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Mr. Gardiner: Will the hon. Gentleman give way?
Mr. Bruce: I will, indeed. The hon. Gentleman is very energetic.
Mr. Gardiner: Does the hon. Gentleman not realise that one of the most important ways of persuading poor people to save is to ensure that the funds that they put into a savings account are not locked up? The fact that they can withdraw their savings does not mean that they will, but the ability to do so acts as a great incentive for people with not much money to put it into a savings vehicle.
Mr. Bruce: I understand what the hon. Gentleman is saying. I am disappointed that he did not listen to my economic argument.
We already have the Giro bank, National Savings and many building societies, banks and other establishments that spend a fortune persuading people to invest with them on the basis that it will be easy to get their money out. In effect, some are saying, "I will even give you more money than you put in." Much is being done to encourage people to save. However, at the end of the day, if someone does not really have enough money on which to live, is scraping all the time and is trying to decide whether he can afford to buy a tin of baked beans or a tin of cat food at the end of the week, he will not save. That will be the position whatever we politicians say to encourage such people to save.
I accept that some people are regular savers. Some kids put half their pocket money away and accumulate. Other kids are always coming to mum by Wednesday, saying, "Can I have some more pocket money, because I have spent all that I was given?" People are like that. I remember that, whenever I gave one of my employees her pay slip--I used to pay my employees with cash--she would say, "That is for the mortgage, that is for my club, that is for this and that is for that, and I have £5 to last me till the end of the week." Some people spend in advance and other save.
I am not suggesting to the Government that they should not try to encourage people to save. I am saying that it is a good thing to encourage people who can put a good
deal of their money away every year because it is tax advantageous to do so. Such an approach should not be destroyed. I cannot see any logic in anything that acts against those investors in the vain hope that people who are poor will suddenly start saving lots of money. That defeats me.
Several Members have spoken about the fuel escalator. It may be known that I am the vice-chairman of the all-party motor group. The Automobile Association has spent much time and trouble analysing what happened over the years during which the Conservative party had a fuel escalator. I can assure the House that, in looking after a rural constituency, every time that fuel tax has increased, I have said, "I don't think that you should have done that, Chancellor." However, we know that Chancellors want to raise money. They also have the excuse that Rio has intervened.
Sir Robert Smith (West Aberdeenshire and Kincardine):
Did the hon. Gentleman feel a slight pang of guilt when, in 1992, the Conservative party fought a fairly hefty campaign implying that a fuel escalator was a very bad thing? Was there not then a slight element of hypocrisy when the then Conservative Chancellor introduced it?
Mr. Bruce:
I do not recall fighting the 1992 election and saying that there would not be a fuel price escalator. If the hon. Gentleman tells me that that was my manifesto, I shall defer to his greater knowledge.
On the carbon tax issue, if the Chancellor had said, "I shall not put VAT on fuel. I have read the Liberal Democrat manifesto. I have read the Labour party's policy papers. Although my Conservative colleagues tell me that it is a bad idea, I am persuaded that we should introduce a carbon tax at 17.5 per cent," who could have argued against that? It is presentation, presentation, presentation, is it not?
We had given certain undertakings that we would reduce carbon dioxide emissions into the atmosphere. We as a country should be proud, and I believe that the Government are proud when they go to environmental conferences and say, "We Brits have done what we said that we would do."
The tax on domestic fuel was highly unpopular. I am a realist and I was in favour of removing it as soon as possible. That was an unhappy experience for Conservatives. We decided to squeeze the motorist, and we raised a lot of money from that. We spent a considerable amount of it on new road building, but that programme has now been slashed. Much of the money that was raised from the escalator was spent on hospitals, schools and so on. If people are willing to pay a tax and it also has the effect of reducing carbon dioxide emissions, that could be a good thing.
When the Automobile Association carried out a survey of how much fuel was burned by our cars in the UK, the findings were amazing. Despite the fact that the economy had been booming and people had been buying cars and driving further in their cars, the amount of CO 2 being produced by those cars had gone down. People had got rid of their old gas guzzlers and bought more economic cars. We in the House have changed the way in which we pay our allowances so that it is more economic for hon. Members to take on smaller cars.
In the Bill, the Government have tried to avoid complicated ways of getting more fuel-efficient cars on the road. They have decided that any car under 1100 cc will be cheaper to run, and any car over 1100 cc will be more expensive. I have made the same comment on several occasions. My wife used to have a Vauxhall Nova that was just under 1100 cc. After seven or eight years, she changed the car to another Vauxhall Nova of the same size and shape, but with a 1.4 litre engine--a more modern engine--but she uses less fuel with that engine than with the previous one.
The data provided by the Government laboratories on buying a car and the different engine sizes show that it does not follow that a bigger engine in the same car uses more fuel--on the contrary. If one puts a diesel engine, which is the largest of all, in the car, it uses a good deal less fuel. In trying to achieve simplicity, the Government have missed the point. The escalator has done its job of persuading people to change to more fuel-efficient cars, but it is wrong to continue with the measure. If the Government decided to give a special boost to fuel cells and provide a subsidy that was not available to other types of car, that might do some good, but they are not tackling the problem in the right way.
With their measures relating to diesel in lorries, the Government have lost the plot entirely. If they make diesel so expensive that people will drive to the nearest port, cross the channel, fill up with diesel on the other side paying French taxes, drive back via the port and do a week's work on that diesel fuel to save money, or if they encourage drivers from eastern Europe with clapped-out old lorries to come over and do all the cabotage, they will increase the amount of fuel used. That strikes me as wholly logical.
When I was on a radio programme with a Labour MP recently, he boasted, "We are spending an extra £21 billion on the health service. You have never been able to match that." What is more, he claimed that our Treasury Front Bench team had said that the expenditure was too extravagant. I said, "I think that your smoke and mirrors were so efficient that they fooled even our Front-Bench team."
What does an extra £21 billion actually mean? Let me analyse it. Labour Members laugh. They must wonder why those who run schools in their constituencies telephone them to say that they have not received the £19 billion that was supposedly going to arrive.
Let us deal with the £21 billion, because that is an easier amount with which to deal. The period involved is three years. My right hon. Friend the Member for Fylde suggested a moment ago that £1 billion over three years meant a third of that amount in each of those years, but that is not the case. The £21 billion does not mean that, in each of the years involved, the Government will add £7 billion to the total, so that, at the end of the three years, an extra £21 billion will go to schools.
Let me explain the system. It is wonderful: it is like magic. I am sure that all hon. Members are very attentive. In fact, the Government will give an extra £3.5 billion--I believe that that is 0.2 per cent. more than the amount that we used to give in every one of our 18 years in office--to the health service in year one. In the next year, they will provide another £3.5 billion--a little over inflation, but there we are--and, in the year after that,
they will provide a further £3.5 billion. That amounts to £10.5 billion. Where does the £21 billion figure come from?
To achieve that figure, it is necessary to add three figures together. First there is £3.5 billion, then there is £7 billion, then there is £10.5 billion--and that adds up to £21 billion. Those who want to know how much extra they will receive over a year according to new Labour arithmetic must cut the amount by half to start with--because we are talking about the extra amount that will be received in the third year--and then cut the final amount by a third to find the annual income.
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