House of Commons Hansard Debates for 13 May 1998 (pt 45)

9.30 pm

If a Chancellor says in a Budget speech that he intends to make "further changes", that is code for every single person who has experience of the House to report that those changes will take place when the Finance Bill is in Standing Committee, and that they will be embodied in that Bill, which is before the House in that financial year. Therefore, it could be expected by everybody who listened to the Chancellor's words that the measures promised in those words would be enacted in the same financial year. Although I have many criticisms of our Chancellor, lack of intelligence is not one of them, so I simply cannot believe that he was not perfectly aware of the word he chose when he said "further" in his Budget speech.

If the right hon. Gentleman had said "future", as it is now claimed he intended to say, that would have meant something entirely different. The future is exponential--it never has a due date in the House. It is an intention that, however honourable, has no financial reckoning. It is something that might not even happen within the lifetime of a Parliament. It is a good intention expressed by a Government, but it is certainly not an intention that anyone would take seriously until they saw it in black and white on the face of a piece of legislation. I cannot believe that the Minister does not understand that that is the difference between the uses of those two words.

I am therefore minded to agree with my hon. Friends, who have spoken so eloquently tonight, that there was a deliberate attempt to confuse the journalists who sit upstairs in the Gallery into believing that the Chancellor intended to make the changes this year. My hon. Friend the Member for West Dorset (Mr. Letwin) spoke magnificently about the whys and wherefores of the relationship between Ministers and the press. I know from my days working in the national media that there is a new element in that relationship: not only do we have to take Ministers out to lunch to try to ascertain their intentions for future legislation, but, if we are serious journalists, we have to try to get ourselves on to one of the focus groups, because if we succeed in doing so, we shall find out the Government's intentions and be able to manipulate those intentions by our reactions to the various proposals put before us.

I can quite believe that the Chancellor saw the value of saying that he intended to make changes to employees' national insurance contributions in the Budget, and that he deliberately allowed that intention to be expressed to our national newspapers on Budget day. Recalling my time on The Daily Telegraph, I know only too well the intense briefing and spinning that goes on in the Corridors upstairs on Budget day and on any other day a major Government announcement is made. Given the sort of press coverage that the changes got, it is simply inconceivable that they were not cross-referenced with the Government spin doctors--Charlie Whelan, perhaps Alastair Campbell himself and others. It is not possible that, in respect of a major and significant change--one of the most well-focused changes in the Budget--journalists would not have asked whether the Chancellor meant to say "further".

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I am sure that, while not actually lying to members of the press, the spin doctors deliberately turned a blind eye to the presentation that they saw the press would give the facts the following morning. As we saw, even my former newspaper announced the intention--this year's intention by the Government--to make the changes to reduce employees' national insurance contributions. We also read it in the Financial Times--the doyenne in the Lobby of those who understand a balance sheet and whose journalists would know the import and intention of the measures.

There was also confusion on the radio about precisely what the Government intended. It comes as no surprise to me that the Government, who were very good at manipulating the media even before their election, allowed their supposed intention to fester in the minds of the public in order to gain credibility and acceptance.

Mr. Clifton-Brown: I am sorry to interrupt my hon. Friend, but I fear that she may be being too kind to the Government. I do not think that there was any media spin to create a warm impression of the Budget; I think that it is a question of the Chancellor's pure incompetence in not ensuring that his statement was in concert with the Red Book.

Miss Kirkbride: I do not wish to disagree with my hon. Friend. The fact remains that there is a huge dichotomy between what was said and what is now going to happen, and only our personal convictions and--perhaps--prejudices can suggest to us why that is so. Certainly, in the light of my experience of the relationship between Ministers and the press, I do not find it surprising.

The Under-Secretary's defence of his Government's position was the most disingenuous statement that I have ever heard. First, we were told how dreadful it was that we had pinched the Chancellor's idea; then, in the next breath, we were told what a terrible idea it was. I am still trying to get my mind around the peculiar message that the Government are sending us, which has been repeated by many of the Under-Secretary's hon. Friends. Something cannot be a good idea when voiced by the Chancellor and a terrible idea when the official Opposition seek to put it into practice by means of a Lords amendment.

Many Labour Members have criticised Conservative Members for not being particularly robust about low pay. I consider this the most important Bill that the Government could have introduced because, unlike the minimum wage--which may well destroy jobs--it will enable people who want to work to afford to do so. I urge the Minister to consider our arguments and the Lords amendments in a more favourable light.

