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Mr. Syms: Some 55 per cent. of the value of pension funds is invested in UK equities, and the change in the tax regime will inflict a body blow on those pensions. Does my hon. Friend believe that this will mean greater investment not only in property, but in foreign equities and economies?

Mr. Loughton: I am grateful to my hon. Friend for hurrying me along to a point that I intended to make and to which I shall come shortly.

I wanted to deal with one of the Government's favourite betes noires--as far as the rest of the House is concerned--the windfall tax. The utilities sector has gone up in the stock market, which is not what one might have expected. But it has lagged behind the rest of the stock market for many months because of the threat of the windfall tax. It has gone up by 1.8 per cent. If the utility companies have been so despicable, evil, fat-cattish and exploitative in wanting to grab higher charges from the consumer, why are the Government not instructing those companies to give back the equivalent of the windfall tax to the users of electricity, water and other utilities? Surely that would be much fairer than grabbing it for themselves for their own pet projects where, as we know, it will be wasted.

One has to query whether the Government trust the regulators, whose appointment they were happy to go along with. The whole point of having regulators to

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regulate monopoly or near-monopoly utilities is that they are the ultimate arbiters to set fair prices for the consumers. As the rug has been pulled from under the feet of those appointed regulators, are we going to see a swathe of sackings among them in the next few weeks?

In the year 2000--when many of the electricity companies must renegotiate the prices they will be allowed to charge consumers--a key criterion within that policy will be the level of borrowing. Many of the electricity companies do not have large pots of ready cash, and will have to increase their borrowings to pay the windfall tax. That will be a part of the consideration when prices are considered. QED--it does not take a mastermind to work out that prices, and the consumer, will suffer yet again.

Another point that the shadow Chancellor, my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley), has made on a number of occasions is that if the Government accept that bringing in the welfare-to-work scheme to create false jobs with subsidies will work, they must equally accept that loading businesses with the type of social contract implicit in the social chapter can only destroy jobs. The Government have been quiet on considering the other side of the coin.

We must consider briefly two more sectors. Another strong mover in the stock market in the past eight days has been the alcoholic beverage sector--the sparsity of Labour Members in the Chamber today may account for the strong performance of that sector--yet we were promised that the Budget would give careful consideration to alcohol duties. The preamble to the Budget raved about alcopops, and yet one of the biggest movers on the stock market has been the alcoholic beverages sector.

I am delighted that Labour Members are listening so intently to this pep-talk on how the stock market works, because they are obviously interested in entering that circle. Only this afternoon, the Chancellor claimed that he had cooled down consumer demand.

Mrs. Liddell: Will the hon. Gentleman give way?

Mr. Loughton: Yet again, I shall give way graciously.

Mrs. Liddell: The hon. Gentleman seems to be getting near to his wind-up. We have asked on two occasions for him to give his views on personal taxation. I specifically asked him if he would give us his view on the points raised by his hon. Friend the Member for Grantham and Stamford (Mr. Davies) and those of other hon. Members who referred to personal taxation. Which aspect does he agree with?

Mr. Loughton: I am grateful for yet another intervention from the hon. Lady. My hon. Friend the Member for Grantham and Stamford (Mr. Davies) went on at length because, having experience in the City, he knows the subject well. I watched most of his long speech on television intently, after the news bulletin. The hon. Lady may be referring to the fact that he advocated that the Government should abolish mortgage interest relief altogether. That is not a view I share. My hon. Friend is not a member of the Front-Bench team and is not in a position to advocate such personal tax changes.

The final sector of the stock market about which I want to inform Labour Members is retailing. This afternoon, the Chancellor informed us that he had cooled down

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consumer demand through personal taxes the like of which the hon. Lady might have been alluding to. Yet shares in some retailers have risen by 11.5 per cent. on the stock market in the past eight days. The key retailer, Dixons, announced yesterday that like-for-like sales of clever, foreign, imported, wide-screen gizmos were up by no less than 17 per cent.--yet another recipe for disaster for the import-export bill, inflation rates and, therefore, for what will have to happen to interest rates.

Mr. Syms: Does my hon. Friend agree that the high exchange rate will also help to feed the domestic boom in the high street because it will reduce the cost of many of the goods that people want to buy? That boom will become a major burden on our balance of payments and will continue to unbalance the United Kingdom economy.

Mr. Loughton: Of course, my hon. Friend is right. That is the thrust of what I have been trying to say. What was supposed to be a balanced and measured Budget has had completely the reverse effect. Judging from the reaction of Labour Members, I take it that they no longer want the flourishing or otherwise of the stock market to be their benchmark for the cleverness of the financial measures that they are proposing. So, will they listen to the stock market in future or not?

