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Mr. Gardiner: Will the hon. Gentleman give way?
Mr. Flight: No, I will not give way. I have only 10 minutes to speak.
The Budget was unnecessarily complex and tinkering. A great deal of its objectives could have been achieved simply by raising personal allowances. It was clearly an
electioneering Budget. The Chancellor achieved the sort of publicity the next day that he wanted and obviously felt extremely clever presenting all the good news and concealing all the bad, but I shall point to one or two groups of people in my constituency who are not so happy.
Mr. Caplin:
Will the hon. Gentleman give way?
Mr. Flight:
No, I will not give way--sorry.
Mr. Caplin:
On a point of order, Mr. Deputy Speaker.
Mr. Deputy Speaker:
I hope that it is a point of order.
Mr. Caplin:
We are trying to engage in a debate, but the hon. Member for Arundel and South Downs (Mr. Flight) seems to be of the opinion that he has just 10 minutes to speak. My understanding of the House's rules is that extra time--
Mr. Deputy Speaker:
Order. That is not a point of order.
Mr. Flight:
Thank you, Mr. Deputy Speaker. I am sorry that your time was wasted.
I shall comment on three groups of people in my constituency who have approached me. One is what I would call the post-war baby bulge generation--people typically aged from their late-40s to their mid-50s. When those people were bringing up their children, they suffered from the abolition of income tax allowances for children and from the fact that the last Conservative Government failed to transfer personal allowances. Just as their children are off their hands, these people are now losing their married couples allowance. They are not pleased about that. Those are just the sort of people whose votes Prime Minister Blair has been so keen to get.
The second group is pensioners of the future. The worst example of deviousness in the Chancellor's presentation was the fact that he said clearly that pensioners would continue to receive the married couples allowance. What he meant was current pensioners. People born after 1935 will not get the married couples allowance in the future.
That is grossly unfair. Many people have planned carefully for their retirement. They are not rich, and they assumed that they would get the married couples allowance. The change will cost them several hundred pounds a year. What the Chancellor did was just as bad as stealthily abolishing the widow's pension, except on a means-tested basis. People have taken the married couples allowance into account in their financial plans for the long term.
Mr. Caplin:
Will the hon. Gentleman give way?
Mr. Flight:
No, I will not be giving way.
The Chancellor will not reap the success that he had hoped for, in terms of winning votes. The Budget was supposed to be family-friendly, but the total being taken back through the abolition of MIRAS and the married couples allowance is some £600 million more than is
being given out in total to families through the new child credit and the increased child allowances. It is not a family-friendly Budget.
Mr. Flight:
It was an act of stealth to abolish the married couples relief this year, before the new family credit comes in next year. The abolition of the married couples allowance is wrong in principle. The Chancellor brushed it under the carpet with a few feeble excuses. The institution of marriage should be buttressed by both tax and welfare facilities.
Mr. Caplin:
Will the hon. Gentleman give way?
Mr. Flight:
I am not giving way. In Britain, as elsewhere, children are brought up better with two parents in a married family unit.
Let us consider entrepreneurship and another example of the Chancellor's deviousness. It sounds extremely attractive to reduce the rate of tax on small companies to 10 per cent., but the overwhelming majority of small entrepreneurs are not companies--they cannot afford to be. They are ordinary sole traders, who will still be liable to existing standard rates of income tax, and certainly will not be paying 10 per cent only.
In my constituency small businesses are howling at me to try to reduce bureaucracy and red tape. They find that they cannot compete and comply.
Mr. Gardiner:
Will the hon. Gentleman give way?
Mr. Flight:
The introduction of the European social chapter measures was the last straw. Small businesses faced with the possibility of having to pay out £50,000 if they make a mistake in the way that an employee is dismissed will go bust as a result.
I spent part of my career in the United Statesof America. I welcome US-style measures to get entrepreneurship going in this country. However, those were not the measures in the Budget. The most crucial requirement is to abolish an excessive 40 per cent. rate of capital gains tax.
Mr. Flight:
There is clearly a regressive element in the tax on cigarettes and petrol. Speaking on behalf of rural constituents, as other hon. Members have done, I can tell Ministers that the 4p a litre increase on petrol will hit hard all levels of society in rural areas, especially pensioners.
I was interested to note that the hon. Member for Sittingbourne and Sheppey (Mr. Wyatt) began his speech by saying that he was brown-nosing. I suggest that this was a Brown-nosing Budget, designed, somewhat early, to win votes in the next general election. It was an immoral Budget, because the one thing that it did nothing about was charities.
The Government have increased taxation on charities by £500 million per annum as a result of the abolition of advance corporation tax recovery. I have been
corresponding with the Treasury on this matter for some time and was assured that something would be done in the charity review that would be announced in the Budget, but what is in there? Absolutely nothing.
The Prime Minister prides himself on being the moral and spiritual leader of half the world and yesterday I asked him about tax changes for charities. Why is he imposing the greatest taxation ever on all the charities in this country? I suggest that Labour Members should pause to think about the morality of the Budget and all the charities that will suffer as a result of it. Yesterday, I was at a meeting of one of the charities with which I am involved. It will be cutting expenditure by £500,000 per annum as a result of these measures. It has been lobbying the Government for some time in order to achieve some form of compensation, but in vain.
Mr. Gardiner:
Will the hon. Gentleman give way?
Mr. Flight:
I am about to conclude my speech.
