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Mr. Heathcoat-Amory: The hon. Gentleman cannot even understand his party's Bill. Although he was on the Standing Committee, he cannot have been alert--we voted and argued against the Labour Government's tax increases, which have already done so much damage to the economy. If he cannot understand the difference between taxation and expenditure, he should not have been on the Standing Committee.

Last year, the Government targeted savings in their tax measures, and we are already seeing the damage that that caused. In this Finance Bill, they have targeted businesses. All businesses, which we try to represent, will suffer from an increase in corporation tax and from other measures--such as the increases in stamp duty and in road vehicle duties--that will damage the competitiveness of British industry in the wider world and hit the employment market in the United Kingdom.

We have already had an economically illiterate intervention from the hon. Member for Broxtowe (Dr. Palmer), who clearly cannot understand the difference between a nominal tax rate and the actual tax paid by businesses. If he does not believe me, perhaps he should read the Red Book, where the extra £2 billion from corporation tax advance payments is clearly set out.

Dr. Palmer: The shadow Chancellor, on one of his rare visits to the Chamber, said that the rates--not the total impact--of corporation tax and income tax were narrowing between Britain and other countries. That is the point that I was questioning.

Mr. Heathcoat-Amory: The hon. Gentleman is wrong to say that my right hon. Friend is a rare visitor to the

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Chamber, but he will have noticed that the Chancellor makes no visits here at all, preferring to address the European Parliament rather than to defend his policies here. He prefers addressing media conferences organised by Mr. Rupert Murdoch to dealing here with the fiasco that his economic policies have created. In our term of office, we cut the rate of corporation tax from 52 per cent. to 33 per cent., and the Government are now raising the effective rate by £2 billion a year, as is clearly shown on page 18, line 8 of the Red Book, which I commend to the hon. Gentleman.

As only one example of their mean-minded measures and regressive taxation, the Government have ended the arrangement whereby those working overseas do not have to pay United Kingdom tax if they are abroad for 365 days. That will hit, not the tax avoiders and big earners, but the ordinary workers--nurses, engineers, aid workers--who cannot time their absences so that they can become non-UK tax residents. [Interruption.] The Government should be ashamed of that regressive measure.

The Financial Secretary talked about child care measures, but they are not even in the Bill. The Bill will enact all the tax-raising measures, and we are still awaiting any of the benefits that are meant to flow from them.

The new capital gains tax system is a fiasco, and I predict that we will need a rewrite. The system is far too complicated, and probably unworkable, and it is already backfiring on the Government. In a mean-minded way, the Government have withdrawn the retirement relief that benefited small businesses and replaced it with a tapering system that will give each Goldman Sachs partner an extra £16 million. Those are new Labour's priorities.

We extracted one or two small concessions from the Government. Because of the opposition and arguments of Conservative Members, they climbed down on dividend tax credits for non-taxpayers; there is to be a gaming duty revision; and they signalled that they would in due course accept our proposals for the reform of stamp duty and of the corporation tax payments for businesses affected by seasonal variation.

Labour Members were entirely silent in Committee and virtually silent on Report. As always, it is the Conservative party that defends the rights of taxpayers and businesses. The concessions may have been minor, but they were significant.

The Budget confirmed all the broken pre-election promises of a Labour Government, and the electorate will not forget that. I invite my right hon. and hon. Friends to vote against Third Reading.

5.13 pm

Mr. Malcolm Bruce : There are some inherent unfairnesses in the Bill that the Government have not addressed. I give them credit for the fact that, on matters such as individual savings accounts and the tax credit for non-taxpayers, they have recognised the force of the arguments: they have changed the rules on ISAs and intend to amend the tax credit provisions as soon as they can find the right formula.

That is welcome, but the fact remains that the Bill contains provisions that grow out of an unbalanced economic policy. It was interesting to see that Labour

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Members simply did not believe that changes to the foreign earnings rules would hit people such as overseas aid workers. They will hit people from my constituency such as overseas construction workers and those in the oil and gas industry.

It may be arguable that the package should involve a payment of taxation but, as we all know, many such people are on two or three-year contracts that were entered into on the clear understanding that the relief was part of the deal. This is effectively retrospective taxation on those people, and the Government should have taken some account of that.

Sir Robert Smith: Will my hon. Friend give way?

Mr. Bruce: No, I have only a short time.

The Government failed to recognise that they have completely distorted the capital gains tax regime. Abolishing the 100 per cent. retirement relief will clearly hit hard the small business people, farmers and others for whom the business is effectively their pension. They will be clobbered by an increased tax rate while very high earners will get a massive tax bonanza. The tabloid headlines may be about the Rolling Stones, but they will be completely unaffected. They will make their own arrangements, thank you very much, but other people will not be able to do that.

Mr. Fallon: Those points were made in Committee.

Mr. Bruce: Those points were indeed ably made in Committee by Opposition Members, but it is important to summarise on Third Reading why we take the view that the Bill is flawed and unbalanced.

The fundamental problem with the Bill is that it is based on an economic policy that is not delivering the Government's stated objectives. We do not have a stable exchange rate, or if we do, it is stable at a very high rate. We have rising interest rates and inflation, and it looks as though unemployment may be on the turn.

The Bill imposes taxation on the hard-pressed business sector that should have been imposed on the consumer sector to take the heat out of the economy and deliver results on inflation.

For all those reasons we, too, will vote against Third Reading.

5.17 pm

Mr. Derek Twigg: For several weeks, we have had to listen to a lot of nonsense from Opposition Members, usually in the guise of insults to individuals about what we were doing or not doing in Committee, to cover their own inadequacies and incompetence in tackling the Bill.

I was on the previous Finance Bill Committee, and the performance of the Opposition was even worse this time, although, to be fair, there were one or two exceptions. The Opposition failed miserably to dent the Bill or the Government or to perform their task of opposition. For those who had to sit through the Committee, it was like Chinese torture, believe me.

The hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) played a significant role in Committee. We had a detailed debate about how the Bill would damage those who own pushing machines in the arcades of

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Littlehampton and Bognor. I did not know what pushing machines were, as pushers usually have a different connotation where I come from. I am not sure whether the machines should pay at a 2p or a 10p rate.

The hon. Member for Bognor Regis and Littlehampton also made an interesting contribution concerning tax relief on private health insurance. He tried to tell us, at about 2 o'clock one morning, that we should prevent people from using hospitals in Littlehampton or Bognor because they ought to take out insurance. He said that all the tourists who go to the area should carry health insurance and not bother using the hospitals. There seems to be a moratorium on visitors to his constituency using hospitals, which seems rather a good way of attracting people in.

We heard an interesting speech from the hon. Member for Guildford (Mr. St. Aubyn), who told us that the average person in his constituency often went to local auctions with a £10,000 table or painting--

Mr. Leslie: Or a carriage clock.

Mr. Twigg: Yes, carriage clocks were also mentioned. That is normal behaviour for the hon. Gentleman's constituents. When we were discussing historic houses, the hon. Gentleman said that he opened his house every weekend to visitors, and that he thought that every other Member should do the same.

Mr. Nick St. Aubyn (Guildford): It is clear that, although he spent so much time in the Committee, the hon. Gentleman heard hardly a word of what was said to him.

Mr. Twigg: If that is all that the hon. Gentleman wishes to say, I will continue my speech.

Points have been made about foreign earnings. The Opposition were concerned about the Rolling Stones. Indeed, a point of order was raised at the beginning of one of our debates about the damage that the Bill could do to them. They have shown no loyalty to the country, have they? But that is what we have heard from the Opposition.

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