Ms Hewitt: The hon. Member for Bromsgrove (Miss Kirkbride) reminded us that she was a journalist before she entered the House. Perhaps that explains her obsession--although it does not necessarily explain that of many of her hon. Friends--with the activities of journalists and spin doctors.

I have listened to the debate with a mixture of fascination and deep horror. I was reminded of the years that I spent studying English literature at university, where

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there was an obsession with textual analysis--but never, even in the rarefied atmosphere of Cambridge, did I encounter such a nit-picking approach as this. It is to no purpose to analyse "further" and "future", and what was said in this and that press release. Such an attitude betrays the fact that the official Opposition have no serious purpose in engaging in this lengthy debate.

We may have been entertained by much of today's proceedings, but I wonder how the debate has struck members of the public. I noticed that many young people who came here to observe the House of Commons in action--I suspect because they were equally appalled by much of the debate--

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I am sorry to interrupt, but the hon. Lady should know that nothing exists outside this Chamber.

Ms Hewitt: I am afraid that I betray my lack of experience here, Mr. Deputy Speaker, but it is the fault of the Opposition that they have given the appearance this evening that, for them, nothing exists outside the Chamber. That is a great shame.

The Budget presented by the Chancellor earlier this year contained a long series of proposals for radical reform of the welfare state--which we inherited in a shambles from the previous Administration. Considerable progress will be made as a result of this Bill and of the Tax Credits (Initial Expenditure) Bill, to which we return tomorrow. They will make changes that will enormously improve work incentives and help my constituents, from April next year, who are trapped either in unemployment or in low-paid jobs.

The Government will go on to make further changes, as the Chancellor said, in the future. I welcome those changes, and I commend the Government amendments to the House.

Mr. Burns: This has indeed been an extremely interesting and invigorating debate. The nub of the argument has been the Chancellor's comments in his Budget statement on the lower earnings limit for national insurance contributions. My hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) has powerfully exposed the Chancellor's shenanigans. My hon. Friends the Members for Grantham and Stamford (Mr. Davies), for Cotswold (Mr. Clifton-Brown), for West Dorset (Mr. Letwin) and for Arundel and South Downs (Mr. Flight) have all made powerful speeches exposing what went on during the critical 48 hours when the Government's spin doctors at the Treasury worked overtime to create an impression that was just an illusion.

I pay tribute to my hon. Friend the Member for Bromsgrove (Miss Kirkbride) for her elucidating speech. She used to be a journalist for The Daily Telegraph, so she is well aware of how spin doctors operate. They choose their words carefully when they want to convey a message. We are indeed grateful to her for exposing some of the hollow excuses proffered for the activities of Mr. Charlie Whelan.

I remind the House of the seriousness of the situation, although I can understand why Labour Members would like to downgrade the charges laid against them this evening: this is an issue of considerable embarrassment

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for them. In his Budget speech the Chancellor announced that he would raise the lower earnings limit for national insurance contributions from £64 to £81--so much is beyond dispute. He said:

"I am abolishing the perverse entry fee that every employee pays to be part of the national insurance system and, in doing so, I am cutting national insurance for every employee in the country . . . Further reforms will also ensure that no one pays national insurance for the first £81 of their weekly earnings. All employees earning between £64 and £81 will have their right to benefits protected."--[Official Report, 17 March 1998; Vol. 308, c. 1106.]

When I heard the Chancellor say that, I understood--as did members of the press--him to mean that the measure was to be part of a reform package--[Interruption.] The hon. Member for Corby (Mr. Hope) should listen for a minute and then take the time to go to the Library, where he will find that the front page of The Daily Telegraph the day after the Budget stated that no worker would pay national insurance contributions on the first £81 of earnings. Similar coverage of that element of the Budget speech can be found in the Financial Times of the day after the speech.

It is clear that many members of the public were left with the clear impression that the changes would be part of the total package of changes in national insurance contributions. The confusion was so great that, a few days after the Budget, the BBC programme "Money Box", which my hon. Friend the Member for Chingford and Woodford Green mentioned, did an item on it to help clear up the confusion that had been created by the Chancellor's statement. In an interview with Stuart Richie of Scottish Equitable, which I will repeat for the benefit of the Minister, so that, just for once, he will be able to answer my questions in his winding-up speech, the interviewer said:

"a lot of people seem to think that they won't have to pay any National Insurance until their earnings hit eighty one pounds a week. I mean, even if I've been a bit muddled by this. But that's not quite right, is it?"

Stuart Richie said:

"No, the Chancellor got it a bit wrong in his speech and newspapers are actually still getting it wrong today".

The response from the interviewer was:

"Yes, I notice the FT got that one wrong."