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9.15 pm
The hon. Member for Grantham and Stamford (Mr. Davies) also contributed to the Second Reading debate. Alone among Opposition Members, he has been honest enough to say what the Opposition would like to do about MIRAS. I shall quote two comments that he made in his speech that evening. When asked by the Economic Secretary to the Treasury what the Opposition would have us do, first he said that he would not reduce VAT on fuel, because that would be
More important for tonight's debate, when the hon. Member for Grantham and Stamford was asked about MIRAS--the next Opposition Member to speak may choose to agree or rebut, criticise or congratulate--he said:
We all know the essential details of the measure reducing MIRAS to 10 per cent. It has been welcomed by the Confederation of British Industry and others because it helps to place our public finances on a sound footing. It helps to create a system of stable economics. It removes once and for all the concept of boom and bust--that has been a litmus test of economic policy--and I am reassured by the fact that it prevents overheating in the property market. If we are talking about the working poor, as the hon. Member for Teignbridge (Mr. Nicholls) did tonight, that fact in itself is of great benefit to those at that lower end of the property market.
Mr. Loughton:
If the hon. Gentleman believes that the reduction in MIRAS will end the boom-bust syndrome in the property market, why have the Government not abolished it? Why have they introduced other measures in the Budget, especially that to remove ACT from equities--which has direct consequences for property investment by pension funds, among others--that will cause a marked return to a boom, which will inevitably be followed by bust in the not-too-distant future?
Mr. Murphy:
I thank the hon. Gentleman for that interjection. The Labour party takes a balanced approach to those issues. We are talking about a 5 per cent. reduction, whereas the previous Government brought about a 10 per cent. reduction. We are moving away from boom and bust towards long-term economics. I believe that the hon. Gentleman will be one of the next speakers in the debate and I look forward to hearing what he would have done in terms of MIRAS and all the other policies in the Finance Bill, were the Conservatives in government.
The hon. Member for Daventry (Mr. Boswell) said earlier that the Labour party was involved in an enormous "material breach of trust". I do not know why he asserted that--nothing could be further from the truth.
Mr. Boswell:
The hon. Gentleman will appreciate that, even if I complimented him on his last speech, I do not always have to do so. The point is that the then Opposition set itself up as somehow vested with moral superiority. They said that they would keep all their pledges, which the previous Government had not done, and that there would be no tax increases. There was also a specific
Mr. Murphy:
I thank the hon. Gentleman for that interjection. He clearly did not read our manifesto in detail, or the 12 ft by 8 ft posters about our tax policy, which were put up throughout the country. I was grateful to the hon. Gentleman for his compliments on my speech; he will be aware that, thus far, I have not complimented him on his speech, because it was devoid of coherent argument. I hope that any other speeches he makes this evening will redeem the quality of his argument.
The electorate are in no doubt who breached their trust before the election and, to an extent, since the election. They showed clearly that the Conservatives were distrusted on the economy and had surrendered that ground to the new Labour party. They believed that the Conservatives were the party of boom and bust--the party of the few rather than the many--and that the Labour party was the exact opposite: we believed in long-term economic prosperity and understood how to deliver it, and we believed in governing for the many rather than just the few.
Conservative Members sometimes find it uncomfort-able to talk about polling evidence. I contend that it is sometimes helpful for politicians to be in touch with public feeling and public opinion. That is one reason why we sit on the Government Benches putting forward our Finance Bill, while Conservative Members sit on the Opposition Benches with a 23-word amendment which will do nothing to improve the economy. Nevertheless, in opinion poll after opinion poll before and after the general election, the public realised that the previous Government's inactivity and economic impotence brought about repossessions and negative equity.
More important than any headline figure, the individuals who make up that polling evidence want long-term economic stability. They want to be able to plan their lives for the next five or 10 years, which is why people, especially my constituents in Eastwood, welcome the idea of long-term planning. Even after the reduction in MIRAS, families with a £50,000 mortgage are £250 better off than they were at the high point of interest rates under the previous Government.
We have heard much this evening about how Labour has allegedly lost touch with those who represent the "working poor". In addition to the contents of the Finance Bill, which will help those very people and bring about long-term prosperity, it is important to consider what we have done in respect of education for those people, and what we will do in respect of the health service for the majority of our population, and in respect of job opportunities to ensure that many more people are working and many fewer people are poor.
That is why I am eager to lend my support to the Finance Bill. With reference to the working poor, I want to ensure that many more people are working and far fewer are poor.
Mr. Robert Walter (North Dorset):
I hope that the Committee will forgive me if I rise to the challenge of the hon. Member for Eastwood (Mr. Murphy), who asked what we would have the Government do. We would not have introduced a Budget at this time, so we would
I shall try to confine my remarks to the reduction in MIRAS and the implications for home ownership. From the contributions that we have heard this evening, it is clear that Conservative Members are concerned about that, whereas Labour Members seem less concerned.
I congratulate the hon. Member for Dudley, North (Mr. Cranston) on his honesty and frankness with the Committee when he said that he wanted the total abolition of mortgage interest tax relief. From the answer he gave, I suspect that he was not so frank with his constituents at the last election, which may be a pity. None the less, I am sure that they are all avid readers of Hansard and that they will be put right tomorrow morning.
The clause is a mean measure. It fails to meet the criteria or the rhetoric in the Chancellor's Budget statement. In his concluding remarks in that statement, the Chancellor said:
"a perverse thing to do."
It is making an unusual and warped value judgment to suggest that reducing charges for the most vulnerable members of our society would be perverse.
"I would have got rid of mortgage interest relief altogether."--[Official Report, 10 July 1997; Vol. 297, c. 1120.]
15 Jul 1997 : Column 280
That is a telling statement of the feelings of many Conservative Members; thus far, it has been the only statement by any Opposition Member on what they would have us do. Until such a claim has been rebutted or clarified, I, for one, will take that as a statement of what the Conservatives would have done if they had been in government.
The hon. Member for Ashford (Mr. Green) made what seemed, at least to me, an unusual comment--he mentioned Shelter's briefing on the Budget. It is unusual for a Conservative Member to compliment Shelter, as the previous Government did so much to bolster its business. That is one of the businesses and organisations to which the previous Government did bring increased funding and increased business--because of their housing policy, the number of repossessions, the amount of negative equity and the difficulty caused to what have been described tonight as "the working poor".
"The measures that I have announced today for stability, for investment . . . will make Britain better equipped and more ready to face the future with confidence.
For this measure, the people will pay. In the first year of its introduction, they will pay £900 million. I am sure that people will be delighted with that contribution to their long-term investment in their homes and in home ownership.
Previous Budgets pursued the short-term interests of the few. This Budget advances the long-term interests of the many. It is a Budget that equips Britain for the future--meeting the people's priorities. It is a people's Budget for Britain's future."--[Official Report, 2 July 1997; Vol. 297, c. 316.]
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