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House of Commons
Thursday 28 November 1996
The House met at half-past Two o'clock
PRAYERS
[Madam Speaker in the Chair]
MESSAGE FROM THE QUEEN
Double Taxation Relief
The Vice-Chamberlain of the Household reported Her Majesty's Answer to the Address, as follows:
I have received your Address praying that the Double Taxation Relief (Taxes on Income) (Latvia) Order 1996, the Double Taxation Relief (Taxes on Income) (Denmark) Order 1996, the Double Taxation Relief (Taxes on Income) (Finland) Order 1996, the Double Taxation Relief (Taxes on Income) (China) Order 1996 and the Double Taxation Relief (Taxes on Income) (Republic of Korea) Order 1996 be made in the form of the drafts laid before your House.
I will comply with your request.
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Endangered Species and Products
1. Mr. Tony Banks: To ask the Chancellor of the Exchequer if he will give details of seizures made by Her Majesty's Customs and Excise of endangered species and products during the last 12 months. [4856]
The Exchequer Secretary to the Treasury (Mr. Phillip Oppenheim): In the financial year from 1 April 1995 to 31 March 1996, Her Majesty's Customs and Excise seized 4,374 live animals, 12,178 parts of derivatives of endangered animals species and 2,748 plants. In the first half of the current financial year, Customs and Excise has seized 20,936 live animals, 4,446 parts of derivatives and 89 plants. The dramatic increase in the live animal figure is explained by two individual seizures of 10,000 medicinal leeches.
Mr. Banks: Those are terrible figures, although the whole House will congratulate Customs and Excise on its vigilance in seizing the items. I realise, of course, that the Minister is something of an endangered species himself, but does he agree that those who trade and traffic in endangered species are among the worst criminals on earth? They are even worse than drug traffickers, because their vile trade threatens whole species. What additional resources will the Minister make available to Customs and Excise? What particular support has he given to Europewide initiatives? Is there something we can do about the appallingly low level of fine that is imposed on traffickers who say that they did not realise that what they brought in was an endangered species? Surely we must do far more.
Mr. Oppenheim: I agree with many of the sentiments that the hon. Gentleman expresses. I personally consider the illegal trade in endangered species to be particularly horrible. Its detection and stamping out are among the most crucial and important of the roles of Customs and Excise.
In response to the other part of the hon. Gentleman's question, he may say that Tory Members of Parliament with majorities such as mine are an endangered species, but so apparently is the species known as socialist red in tooth and claw, which is how he used to like to characterise himself. However, I see that his new habitat is the director's box at Stamford Bridge: perhaps he has come over all aspirational and has sold out to new Labour's mobile phoneys. Either way, we endangered species should stick together. I take his comments very seriously and I entirely agree with him.
Unemployment
2. Mr. Congdon: To ask the Chancellor of the Exchequer what assessment he has made of the factors, with special reference to fiscal and monetary factors, which have contributed to the United Kingdom's fall in unemployment since its peak. [4857]
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The Chancellor of the Exchequer (Mr. Kenneth Clarke): Sound public finances, low inflation and low interest rates have helped unemployment to fall to its lowest rate for more than five and a half years. My Budget will ensure that it continues to fall.
Mr. Congdon: Does my right hon. and learned Friend agree that our success in reducing unemployment is in sharp contrast to the record of France and Germany? Does that not show conclusively that we would be foolish to sign up voluntarily to the social chapter, which would impose additional costs on companies, and that we should continue to resist any attempt by our European partners to impose their sorts of social costs on Britain, whether by the front door or the back door?
Mr. Clarke: I agree entirely. Even when the other continental countries achieve better rates of economic growth, their experience tends to be that that growth does not create jobs as it does in this country. That is because they are over-regulated, they have inflexible labour markets and the costs of employment are far too high. It is therefore extremely important that we should repudiate the social chapter. That sentiment is shared by large numbers of German, French, Dutch and other industrialists. It is quite extraordinary that the British Labour party continues to advocate a turn towards that approach to employment, when the business community in the rest of the continent is hoping to get away from it.
Mr. Malcolm Bruce: In view of the need to keep down unemployment and sustain that reduction, is the Chancellor prepared to contemplate an increase in interest rates, if that is recommended by the Governor of the Bank of England at their next meeting? How does he think the unemployed and those on low incomes are helped by the continuing increase in indirect taxes, given that they do not benefit from the reduction in direct taxation?
Mr. Clarke: First, interest rates sometimes go down and sometimes go up. I shall set interest rates at whatever level is necessary to achieve the inflation target, which is important to keep our present healthy recovery on a sustained course for many years to come.
