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Mrs. Ann Winterton (Congleton) rose--
Mr. Milburn: I remind that right hon. Gentleman and other Conservative Members of the warning issued by the
then Tory Chancellor, the right hon. and learned Member for Rushcliffe (Mr. Clarke), about the escalator--the hon. Member for Congleton (Mrs. Winterton) should listen to this. He said:
- "Any critic of the Government's tax plans who claims also to support the international agreement to curb carbon dioxide emissions will be sailing dangerously near to hypocrisy."--[Official Report, 30 November 1993; Vol. 233, c. 939.]
Mr. Milburn: If I were the hon. Lady, I would be extremely cautious. She should look at the figures. Since the general election, the fuel duty escalator that we have imposed on diesel has led to an increase of 7p per litre. The Conservatives increased the price of derv by 26p per litre. I also remind the hon. Lady of the other measures that the Government have taken to help Britain's haulage industry. We have frozen vehicle excise duty for 98 per cent. of lorries. We have doubled VED reductions for the cleanest lorries and we have widened the differential between cleaner diesel and ordinary derv. And, of course, the cuts in corporation tax will benefit haulage firms, just as they will benefit other firms.
Even at this stage, it is not too late for the hon. Lady and her party to say now what they said when the Conservatives were in office--that the escalator is a necessary environmental measure that will help Britain meet our international legal obligations and contribute to better air quality in our country. The Tories should be supporting the escalator duty now rather than opposing it, but their opposition to the Bill speaks more of them than it does of the Government. They failed in government, just as they are now failing in opposition. They failed to keep their promises then and they are failing to maintain their policies now. They say that they want to put their past mistakes behind them, but their opposition to the Bill shows that they have failed to learn any lessons from their defeat in May 1997. Isolated in Britain and determined to isolate Britain in Europe, they have put themselves on the margins of British politics. They are incapable of knowing what is good for Britain because they are so out of touch with the British people.
The Conservative party belongs to the past. By contrast, the Labour Government are delivering for the future. The Bill will help to build a stronger economic future for our country; it will help to create an enterprise economy and a fair society in which there is opportunity for the many and not merely for the few. The Bill provides the right incentives for people to work and for businesses to invest. It offers a better deal for British business and a better deal for the British people. I commend the Bill to the House.
4.11 pm
Mr. David Heathcoat-Amory (Wells):
I beg to move, To leave out from 'That' to the end of the Question, and to add instead thereof:
The story began in the Chancellor's speech on Budget day, but was heard in the Prime Minister's words the following day when he told the House that there was
It was not only the Prime Minister; in the Budget debate of the following week, the Chief Secretary referred to a £4 billion tax reduction--he lost £0.5 billion somewhere during that week, which the Chancellor does not care much about. However, there is no possible way that the Budget and the Finance Bill can be construed as cutting taxes on anything like that scale. Indeed, the House of Commons Library has described it as, in total, a tax increase measure of £200 million over the next three years.
Mr. Barry Gardiner (Brent, North):
Will the right hon. Gentleman tell the House whether his party's policy is now to abandon the fuel escalator and so achieve the tax reductions he seeks?
Mr. Heathcoat-Amory:
Yes, it is our policy to abandon the fuel escalator, and I shall talk about that later.
I am dwelling--perhaps to the embarrassment of Treasury Ministers--on the fact that they have fiddled the figures so as to try to dress up a tax-raising Budget as a
tax-reducing Budget. They did so on a spectacular scale by classifying the working families tax credit not as an expenditure item, but as a reduction in taxation. I do not ask the House to accept my word for that: the Chief Secretary, in an answer to a question asked by my hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb), confirmed that the WFTC is an expenditure item and should be classified as such.
The Chief Secretary has broken his own rules by permitting the Prime Minister and his colleagues to claim a tax reduction. If the right hon. Gentleman goes on like that, he will end up describing the extra cost of the war in Kosovo not as an expenditure item, but as a tax reduction. Does he have any idea how much damage he does to the cause of transparency and honesty in public accounting by abusing his own definitions in the way I have described?
Mr. Roger Casale (Wimbledon):
The right hon. Gentleman appears to be arguing that, if one looks in the Red Book and adds up the figures, one will conclude that a benefit is the same as a tax reduction. However, if he leaves the Red Book for a moment, visits my constituency and meets some of the young people who have passed through the gateway to the Government's new deal and who are now going into work, he will notice that there is a great difference between a benefit and a tax credit. A tax credit gives a person an incentive to return to work that a benefit does not give. The whole thrust of the Finance Bill is to give people an incentive to work and to reward work, and I hope that the right hon. Gentleman accepts that that is the reason why some of the changes have been made.
Mr. Heathcoat-Amory:
I agree that there is a big difference between a benefit and a tax cut; our point is that the Government are deliberately confusing the two. It is not me but the Chief Secretary who calls the WFTC an expenditure item, but the right hon. Gentleman has not followed that through in the presentation of his figures, on the basis of which he claims that the Budget is a tax-cutting Budget. I strongly support the Bill presented to the House earlier this afternoon by my hon. Friendthe Member for East Worthing and Shoreham (Mr. Loughton). It is designed to put some honesty and straightforwardness back into the presentation of the national accounts.
Jacqui Smith (Redditch):
In the spirit of transparency and honesty, will the right hon. Gentleman now explain which tax he would increase, or which section of expenditure he would reduce, so as to recover the £1.6 billion lost by getting rid of the fuel escalator, which is now Conservative party policy?
"this House declines to give a Second Reading to the Finance Bill because it imposes further hidden taxes on families, on homeowners, on motorists, on consumers and on business, adding extra costs to business at a time of economic uncertainty and rising unemployment and fails to reverse the damaging measures introduced by the last two Finance Acts which introduced similar damaging and hidden tax increases together with increases in the tax burden on companies and tax rises on savings and on pension funds."
There was nothing new in the Chief Secretary's speech, but there is something new in the Finance Bill this year. It begins, on its introductory page, with the Chancellor of the Exchequer's assertion that it is compatible with the European convention on human rights. It is just as well for the Government that the provisions of that convention do not include the right of the public to honest and straightforward accounts and descriptions of the amounts that they will be paying in the coming year. The whole Budget exercise--from Budget day to the Finance Bill--has been a story of half-truths, fiddled descriptions and cooked statistics. We heard some more of those in the Chief Secretary's speech today.
"a net tax cut of £4.5 billion."--[Official Report, 10 March 1999; Vol. 327, c. 358.]
That is a complete invention. If we try to piece the crime together from the Red Book, it seems that what the Prime Minister did, and what the Treasury is still trying to do, is to reclassify all the spending measures in the Budget table as tax reductions; they have reclassified all the spending measures as negative taxes. One can take an example more or less at random; there is a pledge of an extra £5 million a year for green transport plans. We might think that an extra £5 million a year is a pretty insulting amount to set beside the £1.7 billion that the Government are raising in this Budget alone from extra fuel duty. However, the point is that that extra expenditure on green taxation is classified not as an expenditure measure, but as a reduction in taxation. That is how the Government and the Prime Minister arrived at that £4.5 billion tax cut.
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