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Mr. Hayes: My hon. Friend mentioned the National Audit Office prediction on unemployment. That is supported by the Chancellor's estimate in the Red Book of an increase in welfare spending, principally because he knows--in my judgment--that the Government will have to bear the extra cost of unemployment.
Mr. Syms: My hon. Friend makes a good point. Despite what the Chancellor said, welfare spending is still growing strongly, and I am sure that he will have to eat his words as the consequences become clear over the next year or two, especially when we consider the trajectory of the economy, see how fast it slows, and learn whether the Government's prediction of 1 to 1.5 per cent. growth is realistic or whether the private predictions of less than 1 per cent. are realised.
The Budget certainly increased taxation. MIRAS was scrapped, and I am afraid that I cannot agree with my right hon. Friend the Member for Fareham (Sir P. Lloyd), who welcomed that. MIRAS helped those who were on the margin of being able to buy a property and wanted to get on the property ladder. By scrapping the relief, we are restricting people's choice to own a property, which many aspire to do.
Married couples allowance was abolished. I agree that in its current state it did not mean much, but that is after a systematic reduction, for which the previous Government must bear some responsibility. As a state we should give
a signal to the public about what we believe in. The fact that the tax system is neutral on marriage is not a good thing.
Company cars have been hit. Little has been said about that, but many people will pay substantially more for their company cars after the changes in the Budget. We hear much about the Kyoto summit, but as my hon. Friend the Member for Beaconsfield (Mr. Grieve) rightly said, there is no evidence that increasing fuel taxes reduces motoring use. However, it does take money away from people who have to use cars, especially those in rural counties such as Dorset. If parents have to take children five miles to school, they do not drive four miles and make the children walk a mile because the tax has gone up. People still have to go all the way to Sainsbury's, and to see the doctor. Many rural dwellers have to visit local towns to use services because those services are not available in the villages.
The Government are cynical about fuel taxes, as they are about the smoking tax. They know when they put petrol tax up that it will raise the revenue and that is why they do it. Before the Budget changes, £9 billion was raised and, according to the Automobile Association, £8.50 of every £10 now spent on fuel goes in tax to the Government. Almost all the food that is sold in supermarkets and all the other goods we buy travel by road. If the Government keep on putting up diesel and petrol taxes, the cost of living will increase.
If the Government were really serious about Kyoto and reducing pollution, they would tackle the issue through the tax system by making people buy newer and more fuel-efficient cars that had better technology, such as catalytic converters. They would not do it by raising fuel taxes. The other problem with raising fuel taxes is that it is regressive. If someone is wealthy and drives a Jaguar--
Mr. Syms:
If someone drives two Jaguars, he can probably afford fuel taxes, but for many less-well-off families living in rural areas--who need a car--it is a large part of their family budget. When fuel taxes are raised, other parts of their budget suffer. They may have to go without a family holiday or trainers for the children.
The landfill tax was increased and that will affect the budgets of local authorities. Poole borough council is struggling to pay that tax. It has not had the best standard spending assessment settlement from the Government, and rising landfill taxes are a constant annoyance. In effect, the landfill tax is a tax on local authorities which have a limited amount of money.
Mr. Grieve:
Has anyone suggested to Poole council how else it should get rid of its rubbish, with the Government's approval?
Mr. Syms:
The council is examining all options, but sometimes it does not have a great choice. The landfill tax is costing my constituents dear.
The Chancellor said in his Budget statement that enforcement measures on smuggling would be increased. However, market forces are at work. If people can travel to the continent, buy beer and cigarettes cheaper, sell them back here and make a profit doing so, they will. The way
to combat that is not to have more customs officers, but to address the problem of price. That means not a freeze but a reduction.
This is a consequence of the single market. If people can cross boundaries, the Government have to address differential pricing by introducing a competitive price structure for tobacco and drinks; otherwise rolling tobacco and beer will be smuggled in large quantities and cost us billions of pounds a year. The consequence is that British jobs are lost and British companies are affected.
Mr. Derek Wyatt (Sittingbourne and Sheppey):
I apologise for having been in and out of the House this afternoon, Mr. Deputy Speaker, but as I am sure you will understand, I have had one of those days.
Private Eye may give me the order of the brown nose for this, but I should like to say how brilliant the Budget is, and to congratulate my right hon. Friend the Chancellor of the Exchequer and his Front-Bench team on it. Around my kitchen table, we believe in two things--stability and fairness. Stability and fairness seem to shine from all that the Budget has introduced.
We want low inflation and low borrowing, and those are being delivered. We want a child-centred approach to the United Kingdom's future, and that is being delivered. We have been unreasonable to our old age pensioners, and that is being addressed. My family wants good schools, better health services, a friendlier business attitude and a better environment. The Budget stimulated me, and it will stimulate the country. I congratulate the Treasury team once again on the Budget.
The most sensational announcement was about the 1,000 computer centres, which beggars belief. I wonder, however, whether the Treasury team might reconsider the proposal because it may be that different communities will establish different centres with different practices, different technologies and perhaps even different purchasing systems or teaching mechanisms. My right hon. and hon. Friends might join Peter Fanning at 4PS in considering a private finance initiative system.
Such a system might include Tesco, which has a long history in the area, and McDonald's, which has a long history in the internet and computing. It could create a kind of public service company that might be the buying and delivery agency for the 1,000 centres without taking away from local authorities the opportunity to design something to suit their libraries, post offices, village halls or schools. It would give purchasing power to the centre, which might achieve better value for money.
A few weeks ago, I was the first Member ever to have an Adjournment debate on libraries, and it is fantastic that our schools are being given £2,000 for libraries. Many schools are information poor, even before we start talking about computers or the internet. I have been to 33 of my 44 schools. Some have no librarian, one or two have libraries in halls and aisles on the way to classrooms; and some have books that are 20 or 30 years old. That is not fair or reasonable. The gift of £2,000 is most generous, and my schools are thrilled about it. I congratulate the Treasury team on that gift.
Giving teachers an opportunity to get on the net at home, through laptops, is a terrific idea. It is a real sea change. Teachers do not find technology easy and they
are sometimes uncomfortable with it. It is not life- threatening, but they do not find it easy to deal with. The opportunity to get on the net at home and to upgrade their skills is a double plus.
May I ask Treasury Ministers to reconsider the risk element mentioned in relation to the university fund for venture capital? Some books and economic forecasts name the UK as the seventh largest economy, with California the eighth. However, 0.5 per cent. of our economy is driven by venture capital, while in California the figure is more than 35 per cent. Of the 0.5 per cent. in the UK, most is accounted for by mergers and acquisitions. It is not risk capital.
Although we have put more money into universities, I wonder whether we might do so differently. Would Ministers consider creating a fund that could be shared between chambers of commerce and universities? The amount could be increased, and we could say--as with the £2,000 for libraries--that a set amount of £1 million or £2 million should be given to each chamber for venture capital. Then they, in association with the universities, could develop brand new, scientifically based software industries to increase at a local level our knowledge of how capital works and our understanding of the modern business world--its model is set by California, not Europe. In that way, we could improve our whole knowledge base.
A good example of how that might work is the Prince's Trust, the only fund in the UK that has given small amounts--£2,000 or £5,000--to kids who understand pop music, design, internet access, web architecture and much more. Three of their companies were so successful that they sought listings on various markets. That is a sensational success story. We should build on what the prince has done and borrow from that model so that, at the bottom level, sums of £5,000 or £10,000 get to the community and to the sort of garage entrepreneurs who created companies like Apple and Intel in America 25 years ago.
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