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8.16 pm
Mr. James Cran (Beverley): I thoroughly enjoyed the speech made by my right hon. Friend the President of the Board of Trade. Unlike the relatively few contributions of Opposition Members, it was factual. The speech made by the right hon. Member for Derby, South (Mrs. Beckett), who led for the Opposition, did not contain one fact. Of course, she attacked us--I do not complain about that-- but it would have been novel to hear just a little about what the Opposition propose to do to make up for what they consider that we have not done.
The right hon. Member for Derby, South also had a rattling good cheek in suggesting that the Government had arranged for so many statements to be made today to reduce the time for debate on the Budget. The irony was that, at that moment, there were hardly any faces to be seen on the Opposition Benches. Had the Government done as she suggested--of course, I do not believe for a minute that they did--then one would have to say, "Thank goodness" because we would have had precious few contributions from Opposition Members.
I was interested to hear what the Liberal Democrat spokesman had to say. He said that, on Budget day, he and his colleagues noticed how glum we--the Conservative
Members--were looking. That is odd, because we were looking at them and thinking how glum they were. I think that they realised that there might be a great deal more in the Budget than they were able to take in on the day.
Mr. Spring:
Does my hon. Friend recall that the Liberal Democrats looked most glum after the speech made by the right hon. Member for Yeovil (Mr. Ashdown)?
Mr. Cran:
My hon. Friend makes a telling intervention.
I support the Budget. As I look back at various Budgets, but without mentioning one in particular, I would have to admit that I found it less easy to say that I supported some of them, but I certainly support this one. Like many of my colleagues, I have been astonished by the publicity surrounding the Budget, which implies that Conservative Members are opposed to it. That is not the case. If I achieve nothing else, I should like to say that I and many of my colleagues support the Budget. Opposition Members may be worried that it is a two-stage exercise. The Chancellor would not say that--he would say that it is merely the latest Budget, and I understand that. However, I expect it to be a two-stage exercise and I am afraid that Opposition Members will have to wait for another Budget in November 1996. The smiles on the faces of Opposition Members may be fewer then than they appear to be now.
My first reason for being enthusiastic about the Budget is that it is fiscally sound. It introduces tax cuts, but there are also cuts in expenditure. I might have wanted rather more in the way of tax cuts than were introduced and I might have wanted a few more cuts in public expenditure, but that is a matter of judgment. Whatever else might be said, there is no doubt that the Budget has impressed the marketplace. That fact was not taken into account by any of the contributions that I have heard from Opposition Members.
I like the fact that there are no gimmicks in the Budget. What is a gimmick? We can all look up the word in the dictionary, but one gimmick that we kept on hearing about from Opposition spokesmen was kick-starting the housing market. I am delighted that the Chancellor did no such thing. There are low interest rates and price discounting in the housing market, which is enough to get the market moving eventually. I invite all Opposition Members to come up to Beverley, where the housing market is beginning to move. I have the impression that that is happening in other parts of the country--therefore, there is no need for gimmicks.
I am also delighted that the Government have resumed the tax-cutting propensity--that is what Conservative Governments are rightly concerned about in the medium and long term. I am delighted at that resumption because I have always believed, and I expect I always will, that the state--even under prudent Conservative Governments-- has spent too much of other people's money. That was brought home to me by the social security budget which, I well remember, stood at £37 billion when I was first elected to Parliament in 1987 and next year will be about £94 billion or £95 billion. Conservative Governments have done much to add to that total, which is why I am supportive of the present Government's efforts to examine critically what the state spends and what the individual spends. I would like that debate to be encouraged among not only
Conservative Members, but Opposition Members. I do not think, however, that it is taking place among Opposition Members.
I like the Budget for another reason which was never mentioned by Opposition spokesmen--it encourages business, industry and the City. Undoubtedly, the reaction to the Budget from business generally has been better than the right hon. Member for Derby, South was prepared to admit. She merely took the tepid view of the Confederation of British Industry--an organisation that I admire less and less, even though I was once employed by it. One has to look less at what the CBI says and more at what individual business men say, which gives a different picture. Business men have given the Budget a much more enthusiastic response and if I have time I shall tell the House what one or two business men have said.
