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Column 809discuss where the money might be found to fund it. The Government have to balance the books and meet the £50 billion deficit that they have caused.
Under the rules of the House, as you know, Mr. Deputy Speaker, neither Opposition nor Government Back Benchers can table amendments to raise taxes on individuals. We can table only amendments that would decrease taxes. That is why we need the opportunity of debate, not merely the opportunity to table amendments for the record. We need to be able to say that, although we ask for a tax reduction in one area, on balance there could be a tax increase somewhere else. As I said last week, one example would be an increase in tobacco tax--there is no disagreement between the parties about that. Hon. Members should not be deprived of the opportunity to debate such ideas.
If the draconian guillotine motion had not been introduced I would have wanted the chance to update some figures that I gave at the end of my speech on Second Reading. I was talking about the burden on the lowest fifth of income earners over the past decade, compared with that on the other four fifths of income earners, and I cited what were then the latest figures available--"Social Trends" for 1993, which the Government published a year ago. Since Second Reading the latest, 1994, edition of "Social Trends" has been published. If I had had the opportunity I would have updated my statistics, although not in great detail, and explained what happened to the figures when the extra year since 1979 was added on. Of course, I cannot do that now, but it shows that by 1990-91, in real terms, the bottom fifth of income earners had had a 3 per cent. reduction in their median real income after housing expenses. Meanwhile, the next fifth of income earners had had a 12 per cent. increase, the middle fifth a 25 per cent. increase, and the next fifth a 34 per cent. increase. Finally, you will be astonished to hear, Mr. Deputy Speaker, between 1979 and 1990-91 the top fifth of income earners had a 49 per cent. increase in their real median income after housing costs had been taken into account.
I would have used the argument of fairness and said that some of the money to pay for the increase in tax thresholds, to relieve the burden on the low paid, could be found by taking a couple of per cent. off that 49 per cent. increase for the highest-paid one fifth of the population. I make no bones about that. The cake is there and the Government have set the size of it. I cannot make it grow, but I want to be positive rather than negative.
It is outrageous that both Opposition and Conservative Members have been deprived of the opportunity of speaking in those three key debates. We may manage to discuss the insurance premium tax, but, as you know, Mr. Deputy Speaker, that will take all the time until 10 o'clock. There can be no argument about that, because it is an important brand-new tax that deserves to be debated in the House. I do not want to take all the rest of the time available, and there are only a few minutes left for the debate on this squalid guillotine motion. Last week, to the annoyance of Conservative Members, I made a point that I shall make again now, because it cannot be repeated often enough. The Government have a mandate in this place because they have more than half the votes here, but they have no
Column 810mandate from the British public for such measures. They received the support of only one third of the total electorate in 1992 ; that is all that they got. With all their promises their lies, as it turned out--they still managed to secure the support of only one third of the electorate. Translated into a percentage of those who could be bothered to go out and vote, that is still only 42 per cent. The Government can claim no democratic legitimacy for the biggest tax hike in history. They cannot claim support at the ballot box. They can come to the House and try to shut us up and stop us talking about it, but if there is any justice, if the Leader of the House wanted to hold out an olive branch- -it would behove the Government to do that, because they created the conditions for the present impasse, with their two Bills before Christmas-- there are things that he could do to ameliorate the situation.
For example, the right hon. Gentleman could put the Opposition on the spot. He could meet the legitimate demands that he has heard for the past three hours to make possible a vote on VAT on fuel on the Floor of the House before 1 April. We would move heaven and earth to create those circumstances. We would not argue about time, or delay whatever business happened to be in front of us. It is not up to me, and I have no idea about the discussions, but if it were up to me I should be willing to give up an Opposition day for the Government to use for that purpose.
The Opposition cannot use Opposition days or Adjournment debates to change the law. People outside the House must understand that. It is not within the power of the Opposition to say, "It is our debate, so we shall decide what to do." Under the rules of the House we cannot do that, but the Government could, with our co-operation. That would earn some brownie points for the Government and I hope that the gesture would be reciprocated, because we are dealing with a key demand.
