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Mr. Legg: I am glad to hear, at this stage of the debate, the hon. Gentleman apologising for the absence of his colleague, the shadow Chancellor. I maintain that when there is a major economic debate the whole of the shadow Treasury Front Bench should be here. Instead, we have the politics of the soundbite--the stakeholder economy being enunciated from Singapore.
We do not need to go to Singapore to learn about stakeholder capitalism--it is all in Will Hutton's book,
"The state we're in". It contains a whole chapter on stakeholder capitalism. I am gravely disappointed that all the members of the Opposition Front-Bench team have
not come here this afternoon to lay out the measures that the Opposition want in the Budget to deliver what they call stakeholder capitalism.
I want to mention a few of the things that are involved in stakeholder capitalism. First, the Opposition want regional banks set up across the country. They also want regional Parliaments. The chief executives of the regional banks would be selected and appointed by the regional Parliaments. The Opposition want a federal system within the United Kingdom. They want to create stakeholding trade unions. I should be interested to hear from any Labour Member what he thinks should be done to realise the concept of stakeholder trade unions. Will Hutton says that more powers and rights should be given to trade unions to create stakeholder trade unions. That is what it is all about. Have not we heard that somewhere before? It sounds like a return to the 1970s.
What are the other prescriptions for stakeholder capitalism? There is the old canard that not enough finance is available in the UK. Stakeholder capitalism means urging the Bank of England to provide more finance so that businesses can borrow aggressively. That sounds like a return to the inflation of the 1970s. Stakeholder capitalism is about corporatism. Other measures include taking power away from individual shareholders.
Mr. Denis MacShane (Rotherham):
The hon. Gentleman has patronised Yorkshire bank. I hope that that fine regional bank will read his speech tomorrow. He appears to be saying that businesses should not have access to capital on reasonable terms.
Mr. Legg:
The hon. Gentleman knows very well that the concept behind stakeholder capitalism is the state providing extra resources to banks to enable them to invest aggressively. That concept rejects free-market economics. It rejects resources being allocated by the free market. Labour wants to take power away from individual shareholders. It believes that company takeovers are wrong and it wants to create a corporate Britain in which only shareholders who are represented on the board have voting rights.
Mr. Jenkin:
While listening to my hon. Friend, I am looking at a copy of the speech of the right hon. Member for Sedgefield (Mr. Blair). The right hon. Gentleman hinted at interference in the natural forces of the market when he said:
The right hon. Gentleman did not explain what he meant by that. Unless I am mistaken, pension funds and employee share-ownership already provide that sense of community in a company. What else can he be talking about?
Mr. Legg:
As usual, the Leader of the Opposition made a vague statement. Hon Members probably saw the right hon. Gentleman on "Breakfast with Frost" yesterday trying to convince the nation about stakeholder capitalism.
"It is only a soundbite. It means nothing at all," he said.
"Forget it. It was just my soundbite for last week." Anyone who aspires to Government must understand that they cannot govern by soundbites.
My right hon. Friend the Chief Secretary was correct to say that behind the statements of the Leader of the Opposition lies a return to the corporatist 1970s, a return of power to the trade unions and a reduction in the power of ordinary shareholders. That is what stakeholder capitalism is all about.
Mr. Hutton's prescription for that matter is honest. He admits that he would like to see more public spending. Opposition Members would like more public spending on issue after issue, but Opposition Front Benchers fail to admit that that would entail extra taxation. Mr. Hutton is clear that there would need to be extra taxation to finance higher public spending, and he would extend the welfare state because, he believes, the problem of people not wanting to pay higher taxes could be solved by extending universal benefits. The more people have universal benefits, the less resistance there will be to high taxes. That is an honest socialist point of view, and I am sure that we could have a meaningful debate on the subject if Opposition Front Bench Members wanted to engage in such a debate in the Chamber. I would respect them if they honestly put forward a socialist point of view. Instead, all that we get from the Opposition Front Bench is a vacuum.
There has been much debate about Britain's international performance, and Labour focused much attention during our previous debate on economic affairs on the latest report from the Organisation for Economic Co-operation and Development, which suggested-- the Opposition claimed--that Britain had been pushed down the league table. Today, we have heard nothing from the Opposition about international comparisons.
In the past few days, a new international study has been released which shows that economic prosperity and success are achieved on the basis of economic freedom and that the most succesful countries are those that make sure that economic freedom exists and expands. That international study ranks Britain sixth behind Hong Kong, New Zealand, Singapore, the United States and Switzerland. International comparisons show that the Government's policies are increasing the prosperity of this country.
Mr. MacShane:
Will the hon. Gentleman give way?
