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5.50 pm
Sir Terence Higgins (Worthing): I am rather surprised that the shadow Chancellor is not still in his place, because there has been a long convention in the House that, after one has spoken, one remains at least for the next two speeches. It is a great shame that the hon. Member for Dunfermline, East (Mr. Brown) did not do so, because he would have been able to hear the right hon. Member for Chesterfield (Mr. Benn), and that would have given the hon. Gentleman some idea of the problems that he will face if he really thinks that in future the Labour party will become a party of low taxation and low public expenditure.
We could not have had a clearer indication of the way in which the Labour party--and it would be true if it were in government--is still a party that believes in high public expenditure and high taxation than the speech of the right hon. Member for Chesterfield. No amount of change by the shadow Chancellor will convince people otherwise. Such economic thinking is still deeply ingrained in the Labour party, as the right hon. Member for Chesterfield clearly demonstrated.
I am bound to say that this is the third occasion on which we have begun a parliamentary Session with an unsatisfactory timetable ahead of us. We have spent a number of days debating the Queen's Speech. We will then spend a number of days next week and the week after discussing the Budget. Before we know where we are, it will be Christmas. It is no longer possible under the current legislative process to have Second Readings of Bills, which could then go into Standing Committee and make progress, before Christmas.
What is even more surprising is that, ever since the change in the legislative programme, the Opposition have repeatedly insisted on debating the economy during consideration of the Queen's Speech--the week before the Budget. The shadow Chancellor is coming up for his third Budget and, by now, I should have thought that he had realised that that strategy is a mistake. As my right hon. and learned Friend the Chancellor has pointed out, today's debate gives the Opposition a marvellous opportunity to put forward their policies ahead of those of the Chancellor, who is severely handicapped by being in purdah. But what happens? Year after year, the shadow Chancellor has totally failed to produce any policies, except for one this year on 10p tax, which I shall discuss later.
Although I have been somewhat persuaded by the Chancellor's view that a unified Budget helps the Government by focusing Ministers' ideas on the relationship between taxation and public expenditure, I am far from clear which way round that relationship operates. Does taxation determine the expenditure, or expenditure the taxation? As for the House, the Budget has not become a unified one, because for well-known reasons we still do not have the power to increase public expenditure or taxation. We can only reduce one or the other, or both, so we cannot exercise a choice. We cannot have a truly unified Budget in the sense that the House can trade expenditure and taxation against one another.
I am somewhat persuaded, however, by my right hon. and learned Friend's view that a unified Budget at least concentrates the mind of Ministers. Although we have only the same amount of time to discuss expenditure and taxation, we can take a view on both according to the
events of next week. I want to defer my remarks on that until next week, which is the appropriate time to discuss the major issues of macro-economic policy.
If it is intended that the Budget should deal with public expenditure and taxation, I hope that my right hon. and learned Friend the Chancellor, and the Leader of the House, who will reply to the debate, will consider whether the Budget should be produced in the spring. I know that that would require a radical change in the Government's internal workings, but it would be vastly preferable from a parliamentary point of view.
Since I do not believe that this is the appropriate moment to discuss macro-economic policies, I merely want to refer to two specific issues, not least because they are of great concern to my constituents. The Gracious Speech referred to legislation being brought again before the House regarding the high speed rail link. That raises the question of compensation for those who are affected by such programmes. The high speed rail link will not affect Worthing, but it is important to consider compensation for those blighted by road programmes in my constituency.
The Chancellor is aware that that issue of economic policy potentially involves huge sums of money, but we are not giving members of the electorate a fair deal. I am strongly of the opinion that we are getting our road and rail infrastructure on the cheap and at the expense of those who happen to be in the way of a particular scheme.
A number of ombudsmen reports have been written about compensation to be paid in my constituency, where there has been a great deal of blight along the route of the A27. The Government have also lost a court case relating to compensation. I had hoped that those facts would provoke them to include in the Gracious Speech better and fairer proposals to compensate people affected by blight, not least that caused by rail projects. To my disappointment, instead of introducing new legislation to overcome the problem, which we could have debated and, if necessary, amended, the Department of Transport, no doubt aided and abetted by the Treasury, issued new guidelines for compensating people affected by blight.