I believe that my hon. Friends are signalling to me to shut up because I have lost track of how much time is left. I shall gladly walk into the Lobby to vote against this unfair motion. The Government could have taken a more reasonable position, because they knew what the demands of the Opposition were, even though we are not operating through the usual channels. However, it is not too late. It would not be too late, even after the motion were passed, if the Government wanted to bring it back and amend it so that the Bill could be dealt with differently. We would not then come up against the impasse. But the Opposition will have even more reason to pursue our legitimate arguments against the Government if we see that they are not prepared to be reasonable on this matter.
Let us be clear what the debate is about : it is about a Government running scared, a Government who have broken their promises and who are now attempting to stifle debate. A Government who have lost all the arguments will do anything to avoid losing the vote. A Government who have trodden all over the people of Britain are now treading all over the House of Commons.
The guillotine motion marks a new low even by the Government's standards, because for the first time in history a Government are guillotining a Finance Bill before
Column 811it has even gone into Standing Committee. For the first time in the history of the House a guillotine has been imposed when only one clause of the Finance Bill has been debated.
We should make no mistake about it : the timetable motion is a carefully planned cynical exercise designed to give the Government absolute control over the debates and the timing of votes on the Bill.
This guillotine has two simple objectives : to prevent the House from having the chance to vote down value added tax on gas and electricity before it comes into force on 1 April, and to close down the debate on tax increases. The Tories are running scared. They are scared of the people ; they are scared of debate in this House ; and they are scared of some of their own Back Benchers. They are scared of the people of this country because people are angry at the Government for putting up their taxes and at the unfairness of the Tory tax increases. People are angry that the Government have broken all of their promises.
The Government are scared of debate in this House because they have lost all the arguments. They have lost the arguments on taxes ; they have lost the arguments on the economy ; and they have lost the arguments on public services. They are scared of their own Back Benchers because they know that some fearful Tory Back Benchers have privately promised their constituents that, if only there was an opportunity, of course they would vote against VAT.
Labour has tabled a new clause which would delay the VAT on gas and electricity coming into effect for one year. But the Government's purpose in this timetable motion is to delay any debate on VAT or on our new clause until after 1 April when VAT would already be in force. The Leader of the House shakes his head. I challenge him to intervene in my speech and to put the record straight. He could take this opportunity to deny that if it is not true.
What we are saying to the House and to the country is that this squalid guillotine motion is an attempt by the Government to paper over the cracks in their ranks and to prevent their Back Benchers from having to make a choice on VAT.
Mr. Newton : If it is of any interest to the hon. Lady, may I say that what she has just said is flatly, totally and completely untrue. What is more, there are Labour Members who know that to be the case.
Mr. Newton : I am not saying that that opportunity will arise. The hon. Lady suggested that the purpose of this motion was as she described it. That is untrue. We went into yesterday's debate in the expectation that some contacts that had taken place would bring about a position in which the Bill would proceed in a different way by agreement. By this time yesterday evening, that expectation had been destroyed by the opposition of Labour Members.
Ms Harman : It is absolutely clear, and the Leader of the House has given us all the evidence we need in his intervention, that the purpose of the guillotine motion is to prevent Tory Back Benchers from having the opportunity to vote against VAT on gas and electricity.
Column 812The Government know that they have lost the debate in the country and in their party. They now take the only course left open to them--they seek to control and manipulate the debate in Parliament. They seek to prevent their own Back Benchers from voting on VAT. They seek to spare Tory Members from having to make what they find to be a difficult choice on VAT. The choice should be obvious--honouring the promises that they made to their constituents, or following the orders of their Whips.
We are determined to ensure that Tory Members have the opportunity to make that choice. We want to ensure that they have another chance to join us and delay the imposition of VAT--a chance to honour the promises that they made to their constituents and the pledges that the Prime Minister made to the country on their behalf. Tory Members who tell us that they also want the chance to vote against VAT on gas and electricity should vote against this timetable motion if they want that chance.