Mr. Legg:
I have already given way to the hon. Gentleman, and I wish to continue.
Mr. MacShane:
What is the source of that study?
Mr. Legg:
If the hon. Gentleman wants to read more about the international study, I would refer him to last Friday's Daily Telegraph. He can get all the details there.
Mr. MacShane:
Well, that is alright then.
Mr. Deputy Speaker:
Order. The hon. Gentleman must not continue to intervene from a sedentary position.
Mr. Legg:
Thank you, Mr. Deputy Speaker. What Labour stands for covertly and overtly is higher public spending, which will lead to higher taxation in one way or another as it always has done in the past.
I am particularly pleased to be able to welcome a Finance Bill that brings into effect measures that will cut taxation. We have had to take action for three years to reduce the deficit, but we are now able to introduce a Finance Bill which proposes lower business taxation,
lower personal taxation, lower excise duties and improved incentives. I particularly welcome the incentives for improved share participation through savings-related share options and approved profit-sharing schemes.
Many hon Members have commented upon the length of the Bill, and my hon. Friend the Member for Carshalton and Wallington (Mr. Forman) hoped that, although it was long, it would not be an obscure Bill. I hope that he and I will serve on the Finance Bill Committee together, and we shall then see whether this is obscure legislation or not.
Hon. Members may be interested in clause 53. It is said that the British are particularly fond of animals, and it is noteworthy to see that the hard-hearted officials of the Inland Revenue also seem to be fond of animals. Clause 53 deals with the landfill tax, from which there is an exemption where
So even in the Inland Revenue we find concern for pets and for pet-owners. Typically, that concession for the disposal of dead pets is heavily qualified by a proviso in subsection (5), which reads:
When studying the landfill legislation, one finds that there are a further five pages of interpretations and a schedule of 25 pages dealing with the administration of the landfill tax. The Committee will certainly have some interesting debates.
My hon. Friend the Member for Coventry, South-West (Mr. Butcher) commented on capital gains tax, and I endorse his comments. We need a thoroughgoing reform of capital gains tax. A system based on a tapering of capital gains tax rates so that only short-term gains were taxed would be beneficial to the economy and raise more revenue. At present, many people and institutions retain shares because there is potentially a high capital gains tax liability if they liquidate those assets. Scope for further tax reform is certainly available to Ministers.
Several hon. Members have commented on the Treasury and Civil Service Committee's report on the Budget which was published today. The Committee broadly supports the Government's taxation and spending policies and believes that the Government have the right fiscal strategy. The Committee was pleased to report that the Government were exercising more effective overhead control, but expressed concerns about the continuing growth of social security. All of us regret that the PSBR is higher than was forecast this time last year, but that is mainly due--as some of my hon. Friends have said-- to lower revenues and a lower rate of growth in the economy. My right hon. and learned Friend the Chancellor's forecast for the coming year shows a revival in growth, an objective which most hon. Members hope will be achieved.
The Treasury Select Committee has also been critical of the Bank of England's advice on interest rates and the weight which it has given to certain factors in trying to support an interest rate rise. The Committee was concerned by the Governor's assertion that he was right to seek an interest rate rise in May. We have supported the moves of my right hon. and learned Friend the Chancellor for lower interest rates and we will continue to do so.
I conclude by returning to the subject of stakeholder capitalism and to the views of Mr. Will Hutton. One of Mr. Hutton's concerns about Britain is that there is still a north-south divide. He believes that the interest rate rises in the late 1980s were necessary in the south-east of England, but that they damaged the economy in the north of England. That view is worthy of consideration. If one reads on in Mr. Hutton's book, however, one finds that he is a committed supporter of the ERM. He believes in fixed exchange rates and supports the ultimate objective of a single currency. One may think that that is a strange stance for a man who believes that, even in the United Kingdom, an interest rate may be set for the nation which is appropriate for one part of the country but inappropriate for another part. I think that he has failed to make the connection between what is happening in the real economy and how interest rates should be set.
"But it is surely time to assess how we shift the emphasis in corporate ethos from the company being a mere vehicle for the capital market--to be traded, bought and sold as a commodity-- towards a vision of the company as a community or partnership in which each employee has a stake and where a company's responsibilities are more clearly delineated."
"the disposal is of material consisting entirely of the remains of dead domestic pets".
"The test is that during the relevant period--
hon Members will not be surprised to realise that subsequent subsections define the relevant period--
"(a) no landfill disposal was made at the site--
hon Members will be pleased to know that there are subsequent clauses defining site--
"or
(b) the only landfill disposals made at the site were of material consisting entirely of the remains of dead domestic pets."
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