Madam Deputy Speaker, the tremendous increase in prosperity throughout society during the past 13 years was due in part to the fruits of a successful, dynamic economy during the 1980s. It was also due to the Government's constant attention to reductions in the direct rate of tax : 3p off in the first Parliament, 3p off in the second Parliament and 2p off plus the 20 per cent. band in the third Parliament. If we go back to that typical family which is £70 a week better off, more than £20 a week of that is accounted for by the tax that it no longer has to pay but which it would have had to pay if the rates of taxation that prevailed under the Labour party had been continued.
The debate provides us with the chance to make clear a great difference between ourselves and the Opposition. They proceed under a fundamentally false assumption. Taxation is a takeaway, and a reluctance to tax is not a giveaway or a bribe. We cannot emphasise that point too much.
The Opposition say that public services are underfunded, but, in deference to the time problems, I shall not deal with that issue in detail. I merely point out, as I did during the Budget debate, that the health service and all other substantial public services have gained enormously from increased public expenditure, the better direction of that expenditure and the more effective management that has been possible under the Government.
On health, we know that the Labour party would have to spend £1 billion extra on the minimum wage and on getting rid of charges and competitive tendering before a penny could be spent on patient care. That, of course, explodes the myth that the Labour party would spend wisely the money that it would get back out of tax cuts.
I had a good illustration of that this morning as I was coming from my home in Putney through the borough of Lambeth to Westminster. Wandsworth has a nil community charge under Conservative-controlled council. Lambeth has a community charge of £449.
Mr. Frank Dobson (Holborn and St. Pancras) : Pillock.
Mr. Mellor : The hon. Gentleman, with charm, says, "Pillock" but the pillocks are the members of Lambeth council, not us. I wonder when he will be prepared to do something about it. Is he embarrassed by the fact that Lambeth has a community charge of £449? He is now tight lipped--not even the word "pillock" escapes his poetic lips. If he is not embarrassed, he should be, because I have the 1992-93 figures of Government assistance per head to those two London boroughs. Wandsworth, which has a nil community charge, gets £1,424 per head from the Government. Lambeth, with a community charge of £449, gets £1,628 per head from the Government.
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We know that far from spending wisely the money that it is not prepared to let the public keep, Labour will scatter it around as it is scattered in Lambeth, Haringey, Hackney and various other boroughs. People said that the pathetic fallacy was believing that animals think like human beings. The truly pathetic fallacy is that people could believe that the Labour party would spend more wisely than they could spend it themselves.To sum up, we have established the real difference between the parties. The Labour party began by believing that the rich began at £20,400. No one below that, it said, was to be inconvenienced by its tax proposals. We now learn that a single wage earner is rich, starting at £3,500 a year. That is the point at which the Labour party proposes to increase the marginal rate of tax by 25 per cent. It is a rake's progress as the Labour party moves from Robin Hood to Robbin' Everybody.
Mr. Dobson : That is very original.
Mr. Mellor : The hon. Gentleman has come alive again, like something out of the Hammer films that used to delight me as a child. Truth, not originality, is the name of the game. Originality is what the hon. Gentleman makes up. In any event--and certainly in political terms--it is not a compliment. The hon. Gentleman is a past master at it. He owes his facts to his imagination and his jokes to his memory.
If the Labour party is prepared to increase the marginal rate for the least well-off, what does that tell us about what it might be prepared to do about the 25 per cent. rate? After all, Labour opposed the reduction from 33p to 25p every step of the way. We must now ask ourselves, what other tax plans is Labour concealing up its sleeve to satisfy the restless desire of each and every member of the Labour Front Bench to spend.
Mr. Tim Smith rose --
Mr. Mellor : I am just about to finish.
I welcome the opportunity for the Labour party to confirm its complete addiction to the taxation of each and every person in the community. No one is safe, and we shall prove that this afternoon. 12.34 pm
Mrs. Margaret Beckett (Derby, South) : We can be under no illusion today that those of us who have been fortunate enough to catch your eye, Mr. Deputy Speaker, are speaking for the benefit of anyone except those present in the Chamber, for Hansard and for posterity. None of us will nurture any illusions about what the media will report of today's debate.
