Previous SectionIndexHome Page


Mr. Hammond: Does the hon. Gentleman accept that the confusion and uncertainty over the future of PEPs, TESSAs and ISAs has permanently damaged the saving ethic of the middle classes?

Mr. Robinson: That is the most ridiculous thing that has been said from the Conservative Benches all evening. The savings plan has been welcomed; we are confident that it will be a great success. I have had nothing but a welcome for the new proposals and a determination to see them fully taken up.

The hon. Member for Sevenoaks asked what we can say about the proposals for the new ISA in respect of the amounts and the duration of the tax relief arrangements. I can give him an assurance of the sort that has not been given by a Government before. He knows that it was an open secret in financial circles that the Tories themselves were planning a cap on the exponential growth of both TESSAs and PEPs, especially PEPs.

We are the first Government to have given a commitment covering 10 years, and that commitment puts in place the certainty that the savings community needs. Yes, we shall review the arrangements after seven years, but the commitment to 10 years is absolute. Yes, those savings will continue to enjoy at least the present levels of tax relief. Again, this is the first time that any Government have given that undertaking, and we do it precisely to avoid the sort of uncertainty that underlay PEPs and TESSAs. Conservative Members know that that is true.

Yes, we have said that the amounts that we envisage for the 10 years will remain as they are, and will not be reduced, although they may be reviewed. We have made that clear. Indeed, in the latter stages of the consultation--[Interruption.] They will not be reduced. If the right hon. Member for Wells (Mr. Heathcoat-Amory) does not understand what I am saying, I am sorry for him. It is a bit late in the evening, and we understand.

In the consultation period, it was put to us that to get the cash element of the new ISA, which was so important to us, off the ground, an increase in the first year, directed towards that cash element, would be welcome. We therefore made an increase for the first year--from £5,000 to £7,000--in the latter stages of the consultation, and it has all been extremely well received.

The hon. Member for Sevenoaks asked what we were doing about privatisation. I can tell him this: we shall not have any more of the rip-offs that the Conservative party allowed and we shall not have any more fat-cat millionaires--[Hon. Members: "Like you."] We shall not. As Conservative Members have understood, the whole capital gains tax structure is geared towards those who undertake to make their business assets work hard to increase their capital gain. That is precisely the aim.

Mr. Gerald Howarth (Aldershot): Will the hon. Gentleman give way?

Mr. Robinson: I shall--not that the hon. Gentleman has been heard much in the debate, but as it is him, I shall give way in a moment.

19 Mar 1998 : Column 1507

There will be a statement tomorrow on the London underground and I advise hon. Members to attend. It will be most instructive for them to see what progress we are making, especially in avoiding the sort of traps that the Conservatives fell into. The hon. Member for Sevenoaks should take note of the arrangements that my right hon. Friend the Deputy Prime Minister will unveil.

A review of the Post Office, too, will shortly be announced, and the hon. Gentleman will see that we are also making progress there--progress on a balanced set of relationships between the public and the private, which avoids the Conservatives' mistakes.

Mr. Howarth: I am grateful to the Paymaster General for giving way to me, despite the fact that I have not been able to participate in the debate as much as I would have liked. He will not be allowed to get away with the assertion that the taxpayer did not get due value for money out of rail privatisation. The assets did not achieve a better market value because investors were put off by the Labour party's threats to take the assets back into national ownership.

Mr. Robinson: The hon. Gentleman will probably regret that intervention on reflection, but I am pleased that he made it because it enables me to clarify one point of distinction about rail privatisation that is worth making. I think that the Conservatives, slow and painful though the process was, came to learn the error of their ways in some respects, and their treatment of Railtrack avoided some of the worst aspects of their earlier privatisations. However, that did not stop the Tory Government making a hopeless mess of the rolling stock companies. Because of the definition that we used, ROSCOs were not drawn into the windfall tax, but there is every reason for thinking that they should have been. Even the hon. Member for Aldershot (Mr. Howarth) cannot feel terribly proud of them, even on commercial terms, let alone in terms of the national interest.

We are pressed for time and I shall make progress as quickly as I can. The hon. Member for Sevenoaks said that there was nothing in the Red Book about the code for fiscal stability, which is an important element in our approach to the economy. Our approach is totally different from that of the Conservatives; it is long term and principled, unlike the short-termism that characterised the Conservative Government.

That short-termism led to our taking office with accelerating interest rates, because action was not taken--

Mr. Duncan Smith: What?

Mr. Robinson: Absolutely. Where has the hon. Gentleman been for the past four years? He must have been living somewhere else. It is an acknowledged fact that the previous Chancellor of the Exchequer refused, for purely electoral, party political reasons, to increase interest rates when he should have done, and that inflation

19 Mar 1998 : Column 1508

was accelerating, which is why, on our second or third day in government, my right hon. Friend the Chancellor had to take steps.

Mr. Fallon: Will the Paymaster General give way?

Mr. David Heathcoat-Amory (Wells): Will the Paymaster General give way?

