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Mr. James Cran (Beverley): Before referring to the details of the Budget, I wish to say--in as non-partisan a way as I can--that I was rather disappointed by the speech of the hon. Member for Peckham (Ms Harman). I am not complaining about the fact that she made a vigorous speech, which she did, because the differences between the Opposition and the Government are sharp on the

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subject of social security, but she presented us with one of the most exaggerated cases that I have heard for a long time. I jotted down some of her words and phrases, such as "fractured society" and "breadline". She suggested that the Secretary of State is in the pocket of somebody. Many of us will look carefully at Hansard tomorrow to study that particular allegation, and the exaggeration of her case did not elevate her contribution to the debate in any way.

I strongly support the Budget, as I did last year's Budget. I was correct to do so then, Mr. Deputy Speaker, was I not? There were no giveaways in the Budget, despite all the speculation beforehand--particularly by the Opposition. It was a sensible Budget. There were tax cuts, but in no way, shape or form were they excessive. There were cuts in public spending and, my goodness, we needed them. We need more of them and, following this Budget, we will get them; but at the same time there was more money for the priority services such as the NHS, education and crime, as my hon. Friends--particularly my hon. Friend the Member for Erith and Crayford (Mr. Evennett)--have already mentioned.

All this, and inflation is under control. For me, that is a winning combination. This is the fifth year of economic growth, as was recognised by Opposition Members on Budget day. Opposition Back Benchers sat there with poker faces all afternoon. We heard nothing at all from them. That suggested a great deal. It would be expected that I would not think much of the speech of the Leader of the Opposition, but I have to say that it was very vigorous. However, the Leader of the Liberal Democrats, the right hon. Member for Yeovil (Mr. Ashdown)--who, presumably, is more impartial than me--called it an "attacking speech without content." That was absolutely right.

The Labour party is touchy and evasive about details, as my hon. Friends have exposed precisely this evening. In fact, Labour has no details of its economic policy. We were told that we would get the details of Labour's spending plans just after the Budget. Now, I understand that that announcement has been postponed until January next year. I venture to suggest that we will hear nothing about what Labour would spend in the unlikely event of its getting into government. An economic health warning is needed on the front of Labour's economic policy, and the electorate must beware.

The electorate are clearly alarmed already. I received a letter from the chief executive of Yorkshire Electricity, Malcolm Chatwin, on the windfall tax, about which we have heard one or two rather facile observations from Opposition Members. Opposition Members obviously have not received a similar letter--or are they just not quoting from it? Mr. Chatwin said that, for his company, the windfall tax would

"undermine our ability to sustain the current level of investment",

which seems very serious to me,

"increase prices to our customers in the longer term . . . reduce the dividend income for our shareholders"--

but the Opposition do not mind that--and

"reduce pensioners' income as many of our large shareholders are pension funds."

That is a fairly major privatised utility telling us what would happen if we were to have a windfall tax.

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Industrialists are not the only ones who are concerned. A number of my constituents have sent me Inland Revenue leaflet FAI 1979. I was sent it because leopards do not change their spots; Labour Members are taxers by nature and, just as they did it before, they will do it again. The leaflet sets out the 12 tax bands that the last Labour Government used to leach money out of other people's pockets--25 per cent., 30 per cent., 33 per cent., 40 per cent., 45 per cent., 50 per cent., 55 per cent., 60 per cent., 65 per cent., 70 per cent., 75 per cent. and 83 per cent. If Labour regains power, it will have as many different bands as it can get into the system to get as much money as possible out of electors' pockets. Frankly, Labour cannot help it.

On the back of the leaflet is the Labour party's old friend, the investment income surcharge. The Opposition do not like investment income--they did not then and they do not now. At that time, there was a 15 per cent. surcharge, and I would bet a lot of money--and I am a canny Scotsman--that that will be repeated next time, if there is a next time. An industrialist from Yorkshire Electricity and many of my constituents are becoming alarmed.

The Chancellor's decisions delighted me, as they did last year. First, I welcome--as did my hon. Friend the Member for Erith and Crayford--the 1p cut in the standard rate. It was not meant to be dramatic; it is a stage in the plan to reduce the rate to 20p in the pound. If I had my way, it would be somewhat lower. My right hon. and learned Friend was correct not to go the whole way and reduce tax by 2p, and he was absolutely correct to raise personal allowances and to widen the 20p band. He was also right to raise the threshold for 40 per cent. taxpayers--a much-misunderstood bunch of people who are currently being pursued by the Inland Revenue for more revenue.

I am also pleased about the movement on inheritance tax. It is, as I said last year, a shameful tax. Every year, the capital earned interest, it paid tax, and then the Chancellor gets the last cut out of it when the individual dies. I have never understood it, and I am delighted that the Prime Minister made the commitment that he did. It would be niggardly of me to say that I did not think that the Chancellor moved far enough this year; I must be grateful that there has been a considerable move over two years.

There are two prerequisites to cutting tax. The first is that a Government should spend less. In my view, all Governments spend too much, although Labour Governments spend a great deal more than Conservative ones. They try to do everything, and bend to every demand so that spending programmes grow like Topsy. That said, the Government must be commended not only for what they have done up to now to cut public expenditure, but for their commitment to cut it by £7 billion over the next three years.