Finally, I am enthusiastic about the Budget because it encourages savers. I am not only a Scotsman but an Aberdonian and we are famous for our capacity to save money, which I do. I am delighted that the Government are now giving the community another impetus to save because the savings ratio of late has not been nearly good enough, although it is improving. Many within the community will wake up to the fact that there have been reductions in tax for those of us who save money in building societies, banks or wherever. Moreover, I note that even my hon. Friends are forecasting cuts in the interest rate. Of course, the business community wants interest rate cuts, but we must remember that what benefits industry does not benefit the saver. I shall, however, leave the Treasury team to deal with that conundrum.
Direct taxation is thankfully resuming its downward trend. The Labour party--not particularly tonight, but on radio, television and in the newspapers--states that it is now the low-tax party. My constituents in Beverley should treat that statement with extreme caution. My neighbour, the deputy leader of the Labour party, the right hon. Member for Kingston upon Hull, East (Mr. Prescott), said that such promises as the Labour party would make-- we do not have the details--would be for one year only. The electors of Beverley and elsewhere had better remember that.
In addition, Opposition Members in private also tell me, "Well, you will see what happens when the boot is on the other foot." We all know what that means: the Opposition will enjoy the ability to take more money out of people's pockets. I warn the taxpayers of this country to look out. The Labour party would introduce more bands for direct tax because that would take out more money from other people's pockets. The upper rate band would undoubtedly be increased to between 50 and 60 per cent., if not more.
The other issue that I never hear mentioned by Opposition Members, except in private, is that of unearned income. I do not have any unearned income; I have had to earn all my capital--a distinction not made by the Opposition. Under a Labour Government, unearned income will undoubtedly be plundered because they will need the cash.
I am pleased about what the Government have done in relation to inheritance tax. I was delighted last June to hear my right hon. Friend the Prime Minister make a commitment to the Conservative party that inheritance tax should be progressively abolished. It is a monstrous tax.
I caution Opposition Members to look at how many people in the community have to pay inheritance tax. In some cases, tax has been paid throughout the lifetime of the capital and the Treasury and the Government take the final cut on one's deathbed. That is simply monstrous and I am delighted to hear what my Government intend to do. I welcome the increase of the exempt amount to £200,000 and I look forward to the abolition of the tax.
I have mentioned reducing tax on savings. Clearly, many people have not cottoned on to the fact that they will retain more of the interest than they receive on their accounts. I applaud that measure.
I was pleased that the Budget contained very few references to VAT which, as we know, is an unpopular tax. It is not as bad when it is levied on luxuries-- although I never know what a luxury is these days--but it is a different matter when it is levied on essentials. It is, however, far too easy to raise VAT. It encourages spenders in Government. We must have one or two spenders on the Conservative Benches--although not too many--but there are certainly a great many on the Opposition Benches.
I warn the community again. A tax that is too easy to raise encourages spending in Government Departments. I say to my Conservative colleagues that we must be careful and recognise the public resistance to that tax. I am resistant to VAT. I have always bought new cars until now, but I have no intention of doing so in the future, as I am not prepared to pay the valued added tax on a new car. I may even reach the stage of buying second-hand suits, if I have to, to avoid that tax. However, I am idiosyncratic on that subject and I expect that the House will bear with me.
On long-term care, I am delighted that my Government have recognised what were undoubtedly the beginnings of a minor scandal, which occurred as a result of the developments in community care. I am pleased that the first step has been taken. I do not regard the first step as being especially generous, but it is a move in the right direction. I look forward to quick initiatives that will come out of my Government to ensure that we do not have the position that exists in my constituency--the same can be said of others--where people find it necessary to sell houses to pay for the fees for long-term care that they receive alongside some people who did not save, although some people were simply unfortunate and could not save. I fail to understand why I, and many of my constituents, should forgo consumption to pay for that care whereas others do not.
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