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Mr. Prescott: That is a proper question, and I shall deal with it at the appropriate time. The hon. Gentleman has told us his opinion on such matters, but I remind him that he led the campaign to stop taxation of share options. Should the Chancellor, in his Budget--he will not tell us anything about it today--introduce a capital gains tax, people with share options will enjoy an even greater windfall than they have so far. I do not know whether the hon. Member for Dover (Mr. Shaw) would support that.
Today, we have seen the Deputy Prime Minister weeping crocodile tears for taxpayers, pensioners and consumers. This Government profess to have concern for the taxpayer, but are they not the Government who imposed 22 new taxes on the taxpayer? They profess to have concern for the pensioner, but are they not the Government who broke the link between pensions and earnings to fund tax cuts for the better-off? They also profess to have concern for the consumer, but are they not the same Government who slapped value added tax on to domestic fuel consumers, and penalised consumers--especially many pensioners--who cannot afford the heating bills imposed by the Government?
The Deputy Prime Minister must know that that value added tax increased fuel bills by £3 billion in three years. Are they not the same Government, and the same Deputy Prime Minister, who imposed the fossil fuel levy, which
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We have heard a great deal from the Deputy Prime Minister about shareholders and pension funds, of which he knows a great deal because of his business background. Was he thinking about shareholders when he encouraged firms to delay paying debts, which is the main cause of bankruptcy for small firms in enterprise Britain?
I recall when the Deputy Prime Minister sat on the Treasury Bench as a Tory Transport Minister, in 1970, when I was first elected as a Member of Parliament. I recall the debate that we had on the Mersey docks and harbour board, and I am sure that he, too, remembers it well. We were dealing with a statutory trust, which had statutory trustees. All the pensioners who invested in the trust thought that they had Government bonds, which were as safe as the Government. The Deputy Prime Minister, who was then a Minister, belonged to a Government who slashed the price of those bonds and the value of that trust's assets by one third. That action affected pensioners, and I protested about it to a Government who were supposedly concerned about pensioners and shareholders, but who imposed that tax on those pensioners and that trust fund.
I shall give the Deputy Prime Minister another example. He has been a Member of Parliament for a long time, and I cannot simply sit here and listen to him tell us how much he feels for shareholders and pensioners. Does he remember the nationalisation of the shipbuilding industry, when he was an Opposition transport spokesman, protesting about our formula for compensation? No doubt he will remember that. He said that the Labour Government's terms for compensation to shareholders were unfair. Day after day, he protested about those terms in the House. But after he became the Minister with responsibility for dealing with compensation claims, he rejected that stand and endorsed Labour's settlement for shareholders. It was simple hypocrisy.
The Deputy Prime Minister:
The very reason why we could not restore the legitimate rights of the shareholders was that there had been so many transfers of ownership after nationalisation and before we came to power. It is precisely the same story here. There is absolutely no justice in penalising people who have bought shares at today's value because of mythical accusations of what happened yesterday.
Mr. Prescott:
It sounds like another broken promise to me. The Conservatives promised one thing in opposition, and they delivered something else when they were in government. But the right hon. Gentleman should not take my word on it; shortly after the event, the editorial in The Times--I do not think that it is a Labour newspaper--judged that
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Let us come more up to date--to Tuesday 7 March 1995. The right hon. Gentleman claims to be concerned about shareholders. What about the £4 billion wiped off the market value of electricity companies in one day because the regulator, appointed by the Government, got his sums wrong on the formula?
I was particularly surprised that the right hon. Gentleman dared to mention pension funds, when he belongs to a Government who spent most of their time raiding the pension funds of most of the industries that they privatised. Hon. Members do not have to take my word for that--the Government were condemned by the pensions ombudsman for it. He took the view that a £200 million surplus had been taken out of the National Bus Company pension fund. He arrived at the judgment that the removal of the surplus was a breach of trust. The Conservatives raided the pension funds, but they have the audacity to come here and talk about a windfall levy on pension funds.