Nevertheless, in the Finance Bill, the Conservative party is offering a "buy now, pay later" Budget for a "buy now, pay later" election. It shows that one cannot teach an old Government new tricks. It is, after all, the same stunt that they pulled in 1983, when they cut taxes a month before the election and spending a month after. It is the same stunt that they pulled in 1987, when they cut taxes before the election and the spending promised at election time never materialised.
As a Second Reading of a Finance Bill, this must be one of the oddest in history--odd even before we had the fire, and heaven only knows why that happened. Four hours for all the stages of a Finance Bill from start to finish--including a debate on the guillotine motion--is certainly a
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most extraordinary precedent, even for this Government. It is an extraordinary precedent and an extraordinary procedure, due not to accident or misfortune but to the sheer incompetence and mismanagement of the Government, who cannot get right even the timing of the election.On Second Reading, the House weighs legislation, considers the circumstances with which it is designed to deal and its fitness for the purpose. One only has to consider this cursory Bill to realise that the circumstances with which it is designed to deal are the problems that the Government face in getting from here to 9 April. It is visibly designed to deal not with the country's circumstances but with the narrow purposes of the Conservative party.
In many ways, the Bill characterises the Government's approach. The Secretary of State for Employment said that this Budget would be a Budget for jobs. It is not. The Chancellor said that it was a Budget for recovery. It is not. The Bill contains some measures that will be of help to business, and we welcome them, but the problems with which they are designed to deal were created by the Government. Some of the measures, such as those for car tax, will alleviate the strains of the recession that the Government have caused. However, it is only under this Government that the overall burden of taxation on cars and on people has become so high that the measure is needed. The weight of the car tax plus the value added tax that they have more than doubled in their 13 years in office have made taxes on cars so high. The Bill contains other measures, such as the easing of the business rate. The Government introduced the business rate, ignored the cries of small business and then, miraculously, on election eve they listen at last. Then they expect credit for easing problems that they, and they alone, created.
There are no other measures of any weight to promote recovery. Why? The answer can be found in the Red Book. Yet again, the Government tell us that recovery has already begun and will accelerate from the end of this month. We certainly hope that they are right, but, of course, that is what they told us last March, last April, last May, last June, last July, last August, last September, last October, last November, last December, last January and last February.
What is holding up the recovery? The Government are. It is held up by the uncertainty of waiting and waiting while they have tried and failed to find a favourable time to go to the country, by the damage caused by their prolonged use of high interest rates to squeeze out inflation which they fuelled for so long, and by the fear of the unemployment that they have fostered and to which they remain supremely indifferent.
In their private briefings, Conservative Members and Ministers still tell the press, "Unemployment didn't lose us the election in 1983 or 1987, and it won't lose us the election this time," as if that were all that mattered. Of course it is all that matters--to them. Never mind the costs to the country directly or indirectly--such as the £8,000 per person unemployed. Never mind the devastation to millions of individuals and millions of families. There is nothing in the Bill that begins to tackle the problems of unemployment, nothing to stimulate the construction
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industry and nothing to deal with skill shortages, which are damaging in themselves as well as damaging to the prospects for inflation. There is nothing to build for the longer term and nothing directly even for families with children--although there is what I can describe only as a sop for some pensioners.Seventy-five per cent. of pensioners do not pay income tax--they do not have big enough pensions--so they cannot benefit from the lower band. The Government have given an increase in a means-tested benefit, but they must know that the poorest pensioners of all are the million or so who will not claim means-tested benefits because they were raised in a generation which regards such benefits as charity, so they live below the poverty line. The Budget does nothing for them.
The main measure in the Budget--as the Chief Secretary implied at the end of his speech, it is the only measure that the Government care about--is the tax cut, which, we are told, has been carefully targeted. Ministers, including the Prime Minister, who sat smirking on the Front Bench as the Chancellor revealed the mechanism of the tax cut, are so thrilled with their own cleverness that they have given the game away. The tax cut is carefully targeted not on the poor, but, as Ministers told Lobby journalists, on trying to embarrass the Labour party. Well, it does not.
