Previous SectionIndexHome Page

Mr. Nicholas Soames (Mid-Sussex): On a point of order, Mr. Deputy Speaker. Do you agree that we are witnessing a sustained and concerted filibuster on the Bill, and are not such practices to be deplored by the Chair?

Mr. Deputy Speaker: Order. The Chair is aware only of speeches that are in order or not in order. The speeches that I have heard have been in order, except where I have chosen to correct hon. Members. It has been known for debates on the Third Reading of the Finance Bill to continue for several hours.

7.11 pm

Mr. Alexander: The broad themes of the Finance Bill, as well as the detail, emerged in Committee. In particular, as my hon. Friend the Member for Edinburgh, North and Leith (Mr. Chisholm) said, the Government have made it categorically clear that, unlike the previous Government, they are determined to encourage work. That aim has undoubtedly been welcomed by my constituents.

For many years, my constituency has had a rate of unemployment higher than the national average, which is why welfare to work is not a slogan in Paisley, South, but a vital programme for many of my constituents. As the Chancellor made clear in his Budget statement, the welfare-to-work programme is now to be extended to provide wider employment opportunities particularly to groups such as the long-term sick and disabled. That matter is close to the heart of my constituents. Indeed, my predecessor, Gordon McMaster, was acknowledged on both sides of the House as a tireless campaigner on behalf of disabled citizens. Only two weeks ago, in Paisley town hall, I attended an awards ceremony for disabled people who have now found employment and gained greatly from that experience.

In the previous Budget, £195 million was provided for voluntary advice and practical help to disabled citizens to move back into work. Pilots will begin this autumn, with a view to the programme being nationwide by April 2000.

That approach reflects the Government's coherent strategy--that there is no contradiction between social justice and economic efficiency--which underpinned the detailed measures in the Budget. For years, under the previous Government, we were told that the price of a modern, dynamic economy was a divided society, but the individualism that characterised Thatcherite economics has been found wanting on major challenges such as tackling unemployment, which I mentioned, social exclusion and the environment.

The understanding underpinning the Finance Bill is that the ingredients of a good society in a modern global economy are also the ingredients of a successful economy. The Budget made it clear that the foundation stone is encouraging and rewarding work. The working families tax credit announced in the Budget will help lowerand middle-income Britain, particularly families with children, to keep more of what they earn. No family with

1 Jul 1998 : Column 420

earnings of less than £220 a week will now pay any income tax at all. Any family with a full-time worker is now guaranteed take-home pay of at least £180 a week. When people ask what the difference is between Labour and the Conservatives, they need look no further than that measure to see the difference that a Labour Government are making.

In keeping with the Government's recognition that good economics also makes for a good society, the Budget also addressed the needs of families in a modern economy. Child poverty has scarred this country for many years, as the work of organisations such as the Child Poverty Action Group has made clear. My hon. Friend the Member for Edinburgh, North and Leith mentioned that one family in five is raising children in poverty. That figure is all too well known after 18 years of Conservative government. That is why the announcement that child benefit for the eldest child is to be raised by £2.50 a week or £130 a year from April 1999 was particularly welcomed in constituencies such as my own. In addition, the new child care tax credit, which forms part of the working families tax credit announced in the Budget statement, will be welcomed by families throughout the country.

A fortnight ago, I had the privilege of opening anew class at Auchenlodment nursery school in my constituency, when parent after parent told me about the importance of child care. What is fundamentally different about the Government's approach, as made clear in the Budget and the Finance Bill, is that child care is not some add-on to economic policy, but central to their economic strategy.

The hon. Member for Banff and Buchan(Mr. Salmond), who was in the Chamber earlier, talked about the importance of the service sector of the economy and to that extent--perhaps only to that extent--I agree. Yet I would argue that if the hon. Gentleman is keen to assist the service sector of the British economy, he should support the child care measures announced in the Budget, as women in particular will benefit from them and, of course, the service sector provides employment for huge numbers of women.