This guillotine motion seeks to deprive a Committee of the whole House of the chance to engage in full debate about three Tory tax increases--tax increases which are all clear breaches of election pledges. The new insurance premium tax is a tax on the victims of crime. It hits hardest at ordinary people and their families--those who are already paying the price for the Government's failure on law and order. They must pay it again with this new tax. What is more, as with all Tory taxes, it is unfair. It hits hardest those who can least afford it. People who live in less prosperous areas already pay up to seven times more in insurance premiums to protect their homes than people in better areas. This tax will hit people living in the inner city areas of Liverpool, Manchester, Glasgow and London up to seven times harder than those living in more affluent areas. Both the insurance tax and the airport tax are the thin end of the tax wedge-- introduced at a relatively low rate and then jacked up to pay not for new hospitals, schools or railways but the constant bills of unemployment and low growth.
It is a bit disingenuous for the Leader of the House to say that all the Government want is a reasonable debate on the Finance Bill because when the Chief Secretary introduced the Bill he did not even mention the insurance tax and the airport tax. So keen is he to debate the Bill that he could not even get the words "airport tax" and "insurance tax" past his lips. Perhaps he will manage to refer to them tonight and explain how the Government have come to break their promises.
Perhaps the truth is that the hon. Member for Dudley, West (Dr. Blackburn) was more prophetic than he realised when he wrote in his election address to the people of Dudley, West :
"Tax is the dirtiest word to the Conservative philosophy". It certainly is such a dirty word now that Tory Ministers who are putting up taxes do not even want to discuss it.
As my hon. Friend the Member for Perry Barr mentioned, the Government are also stifling debate on the freeze on personal allowances. Of course, this is a tax increase which hits hardest at the low paid. In response to questions from my hon. Friend, the Government have been forced to admit that it will drag an extra 400, 000 low-paid people into the tax net. No wonder they do not want to discuss it--no wonder they wanted to squeeze the debate. They are also stifling debate on the cuts in mortgage interest tax relief, which amount to the equivalent of nearly
Column 8132p on the basic rate of income tax for a typical family with a mortgage. No wonder the Government do not want to discuss it. In their manifesto, they promised the electorate :
"We will maintain mortgage tax relief."
Of course, it was only after the election that the Chancellor said with a snigger :
"Luckily we didn't say at what rate".
The promise of tax cuts was made by the Government to the country and by Tory Members to their constituencies. These tax increases break those promises. Faced with their betrayal, the Government try to hide from debate. They try to force these tax increases through with only a one-hour debate. Labour's tax in the face of that contempt for democracy becomes even more important. Not only must the economy be rebuilt and the community and publice services restored. We must rebuild the confidence of the British people in democracy--the confidence that the Tory Government have destroyed.
The Government are in office but not in power. Despite holding the great offices of state, they are powerless. They cannot use the power of their officers to keep their election promises, so they shut down debate. They cannot run the economy, so they shut down debate. The one thing that they have not lacked is money. They have squandered £130 billion in North sea oil revenues and privatisation receipts. Having squandered all that money, they are now dipping into the pay packets of ordinary families. They cannot command the respect of the British people, so they stifle debate.
There is only one thing that the Government are good at any more, and that is guillotine motions. My hon. Friend the Member for Wallasey (Ms Eagle) was absolutely right : this is the fourth Bill in four parliamentary weeks that the Government have guillotined. Although they can shut down the debate in this House, they cannot shut down the debate in the country. This gagging motion is the last refuge for a Government who have lost every argument and broken every promise. This Tory Government are nothing more than a rabble--a rabble without a cause. We will vote against the guillotine tonight. 7.58 pm
The Chief Secretary to the Treasury (Mr. Michael Portillo) : My right hon. Friend the Leader of the House began the debate sombrely enough by saying that the Government entered into this guillotine motion with no pleasure and no cheer. During this debate, the genuine concern felt throughout the House at the present state of affairs--the breakdown of normal communications between the two parties--was expressed by my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd), my right hon. Friends the Members for Worthing (Sir T. Higgins) and for Shropshire, North (Mr. Biffen) and my hon. Friend the Member for Carshalton and Wallington (Mr. Forman). That concern was also expressed by the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) and, to a certain degree, by the hon. Member for Birmingham, Perry Barr (Mr. Rooker).
