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Mr. O'Neill: I want to make two points. First, if there are to be energy taxes, they must be fiscally neutral, and the Government have accepted that. The attack on my hon. Friend the Member for Harrow, West (Mr. Thomas) and the general thrust of the right hon. Gentleman's argument therefore has no substance. Secondly, vehicle excise duty is a complicated issue and there is much special pleading by the road haulage industry. Some of us have sympathy with the industry, but VED will not
necessarily undermine the opportunities available to manufacturing industry in this country. The Opposition spokesman has not done justice to that case--
Mr. Deputy Speaker: Order. The hon. Gentleman's intervention has been far too long.
Mr. Heathcoat-Amory: It is intolerable that a well-considered case advanced by the British haulage industry should be dismissed as special pleading by Government Members in that way. The industry has made a good case, which the Government have not answered at all. The industry would have more respect for the Government, as would we, if its case for a lower or non-existent escalator had been answered by Ministers. We shall shortly hear a reply to the debate and we shall give the Paymaster General an opportunity to answer that case, but so far we have heard nothing.
On the fiscal neutrality of the energy tax, we should be forgiven for being a little cynical about whether the Government will pocket something along the way.
Mr. Gareth R. Thomas:
Will the right hon. Gentleman give way?
Mr. Heathcoat-Amory:
If the hon. Gentleman will forgive me, I will not because I am answering some of the points that he made.
By definition, the firms and sectors that pay the tax will not be those that will be reimbursed from the revenue. Manufacturing, as a whole, will pay more than its share of the tax, and the money will flow back to different sectors, mainly the service sector. There will be a net distribution of wealth from manufacturing to the service sector. I hope that hon. Members with large manufacturing concerns in their constituencies--I certainly have some in mine--will bear that in mind before they advance the case for the tax on environmental grounds alone.
The estimates on which the Budget is based are extremely shaky. My right hon. Friend the Member for Haltemprice and Howden (Mr. Davis), who has told me that he cannot attend this part of the debate, put forward the good idea that the National Audit Office should audit and check parts of the Budget that it is excluded from auditing at present.
The Government have given in on unemployment. They used to assume that it would simply be flat. They have now agreed that it is more realistic to accept the National Audit Office assumption of an increase in unemployment over the next few years. I am afraid that very little in the Budget will prevent that 400,000 increase in unemployment that the NAO is projecting.
All the Government schemes in the world will do nothing unless the economy generates real new jobs, and the Government keep taxes down and reduce the cost of employing people. I do not believe that the Government have understood that message. If they have understood it, they have not acted on it. They are squandering the golden economic legacy that we left to them, and the country as a whole will pay the price.
9.45 pm
The Paymaster General (Dawn Primarolo):
The official Opposition have been whistling in the wind this evening to keep up their spirits in the face of the congratulations that the Government have received on their economic policies and yesterday's Budget, from sources that range from the International Monetary Fund to the mother of the Leader of the Opposition, Mrs. Hague.
During the debate, the Opposition adopted not so much a kitchen table approach as a pick-and-mix approach. The quote from the hon. Member for Tunbridge Wells (Mr. Norman), who welcomed the help for small business in the Budget and described the Budget as not bad for business, was not echoed by many of his hon. Friends, despite the fact that the hon. Gentleman is vice-chairman of the Conservative party.
The comments of the shadow Chancellor, who described MIRAS as having outlived its usefulness and said that it should be abolished--the sooner the better--were not echoed in the Opposition's official policy this evening, presumably because the shadow Chancellor had to rush off to the shadow Cabinet meeting. The shadow Secretary of State for Trade and Industry suggested that we had deliberately timed the debate in order to deny him the opportunity to attend that meeting.
The Leader of the Opposition said that if we were going to phase out the married couples allowance, we should replace it with a better-targeted allowance for families who need help. That is precisely what we have done, but did the Opposition stick to that policy? No. They are into their kitchen table pick and mix.
The Opposition could not explain why Sir Ronnie Hampel, chairman of ICI, welcomed the overall approach of continuing the direction adopted, in order to strengthen the foundations for business growth; nor could they explain why Alan Leighton, the chief executive of Asda, said that he welcomed the Budget and called it a Budget for individuals, a Budget for families, a Budget for enterprise, saying that the benefits that it will bring will flow through to every sector.
The Opposition could not explain why they disagreed with Lord Harris, the chairman of Carpetright, who said:
In their many contributions to the debate, my hon. Friends touched on various aspects of the Budget. My hon. Friend the Member for Ochil (Mr. O'Neill) welcomed the Small Business Service and said how important that would be. He welcomed the Marshall report and, in an intervention on the right hon. Member for Wells (Mr. Heathcoat-Amory), he re-emphasised the importance of taxing the bad and helping the
good--exactly what we are doing--to deal with the issues and challenges arising from the Kyoto conference and our international obligations on greenhouse gases.
My hon. Friend the Member for Harrow, West (Mr. Thomas) made an interesting speech, going further than the Budget with regard to environmental commitment, but, none the less, raising important points about how to tackle the environmental problems that we face.
My right hon. Friend the Member for Coatbridge and Chryston (Mr. Clarke) underlined the importance of the Budget in helping those in most need. My hon. Friend the Member for Worcester (Mr. Foster) reinforced that point, but went on to deal with the importance of introducing employee share ownership.
My hon. Friend the Member for Lincoln (Gillian Merron) also made important points about how many families and pensioners in her constituency will benefit from the Budget, and those points were echoed by my hon. Friend the Member for Jarrow (Mr. Hepburn).
My hon. Friend the Member for Watford (Ms Ward) spoke of a meeting today in her constituency at which pensioners told her that there is something for everyone in the Budget, and a bit more for those who need it most. She summed up the assessment of the Budget across the board. Even the Institute for Fiscal Studies had to admit that as a result of its analysis today. A single pensioner will now receive £500 a year more than when the previous Government left office and pensioner couples will receive £800 a year more.
Central to the Government's strategy is the need to tackle the employment and poverty traps, to deal with skills shortages and to encourage investment in our economy.
Opposition Members referred to the fuel escalator. The hon. Member for Tiverton and Honiton (Mrs. Browning) said that it was a policy which she had been unhappy with for some time. Presumably, she was alluding to the fact that it was her Government who introduced the fuel escalator, and even though she was unhappy then, she decided not to say anything, and has only now discovered the problem.
Mrs. Browning:
I articulated that on several occasions. The hon. Lady might like to know that, during one television interview that I gave after a Conservative Budget, someone said that I sounded less enthusiastic than the Liberal Democrat representative.
Dawn Primarolo:
The hon. Member for Eastleigh (Mr. Chidgey) may wish to take that up with the hon. Lady, but perhaps not now.
Just to reinforce the point, the policy that the hon. Lady now decries was started by the Conservative Government for good environmental reasons, but she wants to forget that. That is part of the previous Government's amnesia.
Mr. Townend:
Will the hon. Lady accept that the Conservative party has changed its policy? [Laughter.] How can she laugh when new Labour has changed all the policies of old Labour? It is no longer in favour of nationalisation and wants to privatise; it now supports business and enterprise. It has changed its policy. Will she not accept that we have changed ours?
"I think it is a good budget for my business. This is a budget that will help people to spend, especially at the bottom end of the income scale."
Throughout the debate this evening, the Opposition complained about what they did not like, denied what they had been committed to in government and said nothing about what they would do to tackle the skills shortage, investment, the productivity gap, help for families, incentives to help people into work and investment in our small businesses. They speak of their golden legacy, but even they do not believe that they left us one, because they cannot tell us now what they would do to help the economy.
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