What a revealing glimpse those comments give us into the minds of the men who govern us. Here we are in the depths of recession, with, high unemployment, negative growth--with, at best, the prospect of a return to low growth--record bankruptcies and record home repossessions. What weighs on Ministers' minds? What keeps them awake at night? They ask themselves not, "What can we do to solve the problems of the country?" but, "How can we dish our opponents?" Where is the vision? Where is the foresight? Where, even, is the responsibility? Plainly, those qualities are not to be found in the Cabinet. And the Government have the gall to say that we are not fit to govern.
The Government have had 13 years of unbroken and secure rule. They have had more than £100 billion from the North sea, where we made the investment and they have reaped the returns. They have made billions of pounds from selling the family silver. Three times they have doubled inflation between elections. Three times they have raised interest rates between elections. This is the third time that they have cut taxes before an election, and three times they have broken their promises after elections.
Mr. Tim Smith : The hon. Lady says that the Government have no vision, yet, for a long time now, the Government have been committed to achieving a 20 per cent. basic rate of income tax. What does the hon. Lady think would be the best way of doing that--to cut the standard rate or to introduce a lower band for low-paid workers?
Mrs. Beckett : I am so glad that I gave way to the hon. Gentleman. His intervention speaks for itself. I mention vision, and what comes into his mind is money.
The Bill represents the way in which the Government will end--not with a bang but with a whimper of a Finance Bill. That whimper is not loud enough to drown the cries from outside the Chamber, such as the cries of youngsters with no job, no home, no security, no prospects and no hope. There are the cries of the pensioners who are slipping
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further and further behind the standard of living of people in work, and the cries of the sick, who cannot make themselves heard above the racket of Ministers boasting about their record on the health service. There are the cries of the victims of crime, which is at record levels--those are the people who have been exposed to the full consequences of the creed that the Conservatives have preached for 13 years --"Look after yourself, and the devil take the hindmost." One of the few things that the Chief Secretary said with which I could agree is that the Bill throws into relief the nature of the choice before the British people. The Government say, "We shall take less from you in taxation, and that will leave you free to make your own choices." They mean choices such as what kind of health care to buy, and how much, and what kind of education to buy, and how much--choices such as how much pension to buy, and what kind of transport to use. "Make your own choices," the Government say to the people of this country, "because you are on your own."For most people, even for those in work, those are choices which they cannot exercise on their own. In the days before we contributed to fund a national health service, a national education service and nationally guaranteed pensions--the good old days when income tax was only a few pence in the pound ; the days to which Conservative Members tell us that it is their vision to return us--harsh experience taught our forebears--at least, the Opposition's forebears--the limits of the freedom that today's Conservative party extols.
Our forebears found that to survive, and certainly to prosper, they had to work together. They set up their own schemes to which each contributed a little when he or she could, so as to help one another when that was needed. That worked, so we, as a country, made it the basis of so much that people take for granted today, such as the health service, the education service and so on.
The tax system is the structure for that pooling of resources. We neither want nor propose a harsh tax system. We want a tax system that is fair and seeks, as nearly as possible, to treat people in the same circumstances in the same way. We shall make proposals and lay them before the country in the next few days, and we want everyone to see them. The structure of taxes that we propose will be designed not to fuel the politics of envy, but to fund the ethics of community. This is not the right Finance Bill for this time. It is time for a different Finance Bill ; it is time for a Labour Government. 12.47 pm
Mr. Anthony Nelson (Chichester) : The speech of the hon. Member for Derby, South (Mrs. Beckett) was both depressing and patronising. That might not be so exceptional in itself, were it not intended to perpetrate yet another fraud on the British taxpayer and on the electorate. The hon. Lady sought to criticise a wholly welcome measure which reduces taxes, but she did not spell out her alternative. She sold the pass by not delivering the secret Labour Budget which is apparently to be declared after Parliament has prorogued. What sort of choice has anyone listening to the debate here or outside the House if we are not to be privy to Labour's formula for success? What are the Labour party's credentials for criticising the Government?