Another theme of the Finance Bill to which I shall address my remarks is the measures to promote enterprise. The Bill makes a further 1 per cent. cut in corporation tax to 30 per cent.--the lowest rate ever achieved in the United Kingdom. In the era of the global economy, such a measure sends a clear signal that the Labour Government want to secure investment and ensure that Britain is the home for dynamic, profitable companies. In the global economy, with increasing specialisation and diversity, new jobs will come from a large number of small companies, not a small number of large companies. That is why the Budget announced a comprehensive package of measures to create a more dynamic small business sector in the UK economy, including the 1 per cent. cut of the small business rate of tax to 20 per cent. from April 1999.

Another element of the Finance Bill--a distinctively Labour element--has been fairness in taxation and spending. As a country in the modern global economy, the more we learn, the more we shall ultimately be able to earn. We cannot hope to succeed economically if we do not succeed educationally. That is why I welcome the Chancellor's announcement that an extra £250 million in 1998-99 will be committed to schools and skills.

1 Jul 1998 : Column 421

To explain further the measures in the Budget, I point out that 80 per cent. of Britain's work force 10 years from now are already in the work force today. That is why, if we are serious about increasing workplace productivity in the United Kingdom economy, we must also direct our efforts towards raising skill levels of those already in work. I therefore particularly welcome the Chancellor's announcement of £10 million for the university for industry.

The final theme of the Finance Bill that I wish to touch on is stability. The need for stability has been mentioned in the debate and, given our country's economic record of boom and bust, it almost goes without saying. As the Bill makes clear, the key to modern economic success is to find the appropriate balance between stability and dynamism. Stability is essential for high levels of investment and employment.

The fiscal policy adopted by the Government adheres not only to the golden rule that over the economic cycle the Government will borrow only to invest, but to the rule that public debt will be held at a stable and prudent level over the economic cycle. The Finance Bill advances dynamism and stability, which is good economics, but it also advances measures on child care, child benefit and the working families tax credit, which is good politics and makes for a good society. The Bill ultimately nails the lie that the price of economic success is a divided society. That is why I commend it to the House.

7.18 pm

Dr. Palmer: We often criticise Ministers for departmentalitis and for focusing exclusively on their own area, but we, too, are somewhat guilty of that tonight. Typically, debates attract specialists in the subject, so today we have more finance nerds in the Chamber than would be seen in a month of Sundays anywhere else. It is said that the average man thinks about sex every 20 minutes during the day, but the population at large would be alarmed to learn that our little sub-population contains people who think more often than that about the public sector borrowing requirement.

Mr. Leslie: Steady on.

Dr. Palmer: I exempt my hon. Friend from my remark.

I should like to consider three aspects of how the Finance Bill affects different parts of the Government's agenda. First, there is the working families tax credit, which was announced in the Budget and which is foreshadowed in some of the measures in the Bill. We are introducing the working families tax credit, which may be the most sweeping act of redistribution in any Budget for the past 50 years and is certainly an impressive step forward in helping the working poor, partly for reasons of justice and partly to encourage a return to work--to nail the lie that it is more profitable to stay on benefits than to work. Together with the minimum wage, which we also introduced, it means that we can say definitively to ordinary people who are out of work that it pays to retrain, it pays to work with the advisers in the new deal and it pays to get back to work.

We have to recognise that there are people outside whom that message will not readily reach, because their daily lives are so desperate that they have no time to

1 Jul 1998 : Column 422

listen. They think that the working families tax credit is just one more obscure piece of politicians' jargon that bears little relationship to them. During the election, I canvassed a council estate where there is a high proportion of single parents. I met more people there who were not planning to vote at all than I met anywhere else in Broxtowe. They were not planning to vote, not because they were indifferent to politics, nor because they disliked all the parties, but because their daily lives were so desperate that they did not have time to consider the issues that we were putting before them. In the same way, I predict that we shall have difficulty showing those groups in society how the measures in the Budget and the Bill will transform their lives.

