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Mr. Marlow: Given the hon. Lady's remarks, do I take it that it is her intention that the incomes of the bottom 10 per cent. should increase, and that a Labour Government would provide the money? Would they get the money from the people whom she referred to as the rich? If not, from where would she get the money?

Ms Primarolo: The Labour Government, who will be elected quite soon, will narrow the inequalities in wealth by providing people with work. One in five households have no one in work, and 62 per cent. of families have only one person working. The children of those families have lost out under this Tory Government. Those people, 9.1 million of them--the number has doubled since the present Government were elected--are the people who will benefit from the stable, sustainable growth in the economy over which the Labour Government will preside.

Mr. Butterfill: I am fascinated to learn that the hon. Lady is going to prove that a Labour Government--if that ever comes to pass--will provide such people with work, but what will they be doing? Will they be working for her leader's office, along with all the others?

Ms Primarolo: That was unworthy of the hon. Gentleman, who has made some interesting and important points this evening, as he often does in debates on Finance Bills. I hope that we shall have his company again, but he knows full well that, by using a number of mechanisms, the Labour Government will ensure that work is created for those whom we shall represent.

The Government tell us that they have done wonders in regard to investment. Apparently, they have presided over spectacular investment in the economy. That is why so many people are unemployed: it appears that the investment has not been in them. In 1978-79, the then Labour Government's gross capital spending accounted for 3.8 per cent. of gross domestic product; this year, the Government's spending is expected to be no more than 2.5 per cent. of GDP.

As my hon. Friends have pointed out, we need to build on our best resources. We need to invest in our manufacturing, and in our people's skills. That is the way in which to establish a secure future. The Government, however, want none of that; they want to play around with fears of job insecurity, pressurising people in the workplace to fear for their jobs and forcing them to work for low wages. They tell us that that will make us the enterprise centre of Europe, but it is difficult to see how.

The hon. Member for Havant (Mr. Willetts)--but I am not sure that I can call him an honourable Member. The Member for Havant--

Mr. Deputy Speaker: Order. The hon. Lady should know that all Members elected to the House are honourable.

Ms Primarolo: Thank you, Mr. Deputy Speaker. I am grateful for that correction. I am sure that, when the hon. Member for Havant was telling us that the Government had not increased taxes and that we were wrong in our

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assertion, he was not "dissembling" in regard to the facts in the Red Book. What he said certainly was not based on an exchange of notes, and it certainly was not based on the sophistry in which the Chief Secretary apparently engages.

As always, my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) made a speech that hon. Members on both sides of the House found thoughtful and challenging. He made clear the importance of monitoring, and of a proper structure in the House to ensure that tax and expenditure plans could be properly assessed. There was no substitute for proper parliamentary scrutiny. He went on to knock down the Government's allegations that, somehow, a splendid inheritance existed, and reminded us again that the danger to our manufacturing base was acute.

The hon. Member for Stamford and Spalding (Mr. Davies) made his usual well-informed, pro-Europe speech. Unfortunately the hon. Member for Havant did not stay to hear it, probably because they had already exchanged notes.

My hon. Friend the Member for Barnsley, East (Mr. Ennis) has been widely complimented by hon. Members on both sides of the House for the good humour and ability of his maiden speech. I think in particular of his comments about Terry Patchett, a well-respected, sincere and honourable man in the House, who was not always at ease with House procedures, but who was an excellent constituency Member of Parliament, defending mining communities. I look forward to hearing my hon. Friend the Member for Barnsley, East continue that tradition in future debates, which he clearly has this evening.

The hon. Member for Upper Bann (Mr. Trimble) made some points about anti-avoidance measures, which I hope he will allow me to pick up later. The hon. Member for Gloucester (Mr. French) made some detailed scrutiny points about that section of the Bill. Other hon. Friends have ensured that we have had a thorough investigation and exposure of the Government's plans.

Treasury press statements tell us that the Treasury is to invest and to "spend to save". They say:

"£800 million will be spent by a number of departments over the next three years to save an estimated £6.7 billion."

In particular, there will be work in Customs and Excise to pursue the continuing problems of failing VAT receipts.

On page 69 of the Red Book, there is an attempt to explain the missing VAT receipts, which will interest all hon. Members as that revenue is not reaching its true destination: the Treasury. In a debate on 3 December, at column 854, the hon. Member for Fulham (Mr. Carrington) specifically referred to the table and its unconvincing explanation, and the evidence to the Treasury Select Committee, which shows that, of the £6 billion that is missing, Customs and Excise officials can explain only why up to a maximum of £2.5 billion is missing. They still do not know where the rest is.

