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Mr. Jim Cunningham (Coventry, South): I congratulate the hon. Members who made their maiden speeches tonight. I have no doubt that we shall hear much from them in coming years.
I was astounded to hear the cries, pleas and wails of the Opposition, particularly in relation to some of the things that they accused us of. Among their throw-away lines was the suggestion that Labour Governments are soft on inflation. That makes me think back to the hyper-inflation of the Heath Government. We certainly remember the hyper-inflation of the Thatcher Government and Geoffrey Howe's raid on the bankers. When the Tories fuss about the windfall tax, we can always take them back to his day, when the precedent was set.
The Tories complained about a £300 million cut in local government. They said that they got that figure from the Local Government Association. They do not talk about the hundreds of millions of pounds that the previous Government cut over the past 10 or 12 years. The Tories are quick to talk about something that is currently speculative. I find it amazing how they can turn things on their heads and blame everyone but themselves. They have not come to terms with the fact that the rhetoric that they have used for the past 18 years has not worked with the electorate or the economy. They have not grasped that yet.
I listened intently to the hon. Member for Grantham and Stamford (Mr. Davies). I kept wondering why the Tories had not made him Chancellor of the Exchequer, which might have saved them a few seats at the general election. We come back to the fact that it is all rhetoric, innuendo and smokescreen. I have listened closely to the debate and the Tories have never come to the real issues of the Budget. As a first step, the Budget seeks to tackle the long-term weakness of the British economy. From successive Governments, particularly Tory Governments, we have had short-termism. Many hon. Members will have come across that issue while fighting the general election.
I was amazed that the Tories raised the issue of mortgage interest relief at source, which is the help that families get to pay their mortgages. It was the Tories who started to cut it. We can go further. They talk about benefits and helping communities, but it was their Government who stopped people who were made redundant getting 12 months' average earnings.
The Budget is about encouraging investment and dealing with poverty, especially among the young unemployed. Tory Members complain about the so-called subsidy to industry to provide quality training, but what about the terrible cost of those young people who were left on the dole under the previous Administration? What about the havoc wreaked in the inner cities, particularly in places such as Coventry, which I represent? What about the level of crime caused by the fact that young people felt disfranchised and could not get jobs? The scheme for young people the Government propose is an investment well worth making. As the economy grows, there will be a need--certainly in the building sector--for apprentices and skilled young people. The Budget is a step in the right direction.
Mr. Owen Paterson (North Shropshire):
I congratulate the three Labour Members on their excellent maiden speeches. The hon. Member for Bexleyheath and Crayford (Mr. Beard) was most generous about his Conservative predecessors and talked interestingly about his constituency.
I was equally impressed by the maiden speech of the hon. Member for Upminster (Mr. Darvill), who replaced Sir Nicholas Bonsor. Sir Nicholas represented my parents for a time in Cheshire. The hon. Gentleman's kind comments matched the character of Sir Nicholas, who was a good man and a good Member of Parliament. The hon. Gentleman spoke fluently and coolly about his constituency, and I was impressed by his comments on the Bill.
The hon. Member for Morecambe and Lunesdale (Miss Smith) gave such a delightful character to her constituency that I am almost tempted to change my holiday plans. She spoke nicely and kindly about Sir Mark Lennox-Boyd, whom I met only once, outside Aintree race course after we had been expelled because of the IRA bomb. She spoke with feeling and interestingly about the problems of her constituency. I wish all three hon. Members well in this Parliament. I am sure that they will make interesting contributions, but that they will not be surprised if I disagree with them.
It is with real humility that I stand to make my maiden speech after such fine performances. I am deeply grateful to those who voted for me and sent me here. I am very conscious that Shropshire has been sending Members of Parliament to London since June 1264, when four knights whose names have been lost went to London. They were deemed "unfit" by Peter de Montfort, most probably because they sided with the King, not the barons' party. Ever since, there has been a tradition in North Shropshire and Oswestry of sending robust, independent-minded Members to Parliament, none more so than my predecessor John Biffen, who was a most splendid parliamentarian. He is enormously popular throughout the constituency. It is an honour to have known him since 1987, when I helped in the election with him.
John Biffen helped to reforge Conservative thinking in the late 1970s. He played a crucial role as Chief Secretary to the Treasury in the early Thatcher Government, helping to forge the first Budgets. As Secretary of State for Trade and later as Leader of the House, he earned extraordinary respect on both sides of the House and from the gentlemen of the press--the fourth estate. He is truly a hard act to follow.
