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9.39 pm
The Economic Secretary to the Treasury (Mrs. Angela Knight): I must tell the hon. Member for North Warwickshire (Mr. O'Brien) that that was a dreadful rant. My hon. Friends will have noticed that the hon. Gentleman shouted that all our taxes are too high, but he had another line when he dropped his voice lower and, in hushed tones, he intoned that spending was too low and benefits were too low. Well, one or other is bogus and the hon. Gentleman and his party must learn to be honest. The Opposition must learn to say what it is that they mean to do and, if they are so frightened that they are not prepared to cost their pledges, I can assure him and his colleagues that we will cost them and ensure that everybody knows.
I am grateful to my hon. Friends for their excellent contributions in this debate. I shall say a few words to them in reverse order. My hon. Friend the Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) made some thoughtful comments on pensions and I have read his booklet with interest. My hon. Friend the Member for Sutton and Cheam (Lady Olga Maitland) made some useful remarks on the family and her concerns for the family are well known. I wish to apologise to my hon. Friend the Member for Beverley (Mr. Cran) for missing his speech, but I was speaking to my children on the telephone at the time. I watched him on the television and his speech was, as normal, entertaining. I was pleased to hear that the Budget improved during his remarks from eight out of 10 to nine out of 10 by the end. My hon. Friend the Member for Erith and Crayford (Mr. Evennett) made his normal vigorous speech and I thank him for it. My hon. Friend the Member for Colchester, North (Mr. Jenkin) gave his customary intellectual and, indeed, probing contribution, as did my hon. Friend the Member for Luton, South (Sir G. Bright).
My right hon. Friend the Member for Worthing (Sir T. Higgins) said that this was his last aria in the Budget debate. I believe that nothing is over until the fat lady sings, but I am not sure that that expression is appropriate to our slim-line colleague. My right hon. Friend asked me why there were so many forecasts for such a long way ahead in the Red Book and he referred me to table 4A.9. The answer that I have found out for him is that table 4A.9 is not a forecast, it is a projection. The difference between a projection and a forecast is apparently not only semantics. Projections are broader and more illustrative, thus output and inflation projections are the same for 1999-2000, 2000-2001 and 2001-2002. The reality of the answer is probably that the Treasury do it that way because it has always done it that way. I suggest to my right hon. Friend that perhaps he should come up and see me some time, to borrow a well-known phrase, so that we can discuss it.
This Budget reinforces the growing confidence that we have seen in recent months. It takes no risks but concentrates on sustained economic growth, which is the
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The Opposition opposed the very measures that have brought about this country's economic success. Last year, when we brought down the basic rate of taxation, what did Labour Members do? They huffed and they puffed, they agonised and they squirmed, and eventually they came to an amazingly brave decision: they abstained. What a decisive party the hon. Member for North Warwickshire belongs to.
The hon. Gentleman and his hon. Friends have ranted on about their mantra of the 22 tax increases. That is juvenile economics--the economics of the kindergarten. Their list includes some increases in fuel duties, which are good both fiscally and environmentally, and it counts one tax, insurance premium tax, four times.
The hon. Gentleman criticised air passenger duty and said that it would cost mum, dad and two kids rather more to take a holiday abroad. When the Labour party was in power, if people could afford to go on holiday abroad at all, it was probably for 10 days in Benidorm, and all that they could take with them was 20 or 30 quid, because of the state of the British economy. I am delighted to say that mums, dads and kids throughout the country can now go to many different destinations. What is more, they can take with them as much money as they want, because our economy is sound and so is our currency.
We have made 25 Tory tax cuts. Interestingly, the Opposition never want to talk about those. For example, in last year's Budget personal allowances went up, as did the lower rate band and the basic rate limit, and the basic rate of income tax was reduced to 24 per cent. Those changes reduced taxation and the tax burden on people. Indeed, this year's Budget has brought the basic rate of income tax down again.
At the general election I said to my electorate that we wanted lower taxes. That is why I am delighted that we have brought income tax down from 33p to 23p in the pound. I am delighted, on my constituents' behalf, that we have a large 20p band into which more than one quarter of earners fall. I am also delighted that people are better off by £370 as a consequence of this year's Budget, and by £1,100 since 1992. That is an excellent record.
The hon. Member for North Warwickshire talked about the tax burden, but I must tell him that the tax burden increases because of buoyancy in the economy, and because of measures to block tax loopholes. It increases because we have intensified the drive against tax evasion, which means that tax due will become tax paid. The hon. Gentleman should try to learn a bit more about economics.
I draw the hon. Gentleman's attention, and that of every other hon. Member, to some of the charts in the Red Book, which has been so extensively quoted. For example, table 2.1 shows how high inflation was at the end of the 1970s, and how low it is now. I refer the hon. Gentleman to page 29, which shows how the total wealth
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We have an excellent record, and the British economy is now well into its fifth year of sustained growth. We have already enjoyed a stronger, longer and steadier recovery than any other major European country. Independent forecasters expect Britain to be the fastest growing major European economy both this year and next.
We are looking forward to the prospect of six years in which Britain will have outperformed Germany and France. People are experiencing a good economy. Even the Hull Daily Mail and the Long Eaton Advertiser agree. We are feeling it in every town and village in the country.
Moreover, inflation has stayed low, which in many previous recoveries did not happen. My hon. Friend the Member for Erith and Crayford rightly pointed out the necessity to ensure that inflation is low. Inflation has been below 4 per cent. for more than four years--the longest run of low inflation in almost half a century. That has allowed interest rates to fall to historically low levels, and mortgage rates are at their lowest for a generation. That is another set of excellent statistics, and another good record.