I believe that it was my right hon. Friend the Chief Secretary who said on television about a year ago that public expenditure should be 40 per cent. or less of national income. That warmed my heart, and I was absolutely delighted to hear the Chancellor recommitting the Government to that aim. My right hon. Friend will understand when I say, "More effort, please" on the spending front. I dislike extending the tax base, because it merely encourages spending Ministers; with more money

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around, we get more public expenditure. I therefore say to my right hon. Friend, "Eight out of 10 up to now, but could do better."

The second prerequisite is control of borrowing. The trend has been downward for the past three years, and it has halved as a proportion of gross domestic product, but it will still be £26.5 billion this year and £19 billion next year. I cannot wait for the year 1999-2000 when, I am delighted to say, we will be in balance and will have eliminated that, in my view, excessive borrowing. If I may again address my remarks directly to my right hon. Friend the Chief Secretary, I merely say, "No slippage, please." That is what Conservative Members want.

My right hon. and learned Friend the Chancellor said that the Maastricht debt or deficit criteria would be met in 1997. That is marvellous, not because it will lead us to a single currency, but simply because it is good housekeeping. I commend the Chancellor, because he framed the Budget for British national self-interest. National self-interest did not die with Parliament's acceptance of the Maastricht treaty, and it did not die yesterday evening at 6.30; it is the concept that should govern the formulation of policy in this country. I want no repetition here of what is happening in France, whose economy is being skewed to reach a single currency, or in Italy, which is attempting to get into the exchange rate mechanism, which I have never liked.

Consideration of the single currency is best left until after the general election. Although I thought that the controversy over the stability pact, which spilled over into the Chamber, could have been better timed, I entirely agreed with what my right hon. and hon. Friends said about the pact's desirability or otherwise.

There is no ambiguity about my position on a single currency. I do not have to wait to take a decision: I am root and branch opposed to it for many economic reasons that I shall outline on another occasion, if I am called--which is not easy these days. For me, it is also a constitutional issue. If the single currency ever sees the light of day here, my response will be no surprise.

We cannot spend on everything, and it is clear that pennies are dropping in Treasuries throughout the globe. The Chancellor was absolutely correct to prioritise spending on health, crime and education. That will be welcomed in my constituency. On health, a problem is developing about emergency cases, which are increasing dramatically.

East Riding health authority wrote to me as follows:

"The main cause is the growth in activity and cost arising from an increase in the number of emergency cases which, if they continue as at present, will exceed the contracted level by a further 7 per cent., over and above the 7 per cent. increase last year. This compares with a national growth of 10 per cent. over 5 years."

We therefore have a problem, so I am delighted that the Chancellor is making available additional resources--£1.6 billion next year, I believe--for the national health service.

Perhaps I should say this not to the Chief Secretary but to someone else, but as he is here, I hope that he will hear me when I say that we in the East Riding need our slice of that £1.6 billion and that I shall be knocking on an awful lot of doors to get it. Of course, if the money were not there, I would have no opportunity to ask for my slice. I am delighted that I shall be able to ask for it.

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I am a fan of the private finance initiative, particularly in relation to the NHS. How could I be otherwise? There is no question about the value of yet another innovation by the Government. It is clearly working for Norfolk and Norwich, and the Chancellor spoke about the £200 million hospital that would be built, but we are not doing quite so well in East Riding.

Two schemes with a local hospital trust are bogged down because additional information is required, there have been rule changes throughout the period of discussion, and no decisions have been taken. One of the schemes has been on hold for a year, so I wish that the Chief Secretary would kick someone somewhere to make them understand that interest will be lost in the smaller schemes if we cannot learn quickly--I accept that we are on a learning curve--and get reasonably quick decisions.

I was also extremely pleased about the £50 million--I believe that that is the figure--for more capital spending on education. We have a problem in East Riding because of the poor fabric of some schools, and far too many temporary classrooms. I am almost tempted to say that more than £50 million is needed, but my logic prevents me from doing that, as I have been saying throughout my speech that we should cut spending, so I shall not fall into that trap, but merely ask for my slice.

Our economic policy is clearly working: the previous Budget worked, and this one is working. On 6 November 1996, that wonderful chronicle, the Hull Daily Mail, carried the headline, "Bouncing back from recession". It is a bit late, but a good headline none the less. The article says:

"Business in the area is bouncing back from recession, according to a key economic survey.


But while sales and orders continue to increase, the partners behind the report warn against overconfidence."

My goodness gracious me, when last did we have to be warned against over-confidence, especially in east Yorkshire? The senior partner of Price Waterhouse, who compiled the report, welcomed

"what he sees as evidence of long-term recovery."

If the Opposition heard that from the Chief Secretary or the Chancellor, they might be entitled not to believe it, but it came from an impartial witness. He, I and my constituents can see the recovery. My constituents are beginning to communicate the feel-good factor to me. I say well done to the Chief Secretary and the Chancellor. I give them nine out of 10; I am improving their score. We need more of the same in the next Budget.

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