| Previous Section | Index | Home Page |
9.20 pm
Mr. Tim Boswell (Daventry): This has been an interesting and good-natured debate enlivened by four remarkably good maiden speeches. The hon. Member for Bexleyheath and Crayford (Mr. Beard) spoke, as did all the maiden speakers, with dignity and courtesy of his predecessors. He also spoke eloquently about skills and his concern for small businesses, points that I was pleased to hear from a Labour Member.
The hon. Member for Upminster (Mr. Darvill) introduced hon. Members to--or in my case, because I was born in Brentwood, reminded me of--the area around Harold Hill. We were touched by his remarks. The hon. Member for Morecambe and Lunesdale (Miss Smith) introduced us to her superb constituency. My hon. Friend the Member for North Shropshire (Mr. Paterson), in a remarkably literate speech, brought in references to Caractacus and several ancient texts, as well as talking perceptively about modern manufacturing industry.
As time is short, I shall not mention all the other contributions, but I must mention the robust criticisms of my hon. Friends the Members for East Yorkshire (Mr. Townend) and for Grantham and Stamford (Mr. Davies), although not everything that the latter says commends itself to the Opposition Front-Bench team. My hon. Friend the Member for Chelmsford, West (Mr. Burns) made a forceful contribution on a narrow but important point about care provision. I hope that Treasury Ministers noted it.
My hon. Friends the Members for Lichfield (Mr. Fabricant) and for East Worthing and Shoreham (Mr. Loughton) also made interesting contributions, not exclusively but largely, centred on the importance of manufacturing industry. They were right to flag up their concerns, which are felt throughout the House by hon. Members who, like me, will keep a close eye on the engineering industry and the implications of the exchange rate for manufacturing industry. That was an important sub-theme of the debate.
In a bipartisan spirit, I should mention the speech of the hon. Member for Eastwood (Mr. Murphy), to which I attended carefully because we used to meet across the student table, as it were. I was interested that he began to invite the Government to tease out some of the details of the welfare-to-work programme. He and the Government will find that matters such as the 16-hour rule are not without complexity.
We are beginning to reach the end of the set-piece Budget and post-Budget debates. We are moving, and some of us are now ready to move, to detailed consideration. It is already clear to Conservative Members that the Chancellor's glitzy presentation--popular versions, Internet and all--has been found out. The Budget is coming to pieces in front of us.
To return to first principles, why are we having a Budget at all? There would have been no Conservative Budget. We do not need one. There is one only because a new Labour Government has been elected on a Labour manifesto. I concede that that manifesto gives them the authority and mandate to implement the windfall tax and the welfare-to-work proposals. Before the election, we did not have all the details that we have now because the Labour party would not tell us too much about their proposals. Even on Budget day, we did not have the details that we have now because even the details in the draft Finance Bill had already been rescinded by Friday last. One remembers how compressed the timetable is.
On Friday, the Paymaster General announced that an amendment would be tabled to a Bill which had not yet been printed. The amendment was described by him as a small matter to ensure that the
This afternoon, the Leader of the House suggested that the draft Bill published on the Friday of the debate was some sort of consultative activity and that that discharged her responsibilities to provide a reasonable timetable. Communications may be slow in my part of the world, and I apologise for not being connected to the Internet yet, but many of us did not get on with scrutinising the Bill until Monday. That is reflected in the relative speed of response of the professional bodies.
It is also worth recording another bit of news from last Friday. The Paymaster General thoroughly got the wind up about the implications of his proposals on foreign income dividends for business location in Britain. It appears--I rely on the Financial Times, from which I get my Budget these days--that one telephone call from RTZ was enough to blow him away in a puff of wind. There is an important point here which reads across to ACT. The point that companies with substantial foreign interests made on foreign income dividends--whatever proposals the Government come up with--was that they objected to being taxed both in the country of origin and here. That is exactly the same point, although slightly differently made, as we make about ACT. Two days and two rethinks. That is perhaps not too bad when we did not need a Budget at all.
I come now to talk a little more about the windfall tax and its implications for the ordinary taxpayer, which are becoming increasingly and alarmingly apparent. The economic problem with the tax is, as we all know, that it claims to build a continuing structure for labour market
policy on a one-off tax. The fairness problem is that it chases fat cats who may well have left the scene as long as 13 years ago. The reality problem is that it hits companies that have, taken together, many millions of shareholders, and even more stakeholders through pension funds' and insurance companies' investments in them. Indeed, the bulk of their beneficial owners are pensioners.
I was interested in the remarks made yesterday and again today by the Chief Secretary. He suggested that the Opposition had pulled in their ardour in criticising the windfall tax. That is not so. We were entitled to assume from the assurances given by Labour before the election in its manifesto that the windfall tax was the only tax increase that a Labour Government would impose. So it is hardly surprising that we had a good deal to say about it. Now, after the election, we all know better. We have heard since then of 17 Labour tax rises and, above all, of the £5 billion annual hit on ACT. Alongside that, the one-off hit of £5 billion in windfall taxation almost pales into insignificance. Of course, both will end up being paid by much the same ordinary people whom the Chancellor claimed to befriend, and for whom he solemnly pledged not to increase taxes.
Before I deal with ACT in more detail, it is worth taking the time of the House to consider the overall impact of the Labour Government on such typical, ordinary people. Of course, not everyone is typical, but I hope that this will do.
A 30-year-old family man with a mortgage faces the need to pay approximately an extra £10 a month because of the change in MIRAS, plus an extra £25 because of three successive interest rate hikes. According to the estimate by the Association of Consulting Actuaries--I accept that the figures differ--he will also have to pay £12 extra a month to top up his pension. So far the total increase is running at £47 a month, but we must add the cost of second-round consequences, including the impact of pension changes on local authority pension costs and perhaps a couple of pounds a week for petrol. Even if he does not drink or smoke, he will then be paying an extra £50 a month or thereabouts. That does not look well, indeed it looks particularly bad for a Government who have pledged not to increase taxes.
One of my constituents, Mr. Morrison, recently told me in a letter:
I must express my genuine personal disappointment at the absence of a proper green report with the Budget. That is another broken pledge. I know that the Financial Secretary said earlier today that one would be prepared for the next Budget, which rather sounds as though this Budget is not really important and is considered a second-class one. I hope that, when such a report comes out, the hon. Lady and her right hon. and hon. Friends will follow our precedent by balancing green taxes with other helpful tax reductions. One should have a balanced package.
"legislation does not inadvertently take into account profits that arose while companies were in the public sector, in circumstances where profits for the financial year straddling flotation have to be apportioned. It is quite clear what is intended."--[Official Report, 4 July 1997; Vol. 297, c. 586.]
I find that somewhat doubtful. It may be clear to some of the sharper of my hon. Friends, but it does not appear to have been clear to the Paymaster General or to the Government when they announced their proposals. Perhaps he knows now, and will explain it in Committee.
"I phoned Mr. Brown prior to the election, concerning future fiscal policies. He informed me that no planned reduction in MIRAS would take place, and that I should look at the Labour Party Manifesto which did not include such measures."
Perhaps rather like one or two of the advertisements on the radio for financial institutions, my constituent should record his telephone calls to eliminate any possible confusion.
| Next Section
| Index | Home Page |