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Mr. Deputy Speaker: Order. I am afraid that the hon. Gentleman has already used his 10 minutes.

7.36 pm

Dr. Stephen Ladyman (South Thanet): Thank you, Mr. Deputy Speaker; I am grateful to be given the opportunity to contribute to the debate today, especially as the Minister on the Front Bench today is my hon. Friend the Paymaster General. On behalf of my constituents, I have made representations to my hon. Friend over the past few months about individual savings accounts and personal equity plans, and when I heard the Budget I was most grateful to find that those representations had borne fruit and that the Government had recognised the problems.

I have been receiving telephone calls in my constituency office over the past two days from people saying, "At long last, we have a Government who really mean it when they say that something is out for consultation, and who really listen when people make representations." Long may that continue.

It is typical of the Conservative party that when we listen to representations we are accused of doing U-turns, and when we do not listen we are called stubborn and arrogant with power. That is typical of the way in which Conservatives have addressed the issues over the past 11 months.

Listening to the debate, not only this afternoon but over the past two days, I have been struck by how detached the Conservative party seems to have become from reality. Conservative Members have obviously been told what to say--presumably by their public relations people, whom I shall not call spin doctors because I know how odious the employment of doctors has been to the Conservatives over the past 18 years. They have been told to refer to their golden legacy. That legacy is as mythical as golden goose eggs.

Conservatives constantly refer to the high level of the pound without pointing out that it was their failure to increase interest rates before the election that caused the need to increase them after it.

The Leader of the Opposition began his remarks after the Budget by saying that the Opposition would support some of the tax reforms for business, but, by yesterday, he was saying that he opposed tax reforms for business. Opposition Members have been told to say constantly that this is not a business-friendly Budget, but they cannot offer an explanation for why the stock market is breaking all records.

I do not want to pick on any individual Opposition Member, but I was struck by the comments of the right hon. Member for South Norfolk (Mr. MacGregor). He began by telling us that he did not understand the working families tax credit and, because he did not understand it, that it could not work. That was a strange argument. He then talked about the effect of petrol prices on rural communities, but forgot to point out that the escalator to increase petrol prices above the level of inflation was set by the previous Government at 5 per cent.

Mr. Ruffley: The hon. Gentleman is wrong tosay that there is some equivalence between the

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increases announced by the last Conservative Chancellor and those announced by the current Chancellor. The two increases announced in last July's Budget have taken place over the few months since then, and that is in no way equivalent to what was factored in by my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke). The hon. Gentleman is plain wrong--will he apologise?

Dr. Ladyman: I do not accept that I am wrong. The previous Administration introduced the escalator with a great deal of pride and claimed it as some testament to their environmental credibility.

The right hon. Member for South Norfolk raised the question of church repairs. He seemed at one point to be calling for higher income tax so that there would be more covenant income, but he failed to point out that rural churches are suffering as a result of the level of VAT on repairs, which was introduced by the Government of which he was a member.

That is typical of the unreality of the Conservative party in this debate. Opposition Members have failed to mention people, which is what this Budget is all about. It is about people who have ambitions. Even unemployed people and those who have been out of work for a long time have ambitions. They may not be big ambitions, like those of hon. Members, but they are important to them. Someone on a fixed-benefit income is unlikely to be able to achieve those ambitions. This Budget is about getting those people back to work and recreating their ability to fulfil their ambitions.

I have been impressed by what the Chancellor has done in the Budget and I have tried to put it into some context. Slipping off message for a moment, having spent most of my life working for the Labour party in one form or another, I know that the old debates in the Labour party were about creating work, full employment and fighting unemployment. It is only recently that what some call old Labour started talking about benefits. No one has ever told me that the Jarrow marchers marched for increased benefits--they marched for increased work. My right hon. Friend the Chancellor has reverted to the old traditions of the Labour party to create full employment, and he is to be congratulated. He is not new Labour or old Labour--he is older Labour.

It is easy for Opposition Members to put down the fact that my right hon. Friend has provided £50 million for rural transport, but it is £50 million more than the Conservative Government ever made available. They closed down bus services with their deregulation policy. The money will go a long way towards helping rural constituencies. It is not the full picture, but it is at least a start.

Encouraging zero-emission vehicles and clean vehicles is close to my heart, as a company is to build a factory in my constituency where zero-emission vehicles will be produced. The Chancellor has commented on the differential between duties on certain types of clean fuel and petrol. I ask him to look at the possibility that hydrogen--which is needed to drive fuel cell-based vehicles--could be included in that differential. The Chancellor should look also at VAT regulations in respect of investments in taxis and buses where those vehicles are powered by zero-emission engines and clean engines. The Chancellor may be able to encourage investment in clean technology over and above the measures in the Budget.

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I very much agreed with the comments of the hon. Member for Beckenham (Mrs. Lait) on bootlegging. I have a tremendous problem with bootlegging in my constituency. Just last week, I found a young man lying outside the door of my constituency office, vomiting. He could not have been older than 14. I put him in my car and took him home to face the wrath of his parents. He would have been drinking bootlegged beer, which is creating a tremendous social problem in my constituency. The police tell me that it is becoming a major problem. The Chancellor must try to improve security and controls on bootlegging, and he has said that he is willing to consider that. The more he does in that area, the better.

Mr. Deputy Speaker: Order.

