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Mr. Pearson: Will the Minister give way?
Mr. Jack: I want to deal with the point raised by my hon. Friend the Member for Gravesham. We haveheard enough from the hon. Member for Dudley, West (Mr. Pearson) for one evening.
I congratulate my hon. Friend the Member for Gravesham on his stalwart campaigning for the Darenth Park hospital. I am glad that he was able to speak in glowing and positive terms about the progress that has been made. He was right to remind the House that it was further down the list of priorities for private finance initiative projects. It has made excellent progress and is now coming rapidly towards the finishing line, just like the Norfolk and Norwich hospital. How can the Opposition deride a hospital programme worth nearly £200 million that will bring better patient care to hundreds and thousands of people in Norfolk? They just rubbish it. That is their commitment to the NHS. We provide progress; they provide criticism.
Let us look at what others have said about our Budget. I remind Opposition Members that the chairman of ICI said that this was a Budget
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The inescapable statistics that the Opposition cannot run away from are those relating to the effect on living standards. Whatever dust storms or dubious tax statistics they put up, they cannot run away from the fact that the tax cuts in the Budget are worth £120 a year to the average family, taking all direct and indirect taxes into account. The average family on average earnings will be another £370 a year better off--£7 a week--taking into account all taxes and inflation. We have heard so many spurious statistics because the Opposition are plain embarrassed at what we have done. That builds on the fact that we are now £20 a week better off since the last election and £100 a week better off since 1979. What was the record of the last Labour Government? The best that they could manage was £1 a week.
Mr. Pearson:
On the issue of being embarrassed,I thank the Minister for his reply to me, due on 7 November, which he finally got round to giving me late this evening. He admits that his failure to close the tax loophole involving special dividends and share buy-backs cost the Exchequer £400 million last year. I thank him very much for that admission, but he has still got his sums wrong. Will he go back and do them again? He will find that far more taxpayers' money is wasted.
Mr. Jack:
Is that the best that the hon. Gentleman can do when we have taken action to block tax loopholes? That goes along with the rest of Labour's claims that we have dismissed this evening.
My hon. Friend the Member for Teignbridge drew our attention to some interesting comments in the newspapers. We read in The Sunday Times that Labour is to cut taxes for middle classes--another uncosted pledge by the Opposition. Where is the money to come from? As with the £8 billion or £10 billion for the 10p starting rate, we do not know. They accuse us of dishonesty, but they are playing with the emotions of the British people.
Looking at some of the finer print in the article, we begin to see a hidden agenda that builds on an existing Labour pledge to remove the tax relief on private medical care. The article tells us that Labour will look for what is described as a hit list. What will be on the hit list? I invite Labour Members to remove the air of mystery. I suppose that the 4.5 million people with TESSAs, the 2 million people with PEPs and the 2 million stakeholders, of whom we hear much from Labour Members, are in line for the removal of their reliefs. That is what it says.
A further article in the Daily Express on 2 December is headed:
The hon. Member for Darlington was not very nice to my right hon. Friend the Chief Secretary to the Treasury. Because of that scurrilous attack, I want to clarify what
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I shall say a little more about where some of our increased revenue is coming from in the "spend to save" package, which many of my hon. Friends have supported. It is not just a package based on what the Inland Revenue is producing. Its corporate technical review and analysis of avoidance, income tax compliance and action on the shadow economy will produce just short of £2 billion of the £6.7 billion scheduled.
The work by Customs and Excise on compliance and avoidance and on fraud and evasion, particularly in the context of the single market, is scheduled to yield about £2.2 billion. The work by the Department of Social Security on fraud and ensuring that benefit claims are appropriately and properly made will yield another £2.2 billion. Also the Foreign and Commonwealth Office, the Home Office and other Government Departments are playing their parts in that "spend to save" package.
Some of the tax loopholes that we plan to close will also make their contribution: stopping abuse in terms of foreign tax credits; the artificial recovery of value added tax on property transactions; and closing the loopholes on finance leasing. Some of those are new schemes and it has taken time to track them down and deal with them, but that is what we are doing.
In terms of yield, the figures are realistic. The Inland Revenue compliance work cost £270 million last year, but yielded £5.2 billion, which is nearly 20:1 in terms of return. The "spend to save" package gives a yield of about 8:1, so it is an entirely realistic area for us to be aiming at.
In spite of the fact that we have one of the strongest economies in western Europe, with one of the most flexible labour forces--not burdened by the social contract--and are the No. 1 for inward investment in Europe, we heard no praise for the contribution of people who have worked hard in this country, for example, the contribution of Rolls-Royce, which is in the constituency of the right hon. Member for Derby, South (Mrs. Beckett). There was not a mention--no pat on the back for the hard work that they have undertaken there. There was no reflection of the fact that it is not merely the Government who are predicting higher levels of investment. The Confederation of British Industry is predicting a 7.5 per cent. increase in manufacturing investment in 1997. We heard nothing of that from the right hon. Lady. We also
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We certainly did not hear anything about the interview with the right hon. Member for Derby, South on the windfall tax. Any privatised company is now fair game in Labour's attempts on the windfall tax.
What we did hear was a lot of bleating on the subject of local authorities. It is worth just reflecting for a moment on the state of some of Britain's local authorities. For example, Southwark is owed £26 million in rent arrears; Birmingham is owed £25 million in council tax; Manchester is in debt to the tune of £1.2 billion; Hackney spends £377 per head just to service its debt; and dear old Islington is in debt by almost £5,000 per head. That is the track record of Labour in government--high-spending and high-taxing local authorities--yet the Opposition have the nerve to attack us about local government.
This has been a Budget for the next five years, not the next five months. It will secure the long-term growth of the British economy and it will continue to put more people back into work. It will sustain lower inflation and maintain vital spending on our public services, on schools and education; and, as my right hon. Friend the Secretary of State for Health has said, it will provide a real terms increase in spending on the health service.
It being Ten o'clock, the debate stood adjourned.
Debate to be resumed tomorrow.
Ordered,
Motion made, and Question proposed, That this House do now adjourn.--[Mr. McLoughlin.]
"for economic growth, which is essential in today's world."
The chairman of the Siebe engineering group said:
"I rejoice for our UK employees, as it will put a bit more money in their pockets."
The chairman of GKN said:
"This is an appropriately prudent Budget which is good news for business."
The lack of business experience among Labour Members tells. They cannot see what is good for business because so many of them have never been in business.
"Labour wrapping tax cuts in a mystery."
Finally on this revelation, The Guardian, which I thought was on Labour's side, tells us:
"Last night some shadow cabinet ministers viewed the tax plans with alarm".
I am not surprised. I have already totted up that about 6 million people are going to be up in arms at this dawn raid on their sensible tax reliefs.
"When people earn more they pay more tax"--
that point has rather escaped the Opposition. Our stewardship of the economy, by putting more people back to work, increasing the opportunities for tax, tightening tax loopholes and making the tax system work better, brings in more tax revenue, but perhaps the Opposition had not observed that. My right hon. Friend went on to say:
"and that is what I confirmed yesterday. But the fact is"--
the hon. Member for Darlington should listen to this, because he is in for a lesson--
"that next year a family on average earnings will pay £88 less in direct taxes than if the Government had simply left the tax system unchanged since 1991/92."
He went on to reiterate the points that I put before the House about rising living standards.
That Mr. Michael Stephen be added to the Trade and Industry Committee.--[Mr. Dunn.]
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