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7.23 pm
Sir Raymond Whitney (Wycombe): The hon. Member for Worcester (Mr. Foster) believes that the Government are good for business. I fear that he will be disappointed in future. I am sorry about that, and I shall tell the House my reasons for thinking so later.
We are accustomed these days to the phrase "spin doctor". It is a feature of modern politics, and yesterday proved that it has become a feature of economics and Budget presentation. The Chancellor of the Exchequer, however, qualifies less as a doctor of spin than as a doctor of obfuscation. It was he who gave us the famous phrase about neo-classical endogenous growth theory, and he has talked about the symbiotic relationships between growth and much more. He has progressed from that to the performance that he gave yesterday: the words were simpler and crisper, but they were no less misleading.
We must carefully consider the reality beneath the golden words of the Chancellor. Two points may be briefly made. The first concerns the tax position and the reality that my right hon. Friend the Member for Richmond, Yorks (Mr. Hague) so successfully exposed in his exchanges with the Prime Minister today. The reality is that Labour's first two Budgets involved an increase in taxes of nearly £41 billion, and in the coming year taxes will rise by more than £7 billion. Stealth taxes are an important theme, and we should hear much more about them.
The second reality obscured by the Chancellor's carefully phrased delivery was the matter of the golden legacy, on which we have already heard some exchanges this afternoon. It is a sensitive point with the Government. The going concern that took over in May 1997 will of course always reject the proposition that the Conservative Government left a golden legacy, so I must draw Labour's attention to The Times yesterday, in which Anatole Kaletsky wrote:
Kaletsky also rightly makes a proviso--that the economy must not be in recession if automatic growth is to occur. That is one of the dangers that the Chancellor's seemingly solid edifice stands precariously against. In his projections for the next two or three years, the Chancellor
still relies on growth of 1 to 1.5 per cent., which is about twice the average forecast of well-respected economic commentators throughout the country.
There is surely no doubt that manufacturing industry is already in recession, or that it has been seriously damaged. Many of yesterday's measures will increase the damage to that unhappy sector. We have heard quoted many times the assertion of Sir Clive Thompson, president of the Confederation of British Industry, that an increase of £20 billion in business taxes has already been inflicted.
Business does not face merely taxes, of course. A bureaucratic burden is also being heaped on industry. I am not prepared to enter a Dutch auction between the present Government and their predecessor about whether there have been 3,000 more documents or 2,500, but we all know that there have been too many of them. That is certainly the view of British industry, and many quotations to that effect can be adduced.
Another danger manifest in the Budget is the temptation to meddle. In The Times today, Anatole Kaletsky cites the interventions that will burden and harass industry, saying:
There is another danger. The Budget will make it harder to continue the downward pressure on interest rates. If anything, it might put pressure on interest rates to rise again, when set against the inflation target. We all know that if that happens, the impact on the pound, on our export potential and on business and jobs will be hugely negative, coming on top of an already difficult situation for British exporters. That would have negative consequences should we approach membership of European monetary union, although I do not wish to go too deeply into that subject from the Conservative Benches tonight.
Gillian Merron (Lincoln):
It used to be the case that the Chancellor wore the heavy mantle of chief distributor of misery, entrusted with executing Budget provisions in a limited and predictable manner. However, now the headlines proclaim, "Flash Gordon", "Everyone's a winner" and "Brilliant". How Budgets, Governments and Chancellors can change!
The Budget is supported by good housekeeping, including a major reduction of the inherited national debt and the costs associated with it and a determined yet practical reduction of unemployment and its associated social security, health and other costs, none of which properly serve the individual or the economy. However, I noted that the Chancellor again failed to realise the fears of George Bernard Shaw, who wrote some time ago:
I especially welcome the Budget's impact on my constituency of Lincoln. More than 11,000 families will benefit from the further increase in child benefit plus the new children's tax credit. That will mean that the Labour Government, since coming to power, will have doubled the financial support available to children. More than 16,000 of Lincoln's pensioners will benefit from an increase in the winter allowance from £20 to £100 which, together with the other measures including the reintroduction of free eye tests--I strongly supported the local Age Concern group's campaign on that issue--and the lifting of many pensioners out of tax liability, will provide a better deal for pensioners than they have been used to for some time.
