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6.6 pm
Mrs. Margaret Beckett (Derby, South): Every Member of Parliament now knows that this is a dishonest Budget. We do not need a sophisticated analysis of the detail to show us that--we have a simple parliamentary litmus test. There have been six statements in two days and two Budget debates that have barely started before 6 pm. If the Government were really so proud of the Budget, they would not be trying so hard to hide it.
What we needed on Tuesday was a Budget for Britain, a Budget to secure our country's future, a Budget to promote and sustain investment in that future. What we received was, unfortunately, what we feared: a Budget, the main--probably sole--purpose of which was to secure the Conservative party's future. The Budget reinforced our criticism of the Government's lamentable record on investment.
The Budget reveals that the Conservative party is beginning to resemble a clapped-out old car. Its steering has gone and it can only lurch to the right, the tax has run out and it has been burning oil, North sea oil, for years--
£128 billion worth of oil, to be exact. It is no wonder that the Tories cannot flog the old banger to the people of Britain. We can imagine the advertisement in the paper:
"16 years old; one not-too-careful lady owner; split down the middle; none of the seats is safe."
The Budget shows, yet again, a Government praising themselves for their aspirations and ignoring their record. How do we judge the worth of those aspirations? First, in the light of the Government's past record and secondly, in the light of their present intentions as revealed in the Budget. The Chancellor told us several times in his speech that he wanted to make Britain the enterprise centre of Europe. This week, the Government's efforts to promote enterprise, of which the Secretary of State has just been bragging, have produced some interesting effects. I think that we would all agree that it takes enterprise and flair to run out of water in Yorkshire. It takes unbelievable acumen to be involved in a business that supplies only one product, to fail to provide that product and still to increase profits by 50 per cent. Is that what the Government mean by "the enterprise economy"?
That is not, of course, the only example of the Government's record on enterprise. The National Engineering Laboratory was recently privatised. What did the sale raise to help fund the Government's programme?
It appears to have raised less than nothing--to be precise, minus £1.5 million. Far from raising money from that sale, the Government appear to have paid someone to take the NEL away.
Another money loser, as well as a vote loser, is the privatisation of Railtrack. It now appears that Railtrack, with assets estimated at £6 billion, might be sold for as little as £1.5 billion--£1 billion less than was anticipated--in the rush to get it on to the stock exchange by April 1996, a rush that almost certainly has far more to do with the need for it to contribute to the Government's accounts than with sound business management of the sale.
A recent analysis of Railtrack's accounts by the Independent suggests that the company may have set aside more than £1 billion from its investment budget to repay debt and boost the balance sheet before privatisation--yet more evidence of the Government's failure on investment, to put alongside the use of £1 billion of public money to meet the costs of privatisation, money which could have been used for investment.
Then there is the privatisation of the nuclear power stations. Some disquiet has already been expressed about the general safety aspects and implications of that privatisation, and about whether the timetable might be somewhat tight, being driven by the Government's need for funds rather than the public interest. Now, that already tight timetable is rumoured to have been further curtailed because Railtrack's privatisation will not raise the sums anticipated, thus creating fresh doubts about safety.
That is probably also the privatisation that most evidently blows out of the water the Government's claim to be, and to be uniquely, the party that understands about how business should work, because that is the privatisation in which, most evidently, the Government are selling the assets and keeping the liabilities. It also blows out of the water their claim to be good stewards on behalf of the British people, because those are liabilities that, through their electricity bills, people have already paid to cover. Thanks to the Government's business acumen, we shall end up paying, not once, not even twice, but three times.
Before the original privatisation, the Central Electricity Generating Board held assets that more than offset its liabilities.
Mr. Michael Stern (Bristol, North-West):
Will the right hon. Lady give way?
Mrs. Beckett:
Not at the moment.
However, when those assets were sold, the money was used to contribute to tax cuts and Nuclear Electric was left with £10 billion of unsecured liabilities. The non-fossil fuel levy was invented entirely--
Mr. Stern:
Will the right hon. Lady give way?
Mrs. Beckett:
Not at the moment. I am right in the middle of an argument. I know that the hon. Gentleman would not wish to interrupt it. The non-fossil fuel levy was invented entirely to cover those liabilities, again at the electricity customer's expense. It was in effect another tax. Nuclear Electric chose to invest much of the income from that tax, saying that it needed to ensure that it had future cash flow and assets to cover those liabilities. Those assets are now, in turn, to be sold again and the cash again used as a contribution to, and justification for, tax cuts, leaving the Magnox company once more with the unsecured liabilities.
Customers will have paid three times: first, through the earlier price levels to build up CEGB assets, secondly, through the non-fossil fuel levy used to rebuild them after privatisation and thirdly, to cover the liabilities that the Government said that those assets were twice supposed to meet.
Mr. Stern:
The right hon. Lady has summarised the letter that many of us received from power unions to good effect. May I remind her, however, that when the Select Committee on Energy reported on exactly the matters to
Mrs. Beckett:
I understand that the Select Committee continues to examine those matters. I take the hon. Gentleman's point when he says that he would argue that the assets of the CEGB would not wholly have covered those liabilities, although I believe that, as it is so difficult to calculate, it is hard to say whether that is wholly true. However, that does not alter at all--as I believe that the hon. Gentleman conceded--my basic argument that the CEGB did have assets that would have contributed towards meeting those liabilities, and those assets, like the ones that replaced them, have been destroyed by the Government, leaving the liabilities in place. I repeat the main point of those observations, which is that that is a clear sign of what we should think of the Government's business acumen.
However, the Government's appalling record in protecting and advancing the interests of the people is, in its own way, wonderfully consistent. Alone among the G7 countries, alone in Europe, the Conservatives formed the Government who had the windfall benefits of North sea oil--benefits that they used to cover the consequences and costs of their failure and incompetence.
I listened today to the President of the Board of Trade going on about the Government's investment record, as Conservatives so often do--usually not very accurately, but never mind--and comparing it with the investment record of the last Labour Government, which was, of course, hit by a fourfold or fivefold increase in the price of oil, something that the present Government have not yet sustained. What I never hear the Government mention, and what the President of the Board of Trade slid over today, is the fact that the Conservatives have had benefits worth £128 billion at today's prices from the North sea alone. That is the equivalent of about £22 million a day for every single day of the 16 years that the Conservatives have been in office.
In addition, the Conservatives have had, and squandered, the proceeds of privatisation--what the late Harold Macmillan called "selling the family silver"--
£80 billion in today's prices. That is the equivalent of a further £13 million a day for every single day of the 16 years that they have been in office. The Conservatives have had £35 million a day for every day that they have been in power for 16 years; £35 million a day that no British Government will ever have again because they have squandered it; £35 million a day that they could have invested in Britain's future if, for 16 years, they had not put the future of the Conservative party first.
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