In seeking some agreement across the House, I begin by agreeing with the hon. Member for Wallasey (Ms Eagle) that this is a big and serious Bill, as the Finance Bill always is. That means that the Bill could only proceed through the
Column 814House on one of two bases--agreement between the parties, or by guillotine. I would have much preferred that there should be agreement.
It is important that the House considers the Bill in a serious and methodical way, partly because that will enhance the reputation of the House--it is the job of the House so to do--but also because it is important that outside interests are given the reassurance that the matters will be considered seriously. Those outside interests must be given time to make their representations.
I wrote to the hon. Lady the Member for Peckham (Ms Harman) to suggest that we reach agreement, and I was rebuffed in the way in which my right hon. Friend the Leader of the House described. I struggled to cope with that disappointment, but I wrote again to the hon. Lady to inform her of the way in which we then intended to proceed, both on the Floor of the House in Committee and in Committee upstairs. We proposed that we should take four clauses on the Floor of the House over two days.
There was every expectation that the Opposition might stick to that. Indeed, we began well with the small number of hon. Members who came to the House yesterday afternoon apparently wishing to address issues seriously before the House. However, at about 6 o'clock yesterday afternoon, there was a clear change of mood--I would say a clear change of control--in the Labour party. A new squad of people entered the House who had not been here at the beginning of the debate. That group of people apparently were uninterested at 4 o'clock, but by 6 o'clock they had become interested to the point of verbosity.
The right hon. Member for Derby, South (Mrs. Beckett) showed in her opening remarks that she was not interested in what I believe the House and the Government are interested in--providing time upstairs for serious consideration of the Bill, and for outside interests to make their points known. The right hon. Lady has become obsessed with getting time on the Floor of the House to consider VAT.
First, the right hon. Lady was offered precisely that in discussions which we thought we were having with the Labour party. We very much hoped that we could reach some agreement, and she said that she wanted to reach an agreement. For all I know, the right hon. Lady did want to reach that agreement. The divisions in the Labour party today are so severe, so arcane and so deep that it is perfectly possible that the right hon. Lady is being sincere.
The right hon. Lady was then in the extraordinary position of having to argue--I think this argument was being made by an Opposition for the first time in history--that the fault of the guillotine motion was that it was giving too much time to the Committee upstairs. Unfortunately, the right hon. Lady failed to tip off the hon. Member for Thurrock (Mr. Mackinlay), who went on saying that the problem was that the guillotine gave too little time to consider a Bill that was too long.
The right hon. Lady said that we should have trusted her. How could we possibly have done so? She was not talking to us and, like a petulant teenager who is not talking to his parents, she then complained that we not been able to reach agreement between the channels.
Mrs. Beckett : I do not remember saying any such thing, but I do remember vividly that, on at least four or five occasions during the debate, the Government have been told that the Opposition certainly wanted the timing
Column 815of the Committee to be controlled. After all, it is a matter of the distribution of time, not just a matter of the number of weeks. We are nervous about how the Government will seek to control the time. They have had repeated offers to accept that we want Report and a vote on VAT in the House before Easter. That point was put to the Government no fewer than four or five times during the debate. The Chief Secretary can accept it now, as he has singularly failed to do on every occasion when it has been mentioned before.
Mr. Portillo : Another point which was put to the Government was that the Opposition would proceed in a normal way during yesterday's debate, which they did not. Everyone in the House saw what happened at 6 o'clock yesterday.
I remind the right hon. Lady that, despite what she says she said to us, the hon. Member for Peckham said in a press notice on 10 January :
"Labour will be fighting every step of the way".
The hon. Lady was then quoted in The Times on 12 January : "Labour will be making no agreements with the Government about the timetabling of the Finance Bill, as part of our policy of non-cooperation."
I remind the House also that the hon. Lady wrote to me on 21 January :
"As you rightly say, the Opposition is not willing to enter into informal discussions this year."
All that gives the lie to what the right hon. Member for Derby, South has been saying.
The right hon. Lady, when intervened upon by my right hon. Friend the Member for Worthing, let out a lament that there were no usual channels. Whose fault is it but the Labour party's?