A common thread runs through all those incidents--the Deputy Prime Minister was in the Government on each occasion, usually pretty close to the source of the crime, intervening before breakfast, intervening before dinner and intervening before tea. Never did he act in the interests of the consumer, the pensioner, the taxpayer or the public. That is hypocrisy.
The Chancellor of the Exchequer (Mr. Kenneth Clarke):
May I take the deputy leader of the Labour party away from his memoirs and bring him back to the windfall tax? Can he explain why he is not able to say whether the tax will apply to British Telecom?
Mr. Prescott:
It is very interesting for the Chancellor to break his purdah and come to the Dispatch Box to ask that. I have some questions for him. Will he abolish capital gains tax? Will he reduce income tax?
Mr. Clarke:
I shall answer all questions about my Budget next Tuesday. Will it take the right hon. Gentleman until next Tuesday to answer my question? Why is his party unable to say whether the tax will apply to British Telecom? He has had four years to think of that detail, as he describes it.
Mr. Prescott:
I shall give the same answer. We shall give all the details in the first Budget of a Labour Government.
Let me say something else in response. All the Deputy Prime Minister's questions about to whom the levy will apply, what the levy will be and how we will do it are proper questions, no doubt about it, but when the bankers' levy or--what was it?--fiscal contribution was announced in the Budget, Conservative Members were whipped through the Lobbies without being told any of those details. They were told that the details would be in the legislation when it came before the House. The measure did not apply to every bank, as the Chancellor knows. People were asking which bodies would pay and which would not. The then Chancellor replied, "We will tell you when we bring the Bill to Committee."
The Prime Minister said today that he wanted answers to those questions. He was a junior Whip in 1981, driving Conservative Members through the Lobbies with no
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Let us stay with the realities. The windfall levy is not an original idea, I confess. It is not even particularly a Labour idea. It is a Tory idea. They did it to the banks. In 1981, the Conservative Government applied a windfall tax on the clearing banks that had made excess profits. In his 1981 Budget speech, the then Chancellor Geoffrey Howe made his position clear:
We have given four years' notice of the principle of the tax. The Conservatives gave no notice in their election manifesto. Unlike the Tories, we have given industry plenty of warning. Even the shareholders and the pension funds have known since 1992 of the possibility of the windfall tax and its implementation. They have no doubt taken it into account when judging their earnings.
Mr. Rupert Allason (Torbay):
Will the right hon. Gentleman give way?
Mr. Prescott:
No. I give way only to full-time Members.
The shadow Chancellor has made our point clearly. I do not know where the chairman of the Conservative party--the other half of the double act with the Deputy Prime Minister--is today, but on Monday he produced a document to try to whip up fear about the windfall levy. It was based on the remarkable assumption that the whole cost of the levy would be passed on to the customers. That was his assumption for the effects on jobs and prices; in other words, he assumed that there were no excess profits in the privatised utilities. I know of nobody who has come to that conclusion, except the chairman of propaganda, the right hon. Member for Peterborough (Dr. Mawhinney), if I can say that about him--sorry.
"their treatment leaves a stain on this government, as on its predecessors, and on the reputation of those ministers (Mr. King, Mr. Heseltine) who made so much political noise and so many implicit promises at the time but who, when they enjoyed power, found it expedient to do nothing."
That was not the Labour party; it was the editorial in The Times.
"Indeed, bank profits in recent years have increased sharply, both absolutely and by contrast with the experiences of most other businesses . . .
Just put the words "public utilities" in that quotation and the justification for the windfall levy has been made by the former Chancellor.
Certainly the contrast with the sharply reduced profits of industrial companies is, if anything, more striking. In present difficult circumstances, I cannot avoid the conclusion that I should require the banks to make a special fiscal contribution."--[Official Report, 10 March 1981; Vol. 1000, c. 772-73.]
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