I am not hung up or obsessed with league tables, as seems to be the case with the Opposition. Contrary to the stories we often hear, Britain is outperforming its main competitors and climbing up the international league tables that really matter. Japan was the only major G7 industrial country to achieve faster growth in GDP per person over the past international cycle. The United Kingdom is the No. 1 destination for inward investment, and we have received as much inward investment as Germany, France and Italy put together. We have the lion's share of Europe's most successful companies. Over the past international cycle, investment growth was more than in any other major European country. We have climbed from the bottom to the top of the manufacturing productivity growth league.
Ms Eagle:
Will the Minister give way?
Mrs. Knight:
Because I have heard enough rubbish from Opposition Members. I am tired of hearing them talk down this country and paint an untrue picture. Scarcely a week goes by without another international company deciding to set up in Britain.
Opposition Members go around the country giving the nod and the wink to every group. They have offered long-serving teachers a year's sabbatical--the hon. Member for Sheffield, Brightside (Mr. Blunkett) has said it, the National Union of Teachers believes it and that is why we have costed it at £1.3 billion. Labour cannot deny that. During yesterday's debate, Opposition Members spent most of their time talking about the need for their local authorities to spend more money. They are committed to lifting capping, and it is worth saying that a 1 per cent. increase in spending by local authorities will cost more than
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Mr. Brian Wilson (Cunninghame, North):
Vision?
Mrs. Knight:
I do not have a vision. [Hon. Members: "Oh!"] I have a considerable concern. If--just if--the Labour party was ever in No. 10, the union tanks would roll up Downing street with their guns pointed towards the door. The unions would ask for those nods and winks--what Labour calls "aspirations" but what those to whom they promised them call "spending pledges". What does one think would happen? Every person in the country knows that Labour would agree to what was being demanded, with the consequence that economic growth would halt, people would no longer be better off, inflation would rise and jobs would be lost. That is the reality of what the Labour party has been saying during this and every other debate.
The hon. Member for North Warwickshire and his colleagues waxed lyrical about a windfall tax, and he apparently believes that such a tax will hurt nobody and is somehow morally sound. No doubt next week a windfall tax will cure tooth decay, too. The reality is that a windfall tax will cost investment and jobs, and it will cost pensioners because many pension funds invested in the privatised utilities. Labour Members have waxed hysterical about VAT on fuel and power, but the hon. Member for Edinburgh, Central (Mr. Darling)--an Opposition Front-Bench spokesman--has said that reducing VAT from 8 per cent. to 5 per cent would be a
I am delighted about the measures that have been outlined for the "spend to save" initiative on fraud. I am sure that many people will agree that the hon. Member for Peckham (Ms Harman) spoke mostly drivel; when she was not talking drivel, she came out with a series of scare points. For example, I did not hear her say that Labour would restore the lone parent premium. I did not hear any Labour Members say that they would honour the expensive list of promises from the hon. Member for Stratford-on-Avon (Mr. Howarth).
What Labour Members promised was a national minimum wage, which they said would not cause job losses. What a lot of rubbish. The majority of research, both here and abroad, supports the Government's view that it would lead to considerable job losses, especially among young and unskilled workers; the only issue in dispute is the size of the losses. We believe in creating jobs, not in putting people out of work with such promises and proposals.
On the single room rent scare, an individual who loses a job has 13 weeks' protection, which is not what the hon. Member for Peckham said. Someone who becomes single
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The hon. Lady made extraordinary personalised allegations against my right hon. Friend the Secretary of State about landlord fraud. Several important steps have been taken against landlord fraud, and she knows that he introduced them. By not withdrawing her allegations, she has shown that, in every sense of the word, she is not a gentleman.
The hon. Member for Rochdale (Ms Lynne) had a list of promises as long as not only her arm but both arms. She said that the Liberal party had a costed programme in its alternative Budget. The costed programme makes wonderful reading. It refers to spending cuts of £670 million, but does not say where from, and to savings on tax evasion and avoidance of £320 million, but again does not say where from. The only point on which I agree with the hon. Member for North Warwickshire is that the penny has been spent not once on education, but four or five times.
Our proposals will help to create jobs. Many hon. Members mentioned lone parents, and our commitment to families is an important element of our overall approach, which is why we have announced our intention to move gradually towards more even-handed treatment of one and two-parent families.
We have a series of important, useful and effective ways of helping individuals back into jobs. Easily the best way to help people, lone parents or otherwise, is to get them back into work. Project work, work skills, parent plus, the child maintenance bonus, earnings top-up and other programmes are in place.
We have an excellent record on jobs. Employment has risen by nearly 800,000 since the recovery began. We have more people in work than any other major European country. That has all happened against a background of change. All developed economies face the twin challenges of technological development and the expansion of global trade. The changes affect Britain as they do other countries. They affect us whether we work in heavy industry, the high street, services or manufacturing. The question is not whether we face change but how we deal with it. We have dealt with it in Britain in a way which has meant--
"cynical ploy from a desperate party".--[Official Report, 23 January 1995; Vol. 253, c. 49.]
My right hon. Friend the Secretary of State spoke with great feeling about social security and rightly pointed out that we have an aging population that will cause pressures on the social security budget. A baby girl today has a life expectancy of 80. That is excellent: if that is the average, think what the maximum could be. It is a tribute to good food, a good environment, increasing prosperity, a social security network, a high standard of living, an excellent health service and a Conservative Government.
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