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7.58 pm
Mr. Thomas McAvoy (Glasgow, Rutherglen): We have just had a demonstration of what the Chancellor called "the slash-and-burn tendency". The remarks of the
hon. Member for Bridlington (Mr. Townend) about Scotland and Wales, and especially about Northern Ireland, were clearly misjudged.
I regret that the Chief Secretary is not in his place, since I took what he said at the start of his speech as a serious confession. He said that he had attacked the Government in 1980 purely and simply to get a job with them. Of course, he eventually succeeded. It certainly told me a great deal about his inner strength.
The right hon. Gentleman is the Chief Secretary of a Government who have increased taxes over the past three years, after they made an election manifesto commitment not to increase taxes. Some measure of humility might have been in order. Although it might have been hard for someone from the Chief Secretary's class to make an apology to the country, he might have said with some humility that the Government were responsible for those tax increases. The nemesis of the Government will come sooner or later, but it will certainly come; and the Chief Secretary's nemesis may come even sooner.
The Chancellor realised early on that the British people would not be fooled by the tax cuts that his Back Benchers wanted. He knew full well that to come up with those tax cuts, even against the fiscal advice of his own Back Benchers, would have told on him, because the Government still have around their neck the fact that they have increased taxes by the equivalent of 7p on the basic rate. I know that they do not like us to repeat it, but that figure should be repeated again and again. Even after the Budget, with its certain level of tax cuts, a typical family will still be worse off by £670 per annum. That is the measure and the achievement of the Conservative Government.
Another reason--I hope, the most important reason-- that the Chancellor took into account in his decision not to cut taxes further was the amount of debt that the Government owe. For years, the Labour party has had to withstand lectures from Conservative Members that it was not fiscally correct, could not run a Government, and could not handle the finances of a Government or run the country. When I think of black Wednesday and the state of the Government, I am not inclined--more importantly, the people of this country are not inclined--to listen to lectures from any Conservative Member, and especially from those on the Government Front Bench, with their record of running the country.
I do not see anything in the Budget to help industry in my constituency. The Hoover domestic appliance plant, which has an excellent export record, is in my constituency. I do not see any measures to help that company to operate and expand its market. The company and its work force have an excellent export record. I do not see any measures from the Government to help such companies. There is not much joy for my constituents in the Budget.
The hon. Member for Bridlington mentioned spending in Scotland. It is a fact of life that the Scottish Office, according to the expenditure plans announced yesterday, faces a sharp reduction in its annual budget over the next few years as a result of an overall cut in Government spending. Although the Secretary of State for Scotland-- as a tactical move--chose to stress that the £173 million
increase in cash terms in next year's total allocation was the highest ever, the fact is that the amount of money allotted pro rata to the Scottish Office has been reduced.
The Secretary of State has failed to fight his corner, and he has failed to fight Scotland's corner. The figures show that the Secretary of State for Scotland has had to accept a £320 million cut in real terms to next year's budget, and his Department faces cuts rising to 5 per cent. in the financial year 1998-99. The Secretary of State has failed to fight his corner against the Treasury.
I echo some of the comments made by a former Secretary of State for Transport, the right hon. Member for South Norfolk (Mr. MacGregor), about cuts in the roads programme. I am a member and a supporter of the west coast main line group. I support rail services. I do not support motorway madness or roads for their own sake.
The fact of life is that the economic life of this country depends on an efficient road system for industry and commerce. Now we have a £4 billion brake on new routes because of cuts in that programme. That is purely and simply a short-sighted, short-term measure to respond to an immediate situation. The Government are putting off the evil day, because they think that we can do without the roads for another year or so, but damage will be done to haulage, freight companies and the economy as a whole because delays and traffic jams result in so much cost to the country. The Government's decision is short-sighted.
I know that the environmental lobby will argue, with some justification, about a reduction in road traffic. The Government have not mentioned the excellent report by the RAC, in which it suggests ideas which would cut car journeys by 20 per cent. I am in favour of cutting car journeys. It is ridiculous that an organisation such as the RAC, in a genuine attempt to tackle the problem of traffic, can come up with innovative ideas and methods that sometimes go against the interests of the car owner, when all that the Government can come up with is a £4 billion cut in the roads programme.
The hon. Member for Gordon (Mr. Bruce) is not in his place. He was in the Chamber for some time, waiting to speak. I am sorry that he is not here. I am sick to the teeth of the hypocrisy of the Liberal party, which preaches one thing in one area and something else in another. The hon. Gentleman said that his party was in favour of cutting the roads programme, yet the Liberals make a special case wherever it suits them to do so. In my constituency, the Liberals are campaigning against a project to complete a 12-mile motorway link. I welcome the hon. Gentleman's comments, but some motorway building is essential.