Another article in the Financial Times--that paragon of truth and leaked virtue--today, which was mentioned at Treasury Question Time states:

We have sort of been assured that there is no U-turn. If the Economic Secretary to the Treasury would like to intervene, I should be delighted for an answer on that one. Last Friday, the same publication showed that abolishing FIDs, foreign income dividends--another tricky speller--purely creates an irrecoverable tax charge unless companies are

    "mainly owned by foreign shareholders",

as the Budget red-white pretty-picture book put it the other day. That has two implications. As a leading FTSE company, RTZ, advocated last week, a company can either change its domicile overseas to somewhere like Bermuda or it can become the subject of a foreign takeover. Perhaps the hon. Lady would like to inform me. Is she encouraging British, blue-chip FTSE companies to change their domicile and taxation status to Bermuda or would she like them all to be taken over by foreign companies? I am genuinely interested to know because that is the implication of what the Government are advocating.

In conclusion--[Interruption.] and in response to the troop of morris dancers behind me, I must briefly return to advance corporation tax and the pension funds, which my hon. Friends have mentioned many times. Every time that we mention ACT and its effect on local authority pension funds, we are told, "What a cheek the Tories mentioning local authorities." It is not a cheek that I am concerned about my county of West Sussex, where the changes to ACT will create a black hole of up to £4 million.

What would the Government suggest to those Conservative councillors who have recently taken back control, have returned serious amounts of money from the bureaucrats in county hall to the schools and overturned a ruling that would have slashed lollipop ladies' pay? Where would the Government make the savings?

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West Sussex has the most pensioner private medical insurance schemes in the country. In the borough of Worthing alone, more than 1,000 people over the age of 60 are insured with BUPA. That is not a small number of people. Many people have come to me during the general election campaign and since saying that they will not be able to afford private medical insurance if the changes go through. That is in an area that, under the Government's formula, both before and after the general election, comes 98th out of 99 in the list of underfunded health authorities.

That is yet another example of how political spite would rather increase the waiting lists--just as, with the assisted places scheme, it would rather increase the numbers in the classrooms--than allow people the freedom to spend their money as they choose and save money for the national purse.

The Budget is a terrible case of attempted deception--of having one's cake and eating it. It is not good enough for the Government again and again simply to shrug their shoulders, say "Not me, Guv", and point the finger at the Bank of England to take responsibility when anything goes wrong. Ironically, the Budget represents a triumph of short-termism. Alas, when the real damage becomes clear to my constituents, they will be too old and it will be too late. I, for one, will continue to oppose the Finance Bill with vigour.

9.15 pm

Mr. Ross Cranston (Dudley, North): I have only five minutes to address the House, so I shall identify only a few points. When the right hon. Member for Wells (Mr. Heathcoat-Amory) opened the debate for the Opposition, I was unsure what their view of the windfall tax was and whether they still objected to it. Certainly, we have a mandate for it, and it is generally accepted. The other day, BG said:

If Conservative Members want to go back in time in relation to the windfall tax, they must examine carefully their own policies which led to lax price controls on the utilities. That was an important element in our thinking. One estimate is that operating profits in the utilities in the period 1991-92 to 1992-93 rose by about 48 per cent. Customers paid a high price for Conservative laxity. I welcome the windfall tax, which redresses an injustice.

I hope that in her review of utility regulation my right hon. Friend the President of the Board of Trade will ensure that the utility companies do not pass on the effects of the tax in price increases. My right hon. Friend the Chancellor told the House the other day that he thought that that could be ensured, and I agree: consumers should not end up paying twice over for the behaviour of the utility companies. In Committee, we can discuss matters such as the formula for calculating the rates, but I shall pass over that at this point.

Conservative Members do not seem to take social justice into account. We heard earlier about the withdrawal of relief on medical insurance premiums. When that relief was introduced in 1991, it did not have the predicted effect and did not induce more people to take out medical insurance. The result is that our change is not the mean measure that

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some Opposition Members have described but a recognition of the fact that it is better to benefit the many rather than the few.

Labour Members were interested by the remarks of the hon. Member for Grantham and Stamford (Mr. Davies), who suggested that mortgage interest relief should go completely, a sentiment with which I have some sympathy. It is an untargeted subsidy. While there is a case for some sort of mortgage subsidy, it should be more equitable.

Finally, I mention the encouragement that the Finance Bill provides through the reduction of corporation tax and the provisions for capital allowances. That is one aspect of the Chancellor's strategy to promote long-term growth. I am especially pleased with the provisions on films, which are in line with the recommendations of the Middleton committee and should enhance our position as a leading film-making centre.

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