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8.43 pm

Mr. Patrick Nicholls (Teignbridge): From the closing moments of his speech, I got the impression that the hon. Member for Dudley, West (Mr. Pearson) did not like the Budget. He is obviously a man who likes quotations, so I shall give one back to him:

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It will not do his political career any good, but I have to admit that I greatly like the hon. Gentleman. Despite his soaring oratory, he was unable to make many inroads into the Budget. Nevertheless, he has done a good job and perhaps, in 20 or 30 years' time when the Labour party gets back into government, he will make Under-Secretary of State. It is no fault of his that his speech was not the most devastating critique of the Budget--the Budget is not subject to such treatment because it is virtuous, it does not try to bribe people and it satisfies all the criteria. As my hon. Friend the Member for Rutland and Melton (Mr. Duncan) said, it is boring and responsible. Such a Budget does not lay itself open to the sort of treatment that the hon. Member for Dudley, West tried to dish out.

There are several things in the Budget on which, was there time to do so, I would dwell at some length--of course, some hon. Members did so and the Conservative Members started it. I should have liked to talk about the reform of the rating system and the freezing of business rates for small businesses. That was a good thing and it obviously stemmed directly from the representations that hon. Members made to the Government. I should like to think that it foretells a day when business rates will be related in some way to the turnover of businesses. Perhaps I am looking too far into the future, but the reform was a start in recognising that, for some small businesses, the burden of business rates is out of all proportion to any public policy of raising money from them.

Ideally, more might have been done in respect of betting duty, because the betting industry has been hit hard by the lottery. I would expand on that, if only there was time for me to make a longer speech.

The importance that the Government attached to education last year was reflected in this year's settlement as well.

In the few minutes available to me, I shall concentrate on the two central attacks that the Labour party has made. That is a legitimate thing to do, because most people approach politics thinking, "The trouble is that one of the parties is going to get in," and they try to spot which one will cause less damage than the other. We do not accept that approach to politics, otherwise we would not have the gall to be here, but it seems to me that, every now and then, one should try to join voters in their assessment of such matters.

The Labour party has said two things about our taxation policy. The first--which is pure Goebbels--is to tell a whopping great lie and hope that it will stick. Opposition Members say that the Conservatives broke their promises because we raised tax, despite saying that we would not. I remember fighting the previous election on the basis of the manifesto, and I am pretty sure that I can remember what was in it. We did not say that we would never raise taxes; we said that we had no plans to raise them. Let us be fair--if we had had any plans to raise taxes, they would have been leaked. The idea that this or any Government could have kept such a secret is farcical.

What we did say, and it was repeated throughout the manifesto, was that we would run the economy prudently. We have done that since 1979. That means that we have to strike a balance between taxation and borrowing, and do so in relation to looking after those matters that the state should look after. That is the balance that we have

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to achieve in order to run the economy responsibly. No one could have foretold how deep the recession would bite, but it bit deep and we faced a temporary problem, which was how to raise the money that was needed to look after those who--temporarily, we hoped, and that is the way the figures are panning out--were unable to look after themselves.

Opposition Members turn round and say, "You suddenly raised taxes," but what would they have had us do? Should we have said to the unemployed, "Sorry, but because we cannot raise taxes, we are not going to maintain you and we are not going to borrow sufficient money to do so--you will just have to starve"? It is a ridiculous idea. We said that we would run the economy responsibly and that is what we did. We had to put taxation up temporarily and we are now in the process of lowering it.

The second great lie--or, as far as the House is concerned, the second great untenable argument--that the Labour party has been peddling is to go on and on about the idea that more tax is being paid now. Of course it is. Even a moron understands that, and we have heard several speeches from Opposition Members today that prove that very point. If we were not raising more tax now than we were in 1979, we would be in a parlous state. Unemployment is falling, so more people are available to make a contribution to the total tax take, instead of having to take money out of the system because they are out of work.

Let us consider the multiplier on average salaries since 1979. A person who was earning £5,000 then would be earning the equivalent of £24,000 today, so there is obviously more money there to pay tax on. But there is a difference. In 1979, a person who was earning started paying income tax at 33p in the pound and could quite soon start paying 40p, 50p, 60p or 70p in the pound, up to a tax take of 87 per cent. By the time that investment income surcharge was added, a person could pay98 per cent.

One amazing and glorious year, a Labour Chancellor of the Exchequer imposed a special levy--presumably to persuade the International Monetary Fund not to come to the airport that particular day--and in one glorious year the top rate of tax was 103 per cent. With the best will in the world, when one compares the situation that pertains now with that which pertained then, it is nonsense to say that the whole story is that more tax is now being paid.

What has the Labour party told us about its tax plans, to enable my constituents to exercise choice? The idea that the basic rate of tax will come down to 10p in the pound is nonsense. It is cloud cuckoo land; it is brazen, even for politicians.

For a really good laugh, look at yesterday's The Sunday Times. It says that the Labour party will ensure that the middle classes no longer make themselves liable for higher-rate tax--absolute piffle. It is almost as if the Government could credibly ensure that there was a headline in The Sunday Times saying, "Conservative party to go unilateral", or "Conservative party to abolish nuclear weapons", or "Conservative party to renationalise everything", and expect to be regarded as credible. To some extent, it is a measure of the success of telling the big lie that one can see a headline in that and that people, other than those who are cerebrally challenged beyond rescue, could believe for a moment that there might be something in it.

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What are Labour's genuine tax plans? Who can say? But every now and again, a little light breaks through the chink in the armour, giving hints. The speech that I enjoyed most was that by the hon. Member for Sunderland, North (Mr. Etherington). It was the type of speech that, once upon a time, would have been set to martial music and howls from the barricades as the guillotines fell on the guilty rich--which basically means anyone who earns rather less than a Member of Parliament. That is the way that some people think about these things.

Once upon a time, that would have been a soaring, martial speech; it is now reduced to a radical whinge on a thin night in the House of Commons, but it was at least honest, because it struck all the things that really matter to the Labour party. Tax the rich. The fact that the figures show beyond doubt that, when one reduces the tax rate on the rich, they make an increased contribution to the tax take, does not matter; the thing is not to generate tax revenue to help people, but to punish them for having the money in the first place.

I say to the hon. Member for Sunderland, North--who has probably gone off to telephone his stockbroker--that his speech, although searingly honest, will not propel him into government if everything goes pear-shaped on 1 May, but it was at least honest.

Some Labour Front-Bench spokesmen have now and again let one or two pearls drop to suggest what life under a Labour Government might be like. The hon. Member for Birmingham, Ladywood (Ms Short) has said that she thinks that people like her could afford to pay more tax and should do--and that was when she was earning a miserable £32,000 a year, before many of our colleagues voted for a substantial pay rise. That shows her attitude to such things.

The national lottery has been an outstanding success. What attitude to it has the Labour party expressed this very day? Give it to a body that does not make a profit. The fact that it is outstandingly successful does not matter two hoots; give it away to someone so that a profit cannot be made.

I do not mind fighting on our record. When, as they have done several times tonight, Opposition Members talk about the general election that will come in the spring, I remember the winter of 1979. I remember what it was like when we could not bury the dead, refuse was piled in the streets and cancer patients queued in the snow because there was no one to take them to hospital. That was the winter before the 1979 general election. I tell you this, Mr. Deputy Speaker: we shall not have that sort of winter before we go to the country in May 1997.

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