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Orders of the Day
WAYS AND MEANS
Order read for resuming adjourned debate on Question [9 March].
Motion made, and Question proposed,
Mr. John Redwood (Wokingham):
I rise to oppose this Budget--a Budget of smoke and mirrors, a Budget with many a sting in the small print and a Budget which announced a little good news and left out a lot of bad news, which came in the press releases that followed. This is the third Budget of this Chancellor and this Government: third time unlucky for many. It is third time unlucky for motorists, for small business people, for industry and for most of the people who make the wealth and generate the jobs in our country.
The Government came to power promising education, education, education as their three priorities. Three Budgets later, we know their true priority: it is tax, tax, tax. There are stealth taxes and wealth taxes, income taxes and spending taxes, business taxes and jobs taxes. After the Government have put taxes up, they dare to say that they have cut them--which is misleading the House on a great scale. Meanwhile, the hospitals are short of nurses and doctors, and schools find it difficult to recruit and retain good teachers.
This is a Government of tax and waste, not tax and spend. They take more money from us so that Ministers can fly Concorde more often; they raise taxes so that we can employ more politicians throughout the country and have more quangos; and they spend massive sums on a welfare-to-work programme that simply does not work, as my right hon. and hon. Friends will demonstrate in future debates.
This is a Government who hire more spin doctors to tell us why they cannot afford more medical doctors. This Government are the nation's pickpocket, creeping up at the dead of Budget to rifle your wallet or purse. Saving for a pension? Not without a tax from this Chancellor. Making profits in your company? Not without paying a lot more corporation tax and then being asked to thank the Government for cutting the rate. Driving your car? Not without being clobbered by the Chancellor every time you go out of the garage, and often when you do not.
This Budget continues the great Labour tradition of tax and waste. For business, there is extra vehicle excise duty [Interruption.] I see Ministers roaring their heads off. They obviously do not know what measures were in their three Budgets. They do not know how much damage is being done to industry. They have no idea of all the tax increases that the Chancellor has squirrelled away in the paperwork. It is a pity that they do not read the stuff, but we do because we need to represent the case to British business.
Vehicle excise duty, a £25 million increase; capital gains on company sales, a £40 million increase--
Mr. Tony Baldry (Banbury):
Is not laughter from Treasury Ministers particularly perverse at a time when the newspapers are announcing even more job losses in the manufacturing sector?
Mr. Redwood:
My hon. Friend anticipates my argument only too well. If only the Government could anticipate it, heed it and change their policy.
This Budget contains changes to the value added tax rules--a £70 million increase; changes in VAT group treatment--a £5 million increase; and an end to VAT exemption on financing--a £95 million increase. I see that the Chancellor is trying to find those figures, so he obviously does not know about them either. For taxation of reverse premiums, there is a £20 million increase. Stamp duty is increasing; I wonder whether that is the Chancellor's revenge on the right hon. Member for Hartlepool (Mr. Mandelson). He reads that the right hon. Gentleman is about to buy a flat for a little over half a million pounds, and up goes the stamp duty. Perhaps we should call it Peter's pence from now on.
There are increased car taxes and fuel duties. The Chancellor says in his "Budget for business" that some taxes will go down next year, and he is right--I have found two of them: a £10 million reduction in value added tax on "certain supplies", although they are not specified; and £5 million in tax relief for employer-loaned computers. Whoopee! That will make a real difference to business when it is set against the £25,000 million in extra taxes from the Chancellor's first two Budgets and the substantial increases in this year's. I assume that the borrowed computers are needed to help people to work out all the stealth taxes that they and their businesses must pay in the financial year 1999-2000.
The overall impact next year on British business will be the raising of the tax burden by a substantial amount according to the Chancellor's own figures, as set out in "Budget 99", his own document. There are no overall tax reductions for business next year. There are massive increases from three Budgets--the largest of them from Budgets one and two and smaller further increases in Budget three.
What do the Prime Minister and the Chancellor say about the Budget? The Prime Minister says that it is another Budget to bring an end to boom and bust. That is his favourite soundbite. Out of his limited repertoire of tired and misleading phrases, "bringing an end to boom and bust" is the most overused and misleading.
The Secretary of State for Trade and Industry (Mr. Stephen Byers):
To Tory boom and bust.
Mr. Redwood:
The Secretary of State is right to say that that is the way in which the Prime Minister chooses to construct his phrase. The Prime Minister repeats it like a music hall line or a comedian's catch phrase. To those in the front line of British industry, it does not seem very funny, however. Industry has been suffering for a year. At the time of the Chancellor's first Budget, I warned of
Was the Secretary of State for Trade and Industry persuaded to make today's silly statement, which had no new content, in order to delay the Budget debate beyond the normal time for the early evening news and because he did not wish to hear the truth about the plight of manufacturing? Did he also wish to delay the debate so long that I might have to be torn away to the shadow Cabinet, where my right hon. and hon. Friends are now? Or was the statement simply an unfortunate slip of his memory? Had he forgotten that all that he announced today had been announced many times before?
Why does the Secretary of State not care about the string of factory closures and industrial job losses that are being left in his wake? Why will he not come to the House to make a statement about what he intends to do about that? The real issue facing us is manufacturing collapse and factory closures, not the silly, trivial matters that the right hon. Gentleman chose to mention or policies that he has announced many times before.
Mr. John Bercow (Buckingham):
Is my right hon. Friend aware that he and my right hon. Friend the Member for Horsham (Mr. Maude), the shadow Chancellor, have approximately 20 times more experience of the private sector of the British economy than the Chancellor and the Secretary of State for Trade and Industry?
Mr. Redwood:
My hon. Friend's calculation is likely to be correct; it would not be difficult to have more industrial and commercial experience than the Chancellor and the Secretary of State for Trade and Industry.
The Minister for Energy and Industry (Mr. John Battle):
You obviously learned nothing from it.
Mr. Deputy Speaker (Mr. Michael J. Martin):
Order. The Minister for Energy and Industry must not shout across the Chamber. He should know better.
Mr. Redwood:
I am grateful to you, Mr. Deputy Speaker.
Why has the Budget done nothing to correct problems for manufacturing industry? It gives no answer to high sterling. It offers no relief from high taxes. It contains only more increases in the high costs facing industry.
When the Prime Minister says that he has abolished the cycle of boom and bust, does he realise that manufacturing is in recession? For a long time, the Government said that output had not fallen for two quarters. Now that it has fallen for many industrial companies for longer than that, we are told grudgingly that it is a technical recession. There is nothing technical about it. It means job losses for tens of thousands of industrial workers. It means many closed factories. It means financial ruin for some who have committed their cash and effort to making things in Britain.
That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance; but this Resolution does not extend to the making of any amendment with respect to value added tax so as to provide--
Question again proposed.
(a) for zero-rating or exempting a supply, acquisition or importation;
(b) for refunding an amount of tax;
(c) for varying any rate at which that tax is at any time chargeable; or
(d) for any relief, other than a relief which--
(i) so far as it is applicable to goods, applies to goods of every description, and
(ii) so far as it is applicable to services, applies to services of every description.--[Mr. Gordon Brown.]
"a treble whammy on profits, investment and jobs in British manufacturing . . . the higher exchange rate, which throttles the prospects of exporters in continental markets; the higher interest rates which have already occurred--undoubtedly there will be more . . .--and higher taxes".--[Official Report, 4 July 1997; Vol. 297, c. 581.]
As we know, there was more. If the Opposition could foresee all that in July 1997, why could not the Government? Why did they blunder and plunder on?
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