It seems that there is increased consumer spending, but there is a shift in the connection with the tax--the tax is not being collected quickly enough. The desire to find that money seems to be based more on shadow boxing than on a proper assessment of where the revenue has gone.

We were promised that the Treasury had undertaken a thorough review and that we would be informed where the money was going--whether it was missing because of

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avoidance, inefficiency, growth in the shadow economy, a fundamental problem with the tax base or, as the hon. Member for Fulham suggested, a cyclical problem. No such report is being made available.

The Government's problem is that, in pursuing anti-avoidance measures, they are in danger of creating more opportunities for avoidance to take place. The whole nature of avoidance is that we do not know where the money is because, if we did, we would have the legislation to ensure that that was not exploited.

Without a proper assessment of where that almost £3.5 billion has gone, the dangers mentioned by the hon. Member for Gloucester about the inefficiencies of the system are likely to cause greater problems. Clause 37 is the second attempt to deal with the abuse of lease and leaseback arrangements. A statutory instrument on that in 1994 seems to have been totally inaccurate and did not properly target the issue. There is also a problem about clause 31 on the aggregation of businesses.

I shall not state what the Chief Secretary said I would, that the ideas in this section of the Bill were ours. Columns 694-96 of the Committee Hansards of 9 and 14 March 1995 show that we warned the Government that if they persisted in cuts imposed by a fundamental expenditure review on the Inland Revenue and especially on Customs and Excise there would not be enough properly trained staff to ensure that revenue was collected. The then Paymaster General, the right hon. Member for Wells (Mr. Heathcoat-Amory), said:

"Customs and Excise can maintain--indeed, improve--its output, even with fewer staff."--[Official Report, Standing Committee D, 14 March 1995; c. 699.]

In our debates on the Bill we have discovered that that is not the case but that we need more staff who will be charged with the responsibility of finding the revenue. That is another example of the Government's sheer incompetence.

A Government who cannot even defend their own tax base and who do not understand that they need the staff to protect that base must realise that they are in serious trouble. They cannot create jobs or give people security or address the problem of the decline in our manufacturing base. They cannot even run the departments that are central to the structure of government--those that collect the taxes. The Government have the cheek to tell us that we are inconsistent. They should stop bickering with us in the House and put their record to the electorate. We shall also put ours and I am confident that when the challenge comes the electorate will choose a Labour Government for security, jobs, investment and hope for the future of their families and their grandchildren.

9.37 pm

The Financial Secretary to the Treasury (Mr. Michael Jack): I thank the hon. Member for Bristol, South (Ms Primarolo) for her kind remarks about my being made a Privy Councillor. She was right when she said that that would be the only nice thing that she would say about the Government. The debate has confirmed that Labour can only criticise, has no serious constructive ideas and is not prepared in the fierce heat of debate in the Chamber to put any of their policies or ideas to the test. That shows that the Opposition are frightened to expose their thoughts to public view and debate.

This useful debate has enabled us to cover the principal themes of the Budget and the Bill. We have demonstrated that we have clear aims for the economy and the tax

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system and that we are achieving them. The principal Budget themes with which the debate and the Finance Bill deal are about sustaining an economy that is regarded by international commentators and by our commercial rivals as a Rolls-Royce economy. My right hon. and learned Friend the Chancellor recently returned from Japan with news of the envy with which the British economy and our performance are viewed from the other side of the world.

The debate has also touched on the matter of keeping public borrowing on a firmly downward trend. However, the theme of living standards has been the common denominator in all the talk of tax and criticism of the Budget that we have heard from Opposition Members. In this debate, no hon. Member has successfully challenged our assertion that, in this Budget, we have achieved rising living standards--which will continue to rise, year after year. This Budget brings the basic rate of income tax to its lowest level for 60 years, increases personal allowances, freezes wine and beer duty and cuts spirits duty for the second consecutive year--a point made by the hon. Member for Gordon (Mr. Bruce) in his remarks on the benefits realised by the whisky industry. The hon. Member for Bristol, South mentioned, although in rather carping terms, that we have introduced further measures to secure the tax base by closing loopholes and ending reliefs that we now believe are inappropriate.

Most importantly, the Budget demonstrates the continuation of our tax-cutting agenda, in which our clearly stated aim is to achieve a basic income tax rate of 20p for all, while not taking any risks with the economy. Tax cuts and rising incomes mean that a family on average earnings will be £20 a week better off next year than at the time of the most recent general election. Prudent management of the public finances backs up that agenda, because we have achieved decreasing borrowing with an overall tax burden that is no higher than at the time of that election. It is a Budget, and now a Finance Bill, that is built for lasting prosperity.

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