| Previous Section | Index | Home Page |
Mr. Lilley: I have just told the right hon. Gentleman that I do not attack these schemes in principle. Had he listened to me during the Queen's Speech, he would find those very words. We believe that there can be a social case for them, but that there is no financial case; and it was the financial case that the Opposition put to the electorate before the election. They claimed that the savings on social security would be greater than the cost of the schemes, and that they would be able to transfer the savings on social security to the education budget. All talk of that has disappeared, because it is nonsense.
There are no such savings, because a large part of the cost of subsidy goes to young people who would have got jobs anyway. A further element goes to people who displace people who had jobs, or who would have got jobs but were not entitled to the subsidy. Yet a further
element goes to people who are on the schemes only for the six months that the subsidy lasts and then return to benefit. For all those reasons, the costs far exceed benefit savings.
I repeat that there may be a social case for such schemes. The Conservative Government certainly thought that there was, for example, to help those who had been unemployed for a long time--two years or more, and we introduced a pilot scheme. The dead weight in that circumstance is far less--because far fewer people get back into work after they have been unemployed for more than two years--so there is a far greater chance that a high proportion of the costs will be met by benefit savings.
When the Labour Government try to pretend, as they did before the election, that they have come up with a magic scheme that will enable the right hon. Gentleman to increase his departmental budget, they are deluding both themselves and the British people. The schemes might work to the extent that the subsidy reduces the cost of employing people. If the Government accept that reducing the cost of employing people will create some additional jobs, surely they must also accept that increasing the cost of employing people--by, for example, adopting the national minimum wage and importing European social costs--will reduce the number of jobs.
The subsidies are temporary, and apply to only a few hundred thousand people. The increases in employment costs are permanent, and apply to millions of people. The net effect of the Government's proposals will be to drive people out of work and into welfare, and the cost of that will be far greater than could possibly be met by a windfall tax.
As well as changes to help young people who are unemployed, the Chancellor made much of his plans for lone parents. However, he did not bother to inform the House of one aspect of his plans that was hidden away in his departmental press releases.
The House may recall that, before the election, I announced, but did not have time to implement, plans to equalise the benefits payable to new lone parents to make them equal to those available to married couples in similar circumstances. That is fair, it does not send out the wrong signals about marriage and the value of two-parent families, and, in the long run, it saves £500 million a year.
However, that was anathema to the politically correct denizens of the Government Benches. Before the election, the then Leader of the Opposition, now the Prime Minister, was asked on the "World at One" programme:
But yesterday, only moments after the nauseating spiel we heard from the Prime Minister about his integrity and how he always sticks to his promises, the Chancellor broke that promise. We now know that the right hon. Gentleman will implement my plans--I welcome that--with total disregard for the pledge the Prime Minister made to the electorate before the election.
The Prime Minister is keen to emphasise that this Budget is no more or less than his party promised during the election campaign. However, before 1 May he was asked a number of clear questions, to each of which he replied, "No." Would he put up taxes at all? No. Would his July Budget go beyond his windfall tax plan? No. Would Labour implement my lone-parent benefit reforms? No. Would Labour leave a £1.5 billion black hole by refusing to privatise assets? No. Would Labour alter Conservative departmental spending plans? No.
Only two months ago, Labour answered no five times. Yesterday, however, we learned that the true answers to those questions were yes, yes, yes and yes. [Hon. Members: "That is only four."] And yes. [Laughter.] Is it not extraordinary how Labour Members are proud of the number of pledges that they have broken? They do not want me to underestimate them, and in future I will not.
The Budget provides not only the opposite of what Labour told voters it would provide, it will accomplish the opposite of what the Chancellor claimed, only yesterday, that it would accomplish. He said that it was a Budget designed to curb a consumer boom; yet the overwhelming bulk of the tax burden will fall on the corporate sector. He said that it was a Budget to control houses prices; yet its net effect will be to make investing in houses more attractive than investing in equities. He said that it was a Budget to encourage long-term investment; yet its biggest effect will be to hit long-term investment in pension funds. He said that it was a Budget to encourage investment in the United Kingdom; yet its measures will encourage people to invest abroad.
The Secretary of State for Education and Employment (Mr. David Blunkett):
I welcome the shadow Chancellor to his new post: may he hold it with distinction for many a long year. Before commenting on his speech, I should like to accord him a tribute. I acknowledge that he does care about young people, about their exclusion from society and about their need to be able to earn their own living and to lift themselves off the scrap heap of time. I accept that he should like those young people to be in jobs and able to develop their own families. After hearing the shadow Chancellor's speech today, however, I am totally unclear about whether he supports our measures, whether he is in favour of job subsidies or whether he believes that the Government should intervene in the labour market to help clearly disadvantaged unemployed people.
The shadow Chancellor has contradicted himself in this debate several times already. He said, for example, that he is in favour of programmes organised by the Government, but that he is not in favour of our programme. He is also in favour of subsidies, but he is not in favour of our subsidy. He is in favour of the Government raising money to spend on young people, but only if it is not raised from a windfall tax on the utilities. Presumably the shadow Chancellor would be in favour of raising money to help young people if the burden fell on the backs of someone else--such as pensioners, whom the previous Government required to pay VAT on domestic
fuel bills. The previous Government imposed 22 tax increases that affected everyone, although the burden of most of them fell on individuals.
My right hon. Friend the Chancellor has introduced a windfall tax on profits which, in the 1980s, the present shadow Chancellor clearly believed--because he came close to admitting it--were excessive. The shadow Chancellor seemed to say that it is all right to raise money to help young people, but only if it does not come from windfall profits. If the money is to come from a windfall tax that demonstrates those excess profits--the billions of pounds of profits made over the past 15 years--he is agin it. He made an extraordinary admission. He is in favour of the type of intervention that we propose--although he would like it to cost less and not to be based on quality, continuity and employability, which are the hallmarks of our programme--and he is agin it.
Yesterday, my right hon. Friend the Chancellor announced a programme that has received almost overwhelming applause and the unified commitment of the British people. He presented the most popular Budget in decades, and he did so in a manner that showed considerable aplomb. He has given hope to the British people. They now have hope that the legacy that we inherited--a legacy of neglecting investment in our health service, in our education, training and employment programmes and in our housing--will be ended.
"Are you going to stick with the Conservative plans to equalise benefits for lone parents with those of married couples?"
The right hon. Gentleman replied,
"No."
It is not easy to misunderstand that reply--it was a quite simple, unusually straightforward "No." He told the people of this country that he would not implement my plans.
| Next Section
| Index | Home Page |