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I believe that the Budget was a winning Budget for taxpayers and for business, and that the Finance Bill--the provisions of which are wholly welcome--should have been nodded through the House. I was dismayed and shocked that the Labour party and other Opposition parties could find fault with and question a Bill which will bring relief to businesses and individuals throughout the country. I certainly welcome the Bill wholeheartedly, as I welcome the whole strategy underlying my right hon. Friend the Chancellor's Budget. I should tell my right hon. and hon. Friends the Treasury Ministers that I especially welcome the intention behind the Bill--to ensure that central to our economic policy is a determination to reduce the rate of inflation and keep it low.I know that you, Mr. Deputy Speaker, will be interested to know that this week, for the first time in nearly 30 years, the latest figures announced show that our rate of inflation is lower than that of Germany. Britain is now leading the way in the European Community with policies determined to pursue sound currency, low inflation and low interest rates. Those who seek to pursue policies of higher taxation, of redistribution towards the centre and of the devaluation of currency will find that the inevitable consequence will be higher interest rates borne by individuals, by mortgage payers and by businesses throughout the land. Only by making our centrepiece a determination to restore sound money and to keep down the rate of inflation can we regenerate sustainable growth, the prosperity that it brings and the jobs that will be derived from it.
Mr. Derek Enright (Hemsworth) : I wish that the hon. Gentleman had not repeated the slur on Germany. Does he not find it remarkable that the German economy is as strong as ours despite having taken on a decrepit country and welded it into its own economy, while this Government have made our economy into a decrepit economy?
Mr. Nelson : The new Germany may be held back in its progress by the socialist domination of part of it in the past. I was not knocking Germany- -my point was that we now have a lower inflation rate than Germany has, and people should know that because it is very good news. All that we heard from the hon. Member for Derby, South was the carping, the criticism, the self-effacement and the deprecation for which the Labour party has made its name and which is so injurious to public and international confidence.
I especially welcome the introduction of the 20 per cent. band. I hope that, even in the short time left, we shall have an opportunity to vote on the clause which implements it. The proposal will be the litmus test for the public to see where the Labour party really stands. The logic of Labour's position must be to vote against the proposal. Labour will then have to go to the public and argue that the return of a Labour Government would not result in a significant increase in taxation. That would perpetrate yet another fraud on the public and it is right that we should decry it.
The Bill follows a Budget which brought one measure of relief on which I especially congratulate the Government. Those of us who represent constituencies in the south of England, where the recession has been hard and deep, are conscious of the impact of the recession on the cash flow of many businesses, especially small
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businesses. Even with the transitional arrangements, the impact was especially marked when the uniform business rate was introduced. With Conservative colleagues in Kent, Hampshire, East Sussex and West Sussex, I wrote to my right hon. Friend the Chancellor, went to see him and approached the Prime Minister and others. We urged the case for freezing the transitional element of the UBR so that an additional burden was not placed on such businesses in the forthcoming year. My right hon. Friend the Chancellor has announced such a measure, which is wholly welcome in my constituency and elsewhere and shows yet again that the Government listen to people. The Government respond to representations made to them. The Government are not unbending. The Conservative party heeds the voices of those who express concern and it adjusts its policies. That worked for my constituents and the representations were listened to. I thank and congratulate my right hon. Friend the Chancellor.I should appreciate an answer from my hon. Friend the Financial Secretary on one narrow point. The relief brought with the reduction in the car tax will be of immeasurable help to the car industry, to employment and to the national economy. However, one aspect has aroused concern among many dealers who have already bought cars in stock and among many finance houses that have bought cars for sale through dealerships. They have had to pay the full rate of car tax, although people who buy those cars after the Budget date will expect to pay only the 5 per cent. rather than the 10 per cent. rate of car tax. With the large stock of cars currently held by dealers and by leasing and finance houses, there will be some perverse results if there is not a change. Just as my right hon. Friend the Chancellor was good enough to listen to the reasonable concerns expressed by business about the UBR, I hope that in the limited time that, rightly, we have to debate the matter, some further relief can be announced or some clarification given about the car tax on vehicles that have not yet been sold to buyers but are held in stock by finance houses and dealers. If the Government do that, it would help to get the economy moving even faster than the Budget and the Bill will. The Bill is a winning Bill for my constituents, for businesses in my area and for the economy as a whole. It follows the Conservative policies that we have set from the beginning of this Parliament. It is wholly prudent, it reduces taxation and it draws out the fundamental differences and the choice for the electorate at the election. The Bill is worth supporting and it goes to the heart of what we in the Conservative party stand for.