7.46 pm

Mr. Archy Kirkwood (Roxburgh and Berwickshire): The longer I serve in the House, the more I think we should look carefully at how we introduce Budgets in it. This Budget is particularly complicated and technical, and it is slightly bizarre and daft that the Chancellor has to get involved in so many different issues and, in one great splurge, release his plans--having been in Budget purdah--on an unsuspecting world, which makes it difficult for those of us who follow these things, particularly technical issues such as social security, to cope with them adequately.

I pay credit to the Government; the Chancellor was wise to make his pre-Budget statement in November. It assisted those of us who are interested in the areas he said he was looking at and it made the work of the Social Security Committee easier. Our third report has direct relevance to this debate and I hope that hon. Members will get a chance to look at the detail of the important matters we investigated.

The Paymaster General is to wind up the debate. He is a man with influence on budgetary matters. Perhaps the Modernisation Committee should examine whether we should have an annual uprating statement, including a technical amendment of taxes Bill, and then leave some of the other complicated issues--such as working families tax credit--to be dealt with in a more consultative and deliberative way. I welcome what the Government have done in so far as it relates to low-income working families.

I want to deal with some of the matters that I think require further attention if these reforms are to be implemented successfully. It is important that, in moving to working families credit, we build on the successes of family credit. I remember the difficulties that arose when family credit was introduced in 1986, especially in terms of take-up, but the benefit now has a good record, not only in rates of take-up but in effective administration. In 1996-97--the most recent year for which figures are available--91.9 per cent. of new family credit claims were paid within five days. Moreover, 91.3 per cent. of assessments were accurate. By benefits standards, that is hard to beat. Those hard-won standards ought also to apply to the new working families tax credit.

I propose that, so that we know clearly what is going on, and because statistics are out of date--it is sometimes two or three years before they are made available--the

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Government consider setting an annually published target for take-up of working families tax credit. Everyone, including me, assumed that the working families tax credit would automatically have a higher take-up, but--if I understand the fine print--it will have to be applied for. If so, we may be going back to what happened with family credit in 1986, which would be a great shame. I hope that the Government will be alive to that and consider take-up rates as a matter of urgency.

The Paymaster General is the most appropriate Minister to whom to address these comments and I am sure that the Secretary of State for Social Security will thank me for doing so. The technology with which the Benefits Agency works is obsolete and inadequate to meet the demands that the changes proposed in the Budget will bring. It is no use waiting for the millennium bug--or some other excuse--before renewing the equipment; is now 10 or 12 years out of date and badly needs updating. If we do not take this opportunity to do so, we shall ask the impossible of those Benefits Agency staff who will have to implement the administrative changes and it will be unfair if we then expect them to get the new benefit right first time.

The Social Security Committee has set itself the task of examining the implementation of the measures proposed in the Budget, especially working families tax credit. The Treasury Committee will, of course, examine them, too, and we shall study with interest its investigations and recommendations after direct examination of Treasury Ministers.

I think that the adverse effect of the Budget onsmall employers and the self-employed has been underestimated. I was not convinced that Martin Taylor, who otherwise did a very good job, spent enough time considering that problem in enough detail. We shall have to return to that matter.

The Secretary of State for Social Security gave me half an assurance that she, in concert with her colleagues in the Department of the Environment, Transport and the Regions, was doing more about housing benefit. I understand the necessity for that. If housing benefit is left as it is, it could, for many of the families that we hope will be assisted, soak up the whole financial benefit derived from working families tax credit.

I agree with the hon. Member for Croydon, North (Mr. Wicks) that the quality of child care is an essential issue. As a second order question, I think that someone should examine the future on-costs for local authorities of registering child minders and child care facilities.

We shall also need to consider the wallet versus purse issue. The hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) was not right in very much of what he said, but he was right to draw attention to some of the difficulties in judging to whom the girocheque should go. Giving evidence to the Social Security Committee, Martin Taylor made much of the importance of the psychology of paying the benefit through the wallet rather than the purse. We will all have to be careful and monitor exactly how choices about the payments are made so that we can ensure that the full benefits of these changes are realised.

On part-time work, I think that a new watershed may be created by the 16-hour qualifying period. Many of my constituents are part-time workers in the knitwear

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industry. There may be consequences if we create such a huge watershed. We shall also have to watch that situation carefully.

I believe that the proposal to protect the rights to national insurance benefits for those who earn between £64 and £81 a week will create a three-tier system. First, there will be those who earn less than £64. Secondly, there will be those who earn between £64 and £81, who will receive credits, although I do not know how people who appear on the payroll at £70, for example, will be identified so that they can be credited. Will it be the employer's responsibility to notify the Inland Revenue that they have suddenly come on to the payroll at that rate? Thirdly, there will be those who earn more than £81, who will receive full national insurance benefits. That is another important matter needing careful examination.

Again, I agree with what the hon. Member for Croydon, North said about the future of child benefit. The Select Committee, on which I serve with the hon. Gentleman, will want to examine that question and contribute to any consultation. I also agree with what he said about the contributory principle--but perhaps we shall learn more about that when the Green Paper is published next week.

The Budget is welcome in so far as it relates to welfare to work, but I fear that the Government may be ignoring people who are excluded from the world of work, particularly rural low-paid pensioners. I also believe that the Government's macroeconomic stance is creating difficulties for manufacturing industry, especially exporters, who are suffering because of the high value of the pound.

Some of the points that have been made about disadvantage in rural areas also need further consideration, but I welcome the Budget in so far as it relates to the incentive to get people back to work. However, we must ensure that there are enough jobs, as there is no point trying to get people off benefits and into work if there are no jobs for them to go to.


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