Previous SectionIndexHome Page


Mr. Rendel: I hope that the tone of my speech will be more tolerant than that of the last two speeches.

I sympathise to an extent with the view expressed by the hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) and others; it is odd that such a major part of the Budget should be introduced in the form of a Lords amendment to a Social Security Bill. I think many people would consider it an unusual and, in some ways, undemocratic way of making a major alteration. In that respect, I have some sympathy with the Conservative party.

It must be said, however, that the Lords amendment was introduced because a large number of hereditary peers outvoted peers who were not hereditary. Conservative Members have referred to abuses of the parliamentary system; surely that is an abuse considerably further up the scale than anything that the Government are trying to introduce, or any method that they are attempting to employ.

Many people outside would think it a rather odd use of parliamentary time to engage in what will probably be three and a half hours of debate about whether the Chancellor said further or future, whether the change was the result of a slip of the tongue or was introduced deliberately and how the two words came to be muddled up--and, indeed, the exact meaning and implication of the two words. People might consider it not entirely sensible for those who have been sent here to represent their constituents to engage in such a debate.

Mr. Duncan Smith: Having recalled the Budget debate and the subsequent media coverage, does the hon. Gentleman not see that there was a clear recognition that changes were made that were relevant to employees? The public would have understood that because of what they read and listened to. The coverage that took place in the 24 hours, or perhaps two days, after the Budget speech is what people will have absorbed most; that is what will have given them an understanding of where the Government were going. There is nothing unintentional about that.

Mr. Rendel: I do not deny for a moment that people probably gained an impression--which was not to be

13 May 1998 : Column 442

realised in practice--of what the Chancellor intended. Perhaps we are all to blame for not pointing out how wrong, or how misleading, the Chancellor had been.

Let me make what is perhaps an even more important point. I am surprised that the main Opposition party makes such a fuss about the matter. Surely one of the things that put people off political parties is finding that they have been misled. I would expect the fact that many people who expected their national insurance contributions to fall have found that they have not fallen to be very damaging to the Government. I would expect the fact that the Government were able to mislead people in the short term to be to their disadvantage, and I am surprised that the Conservative party is complaining.

Mr. Quentin Davies: I entirely agree that trying to deceive the British public is not good politics and that the Government will pay a price for it. The important thing about the word that was used is not whether the Chancellor said future or further but why, having said the one, he then tried to make out that he had said the other. It is the cover-up which is sinister and which requires an explanation from the Government.

Mr. Rendel: I have no idea whether it was a slip of the tongue or deliberate, and I do not think it desperately important. The fact is that the public were given one impression, only to find now that it was wrong. They will take against the Government for that reason. I should have thought the Conservatives would be pleased about that instead of castigating the Government so much for it.

The increase in the lower earnings limit is welcome, whenever it comes. I sympathise with Conservatives who find it disappointing that it is not to happen in the first year. We, like everyone else, are disappointed by that.

Mr. Swayne: Does the hon. Gentleman agree that any reading of the Red Book suggests that the change is never to come?

8 pm

Mr. Rendel: The Red Book appears to give no indication of it, but that does not mean to say that it will never come. There is every impression that the Government still intend to introduce the change at some point. The Red Book comes out each year; if the Government intend to effect the change next year I expect them to change the Red Book then.

Our original criticism--the Chancellor certainly hoped to overcome it--concerned the difficulties caused for those who no longer pay contributions in terms of their rights to contributory benefits. When the changes are made, it is critical that, alongside them, changes to eligibility for contributory benefits are also made. People who no longer pay national insurance on the lower part of their income should retain their rights in that respect.

One of the most widespread criticisms of the welfare system is that benefits are sometimes not provided for those who most need them, maternity benefits being a case in point. Women on the lowest pay tend to be those who have to go without the benefits, which to most people seems absurd. The fact that the system is contributory has done the damage and has led to a great deal of justified criticism.

13 May 1998 : Column 443

If we are to change the threshold at which contributions are paid, we need to overcome the difficulty I have described by making the necessary other changes alongside. That is why it is right on this occasion to support the Government's amendment--the two measures must go through together. They will both be welcome; I hope that they will be put into effect as soon as possible. The Lords amendment would prevent that, which is why it is important to amend it in the way the Government propose.