12.55 pm
Mr. A. J. Beith (Berwick-upon-Tweed) : The hon. Member for Chichester (Mr. Nelson) advanced the astonishing proposition that the Bill should go through on the nod without any debate. He then proceeded to give two clear reasons why it should not. First, he made a perfectly legitimate inquiry about the detailed application of the car tax provisions, on which he hopes to get a useful answer which might be of some assistance to his constituents. Secondly, he talked about provisions for small business and about the uniform business rate. He was obviously
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ignorant of the fact that such provisions are not included in the Bill. One purpose of this debate is to discover what the Bill actually contains.My first question to the Financial Secretary is : why are provisions on the uniform business rate not in the Bill? Does he doubt whether the Labour party, if in office, would implement the provisions? They are important provisions. If he entertained any doubt, that was all the more reason why such provisions should have been included in the Bill because there would then have been no doubt that they would be enacted.
The Financial Secretary may argue that the provisions are complicated. One of the ways in which he could have got round part of that difficulty would have been to accept our proposal--which is similar to his, but a little greater in cost--to freeze the 4.1 per cent. increase in the UBR. That could have been achieved with fewer legislative complications than the arrangements he described. I agree that the transitional provisions should be extended and we welcome that part of the Budget. However, it would have been far better for that provision to be included in the Bill and I hope that the Financial Secretary will tell us why it is not.
It is important that business should get that relief. It will not be a massive stimulus to the economy, but it will save some small businesses from going to the wall and it will relieve the cash flow problems in others. I welcome the fact that something on an equivalent scale to what we asked for is being done.
Much has been said about the lower rate band at 20 per cent. The truth is that the lower rate band is abolished by Conservative Governments when they come into office and reintroduced on the eve of their departure. That has happened in this case. The lower rate band was abolished by the right hon. and learned Member for Surrey, East (Sir G. Howe). Conservative Members should remember that he said : "The case for the lower rate band was never at all clear. The 25 per cent. rate was not the effective marginal rate for more than a small number of full-time adult workers. For those on lower incomes an increase in the personal allowance would always have been more valuable than the lower rate band, and the existence of this lower rate band added significantly to the complexity of the tax system." He mentioned another advantage of abolishing the lower rate band. He said :
"there will be a valuable staff saving of 1,300 persons."--[ Official Report, 26 March 1980 ; Vol. 981, c. 1475.]
When I challenged the Chief Secretary this morning on the point, he could not tell us how many extra staff would now be required simply to enable pensioners to reclaim their lower rate. Now that the composite rate has thankfully been abolished--it is right that it was--pensioners who want to take advantage of the lower rate band on their savings to get the £100 will have to apply to the Inland Revenue for it at the end of the tax year. Those applications will have to be processed, so to dispense the £100 or less, the Financial Times estimates that 800 additional jobs will be required. The Chief Secretary said that the increase would be 300 jobs in the first year and perhaps more in the second. No doubt, we shall get a precise figure later. It is probably the greatest job creation element in the Budget. That does not seem to me to be the most productive area in which to engender jobs. I would much rather we were engendering jobs in more productive sectors of the economy.
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Mr. David Nicholson : The hon. Gentleman is being unfair. A few weeks ago when we were debating the impact of the business rate, he and I made the same recommendation. My right hon. Friend the Chancellor has done exactly what he and I recommended and that will help jobs.Mr. Beith : The hon. Gentleman must have missed the first paragraph of my speech. I welcomed what the Chancellor had said he would do and pointed out that it was not in the Bill and that it would have been very much better if it had been. The hon. Gentleman should not intervene in speeches that he has not heard or has not listened to. The best demolition of the lower rate band appears in this morning's editorial in the Financial Times. The point is made clearly :
"If the Government wishes to offer the flattery of imitation, it should restrict itself to Labour's good ideas and not its bad ones." In a Budget dictated mainly by the priorities of partisan politics, the Government have selected the least effective means of targeting help to the low paid because it happens to have been espoused by the Labour party. It would be hard to imagine a more ludicrous basis on which to make Finance Bill and Budget decisions.