This Budget, like all the Chancellor's other Budgets, sounded clever and wonderful when it was announced. All the nasties were left unsaid or hidden away and there are one or two measures that it was wrong not to have made clear, such as the treatment of the married allowance for old-age pensioners. As one constituent said to me, "Well, it sounded all right, but I don't trust him at all." I believe that that, substantially, will be the reaction of the middle classes, whose votes the Prime Minister is after and, as all the papers have pointed out, which continue to be treated negatively, as they were in previous Budgets. This is not a bad Budget for the economy as a whole, but it is not nearly as clever as the Chancellor would like to think.
Mr. Gardiner:
On a point of order, Mr. Deputy Speaker.
Mr. Deputy Speaker:
I hope that it is a point of order.
Mr. Gardiner:
Is it in order for the hon. Gentleman not to take interventions, because he fears that he will use up his 10 minutes, and then not to use his full 10 minutes? Does he not realise that the clock stops when an intervention is received?
Mr. Deputy Speaker:
Order. Perhaps the hon. Gentleman did not hear my response to a previous point of order, which was in similar vein. It is up to each hon. Member to decide whether to take an intervention and the reason for refusing to take an intervention is absolutely nothing to do with the Chair.
Mr. St. Aubyn:
On a point of order, Mr. Deputy Speaker. My point of order is slightly different. Will you clarify whether the time taken to respond to an intervention is included in the 10 minutes allowed for a Member's speech?
Mr. Deputy Speaker:
The time taken to reply to an intervention is taken out of a Member's 10 minutes. I might add that the clock stops only at the discretion of the Chair. The rule clearly states that the Chair may allow time for interventions.
Mr. Bowen Wells (Hertford and Stortford):
We all owe it to the House, to our constituents and to the country to speak the truth as far as we can possibly know it. The truth is that the Budget is very good in many aspects and we should acknowledge that.
Although we would have liked to have achieved an inflation rate of 2.5 per cent. much sooner than we have, it is a matter for congratulation that the Government have managed the macro-economic situation in this country and conducted tax affairs in such a way that we are able to keep to such a rate. However, our inflation rate is twice that of France and of Germany, and I should have liked the Budget to have aimed at a rate lower than 2.5 per cent.
The hon. Member for Harrow, East (Mr. McNulty) criticised the Conservative Administration for not aiming for a stable macro-economic framework in which to conduct the public finances. In fact, that is the reverse of what the Conservative Government aimed to do when they came to power in 1979. The introduction of a medium-term strategy was one of the measures that were designed to reduce inflation and interest rates, and to keep the economy stable and predictable so that there could be growth in the economy, along with real, sensible, non-inflationary investment, to increase our productivity and output--in other words, our gross domestic product.
The Conservative Government succeeded in their aim for a large part of their 18 years in office, but did not do so during the late 1980s and early 1990s, when the economy--not just in this country, but throughout Europe and indeed the world--was stricken by recession. Counter-cyclically, the Government introduced extra spending, and had to raise interest rates by much more than they would otherwise have done.
Unfortunately, the hon. Member for Harrow, East has disappeared, having had his rant. He did not even show the normal courtesy of staying for the duration of the speech that followed his. I hope that such traditions will nevertheless continue in the House. The hon. Gentleman was, however, right in saying that we should all be aiming for a stable financial background to our Budget, and, by extension, to the Government's tax and spending plans.
I congratulate the Government on keeping the macro-economic framework under control. Interest rates are lower, and I hope that they will fall further before long: they need to do so. I also hope that we shall aim not for the Government's objective of a 2.5 per cent. inflation rate, but for the rate of between 0 and 1.5 per cent. which obtains on the continent and in the United States.
Having said that, I must add that I have never felt more ashamed than I did during yesterday's exchanges about the Budget during Prime Minister's Question Time, which reduced the politics of public finances to the level of pantomime. We had to endure a vituperative and meaningless trading of statistics between the Dispatch Boxes. At one point, the Prime Minister said that everyone in the country had experienced tax cuts.
In answer to my right hon. Friend the Member for Richmond, Yorks (Mr. Hague), he said:
Anatole Kaletsky explains the Budget extremely well in his article in The Times today. There is an increase in taxation, and I do not think that the Prime Minister, having imposed that increase on the British public, should apologise for it if that is what he wants to happen. But it is no good telling the public that there are not increases in taxes when there are.
I welcome some of the additional expenditure that the increased taxation will enable the Government to make. I welcome the increase in the international development budget over three years to--it is hoped--£3.5 billion in the final year of the increases so far announced. I also welcome the increases in spending on education and health. However, I do not believe that, when we have taken into account the effect of the minimum wage and of wage increases to nurses and teachers, the amount of money in the classroom will increase. The schools in my constituency will be worse off in real terms. The test must be: what effect does the Budget have in classrooms, hospitals and GPs' surgeries in our constituencies? At the moment, the answer is that they will receive less money, not more.
5.58 pm
"There is a net tax cut for everyone--direct taxes of £9 billion."
My right hon. Friend asked the Prime Minister to explain. Two answers later, the Prime Minister said:
"There is a net tax cut of £4.5 billion."--[Official Report, 10 March 1999; Vol. 327, c.358.]
11 Mar 1999 : Column 584
In the space of two answers, the cut had been reduced by a half.
The House proceeded to further unseemly exchanges, in which hon. Members swapped statistics of a totally meaningless character, which thoroughly misled the House and undoubtedly confused the public. That is no way in which to conduct public debate on these matters. Sensible inquiries should be made by the Prime Minister and the Leader of the Opposition about exactly what statistics they are discussing; that would avoid the "No, I'm right", "No, you're wrong", exchanges.
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