Mr. Swayne: I fear that I shall be unable to match the passion and anger of my hon. Friends the Members for Grantham and Stamford (Mr. Davies) and for Cotswold (Mr. Clifton-Brown). My heart is filled more with disappointment than with anger. I regard it as a bit rich of the Under-Secretary to accuse my party of irresponsibility and of being precipitate in our haste to bring in the Chancellor's plan to change the lower earnings limit to £81. We have been accused of not thinking the issue through properly and of not giving sufficient consideration to its financing or the rules protecting the benefit rights of those who would be affected.

The Red Book trumpets the reform as the most radical reform of national insurance since 1975. The trouble is that tagging it on to this and subsequent amendments severely restricts the time available for scrutiny and consultation. It is therefore a bit rich of the Government to accuse us of irresponsibility for opposing amendment (a).

My hon. Friend the Member for Cotswold has already pointed out that the amendments contain a range of open-ended powers that enable the Government to make changes subsequently, without reference to legislation.

Mr. Letwin: Does my hon. Friend agree that that is characteristic of the Bill and that such general powers are to be found throughout it?

Mr. Swayne: It is also characteristic of the Finance Bill. My hon. Friend the Member for Cotswold was right to correct me when I drew attention to the Chartists and their desire for no taxation without representation. That question goes much further back, to the Long Parliament, when ship money was the issue at stake. The Executive was raising taxes without the authority of the Commons. That led to the grand remonstrance, which in turn led to a complete change in the polity of this nation over 20 years during which the governance of the country was turned upside down.

Mr. Letwin: Would my hon. Friend agree, on reflection, that there is a remarkable similarity between Dr. Prynne, of ship money fame, and Mr. Whelan?

Mr. Swayne: That is a pertinent point. Ship money was actually a very fair tax, subsequently imposed by Parliament itself during the interregnum. The basis on which it had been calculated was fair and proper. What was wrong with the tax, just as with these arrangements, was that it did not have the proper authority of Parliament--at least not under Charles I.

I want to move on some 400 years now, to Lords amendment No. 64. My constituents thought that the Chancellor was raising the lower earnings limit for

13 May 1998 : Column 444

national insurance contributions to £81 a week--as witness column 1106 in Hansard for 17 March. My constituents can hardly be blamed for doing so: their representative sitting here during the Budget statement also thought that that was what was going to happen. I was thinking about the interview that I had agreed to give subsequently to Meridian Television, and my mind was concentrated on that. I heard the Chancellor's message with mixed feelings. My natural elation at the beneficial nature of the change was tempered only by my nervousness at knowing that I had to face the cameras and pour cold water on the Budget statement. Those contrary emotions rivalled one another.

The Under-Secretary will remember the interview well, because he shared it with me. He will no doubt recall my nervousness and inability to make up my mind one way or the other about the Budget. Had I had the benefit of the subsequent revisions and the gloss that has been put on that statement, I might have made a better fist of the interview.

Equally, my constituents could not be blamed for thinking that the lower earnings limit for national insurance contributions was to be raised to £81 because a disproportionate number of them read The Daily Telegraph, on the front page of which it was headlined on 18 May. For those few corporate bureaucrats who persist in reading the Financial Times, it was in that as well. My constituents were given the clear impression that the lower earnings limit was to rise to a new limit of £81 and, of course, much joy attended that announcement.

As my hon. Friend the Member for Cotswold has said, that would have had significant advantages for all people on lower incomes, particularly those who might properly be considered to move within what has often been characterised as the unemployment or benefits trap. Now they discover that this is a measure for the future. It is to be jam tomorrow, or, more properly, as any examination of the Red Book will reveal, beyond tomorrow--not so much jam tomorrow as the people's strawberry jam having been adulterated with wooden pips by the Chancellor himself.

Frankly, I would prefer the Budget as it was originally given by the Chancellor. That is why I wish to vote against Government amendment (a) to Lords amendment No. 64: to keep the Budget as it was and to preserve the Chancellor's original intention. The Under-Secretary has said that it is most irresponsible of us to do so. He has referred to the huge hole in the finances that will emerge as a consequence.

Perhaps I might be permitted to express an entirely personal opinion. It is my view that the Chancellor's Budget may have significantly overtightened the fiscal stance beyond what is advisable and that we might be thankful of a loosening of some £1.4 billion in the months to come, bearing in mind the significant difficulties in which the manufacturing sector already finds itself, so I reject any argument of irresponsibility that the Under-Secretary makes on the ground of fiscal loosening.

The Under-Secretary has said that we are irresponsible in that we have not properly thought through the protection of the rights of people who will benefit from this measure--the protection of their rights to benefit.


Next Section

IndexHome Page