We are talking about £100 for those whose income carries them right through the lower rate band. That is everyone in the Chamber--you, Mr. Deputy Speaker, our Clerks and our Serjeant at Arms. Many low-paid people earn less than that income band and therefore will not get tax relief on the full amount. They will not get £100 and some people who do get it will have some of it deducted from their family credit. For many of them, the benefit will be much less than £100.
Spent in investment measures, that money would have brought more help to those people. That money spent on measures that would give some of them better-paid jobs would have been a great help. That money would have been spent more effectively providing employment for their children and families in the construction industry and in the trades and professions that can gain from an advance in the construction industry.
The Government have revealed in their Budget a PSBR of £28 billion and have sought to criticise those of us who argue for an even higher figure. I have argued that, if we are to secure investment, we need a combination of revenue-raising measures and a PSBR of £30 billion. The Government had better not launch an attack on our £30 billion proposal, because their PSBR proposal for next year is £32 billion and our proposed £30 billion includes money for measures that would give us a return in future years.
The truth about the Budget is that it offers no hope of getting Britain out of recession, no hope of reversing the pattern of decline in manufacturing industry and no hope of providing what is needed to make industry prosperous and competitive in future. It is a political gamble. It is not a measure of economic commitment and progress at all.
Mr. Deputy Speaker (Sir Paul Dean) : The Front-Bench spokesmen intend to restrict their winding-up speeches to five minutes each. If those hon. Members who have been rising would do likewise, it should be possible for me to call them all.
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1.3 pmMr. Peter Rost (Erewash) : Even though this will be my last speech in the House after 23 years here--not for the first time, to a Chamber that is nearly empty--I shall not detain the House by adding my praise for an excellent Budget which will help those most in need and boost our economic recovery.
I should like merely to express a reservation about clauses 3 and 4 which deal with fuel taxes and car tax. Although I warmly welcome the wider differential between lead-free and leaded petrol, I should have liked a similar differential in respect of diesel fuel. Such a measure is much needed and would have provided a stronger market signal to consumers to use an environmentally more acceptable and desirable fuel.
Other countries have provided such encouragement. In a number of reports on the threat of global greenhouse warming and energy efficiency, the Select Committee on Energy has made such recommendations. In making proposals for tackling the difficult question of energy and transport, the Government's own White Paper, "Our Common Inheritance", makes similar suggestions. Moreover, the European Community has been advocating from Brussels that member states promote diesel rather than petrol. A slightly wider differential in the tax regime would have triggered a stronger signal.
We are all aware that energy and the environment are increasingly matters of great international concern. We also know that energy use in the transport sector is the fastest growing, the most difficult to tackle and the most polluting. Had we introduced such a measure this year, we should have provided the right signal to consumers. I hope that my right hon. Friend the Chancellor will consider introducing one after the election. I hope that he will seriously consider giving this important environmental boost through the Budget and the fiscal system and encouraging more use of diesel for the sake of reducing global greenhouse warming emissions and other emissions.
1.5 pm
Mr. Paul Flynn (Newport, West) : It is claimed that this is a Budget for recovery, but mocking that claim is the news from my constituency this morning that the INMOS company is definitely to close its operation there and move its production to Agreti in Sicily and Roullet in France. The Finance Bill contains many measures which will affect my constituents--on car tax and income tax, for example. The very cars that are the subject of that tax--intelligent cars--have at their heart a thing called a transputer, as will colour fax machines and the miraculous virtual reality high-definition computers that will be selling in vast numbers over the next decade. Where in the Finance Bill is the commitment to British industry to allow a product that is British invented, British designed and the result of investment by a Labour Government to continue to be manufactured here? The transputer is about to take off internationally, but it will be manufactured outside Britain. This is not a Budget for recovery but a Budget for the Conservative party.
