| Previous Section | Index | Home Page |
Mr. Radice: I accept that. Indeed, I started my speech by making some very favourable remarks about the Budget, and I quoted Samuel Brittan, who also made favourable remarks.
I shall finish by offering the Government some more of the Select Committee's suggestions. We would like the tables illustrating the financial effects of successive Budgets to show them not only separately, but combined. That would make it easier to see what was going on.
We would also like to be able to divide taxation and those benefits that are scored as expenditure. Again, that would make it easier to work out what was going on. There should also be a table in the Red Book on distribution, so that we could see the good things that the Budget has done. We should not have to rely on parliamentary questions.
I am in favour of the Budget leaflet suggested by the Chancellor, and I think that it should be delivered to every household--but there should be an independent element. The National Audit Office, for example, or the Institute for Fiscal Studies could look at it so that there could be an agreed view. As I have been trying to show, truth is many sided, but, if such an exercise in providing broad public information is to be undertaken, it is important that it should not be seen as a Government propaganda exercise. In the long term, that could undermine its value. A Government who have made as many innovations in open government as the present Administration should have no difficulty in responding to what I believe are our constructive and helpful suggestions.
The Treasury Committee does not exist to be the Chancellor's cheer leader. If we have suggestions or criticisms, we shall make them. However, we do not exist to provide opposition, either--although, having heard the Opposition spokesman today, I realise why proper opposition is needed.
We have made it clear that we support the Government's overall economic strategy, because we think it highly sensible. We did not hear a word about that from the Opposition. The real role of the Treasury Committee is to ensure that people who come before us, including the Chancellor--and, indeed, my right hon. Friend the Chief Secretary to the Treasury, to whose appearance before us we very much look forward, and my
hon. Friend the Paymaster General--are accountable. That is what the Committee is there for. That is why we ask them questions.
Mr. Malcolm Bruce (Gordon):
It is a pleasure to follow the hon. Member for North Durham (Mr. Radice). The Treasury Committee produced an excellent report. It will be interesting to see the Government's reply to the Committee's specific recommendations. I hope that they will reply not only to the letter, but to the spirit of the report. They may say, "Yes, we might deal with the problems raised," and then find other ways of obscuring the presentation. If we are to have intelligent debate in the House and across the country to inform people, we need a more genuine statement of what Budgets are doing and what the Government intend them to do, and some independent assessment of what is happening.
The Select Committee did not mention the fact that a parliamentary answer on the impact of the Budget on the taxation of the average family is no longer provided. That was the practice for 22 years and was discontinued by the Chancellor after his first Budget. That makes it much more difficult to compare the impact of past, present and future Budgets. No doubt that was the reason for the change. There is, therefore, some justification for the suspicion that the Government do not want, contrary to the spirit of the report, to present an open and clear picture that can be assessed properly and provides a comparison with the past. The Select Committee has done a good job, and is pointing in the direction in which we should go.
Mr. Jack:
I sympathise with the hon. Gentleman's point about the parliamentary answer, which has traditionally been the practice since 1981, when the now Secretary of State for the Home Department, the right hon. Member for Blackburn (Mr. Straw), first tabled such a question. I agree with the hon. Gentleman that the Government have seemed reluctant to tell the truth about the impact on different households of their tax proposals. Is the hon. Gentleman aware that, in their latest attempt to answer such parliamentary questions, the Government are praying in aid the difficulties of measuring the impact of indirect taxes--hence the fact that they will not come clean on that aspect?
Mr. Bruce:
I am grateful for that intervention, not least because it leads me to the increasing complexity of the tax system that the Chancellor has introduced. Before I refer to that, I shall briefly give the overall economic background to the Finance Bill.
I welcome the fact that we hope to secure a soft landing across the economy. Overall, we will not sink into negative growth and we may start to see a recovery. That is to be welcomed: it is what we hoped the strategy would achieve. Our concern was that the Government took risks early on that may have heightened the risk of moving into recession. The Chancellor's first Budget did not tackle the apparent consumer boom through fiscal policy, so the Monetary Policy Committee of the Bank of England was
left with no option but to increase interest rates sharply. That caused borrowers considerable difficulties, and it still remains a serious problem for our divided economy. If the overall situation is looking reasonably encouraging, the situation for manufacturers and exporters is getting worse. We are now predicting a dip into recession.
On today's exchange rates, the pound has almost hit the DM3 level. We have a strong pound and interest rates running at almost double the European rate. All the indications are that that gap is not only likely to be retained in the short to medium term, but could even widen in the not-too-distant future. If recovery starts to show itself strongly in the United Kingdom against a background of fairly flat growth in the European economy, by the middle of the year the Monetary Policy Committee may be putting up interest rates when the European Central Bank is continuing to reduce them. That will inevitably increase the upward pressure on the pound. It remains a concern for us that the Government do not seem to have a strategy for dealing with that problem. We are not suggesting that it is easy for the Government to find a solution.
Ministers are keen to boast about the economic position, with some justification. We predicted that long-term interest rates would come down sharply if the Bank of England was made independent. That was part of our election strategy, and because the Government adopted that policy that is exactly what has happened. The Government, perfectly reasonably I suppose, are claiming the credit.
That being the case, should we not produce policies to encourage more long-term borrowing that can import those lower, long-term interest rates to the short term. [Interruption.] That is a serious point, although the hon. Member for Shipley (Mr. Leslie) is laughing at it. He should recognise that it would be a help in narrowing the interest rate divide between the UK and Europe and taking some of the pressure off the pound.
It is a matter of some regret to us that the Government have not sought to introduce in the Finance Bill some strategy and incentive to make that switch. One hopes, even without incentives from the Government, that institutions, and possibly individuals, will move towards more long-term borrowing. The problem with that--and it must be addressed by the Treasury--is that most individuals are at the mercy of what the financial institutions are prepared to offer. Many of them are not prepared to offer long-term fixed interest rates that give the full benefit of those long-term interest rates. The Treasury could have done more to make that more likely to happen.
We hope that the economy will show an ability to recover, although we expect more job losses and more closures in the manufacturing sector, if the situation continues--as seems likely. Although our reasoned amendment has not been selected and I do not wish to trespass beyond the rules of order, the House will understand that it summarises our main concerns about the Bill and why we will vote against it. One of our concerns is that the Chancellor has made the tax system much more complicated than necessary. It is worth recording that Nigel Lawson, who was a reforming Chancellor, reduced the number of personal taxes to four. When the right hon. and learned Member for Rushcliffe
(Mr. Clarke) was Chancellor, he raised that to eight. Under the present Chancellor, the number has peaked at 54, including the capital gains tax, which forms a significant part of it.
| Next Section
| Index | Home Page |