We have heard some unseemly gloating from Opposition Members about the fact that, in the initial reaction to the new deal, not everybody has taken up the offer with the alacrity for which we had hoped. One Opposition spokesman said, very cheerfully, that when they got the offer, many single parents threw it in the bin, as if that was good news of resistance to a tyrannical Government; but it is a tragedy when that sort of thing happens. My point is that the changes that we are making in the Finance Bill and foreshadowing to appear in next year's Finance Bill need to be followed up with publicity and information campaigns that reach people whom we do not normally reach--people who are indifferent to politics and who have given up the hope that the world of politics has any relevance to their world, or that anyone will come to their rescue. The Labour Government are determined to reach them and, through our efforts, we can make sure that such people benefit from the changes that we are making.

Secondly, I should like to talk about the foreshadowed change to vehicle excise duty. Curiously enough, it is unique to Britain that all cars--from the Mercedes Benz to the Ka--are taxed at exactly the same rate, regardless of how much petrol they use, or how efficiently they process petrol, or whether they use petrol at all. Environmental groups all welcome as a first step the action that we have taken. I commend to the House the Parliamentary Office of Science and Technology technical report No. 116, which analyses the VED proposal in some detail and draws attention to the fact that the different ways in which the change could be introduced would have extremely varied impacts on the environment.

Broadly summarised, POST says that if we do that in the optimal way for reducing fuel consumption, the administrative burden will be considerably heavier, because most of the information at the car registration centre--the Driver and Vehicle Licensing Agency--is not currently geared to that sort of information. Ideally, each car would be examined for its emissions at the time of its MOT test and taxed accordingly; but MOT centres are not geared to communicate their results to the central vehicle registration centre at the DVLA, so considerable investment in technology would be needed to achieve that. One step back would be to tax according to car type, as tested at the time when the type was introduced. The vehicle emissions from a Vauxhall Astra 1997 would differ greatly from those of a 1993 Astra--if there was such a beast. Therefore, one could reward manufacturers that wanted to invest in fuel-efficient technology by changing the rate of tax according to that standard. The drawback of that method is that some manufacturers would produce a car that was extremely efficient on day

1 Jul 1998 : Column 423

one, but deteriorated rapidly. We want to support manufacturers that build energy-efficient motors to last and drivers who use their cars in a way that maintains that high level of energy efficiency.

I would argue that we should opt for those versions of the approach to vehicle excise duty that, in the longer term, can be used to phase in the measurement of individual vehicle emissions. Information technology is at the stage where, in five years' time, it will seem a trivial task for testing centres to communicate such information to the centre. I do not believe that, when introducing such an important principle for the first time, we should do so in a way that skimps on the essential objective of the change, which is to improve the efficiency of engines, to reduce emissions and, ultimately, to achieve the goals that we have set out to achieve in 2010.

Thirdly, I wish to highlight the generosity of the conditions for contributing to overseas development charities, which is a matter that has attracted relatively little comment--indeed, I know of overseas development activists who are still not totally aware of it. Although it has traditionally been said that overseas development is not an issue that the average member of the public finds fascinating, or attractive, or even welcome, that is certainly not what I have found in Broxtowe. Before the election, we published 15 policy papers on different issues--employment, health, education and so on--but it was the papers on the two more exotic subjects of overseas development and animal welfare that stimulated by far the greatest demand, with several hundred people requesting information on those subjects.

People have come to believe that politics in Britain has become a little bit too efficient and too oriented to the maximum level of marginal advantage at every level of the economy--that government and politics in Britain are in danger of losing their soul. When they look at the three aspects to which I have referred--the reinforcement of help to the working poor to make work worth while and to show that group in society that we care about them and that we are the first Government in 20 years to care about them; and our demonstration that we mean what we say about our environmental commitments and about our support for the developing world--the cynicism and disappointment that we have seen among many of our constituents can be countered and they will once again be able to have faith in the political process. I hope that the House will pass the Finance Bill. It is a worthy Bill, and I am proud to be associated with it.

Next Section

IndexHome Page