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Mr. Rendel: On that point, if the woman has a veto, what will it do to her marital relations if she tries to use it?
Mr. Fallon: Absolutely. That is the tangle that the Government are getting into. It is something that we need to know.
Secondly, perhaps the Paymaster General could answer the question from my hon. Friend the Member for Grantham and Stamford (Mr. Davies). If the working families tax credit is such a good idea, why are the self-employed exempt from it? Why does it not apply to them? The Secretary of State for Social Security was asked that six hours ago and she could not answer it because the Treasury has not told her yet. That is the Muppet show to which the Department of Social Security has been reduced. Not only is the Secretary of State unable to give us the answer, but she cannot express a view on whether or not it is right to extend the tax credit to those who are self-employed.
Thirdly--and this is a trickier question so perhaps the Paymaster General will be able to get his mind around it--how will the working families tax credit be classified in terms of expenditure? Let me quote from the Red Book:
While we are on the subject of the Red Book, perhaps the Paymaster General can enlighten us on another matter. What has happened to the privatisation programme, which appears to have come to a grinding halt? Under the Conservative Government it was running at around £4 billion a year. In the current financial year, it brought in £2 billion from sales that we arranged. For 1998-99, it is forecast to raise £0 billion. We now learn from the Red Book that
Finally, perhaps I can turn to the much trailed code for fiscal stability. You will share my concern, Mr. Deputy Speaker, that the document entitled "Budget 98" was published the day before the Budget, and, worse still, was publicly launched in the newspapers. Let us be very clear. Only a Labour Government would need a code for fiscal stability, given the mess that we inherited in 1979. The code presented on Monday fails the test of seriousness required of any code.
The code is not in the "Budget 98" publication. There will merely be two clauses in the Finance Bill requiring the Chancellor to publish a code by next December. He has taken the power to modify the code if the Treasury requires that. The code is supposed to be binding on the Government, but they are allowed to modify it. The code will be limited to the relationship between taxation and
expenditure; it will not cap taxation. It will not and cannot stop this Government continuing to increase the overall burden of taxation.
Yvette Cooper:
Does the hon. Gentleman accept that the previous Government doubled the national debt? Is that what he means by fiscal stability under the Conservatives?
Mr. Fallon:
The hon. Lady knows that the national debt tends to rise in times of recession. We had it on track to descend without the additional tax increases that the Government have introduced.
Dr. Ladyman:
Will the hon. Gentleman give way?
Mr. Fallon:
No. I want to leave the Paymaster General plenty of time to grapple with my questions.
As we have the pleasure of the Paymaster General's company, perhaps we could subject the Budget to the Robinson test. At the Labour party conference last October, the Chancellor said:
Back in December, in an article that described him as a "deeply hurt Robinson", the Paymaster General said:
The Paymaster General (Mr. Geoffrey Robinson):
One point on which I can respond positively to the hon. Member for Sevenoaks (Mr. Fallon) is that the ultimate test of this and all our Budgets--and all the measures that we intend progressively to introduce in a great programme of reform that Conservatives signally failed to undertake during their 18 years in office--will be the management of the economy and the stability that we are setting out to achieve. I therefore say right at the beginning of this winding-up speech that everything we have done since we took office in May has been done with achieving that stability in mind, very precisely to avoid all the errors of previous Governments--both Labour and Tory--that took
Such a cycle is the most damaging thing for small companies, to which many Conservative Members have paid tribute. It is the most damaging thing for families. It is the most damaging thing to the economy of the nation. That is why, on the very day we took office, the Bank of England was granted operational independence. That is why we set in hand a series of changes that, so far from being piecemeal, were successive parts of an overall plan to take the emphasis away from paying dividends in the corporate sector to investment and long-termism. That is why we abolished tax credits.
That is why the second, logically following Budget--unlike what the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) seems to think, the Budget was part of an overall plan--neatly dovetailed to accommodate what practically can be done. I shall come to some of the practical problems in which Conservative Members are seeking refuge. As they realise that the principles of reform, progressive reorganisation and welfare and the incentives to work are things with which they must agree, they seek to take refuge in a series of pettifogging details that we shall have plenty of time to sort out over the next 18 months before the changes are introduced.
In the context of long-termism, we turn to savings. We know the Conservative party's appalling record through the 1980s, when the country had the misfortune to have it in office. We had a negative saving ratio for five years on the trot in the mid to late 1980s.
Mr. Ruffley:
What about what is in the Red Book?
Mr. Robinson:
There is a long way to go before it becomes negative. The hon. Gentleman must realise that the forecasts are there, they are Conservative forecasts and they are in the Red Book. I am very well aware of them. Has he the slightest idea of the difference between the projection and the negative rate that the Conservative Government achieved for five successive years in the 1980s? They are not at all comparable.
Let us talk about the individual savings accounts programme and what has been said about it. The new savings plan has been widely welcomed by every product-producing institution in the City of London. It has been welcomed by the Association of British Travel Agents, by Marks and Spencer and by areas of the retail industry that are intending to introduce the cash ISA to reach the half of the population that did not save at all and was untouched by the Conservative Government's PEPs and TESSAs.
"The net cost of WFTC is split between 'accounting adjustments' in GGE, and 'other receipts and accounting adjustments' in GGR . . . whether or not any or part of WFTC should score in the Control Total has not been decided."
Perhaps the Paymaster General can assist us on that point.
"The Government has not announced any specific sales for 1998-99 or subsequent years."
Is privatisation now off the agenda? What has happened to the sale of London Underground or the immediate review of the Post Office that was promised? What has happened to the "National Asset Register" that was launched in a great fanfare last November? Under the previous Government, asset sales were running at £3 billion or £4 billion a year. Why are they now forecast to come to an end?
"A Labour Chancellor will not permit tax reliefs to millionaires in offshore tax havens."
There was not much about offshore trusts in the July Budget. There is not much about them in the Red Book. We did not hear a great deal about them on Tuesday.
"Indeed, I could show you internal Treasury documents to show that I have been working against my own financial interests on this policy. You will be pleasantly surprised."
We doubted it then and we certainly doubt it now. The only changes proposed to offshore trusts affect those set up before March 1991 and those to be set up by non-domiciled settlers. Will the Paymaster General confirm that, after the changes, he will still be entitled to tax-free income from the dividends on the shares that are held offshore in a trust on his behalf? The man who wanted to cap everybody else's tax-free savings at £50,000 and who is now to limit them to £5,000 a year will still be entitled to keep his millions offshore, tax free.
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