I am sorry to report that John Biffen recently became seriously ill shortly after he was elevated to the peerage as Lord Biffen of Tanat. I am sure that you, Mr. Deputy Speaker, and everyone in the House will wish him a speedy recovery. There is one physical link between us.
He left me his fridge. Despite the best efforts of the Serjeant at Arms and his excellent team, the fridge has not been found. I am sure that if you could help in the search, Mr. Deputy Speaker, you might help me find the secret which enabled John to speak with such prescient wisdom without being pompous and always with a wonderful wry sense of humour without being flippant.
As far as I know, my family have produced no previous Members of Parliament, but my wife's family have produced eight successive generations. Some of them, one has to say, are questionable. One in the 1770s was caught in the act of adultery with his doctor's wife and refused to resign. Another was reputed to be quite the worst Home Secretary in the 19th century and a third sadly died after eating a kipper in too much of a hurry on the way to an election meeting.
Every now and then a family throws up a real star, and Nicholas Ridley was a most brilliant man. He had wide interests outside the House. He was a most talented water colour artist, a stonemason, an architect and a fine fly fisherman and shot. Yet he also had political beliefs of the deepest conviction to which he stuck through thick and thin and which, I am glad to say, he put into effect in a most effective manner in the late 1980s as a Cabinet Minister. Nicholas Ridley was a profoundly politically incorrect person. He ate, drank and smoked things of which many people would disapprove until the day he died.
I was born in Whitchurch in my constituency, and I consider it an enormous privilege to represent the place where I have lived most of my life. I see a large number of historical figures as an example to me. I come here to represent North Shropshire and also to defend the United Kingdom. I see that a major role is to defend the powers invested in the House. One historical figure was Caractacus, who boldly stood up to the harmonising and centralising power of Rome. Another was King Offa who, confronted with his West Lothian problem, built an enormous dyke--as a warning to Welsh Members--to the lasting detriment of the Welsh economy.
I feel that it is our role as politicians to guard the precarious balance of power between conflicting interests and to ensure the peace. The last time that the peace broke down irrevocably was in the civil war, when north Shropshire was badly divided. Oswestry was burnt to the ground by Cromwell. This morning, I went to probably the largest public meeting since the civil war. Well over 100,000 people came together to defend country sports, which generate £3.8 million.
The Labour party won a great victory on 1 May. It has an overwhelming parliamentary majority, but it should be humble and remember that it received a minority of the public vote. The Labour Government have the power to do almost anything that they want, but they should not use that power to impose their ideals on large minorities in distant parts of the country. I quote the words of Catherine the Great, who was invested with total power. She was an autocrat by divine right. She wrote to Voltaire, saying, "You are so lucky, dear Voltaire. You write your ideas on paper whereas I, poor Empress, write upon human skin, which is much more ticklish."
I am glad to say that, following 18 years of Conservative Government, North Shropshire today is an extremely prosperous place. Unemployment is down to 4 per cent.
I consider myself to be in a position to judge the prosperity of the area. I have spent all my life in manufacturing industry, as a tanner. I have travelled the world buying materials and selling leather, overwhelmingly for export. With one or two exceptions, I have not visited a single business or farm in North Shropshire in the past two years which has not invested and taken on new labour, new people, to work in their businesses. That is a tribute to what we have achieved.
North Shropshire is still overwhelmingly rural and agricultural. It has the largest milk lake in western Europe. The industries are mainly family owned and relatively small, and related to agriculture. There are odd shining exceptions such as the enormous investment by British Telecom near Oswestry and the orthopaedic hospital in Gobowen, which is world renowned for its work. We have fine private and state-financed schools in North Shropshire. I have to say that the formula that distributes central Government funds to local government militates sharply against sparsely populated, rural counties such as Shropshire.
The Budget is not necessary. North Shropshire is prospering and investment is coming in. The central theme is investment. I went to Aretsried in Bavaria last year to meet Mr. Theo Muller, who has invested £50 million since 1991 in a state-of-the-art yogurt plant in Market Drayton. I understand that it is the convention not to speak in foreign languages in the House, but what I am about to say is easy to understand. He greeted me with the words, "England ist paradies". Those words uncannily echoed the promise by Jacques Delors that if Britain stayed out of the social chapter it would become a paradise for foreign investment.
For three hours, Herr Muller regaled me with the joys of doing business in an England with a deregulated and reformed economy--such a contrast to the sclerotic regulation that trips him up in all his moves in continental Europe. He said again and again that one of the great attractions of doing business here was, first, that his management and work force in North Shropshire had grabbed the opportunities that he had presented to them and, secondly, that corporate and personal taxation was lower here than in most countries in continental Europe. Yet the Budget, which has been rushed out 10 weeks after the election, introduces 17 tax increases.
