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Mr. Purchase: It is fantasy.

Mr. Bruce: Not so. It is in fact a highly focused, costed programme, leading to a fully costed manifesto. Front

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Benchers of the two old parties are attempting to persuade the British people that gravity can be defied--that it is possible to reduce inflation and taxation and increase public spending. The sums of course do not add up; they would require rates of growth without inflation which no Government, Labour or Conservative, have every achieved.

If greater investment is needed in education, as we believe it is, it has to be paid for from honest sources of taxation which can be identified and which people can understand: such as a penny on the standard rate of income tax. A windfall tax would not deliver a credible programme or finance a Government for a full term. It would create so many confusions and uncertainties and hurt so many people that I believe the Labour party will live to regret it.

6.29 pm

Mr. David Shaw (Dover): The country needs answers. We have not heard any answers from the Labour party today. We have not heard how excess profits or obscene profits are to be defined, but Labour tells us that people out there are earning them. There are 5 million business owners in Britain, who will be frightened stiff by today's debate. Labour will tax entrepreneurs, those with initiative and those who create jobs.

How on earth do Labour Members expect a windfall tax to create jobs? They say that they will create new training schemes, but when has a tax created jobs through new training schemes? Where in the solar system has there been a tax that created new, permanent jobs, especially in the private sector?

Taxes do not build profits. Taxes do not build products or provide services. Taxes do not create businesses. In my business career, I have been involved in 2,000 jobs being sustained or created. I have never created or sustained any of those jobs through taxation. Jobs are created by investing the profits of a business, not through taxation.

I regret that time does not permit me to debate the matter fully. Labour must provide many answers. I challenge the Opposition spokesman to define "excess profits" to the House.

6.30 pm

Mr. Alistair Darling (Edinburgh, Central): I do not know about the rest of the solar system, but I believe that the Government's own training programme, such as it is, is funded out of taxation. Like almost everything else that the hon. Member for Dover (Mr. Shaw) has ever said in the Chamber, his assertion is wide of the mark.

I am glad that we have had this debate, and that the Government have chosen to debate our policies in their time. For a party that keeps telling itself that there is no prospect of a change of Government, the Tories seem to be rather concerned about it.

The hon. Member for North-West Surrey(Sir M. Grylls) said about half a dozen times that he was sure there would be no change of Government, but just in case there was, he should raise various matters. Conservative Members protest too much. They know full well that people have had enough of them. In their desperation they know that their only chance now is to throw mud at us and hope that some of it sticks.

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For the second time in one week, a Tory bombshell has blown up in their own hands. Yesterday they attempted to discredit us by making wild allegations about pledges that have never been made. Each one of the 89 was refuted quickly and shown to be nonsense.

Today we were told to expect great things from the Deputy Prime Minister, but that was yet another damp squib. He failed to rise to the occasion. I read in the Financial Times today that there is a new Tory campaign against the windfall tax which is to be led in part by the Deputy Prime Minister. Anyone who was thinking of joining and paying good money--good money, no doubt, from the profits of the privatised utilities--for that political campaign will have listened to what the Tories said and decided that they had better save their money. Whatever else happens, the Tory party will not be able to do much for them.

It is interesting that the Tories are setting up a campaign against the Labour party. Many people in the boardrooms and privatised utilities will think long and hard about joining a Conservative party political campaign to campaign against anything in the coming general election. Most of them will have enough sense to stay out of it and to leave the Tory party to flounder in its own desperation.

Despite the fact that the Government tell us that there is not enough parliamentary time to legislate on paedophiles or knife control, or for building societies legislation, or even to discuss Europe--one of the most crucial matters facing this Parliament and the next--they find time to discuss our policies in Government time. What an indictment of a Government who have had their day. After 18 years they are so desperate to cling to power that they spend Government time debating the Labour party's policies.

We welcome that opportunity, not just because it allows us to restate the value of the windfall tax, but because it draws attention to another problem facing the Government. The reason why they are not discussing Europe today is that they do not want to reveal the depth of the rift between the Chancellor of the Exchequer and the Euro-sceptics who make up an increasing proportion of the Conservative party.

