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Mrs. Taylor: My hon. Friend is right to point out that there is always a problem in the early days of a new Parliament. I was not aware of the particular problem that he mentioned with regard to the postmaster. I am not sure whether that is a matter for the House or the Post Office, but I will make inquiries.
Mr. Andrew Lansley (South Cambridgeshire): Will the right hon. Lady make time next week to debate "Questions of Procedure for Ministers", which would not only allow the House to discuss the circumstances in which Ministers can discuss the exercise of free speech by hon. Members on behalf of their constituents, but allow us to examine the question of conflicts of interest for Ministers? In that regard, will she look at the Official Report of today's proceedings at Question Time, when the President of the Board of Trade appeared not to know whether the Minister for Trade and Competitiveness in Europe still had a continuing conflict of interest in relation to his shareholding in BP?
Mrs. Taylor: I do not intend to find time for a debate of that nature. My noble Friend the Minister for Trade and Competitiveness in Europe is in the process of complying with the rules in "Questions of Procedure for Ministers", which takes time. During that time, he has not been involved in discussions that would be relevant or relate to his particular interests.
Mr. David Heath (Somerton and Frome): Does the right hon. Lady recall that it is now two weeks since the European Council met in Amsterdam? It would be a shame if it were forgotten. Either it was a triumph for British diplomacy, in which case we should celebrate it, or it was a missed opportunity, in which case we should deprecate it. Either way, does she agree with the Prime Minister that it must be fully debated, and will she provide an early opportunity for that?
Mrs. Taylor: There will be consequential legislation in due course, and that will be debated.
Orders of the Day
WAYS AND MEANS
Order read for resuming adjourned debate on Question [2 July].
Motion made, and Question proposed,
Mr. Peter Lilley (Hitchin and Harpenden):
Yesterday was the first time that the trust which the British people put in the Government was put to a real test. We shall see that, as the consequences of the Budget filter through to them, the British people will realise that their trust was misplaced.
It was the Prime Minister himself who chose to make trust the central issue of his election campaign--above all, trust that a Labour Government would not revert to tax and spend. Invoking almost biblical language, the Prime Minister claimed to have entered into a new covenant with the British people. He, Tony, claimed to be uniquely trustworthy. To allay fears that Labour would once again tax and spend, he gave the British people clear and categorical assurances.
Earlier this year, the Prime Minister told business men in Birmingham:
The truth is that there was no need for an emergency Budget now at all. There was no emergency--quite the contrary. No Chancellor has ever inherited a better economic legacy than that bequeathed to the Chancellor by my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) and his predecessor.
As Lord Healey said yesterday,
As the new Chancellor could not find anything wrong when he looked at the books, he decided to cook the books. He did, in effect, what any takeover merchant about to asset-strip a sound company would do: he decided to downgrade the forecasts. So he came up with four new assumptions, and got the National Audit Office to examine them. The NAO described his assumptions, rather acidly, as a deliberately cautious interpretation of the evidence. And so they are. Indeed, his new assumptions are not merely cautious; they assume that the Government will fail.
The right hon. Gentleman assumes that the Government will fail to privatise anything--that is the black hole of which we warned during the election. He assumes that the Government will fail to get unemployment down. He assumes that they will fail to deter any tax evasion; and fail to get the economy to grow as fast in the future as it has in recent years. So we have four forecast failures by a Labour Administration--a pretty dismal outlook, but, I suppose, a fairly realistic assessment of what this Labour Government may actually achieve.
Even the revised forecast that the Chancellor has made did not justify increasing taxes, but he was determined to raise them, because he wanted to tax now in order to be able to spend later.
Mr. Dale Campbell-Savours (Workington):
The right hon. Gentleman will know that the City has been saying that the economy is overheating and that something has to be done. In those circumstances, would the Opposition have supported raising interest rates, raising taxes or doing nothing? Presumably they would have had to do one of the three--which one would they have selected?
Mr. Lilley:
Funnily enough, I was just coming to that. The Chancellor justified his decision to raise taxes precisely on the basis of the hon. Gentleman's point--that there are some who believe that consumer spending in the short term is growing too rapidly. Yet, overwhelmingly, the taxes that the Chancellor raised fell not on consumption but on the corporate sector. So presumably the Chancellor does not believe in the thesis; there is therefore no reason why the hon. Gentleman or I should believe it either.
Far from trying to take action to deal with a short-term growth in consumer expenditure, the right hon. Gentleman's taxes--by and large--fell on the corporate sector, and were geared to the longer term, by when it is assumed that consumer spending will have slowed, anyway.
The Budget raises very large amounts of extra taxation: roughly £6 billion a year, which is £300 for every household in the land. But it seeks to do so in ways that
are not easily visible, and are at one remove from the ultimate taxpayer. Unfortunately, however, there is a general rule of taxation, stating that, the less visible a tax is in the short term, the more damage it does in the long term. As taxes work their way through to people's pockets, they do a lot of damage en route. Any attempt to conceal the blame will increase the ultimate pain.
There are two big measures in the Budget--the change in advance corporation tax and the windfall tax. Both hit pensions and long-term savings. That is a double whammy for pension funds; it is the Robert Maxwell memorial Budget. No wonder the National Association of Pension Funds has described the Budget as
The House will recall that I published a proposal to give every working person in the new generation a funded pension, which would have involved Government putting billions of pounds into pension funds. Labour is taking billions of pounds out of pension funds. That means that Labour's shameful election lie that we would put people's pensions at risk was not merely dishonesty, but rank hypocrisy.
"We have no plans to tax at all.
He told Daily Express readers:
"Our plans do not involve raising taxes at all. If we have any such proposals we will make them clear before the election."
How does that square with yesterday's Budget--17 new Labour taxes introduced by the Chancellor? They are not taxes on fat cats, but taxes which will ultimately fall on the hard-working, prudent savers of middle Britain. The Labour Government have broken their covenant, they have forfeited their trust and betrayed their pledges.
"As we look at this and future Budgets produced by the Labour Administration, we must always remember that rarely, if ever, have a Government had such cause to be grateful to their predecessor when it comes to the economy."
3 Jul 1997 : Column 429
When the Chancellor arrived at the Treasury and opened the books, as the phrase has it, he found that, far from there being hidden problems, the economy was doing better than my right hon. and learned Friend had predicted during his Budget last November. Borrowing in the four months between the Budget and the end of the financial year was £3.3 billion lower than forecast, and it has continued on a healthy downward path since then. Revised figures show that growth has been better than we thought it would be. The trade figures have been better than expected, despite the strong pound, and unemployment has been falling faster than forecast.
"the biggest attack on funded pension provision since the war. Even Robert Maxwell only took £400 million."
The ACT change alone, according to the NAPF, will take more than £50 billion of extra pension contributions from employers over the next 10 years.
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