Following this morning's announcement, redundancies will be announced immediately and will continue to be announced for a long time. Already, 400 jobs have been lost and 450 more are to go. Although that is a devastating blow for Newport, it is also a mortal blow for the sunrise
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high-tech industries in Britain generally, because the transputer--the miracle computer on a chip--is going. We shall become the customers--the buyers of the transputer and its applications throughout the world. That British invention will be manufactured in Texas, Malta, Singapore, Sicily and France. It is an utter disgrace. This morning, the Chief Secretary did not tell jokes as he did last time. Last time, he told one parrot joke and one haggis joke. I can understand his not wanting to tell a parrot joke because of the sensitivities about Polly Peck. The right hon. and learned Gentleman also accused the Labour party of being anthropomorphic and said that we attributed to animals the feelings of human beings. It struck me forcefully this morning that, when he leaves Parliament in a month's time, the Chief Secretary can get an alternative job delivering gorillagrams without the aid of a monkey suit. It also struck me, when our sitting had to be suspended because of a fire elsewhere in the Palace that the event was reminiscent of what happened many years ago when a repressive Government burnt the Reichstag and made van der Lubbe the fall guy. When the Government collapse in burning ruins in a month's time, the fall guy will be the present Prime Minister. 1.8 pmMr. David Shaw (Dover) : This is a sensible and prudent Budget. It is such a prudent Budget that it has upset Labour Members. The Budget is being implemented when we do not have the crisis that Labour had in 1976 and 1978. We have not had to cut the hospital building programme as Labour did in 1976. We do not have the situation which occurred in 1978, when taxes were so high under the Labour Government that they led to massive strikes and inflation. Surely, the point about the Budget is that income tax reductions and job creation go side by side.
The Budget will produce a further £2 million of disposable income in my constituency. That money will be welcome. Such money helps the Dover ferry industry. Every tax reduction under the present Government has resulted, two years later, in significant increases in passengers and freight carried by the Dover ferry industry. I have every confidence that this tax reduction will result in more freight and passengers using the Dover ferry industry.
I also commend to the House the reduction in the uniform business rate, which has been achieved by freezing the transitional element. That will be good for small businesses and the many shopkeepers in my constituency.
Of particular interest to me is what the Budget does for pensioners. Less well-off pensioners will receive benefits through the income support mechanism. Under Labour, not only was the inflation calculation fiddled in 1976 so that pensioners lost out, but inflation destroyed every pension increase that the Labour Government gave between 1974 and 1979. Pension increases and promises of pension increases in election campaigns are not worth the paper they are not printed on unless they are real pension increases and inflation rates are low. That is the only way to give pension increases. That will be achieved by the Finance Bill because this is a prudent and sensible Budget. The measures are recognised by the City of London and the outside world community as prudent and sensible.
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1.11 pmMr. Tony Banks (Newham, North-West) : I do not know how Conservative Members were able so easily to convince themselves that the Budget is enormously popular. There were no street parties in Newham and no dancing on Stratford High road when the Budget was announced. The Budget means very little to the people I represent in the east end of London. What will the Budget do for jobs? What will it do for people who find that what little has been given to them will be reclaimed through the withdrawal of means- tested benefit? That is the whole point. The Budget means nothing for the real problems of people in my area.
Since 1979, unemployment in the London borough of Newham has gone up by about 326 per cent. We have seen an 84 per cent. decline in job vacancies. We have an unemployment rate of 18 per cent. in the London borough of Newham. We have lost about 40 per cent. of manufacturing jobs. The Budget will do nothing whatever to address those real problems.
The day after the Budget, a cordial gentleman stopped me on the street, as they often do in my area, and said, "Give 'em a good kicking, Tone." Those were his precise words. Obviously, I cannot endorse the proposed action, but I sympathise with the sentiment. The people of the east end have been kicked around by the Government for 13 years. They want an opportunity to give the Tories a good kicking, and on 9 April that is exactly what they will do.
1.13 pm
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