To achieve all that, support for business and enterprise must be a priority. I know that many in the business community will be pleased by the Government's practical responses to their needs, which Labour has listened to for some time. The business community will welcome the Budget announcements, including the tax reductions and credits, the new small business service and new proposals to increase share ownership, to help to increase productivity. Lindum Construction in Lincoln proudly announced such a scheme some time ago and I believe that it will be successfully replicated around the country.
I recently addressed business representatives at a busy chamber of commerce lunch. In discussion afterwards, I heard how business people genuinely felt a sense of stability that, slowly but surely, is rebuilding the confidence lost in the Tory years of boom and bust. Such confidence supports an American parent company's decision to establish a new manufacturing site in Lincoln. A year ago, I was pleased to welcome Sermatech UK to its new Lincoln facility, which employs some 33 people. Sermatech established that plan in partnership with Alstom Gas Turbines, which--incidentally--supplies the turbine that powers the Whitehall energy efficiency scheme. No. 10, the Ministry of Defence and many other key buildings rely on Lincoln's skill and technology for heat and light. That is a powerful position to hold. Sermatech has a positive future and I believe that it will be enhanced by the final Budget of the millennium.
This is a Budget for work. Lincoln has seen a steady reduction in unemployment, which has fallen by 15 per cent. in the past year. The new deal is part of that, and I am especially pleased that the over-50s will have an opportunity to benefit from a new programme to get them back to work so that they are not left on the scrap heap. Anglia Water last year invited me to support its 37 new deal young recruits and their mentors in Lincoln. I was
delighted to hear that since my visit, Gary Peck, a trainee leakage operative, has obtained a permanent job as an assistant surveyor. He is just one example of the powerful effect of a partnership initiated and funded by the Government. Gary's view is:
On education, I especially welcome the £470 million investment to broaden access to technology for both children and adults. I was delighted to see that principle already in action at Ermine junior school in my constituency, which has a dedicated room with IT equipment for that very purpose. Especially impressive is the availability of the new technology to those in the local residential home. The friendships and exchange between the children and the elderly people provide an example of true and meaningful education.
I especially welcome the allocation of £2,000 to every school for books. I welcome it for the contribution it will make, but also for its directness. We all know what the money is, what it is for and where it is going. The path of previous allocations of extra funding for education from this Government has not been so clear in my constituency.
"The real authors of Britain's present economic prosperity--and of the present Chancellor's good fortune--were Kenneth Clarke and Norman Lamont."
Mr. Kaletsky points out that automatic revenue growth is built in to the British system, which is ungainsayable, but which has not been said by Treasury Ministers, who seem always to try to reject a legacy that truly was golden.
"Individually all these may be small measures, but taken together they seem to represent a covert triumph for the traditions of interventionist economic meddling and social engineering that appeared to be buried with old Labour."
That is true, and it is being said by an independent economic commentator rather than coming only from Conservative politicians. The Labour party still believes that everything can be done from Whitehall. We heard bland words from the Secretary of State for Trade and Industry about the necessarily limited role of Government, but by their deeds shall ye know them. As the Budget works out in the months to come, I fear that it will become all too clear that it spells bad news for industry.
"Give women the vote, and in five years, there will be a crushing tax on bachelors."
I wondered whether I should be generous and say that even Conservative Members would not have added that to their intended list of items such as food, books and children's clothing that were under threat of imposition of VAT, had the Conservatives won the election.
"I wouldn't be in this position if it wasn't for all the help I've been given."
He is a bright young man with great potential: he just needed the opportunity of the new deal to get him into work. There are many more like him, who will benefit from the Government's determination to get people into work, including those who find it hardest to get their feet on the employment ladder.
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