The court case led one to believe that those who had been affected by a road or rail scheme would get compensation if the benefit they had gained from ownership of property was seriously compromised. One imagined that that compensation would relate to loss in the value of the property. That has not happened. In addition to making it clear that a reduction in the value must be apparent, the new guidelines still retain the old noise criterion. That means that the Department of Transport is saying that one must meet that old criterion on noise apart from that relating to reduction in the value of the property.
That is a serious issue. When we come to consider the matter in detail in relation to public expenditure, I very much hope that the Government will consider the implications. I am glad to see that the Chief Secretary to the Treasury is present. I recognise that even in my constituency the sums involved could run into tens of millions of pounds or even hundreds of millions. As for the rail link mentioned in the Queen's Speech, the sums involved could run to hundreds and hundreds of millions of pounds. It is still true, however, that the community as a whole is getting such infrastructure schemes without adequately compensating people who suffer because their homes happen to be in the line of a proposed route.
No doubt the Budget will contain proposals for changes in public expenditure. We have suffered from a number of rumours in the press about cuts in the road programme or other projects. That causes great distress to those who are expecting to benefit from a bypass or some other project.
We all acknowledge that the Government are likely to give priority to education or the national health service. It is common ground that those sectors need to receive priority. However, if there are to be cuts in other sectors, such as in transport infrastructure, it is tremendously important that full consideration be given so that we avoid wasting public expenditure that has already been incurred.
In a specific example that I can think of, we have already expended more than £6 million. It would be foolish if, in such cases, one were to stop the operation dead in its tracks, causing that money to be wasted.
Similarly, it is important that the Government consider the effect on expectations of sudden changes in public expenditure programmes. For that reason also I am glad that my right hon. Friend the Chief Secretary to the Treasury is in the Chamber. It is important that the Treasury, in dealing with other Government Departments, should take into account the human impact--the Treasury, of course, is always very concerned with humanitarian issues--of rapid changes in public expenditure programmes.
My right hon. and learned Friend the Chancellor of the Exchequer has discussed the proposal that suddenly emerged from the shadow Chancellor, before the publication of the Sunday newspapers, for an introductory lower rate of 10p in the pound for income tax. That is an extraordinary proposal.
Sub-editors wrote marvellous headlines in the Sunday paper: "Labour goes for 10p rate of income tax without any regard at all for where it is coming from". That is not true. This time we were told where it was coming from. With all previous promises of that type by the Labour party, we were never told where the money was coming from. This time the shadow Chancellor said that it would come from economic growth.
If I may misquote Mrs. Beeton, first get your growth. Post-war history is littered--my goodness, the right hon. Member for Chesterfield knows enough about that--with promises that the Labour party has made in the expectation that there will be growth. One must get the growth first and then decide what to do with it.
Even if the Labour party had got the growth, is a 10p introductory rate a sensible way to proceed? It would be more complicated administratively--especially now, because we are adopting a system of tax self-assessment--and that would be a waste of resources. Surely it would be better to lift the threshold and help people at the bottom of the scale.
This is an extraordinary gimmick. Totally impartial organisations such as the Institute for Fiscal Studies have said that it was an extraordinary thing to say. It reflects the shadow Chancellor's lack of judgment in those matters. He has, if I may phrase it that way, no feel for matters economic. That is a serious handicap--one that would cause anxiety if we believed that there was any prospect of his undertaking the job that he now shadows.
As my right hon. and learned Friend the Chancellor said, we heard nothing about what Labour policies will be. If the shadow Chancellor wants to hold this debate
ahead of the Budget, surely he should tell us about that. He gave us no assessment. We are constantly told that he is having a battle with his shadow Cabinet colleagues about public expenditure, but we are given no sign of what his priorities in public expenditure are, and no explanation for his belief that there should be a 10p introductory rate of income tax.
The shadow Chancellor tells us nothing about how wide the band will be. If there is to be a 10p rate of income tax for income of up to £60,000 a year, it would be of interest; but it was a 10p rate of income tax divorced from any band. For all that we know, it was a 10p rate of income tax on the first £1. We were given no sign. That is a literally unbelievably superficial view of the way in which one should propose economic policy. It should therefore be treated in the way that it deserves.
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