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5.45 pm
Mr. David Hunt (Wirral, West): I congratulate my right hon. and learned Friend the Chancellor of the Exchequer on his Budget and the Bill. I applaud the leadership of my right hon. Friend the Chief Secretary in Committee, and I praise the speeches of my hon. Friend the Economic Secretary, my right hon. Friend the Paymaster General, and in particular, my hon. Friend the Financial Secretary. Committee proceedings, Report and Third Reading have been very good. The Finance Bill is impressive and will do much to sustain a non-inflationary period of growth that will underpin the creation of jobs by businesses and our reputation as the enterprise centre of Europe, which I applaud.
I thought that the speech of the hon. Member for Oxford, East (Mr. Smith) was very inadequate. I realise that he has so little to say. Indeed, in Committee we waited time after time to hear the Opposition's policies. We waited for an inflation target, a growth prediction, some form of alternative economic policy, but came there none. They have therefore been a rather irrelevant Opposition, but happy, smiling, very nice and courteous. I suppose that I cannot criticise them for their personalities and character, but really in politics one has to have a little more. The cosmetics are starting to crumbling and the make-up on new Labour and the Leader of the Opposition is melting.
I do not know whether, Mr. Deputy Speaker, you have had the chance to see the headline in today's edition of the Evening Standard. It says "Blair Hit by Two Revolts". The article says that the Leader of the Opposition
We can add a great deal to that. The Opposition are beginning to learn that they cannot just keep opposing and opposing. They have to have some alternative strategy. The Bill represents an agenda for the future creation of jobs.
When I stepped down from the Cabinet last year, I said that my prime objective was more and better jobs in my area of Wirral. Indeed, unemployment in my constituency fell from 3,215 in February 1993 to 2,947 this time last year, and the latest figures show a further fall to 2,776.
Over the last year, unemployment has fallen by 6 per cent. and over the past three years by 14 per cent., but it is still unacceptably high. The Finance Bill will create the right conditions for a continuing fall in unemployment.
Mr. Malcolm Bruce (Gordon):
I apologise to the Chief Secretary for not having been here at the start of the debate. The House will understand when I say that I was detained by dealing with the crisis in the beef industry which deeply affects my constituency. The right hon. Member for Wirral, West (Mr. Hunt) says that he wants to promote jobs. I have lost 100 jobs today and I have hundreds more hanging by a thread. Although I believe that we urgently need some definite policies from the Government, I shall not detain the House on that matter now.
The right hon. Member for Wirral, West said that,if one wished to oppose, one had to have an alternative strategy. The Liberal Democrats do not agree fundamentally with everything that the Government have done--quite the reverse. There are aspects of Government policy that we broadly support, but we have areas of disagreement. We have spelt them out and have said that we would prefer to promote a different strategy.
I point out, especially to the Chancellor of the Exchequer, that this Third Reading debate comes at a time when the strategy on which the Bill and the Budget are based has moved fundamentally against him. The situation is not as happy as the one that he set out at the time of the Budget. It appears, for example, that the borrowing outturn will be even higher and even more adverse than was originally forecast; the forecast itself was a big upsurge compared with the original forecast. Some of us had little belief that a policy based on a growth outturn of 3 per cent. was likely to deliver 3 per cent., and that likelihood is even less today.
It was interesting that the hon. Member for Oxford, East (Mr. Smith) said that the Labour party supported the 1p cut in income tax. I thought that Labour Members abstained on the issue; they now apparently wish that they had voted in favour of the cut. I remind the House that the Liberal Democrats voted against the cut and we do not apologise for having done so.
Mr. Andrew Smith:
Did the Liberal Democrats vote against the cut in Committee? If not, why not?
Mr. Bruce:
We did not because we had made our position clear on Second Reading. To have repeated votes when one knows the outcome wastes the time of Committees and of the House. The hon. Gentleman's intervention is rather silly.
We believed that money should be invested in education, and we were prepared to say what our priorities were; there was a perfectly legitimate political difference there. The Government have a different view and they have pursued a different strategy. Nevertheless, the simple economic justification for the 1p income tax cut looks even weaker now than we believed it was when it was introduced.
The Chancellor knows that much of my argument with him is a result of my belief that we need to get borrowing under control and that, if we have alternative priorities, we must put them within that framework. Even on the Government's economic analysis, a 1p cut in income tax was not justified at the time of the Budget and was driven by political and not economic reasons. I at least appreciate the fact that the Chancellor resisted deeper cuts, which would have left his Government more exposed and more embarrassed now.
The current crisis in the beef industry adds a further dimension which alters yet again the implications for borrowing and taxation. I do not blame the Government for not anticipating the crisis at the time of the Budget, but I hope that they will recognise that, if a revision of the Budget strategy is required in the national interest, both to ensure that consumers get the encouragement and reassurance they need and to ensure that the industry survives, a substantial amount will be needed to achieve that objective.
The Prime Minister said during Question Time today that the beef industry employs 650,000 people and has a turnover of £5 billion a year. Every day the Government delay getting the industry moving again, jobs are at risk. I said that I had lost 100 jobs today in my constituency. The companies have said that some of those jobs will not be re-created, but that some of them are lay-offs. However, hundreds more jobs hang by a thread, and that situation is repeated across the country. It is very important that the Government come up with a clear confidence-building package. If there are serious implications for the financial calculations on which the Budget has been based, the Government must be honest enough to say so; they will get support from the Liberal Democrats.
I hope that the Government will not stand firm for tax cuts at all costs, regardless of the requirements not only of education but of consumer safety and reconstruction of an industry. Governments can often be knocked off course. If this Government put tax cuts ahead of the deeper and wider national interest, they will reap the consequences, because people recognise that the crisis requires some definite action.
The Liberal Democrats have set out an alternative strategy. In Committee, we identified a number of concerns, especially the future of our whisky industry, the impact of the tax cuts on charities and problems for the disabled and small businesses. Regrettably, we did not get the reaction from Government that we would have wished, but at least the issues were aired. Those who looked at the voting record will see that we took a completely independent line and made our judgment on the individual issues. On a number of occasions, we voted with the Government, and on others we voted with the Labour party, on the merits of the argument.
I do not believe that on Third Reading the Bill has been improved by the background circumstances. I do not suggest that we should vote against it and I believe that
there is a lot in it that needs to be done. We have supported the Government, particularly in their wish to go ahead with self-assessment. I do not doubt for a minute that the Labour party thinks that it is on to something that is an alternative to the poll tax. A major change is bound to cause concern, disruption and confusion.
"was dealt a wounding double blow today when 50 backbench MPs defied him over a single currency and unions branded his flagship training scheme a 'nonsense'."
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