Mr. Eddie Loyden (Liverpool, Garston):
Does my hon. Friend think it a good idea that we should begin to consider reviving the coastal merchant fleet? It is the most environmentally acceptable method of transport and one that we should fight for. Places in Scotland and the rest of the United Kingdom would benefit from shipbuilding. Coastal vessels could transport most of our goods around the coast without all the environmental problems that roads bring.
Mr. McAvoy:
I am grateful to my hon. Friend for that brief intervention--I think. I look forward to intervening in his speech at some point, especially during a 10-minute limit on speeches. My hon. Friend's point is correct. We have under-utilised resources and methods of transport
Mr. Robert Hicks (South-East Cornwall):
The Budget confirms that my right hon. and learned Friend the Chancellor is determined to secure sustainable economic growth in a low-inflation environment. If, as a consequence of the measures announced yesterday, we can expect further reductions in interest rates sooner rather than later, that is to be welcomed.
Much has been written and spoken about tax rates. Given my right hon. and learned Friend's approach and his wish to help specific sectors of the economy and particular groups, he was right to limit the reduction in the standard rate to 1p. As the parliamentary representative for a low-income area, I have always argued that in a tight financial situation it is more important to increase personal allowances than to cut tax rates. I welcome my right hon. and learned Friend's decision to increase personal allowances above the level of inflation.
I am pleased about a number of other measures, one of which specifically relates to the proposed assistance for people in residential and nursing homes. The existing financial arrangements are certainly too harsh in their application, and they undoubtedly penalise the thrifty and cause widespread anxieties among families. On public expenditure, I welcome the Chancellor's decision to make additional financial resources available in real terms for education, health and the police. There will be widespread public support for that decision.
The purpose of my speech is to make a number of comments about public expenditure as part of the unified Budget as it relates to the economy of the south-west, and Devon and Cornwall in particular. The House will know that, historically, the economy of Devon and Cornwall has been dependent upon primary activities such as agriculture, fishing, mining and quarrying, and later on tourism and defence.
The south-west is the most dependent of all the United Kingdom regions on defence and defence-related economic activity. The changes in the United Kingdom's defence requirements have led to the loss of some 21,000 defence-related jobs in the past 10 years, with further reductions of 20 per cent. forecast between now and the year 2001. The loss of income to the local economy through defence reductions is estimated to be in excess of
£500 million.
Unemployment levels in Devon and Cornwall are traditionally higher than in both the official south-west region and the United Kingdom as a whole. Forty-eight per cent. of the travel-to-work areas in Devon and Cornwall feature in the worst 33 per cent. of the United Kingdom's unemployment black spots. Conversely, average earnings in the area are significantly below the United Kingdom national average. In my constituency, average earnings are 16 per cent. below the national average.
It is often said that our cost of living is lower. I wish that that were the case, but nothing could be further from the truth. The cost of living in my area is some 8 per cent. above the United Kingdom average, and this is compounded by the wide discrepancy in average council tax bills. For example, the average council tax bill in Cornwall last year was £447, which was 51 per cent. above the average in South Glamorgan. I would hardly consider Cornwall to be a spendthrift county, and it is more likely that this significant differential reflects a more favourable grant settlement for Wales than for England.
While I am not seeking on this occasion to question the overall level of public expenditure, I am seeking to influence Ministers to agree to a more equitable distribution that takes into account the genuine needs of the far south-west. It is only right that we in the far south-west do everything within our power to help ourselves, and this we will do. Indeed, the fact that we are helping ourselves will be evident from our tangible achievements in attracting foreign inward investment into Devon and Cornwall.
A total of £48 million of inward investment was gained last year, which resulted in the creation of 895 new jobs and the safeguarding of a further 550 existing jobs. The figures for the year beginning April 1995 are even more encouraging. Some £64 million in investment has been gained so far, leading to the creation of 1,237 new jobs and the safeguarding of 595 jobs. That is excellent news, and it is evidence that we are prepared to help ourselves. But just as the UK's industry, commerce and business in general seek a level playing field in their dealings with our European Union partners, so Devon and Cornwall require the same conditions in terms of the support we receive from the Government through public expenditure compared with the funds allocated to other parts of the United Kingdom.
I shall provide the House with two sets of figures to illustrate the existing unfairness. Last year, Devon and Cornwall received less than 1 per cent. of the national single regeneration budget, despite having almost 3 per cent. of the United Kingdom's unemployed people. Yorkshire and Humberside--with approximately the same percentage of unemployed people--received
£19.2 million, or four times the allocation for Devon and Cornwall.
Secondly, taking Government aid and support as a whole, Devon and Cornwall last year received just
£50 million in total, compared with £187 million for Wales and £530 million for Scotland. All these figures are taken from either the reports on the regional economy prepared by the Plymouth business school or the two independent reports prepared by Coopers and Lybrand. In addition, our regional daily newspaper, The Western Morning News, initiated in September a responsible and objective campaign for a better deal for the far south-west.
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