When Nicholas Ridley made his maiden speech in 1950, he quoted one of his predecessors, Lord Dunrossil, who spoke on the 1932 Budget. His statement was clear and as true then as it is now. "All taxation is bad." There is no tax that could be worse than the windfall tax. It is capricious, arbitrary and retrospective.
I do not think that the money yielded will be spent effectively. I have been around the world and I know that such welfare-to-work schemes are extremely expensive and they do not achieve their aim. In the 1980s, the Australians launched such a scheme, but when the Australian Bureau of Labour conducted an in-depth survey of it at the end of the 1980s it found that the results were so calamitously bad that it abandoned the project. I do not believe that the people of North Shropshire will take on school leavers next year; they will simply wait six months and then take them on, and the £60 bribe. That policy will distort the labour market unnecessarily.
The windfall tax is a tax on pensioners whose funds are overwhelmingly invested in the equities of the privatised utilities. Those pensioners also spend a higher proportion
of their income on the utilities' products. Current and future pensions will also be hammered by the Budget as a result of the changes to ACT and the dividend regulations.
When one considers that one of the previous Government's great successes was to build up private pension funds to the value of £650 billion, which is greater than the total sum of such funds held throughout Europe, and when continental Europe is beginning to realise that it has no chance of funding its pension commitment out of current taxation, it is utterly bizarre that we should turn the other way. The Bill will effectively take out £50 billion that would otherwise have gone into investment--that is what it will take to maintain current pension funds. It is simply not good enough for the Chancellor to say that many pension funds are overfunded; many are operated according to different contribution schemes. Between 5 million and 6 million people may pay £20 a month extra because of the Government's changes. That is a straight tax.
I do not believe that ACT will achieve the aim of trying to direct dividends into investment. A study conducted by the City university as recently as May has shown that, quite contrary to current Labour thinking, those companies that pay generous dividends also invest heavily in research and development.
A further particularly pernicious measure in the Bill is the change on tax relief on private health. I am sure that you have heard, Mr. Deputy Speaker, that many constituencies are beautiful; mine is as beautiful as any other and many people choose to retire there. There is always pressure on the health service and I find it extraordinary that the Government should now introduce a measure which could, according to one newspaper report at the weekend, put another 100,000 people on waiting lists. The average person over 60 on a private scheme takes £760 of care a year. The Government's measure does not make sense.
Another particularly pernicious measure which will damage North Shropshire is the increase in fuel duty. North Shropshire has five market towns and 98 villages. In such an area, the car is not some nasty polluting machine which should be locked up in a shed and the key thrown away; it is an essential tool of everyday life. To raise fuel duty by 6 per cent. above inflation is nothing less than vicious.
I see trouble ahead: the exchange rate is rising to levels where 500,000 export-related jobs must be put in jeopardy soon. Their loss will wipe out any advantage from the schemes paid for by the windfall tax. The Government have given all the tools away by handing over powers to the Bank of England. It is bound always to act conservatively and to take a tough line on interest rates. That is exactly what my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) forecast. He held it back, but it has now announced three interest rate rises. That will hurt businesses in North Shropshire.
I am highly alarmed by the relaxation of the inflation target. That is extraordinary because it will hurt those sectors that are dear to many on the Labour Benches, who are keen to see enormous increased spending on health and education. We, on the Conservative Benches, also want good quality services in those sectors, but we are aware that they must be paid for. There are precious few people like me who have been in wealth-creating industries and who can see the matter from the other side.
The Labour party was defeated heavily four times. It saw the command economies of eastern Europe fail and it grudgingly had to admit that state socialism has not worked. It has not, however, taken on market economics with any enthusiasm. It is not enough for the Government to employ the chairmen of enormous corporations and suddenly to say that they are the party of business. To be the party of business and to talk genuinely about the long term, the requirement is very simple, one needs low inflation, low tax and minimum Government interference. The Government still have an overriding belief that the state can direct the economy and steer money from dividends into investment. They do not understand the simple truths that have created the enormous successes such as Hong Kong, where the state only takes 16 per cent. of the gross domestic product.
The Labour Government do not understand that the reward for risk is profit, and that that profit should stay with the person who took the risk, even 10 years after he took it. The person who invests takes a risk. All the businesses that I have in North Shropshire are investing and they deserve to keep their rewards. They should employ people because those new employees will add value and will help their companies to grow. They should not take on employees purely because of a temporary bribe.
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