Mr. Robinson: I shall be delighted to give way in a moment. I should point out to Opposition Members--as they fight each other to clamber to the Dispatch Box--that the code for fiscal stability was published in November. If it escaped the attention of the hon. Member for Sevenoaks--who probably did not hold his present position on the Opposition Front Bench then--I shall arrange for him to receive a copy.

Mr. Fallon: If the Paymaster General is now happy with the level of interest rates, is he equally happy with the high value of sterling?

Mr. Robinson: The hon. Gentleman raises a fundamental question. Conservative Members may not like it, but they must realise that they got into a mess and produced the two biggest recessions in this country's economic management since the war. We have to go for stability--stability is vital to big and small businesses. Our exporters are having a tough time, but other countries have come through these periods. If we were to give in to short-term pressures at this stage--when we could go for long-term sustained stability and growth--we would be making precisely the same mistake as the Tories. [Interruption.]

Mr. Deputy Speaker: Order. The hon. Member for Bury St. Edmunds (Mr. Ruffley) must behave himself.

Mr. Robinson: I am grateful for your help, Mr. Deputy Speaker, although I have to say that I had not noticed the hon. Gentleman misbehaving. He was probably behaving normally.

Mr. Fallon: Will the Paymaster General give way?

Mr. Robinson: The hon. Gentleman must sit down. I have answered his question. If he does not understand it by now, he never will, and he is in for a long period of having to learn about economic management. The sooner he learns--for his own sake--the better. The Government are committed to a long-term stable economy that will avoid the stop-go policies that damaged so many businesses, put so many people into negative equity and broke so many hearts. Shadow spokesmen must learn; there is no short cut on this, and we intend to see it through.

Many right hon. and hon. Members have taken part in what has been a good debate. On the whole, it has been well attended. That is still the case. There has been a tendency for Conservative Members--with one notable exception--to say that the problem is that the detail of the administrative arrangements has yet to be put in place. The hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) made a series of points on that matter and I would not pretend to offer him a detailed answer

19 Mar 1998 : Column 1509

tonight. If he reflects, he will agree that a major change of this kind is bound to impose a great strain on the administration of the affairs to which it relates. We cannot pretend that it will not cause problems, but the question each of us must answer is whether the reforms are principled and going in the right direction. Are they intended to get many people out of dependency and into work? Should they provide that incentive?

The Budget is essentially about children, mothers and families, and the hon. Member for West Dorset (Mr. Letwin) made a remarkable speech in that context. The family credit system was worked through a number of great teething difficulties and if our priorities and principles are right, the same will occur with these reforms. The support that we can expect from both sides of the House will be welcome.

The hon. Member for West Dorset spoke in the absence of Whips--they are present now. He was right to have the courage to say that he welcomed the Budget. He said that it was going in the right direction and that it was based on correct principles, even though he had doubts as to whether, in a certain respect--essentially the question of married couples and the institution of marriage--we had got it wrong. We thought about that long and hard. If circumstances have changed in a way he does not approve of, I understand, but Governments must deal with the reality of any given situation, and it was against that background that we took our decision.

My hon. Friends the Members for Bradford, North (Mr. Rooney) and for Chatham and Aylesford (Mr. Shaw) have detailed personal experience of the problems associated with the less well-off in society. My hon. Friend the Member for Bradford, North instanced the perverse effects of the Conservative reforms on school meals and on child care. My hon. Friend the Member for Chatham and Aylesford spoke about two 18-year-olds whom he met on a train, both of whom had come to the conclusion that work did not make any sense for them and that they were better off on benefits. If that is the attitude--I think that that culture has been inculcated among far too many youngsters and the less well off--it is clear that we must do something about it.

To that end, we are proposing, as hon. Members on both sides of the House know, to introduce the working families tax credit, which is, I think, largely the reason for the fairly positive endorsement of the Budget by Liberal Democrats. The hon. Member for Newbury (Mr. Rendel), who speaks for the Liberal party on these matters, made a good contribution.

We also heard from the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), who speaks with the authority of the chairmanship of the Social Security Committee. We pay tribute to that Committee's work and I take this opportunity to thank Martin Taylor for the excellent service that he rendered the House in writing the initial report. The hon. Member for Northavon (Mr. Webb) posed particular questions to which I shall ensure he receives answers--as I shall for all hon. Members who have raised points of detail on which they would like us to reply.

The Liberal Democrat attitude shows both an attention to detail and a breadth of view. That was demonstrated when the hon. Member for Newbury said that he was particularly pleased that the personal allowance would be granted to women who are caring for disabled husbands.

19 Mar 1998 : Column 1510

That change did not attract much attention, but it exemplifies the Budget's bias in favour of children, women and families, which marks a wholly new departure in social welfare reform as we move from a dependency culture to a system under which people are paid to work. People who want to work will have that opportunity and we want to ensure that the motivation for that is properly rewarded.


Next Section

IndexHome Page