The hon. Member for Roxburgh and Berwickshire wanted us to accept his amendment. I am not able to do that, and I say that also to the hon. Member for Perry Barr. It is not the Government's fault that three hours have been devoted to the guillotine today, because that is not what we intended. It has been the choice of the House this afternoon to devote three hours to debating the guillotine. The Government had allowed 10 to 12 hours for debate on four clauses on the Floor of the House, and that was a perfectly reasonable amount of time. The hon. Member for Roxburgh and Berwickshire went further, and said that a more comprehensive solution was needed to our problems. The attitude of the Government has been that we wish to continue to act in a normal way, and we wish to see normal relations restored across the House.
Nonetheless, I noted with great interest what the hon. Gentleman said, and I know that he meant it in a spirit of co-operation. The hon. Gentleman's concern about the matter is genuine, and my right hon. Friend the Leader of the House will have heard it. Our attitude has always been that we wish to proceed with normal arrangements as much as we possibly can.
My right hon. Friend the Member for Shropshire, North said that he hoped that we could return to street politics and rough common sense, and that those could again break out. I heard the interesting speech by my hon. Friend the Member for Aldridge-Brownhills. I repeat that we took no pleasure in tabling the guillotine motion. An arrangement on the Bill was very much to be preferred. We have the independent testimony of the hon. Member for Roxburgh
Column 816and Berwickshire, who has recognised that the situation has been forced upon the Government for the protection of Back Benchers. It is the duty of the Government to make sure that the Bill is considered in detail. It is our duty to the outside interests to make sure that they have time to make their representations. I believe that it is for the convenience and reputation of the House that this Finance Bill should be considered in an orderly way. We would much prefer to have done otherwise, but, given the situation, the Government have no choice. The Government must protect the House, protect business and protect those people outside who depend upon us, by moving the motion today.
Main Question put : --
The House divided : Ayes 315, Noes 288.
Division No. 97] [8.7 pm
Ainsworth, Peter (East Surrey)
Alison, Rt Hon Michael (Selby)
Allason, Rupert (Torbay)
Arnold, Jacques (Gravesham)
Arnold, Sir Thomas (Hazel Grv)
Atkinson, David (Bour'mouth E)
Atkinson, Peter (Hexham)
Baker, Nicholas (Dorset North)
Banks, Matthew (Southport)
Banks, Robert (Harrogate)
Beresford, Sir Paul
Biffen, Rt Hon John
Blackburn, Dr John G.
Body, Sir Richard
Bonsor, Sir Nicholas
Bottomley, Peter (Eltham)
Bottomley, Rt Hon Virginia
Boyson, Rt Hon Sir Rhodes
Brooke, Rt Hon Peter
Brown, M. (Brigg & Cl'thorpes)
Browning, Mrs. Angela
Bruce, Ian (S Dorset)
Carlisle, John (Luton North)
Carlisle, Kenneth (Lincoln)
Channon, Rt Hon Paul
Clark, Dr Michael (Rochford)
Clarke, Rt Hon Kenneth (Ruclif)
Coombs, Anthony (Wyre For'st)
Coombs, Simon (Swindon)
Cope, Rt Hon Sir John
Currie, Mrs Edwina (S D'by'ire)
Curry, David (Skipton & Ripon)
Davies, Quentin (Stamford)
Davis, David (Boothferry)
Deva, Nirj Joseph
Douglas-Hamilton, Lord James
Durant, Sir Anthony
Emery, Rt Hon Sir Peter
Evans, David (Welwyn Hatfield)
Evans, Jonathan (Brecon)
Evans, Nigel (Ribble Valley)
Evans, Roger (Monmouth)
Fairbairn, Sir Nicholas
Fenner, Dame Peggy
Field, Barry (Isle of Wight)
Forsyth, Michael (Stirling)
Fowler, Rt Hon Sir Norman
Fox, Dr Liam (Woodspring)
Fox, Sir Marcus (Shipley)
Freeman, Rt Hon Roger
Fry, Sir Peter
Gardiner, Sir George
Garel-Jones, Rt Hon Tristan