On the hon. Gentleman's second point, one of the most significant changes that I have made in the Budget is to raise the thresholds for income tax, which measures have taken about 400,000 people out of tax altogether since the last election.
Mr. Evennett:
Will my right hon. and learned Friend confirm that low inflation is absolutely essential for future economic prosperity and that it is only Conservative Members who believe in low inflation, because high inflation destroys jobs and destroys people's incomes?
Mr. Clarke:
We believe in it, we are delivering it and the present experience of living in a low-inflation economy is the best that the British people have had for 50 years. To put that at risk now by going back to Labour Governments--who habitually and frequently had inflation rates going into double figures during their terms of office--would be a disaster for this country.
Mr. Milburn:
Is not the reason why the Chancellor has put up taxes 22 times since the last general election that
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Mr. Clarke:
That is a ridiculous choice of figures to give as the background to a Budget that stimulates further the expected rise in living standards of the ordinary people of this country because the economy is doing so well and because we have returned to our tax-cutting agenda and lowered income tax. That £2,000 figure is apparently some cumulative, rolled-up calculation of the difference between tax paid and what tax would have been if it had not been indexed, and it also takes account of the fact that earnings are going up.
What is happening in this country is that more people are working, more people are unemployed--[Interruption.] If the Opposition believe that, the figures get even sillier. More people are working, fewer people are unemployed, they are earning more and their earnings are worth more. The Labour party is then astonished to find that some people are therefore paying more tax. They are paying more tax because they are better off--their earnings are higher and the average family is £100 a week better off since 1979.
Mr. Duncan Smith:
Does my right hon. and learned Friend agree that it is quite ridiculous that Spain, whose natural non-wage costs should be low because of its historical position, now finds that its non-wage costs and the overall cost of employing a worker are almost as high as those of Germany, even though Spanish productivity is nowhere near as high? Does that not demonstrate that the policies that Spain followed under previous socialist governments are exactly what that lot over there would have done?
Mr. Clarke:
I do not think I would upset many of my Spanish friends--I am very fond of Spain--by saying that the Spanish have one of the most inflexible and over-regulated labour markets in western Europe and they suffer for it. I believe that the rate of youth unemployment in Spain is more than 30 per cent., which is appalling. More than 30 per cent. of the Spanish work force are on short-term contracts, trying to avoid certain labour regulations that go beyond even the social chapter, which itself causes great damage to employment prospects in Spain, as it does across the rest of the continent.
3. Mr. Barry Jones:
To ask the Chancellor of the Exchequer if he will make a statement about his fiscal proposals to assist United Kingdom manufacturing industry. [4858]
The Chief Secretary to the Treasury (Mr. William Waldegrave):
The Government's economic policies provide the environment for a healthy and successful manufacturing sector.
Mr. Jones:
Does the right hon. Gentleman accept that the strengthening pound is posing very real problems for Britain's export industry? Does he agree that, for example, British Steel, which is one of the leanest and
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Mr. Waldegrave:
As the House knows, the Government do not maintain an exchange rate target. I agree with the hon. Gentleman that the privatised British Steel's export performance is marvellous--up by about 400 per cent. since it was denationalised--and it is a fine company. We do not maintain a target for the exchange rate and do not intend to do so.
Mr. Wilkinson:
Does my right hon. Friend agree that the extremely positive measures that Her Majesty's Government have taken in the Budget--for example, reducing corporation tax for small companies to 23p in the pound, in line with the standard rate of income tax, and reforming the uniform business rate--are immensely helpful, as small companies have to expand, by virtue of their retained profits, and those retained profits should be healthier by virtue of Her Majesty's Government's measures?
Mr. Waldegrave:
My hon. Friend is right that the measures in the Budget, and the climate for business maintained and supported by the Budget, are extremely good for small business. That is why the welcome given to it, in resounding terms, by the Forum for Private Business was accurate. It said that this was
Mr. Grocott:
Can the Chief Secretary confirm that the number of jobs in manufacturing industry has fallen terrifyingly since the Conservative party came to power in 1979? Can he explain to the House whom he blames for that?
Mr. Waldegrave:
What matters, surely, is manufacturing output, which fell under Labour. This country has had a remarkable turnaround in manufacturing productivity since 1979, and we have now outpaced Germany and France. That is the key figure for the future of British manufacturing industry, and it is why, for example, Britain is Europe's biggest exporter of televisions and microchips, and of other products of other industries out of which we had been driven when Labour governed this country.
"The best budget in a decade for owner-managed firms."
The same is true for other small firms, which have the benefit of the action on business rates and the benefit of the lower corporation tax. My hon. Friend was entirely right in what he said.
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