It is a measure of the Government's desperation that they have chosen to side with the few who sit in the boardrooms of the privatised utilities against the many who have had to pay the 22 tax increases imposed by the Government, despite the fact that at the last election the Tories promised that they would not increase tax or national insurance and that they would not put VAT on gas and electricity. They did all that, yet they have the gall to attack us for our policies.

In the motion, the Tories have the temerity to refer to the "injustices" of our proposal. What do they know about injustice? What about the injustice of the one in five households in Britain where there is no one in work? Our proposal for a windfall tax is designed to fund a programme that will help young people and the long-term unemployed to get back to work. That is justice and, we believe, it makes good economic and social sense. That is why the tax is fully justified.

When we listen to the questions raised by Conservative Members during the debate, we recognise that the Tories are increasingly the political arm of the privatised utilities. It is a seamless garment, which we have seen today. We see it in the Financial Times article referring to a Tory

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Minister, a Tory Lord, a Tory media adviser, a privatised utility and a Tory campaign. Most people believe that any Government who embark on such behaviour have had their day, and the sooner they are out of office, the better for everyone.

Perhaps this is the first time that we have had a sponsored debate in this, the mother of Parliaments. Perhaps, like the weather forecast, the next debate will be sponsored by PowerGen. That is what the Government have reduced us to.

Unlike the Tories, we say what we intend to do and how we propose to fund it. As my right hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott), the deputy leader of the Labour party, made clear in his excellent speech, we will tell the people of Britain what we intend to do. We have said for four years that we intend to impose a windfall levy on the privatised utilities.

The Tories said nothing about their windfall tax on the banks in 1981--not a word.

Mr. Richards: Will the hon. Gentleman give way?

Mr. Darling: In a moment. The tax was sprung on the banks on the day that the then Chancellor introduced the measure. He could not say which banks or how it would work. Conservative Members say that the tax had to be imposed because the banks had made profits through no fault of their own. They should read the report of the Committee stage of that Bill on 12 May 1981, when the then Chief Secretary to the Treasury, now one of the European Commissioners, said that the fiscal requirement was necessary to achieve the public sector borrowing requirement. Is not that surprising? Does not history repeat itself? The Government were in deep debt in 1981 and they are in deep debt in 1996. After 18 years, it is the same story: the Tories put up taxes to pay for the debts that they have run up, because of the way in which they conduct the economy.

Mr. Richards: The right hon. Member for Kingston upon Hull, East (Mr. Prescott) referred several times to "excessive profits". Will the hon. Gentleman define that term for the benefit of hon. Members?

Mr. Darling: I am exceedingly glad that I gave way to the hon. Gentleman, as he brings me neatly to the next part of my speech. The entire Tory thesis is that there have been no excessive profits. That is what they have all said, time and again. However, no one outside the Tory party holds that view. Industry knows that excessive profits have been made. Analysts have made that point. SBC Warburg, which has no connection with the Labour party, said:

"The ability of most companies to cope with the windfall tax is once again demonstrated."

Every time there has been a takeover, commentators and analysts believe that the case has been made. I quote from The Daily Telegraph, which is also not exactly a Labour publication. It said:

"Each time an electricity company is taken over, Labour's proposals for a Windfall Tax on utilities gains a little more respectability."

Analysts and the privatised utilities admit that there have been excessive profits. The regulators have also encountered that problem: the electricity regulator fixed a

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price review only to discover that Northern Electric had found an extra £500 million to defend itself against the Telstar takeover. There is much evidence of excessive profits.

Such profits do not derive from the endeavours of those who run the companies--in many cases, they are the same people who were on the company boards before privatisation. It is interesting that often their first priority--Cedric Brown is a good example--is not to improve investment or to secure the company's future but to increase their salaries and grant themselves share options. The Government never condemned such behaviour.

The Conservatives say that a windfall tax would adversely affect investment. Let us look at what has happened. The Office of Water Services claimed that it required investment of £36 billion for the 1990s. In fact, the water companies have invested only £13.6 billion since privatisation and their current annual investment of £2.2 billion means that they will not meet the regulator's target. The idea that investment will somehow be affected by a windfall tax does not bear close examination.

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