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8.58 pm
Mr. John Wilkinson (Ruislip-Northwood): We have had the privilege of hearing six maiden speeches today; not, I hasten to add, from the hon. Member for Brent, East (Mr. Livingstone). He is the opposite of a political innocent, but he brought to the debate the authenticity of his real-life political experiences.
When I said that we had heard six maiden speeches, I included that of my right hon. Friend the Member for Richmond, Yorks (Mr. Hague), who today made his maiden speech in debate as leader of our party. To reply to the Budget statement is one of the most demanding tasks to face any Member and I hope that my right hon. Friend will not think me condescending when I say, as a former Yorkshire Member, that, in such extraordinarily difficult circumstances, he produced a speech of great succinctness and clarity. He gave heart to many Conservatives who have looked for leadership and direction for far too long.
If one is blessed with a name that begins with the letter W, as I am, from time to time we tend to find ourselves called to speak towards the end of debates. Today is no
exception and perhaps it gives me the opportunity to make a winding-up speech from the Back Benches, since there will be none from the Front Benches today, and to say some nice things for the record about some particularly good maiden speeches. I include in that those made by Labour Members.
The hon. Member for Eastwood (Mr. Murphy), who is less craggy and cleaner shaven than his respected predecessor, Allan Stewart, brought a similar sense of commitment to his constituents. He will obviously make a serious contribution to our proceedings. My hon. Friend the Member for Witney (Mr. Woodward) made a fluent speech which was notable for his confident delivery. We shall certainly hear much more from him as his natural enthusiasm will be energetically deployed in criticising much that will prove worthy of criticism in Labour's programme, and possibly more.
We then heard a speech from the hon. Member for Weston-super-Mare (Mr. Cotter), who spoke with knowledge and experience of small business. He was followed by the hon. Member for Brentwood and Isleworth (Mrs. Keen), who told us that she had fought the seat three times. In her case, it was not just an example of third time lucky because she will be able to teach us all how to nurse a constituency. She brought to the debate a warm heart and professional experience in medicine which will be most appreciated in our debates on the health service.
My hon. Friend the Member for North Norfolk (Mr. Prior), who is in his place, likewise made a big-hearted contribution. How nice it was to hear him speak so well of Sir Ralph Howell. How good it is that my hon. Friend brings to the House experience of manufacturing industry. He clearly has a deep love of his constituency and the countryside. He will prove a very worthy successor to his constituency and his paternal predecessors.
At the beginning of my remarks about the Budget, I should declare an interest as the director of a small company. The Chancellor made a grandiose start when he spoke about the United Kingdom rising to the challenge of the global economy. Having heard his speech, however, I understand that he has firmly set his sights on placing the British economy within the overall European one. It is not the kind of dynamic model which we should follow.
When the right hon. Gentleman announced his much-vaunted reduction in VAT on domestic fuel--how right it is that he did achieve at least a 3 per cent. reduction in it--he also vouchsafed the admission that were it not for the European Union he would have abolished VAT on domestic fuel. This is evidence of how our sovereignty is slipping away to the European Union and how the living standards of our people are suffering. The Chancellor made no mention of the opportunity cost to the British economy that is related to our contributions to the European Union. Nor did he go in depth into the implications for the sovereign running of our economy of handing monetary policy over to the Bank of England as a precursor, potentially, to handing it over to an independent European central bank.
There were some positive measures in the Budget statement. First, there was the determination to reduce public borrowing. However, as the hon. Member for Brent, East observed, would it not have been much better to set a clear target for the elimination of public borrowing
and the creation of a public sector debt repayment? This could reasonably have been achieved, and is a hallmark of the tiger economies in the global economy, to which the Chancellor referred, which we badly need to emulate.
Secondly, I welcome the reduction of corporation tax by 2 per cent. for both large and small companies. I regret that no threshold was instituted for the payment of corporation tax by the smallest companies, because they grow so much from retained profits. Thirdly, there was the doubling of tax relief for a year on capital investment in plant and machinery for small and medium-sized companies.
A fundamental deficiency in the Budget statement is that the Chancellor does not recognise the important role of private savings and private investment in the generation of growth in the tiger economies. We need greatly to increase the private savings ratio. To that end, I hoped that instead of announcing a review of the operation of capital gains tax, the Chancellor would have been bold--though we could not expect this from a socialist Chancellor--and announced abolition of capital gains tax and inheritance tax.
On the global economy, none of the tiger economies would do anything so rash as to institute a windfall tax on profitable enterprises that have been recently privatised. Those enterprises are not utilities; many are already global companies competing in the global marketplace. I take an example of particular relevance to my constituency. Many of my constituents work at Heathrow airport for companies such as the British Airports Authority. BAA is par excellence an international company in that it provides services not only for British Airways and British carriers but for international airlines that wish to use British airports such as Heathrow, Stansted and Gatwick. The imposition of a windfall tax may cost jobs. It will certainly diminish BAA's profitability and its ability to invest in schemes such as the fifth terminal, which is crucial to Heathrow's long-term competitiveness against other European gateways such Frankfurt, Amsterdam and Paris. Higher landing charges may ensue. All those potential consequences are wholly negative.
The tiger economies do not have the arcane and highly complex tax system of the United Kingdom. I was deeply disappointed that the Chancellor introduced no measures to simplify our tax system, which is replete with reliefs and allowances. Even the workfare scheme and the welfare-to-work provisions are not in the spirit or the practice of the tiger economies. Those economies do not achieve their very low rates of unemployment through subsidies, but by generating enterprise across the board.
I do not wish to be parochial, but the Budget will hit my constituents particularly hard. I mentioned the British Airports Authority and the consequences of the proposed windfall tax on the privatised utilities. The reduction of mortgage interest tax relief to 10 per cent. may seem minor, but for many of my constituents in outer London, whose family budgets are stretched to the limit, it is a matter of considerable consequence.
My constituents will also be affected by the increase in duty on motor fuel. They do not all travel by public transport; many have to rely on using their cars on greatly over-congested roads and the provision will create an
additional burden. It is not even as if the Budget contained a commitment to higher investment in London Underground or the railway network. On the contrary, Railtrack will suffer under the windfall tax.
I heard what the hon. Member for Brent, East said about stamp duty, but there are a great many properties in my constituency worth more than £250,000. The families who are moving into them are often fully stretched. The Budget will bring higher duties on motor fuel, tobacco and alcohol; there will inevitably be higher council taxes. The Budget contained no indexation of personal allowances and no upward indexation of tax bands to take account of inflation.
The tiger economies are noteworthy in their encouragement of private provision, but this Budget penalises the most vulnerable section of the community--those who are over 60--for their thrift and for providing for their health care through private medical insurance. The impost is particularly vindictive, and one which I would not have expected from a son of the manse.
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