| Previous Section | Index | Home Page |
Sir Robert Smith: Will the hon. Gentleman give way?
Mr. Whittingdale: If the hon. Gentleman will forgive me, I shall not as I have only a couple of minutes left.
The policy of annual rises in the price of cigarettes has clearly failed, as the hon. Member for Barnsley, Central (Mr. Illsley) was brave enough to acknowledge. According to the Government's own estimates, revenue
will fall this year. The time has come when the Government must think again. In terms of health, revenue and law and order, their policy is not working, and a new approach is needed. At the very least, they should take their heads out of the sand and freeze tobacco duty at its present rate.
Of all the many unpopular and damaging measures in the Budget, the worst is the increase in duty on hydrocarbons. Motorists in rural areas bitterly resent being treated by the Government as a cash cow. Many have no choice but to use their cars. The justification that raising the cost of petrol will encourage people to leave their cars at home is entirely spurious. People know that the only justification for raising petrol duty is to raise more money for the Government. It is not an environmental or transport measure, but a tax-raising measure pure and simple. Motorists have no choice but to pay the fuel duty, with the exception of those living in Northern Ireland. I endorse the comments of the hon. Member for East Londonderry (Mr. Ross) on that.
While most motorists have no choice but to pay the duty, the haulage industry can choose to fill its tanks with diesel in the United Kingdom and pay British rates or in France and Belgium and pay about half the amount. Even before the Budget, hauliers warned that the differences in duty rates threatened to wipe their industry out, yet the Chancellor ignored their pleas. He did not increase the rate of duty by only the 6 per cent. escalator; he increased it by 12 per cent. To ensure that there was no chance of industry being able to compete, he raised the rate of vehicle excise duty on 38-tonne trucks to £5,750--six times the level in Belgium and 12 times the level in France. The anger throughout the industry is genuine and justified. Hauliers see their livelihoods being destroyed by the Government without any benefit to the environment. The only gainers will be their competitors on the continent, who can hardly believe their luck. Even now, I urge the Government to come to their senses and think again.
The Financial Secretary to the Treasury (Mrs. Barbara Roche):
Let me start by agreeing with the hon. Member for Maldon and East Chelmsford(Mr. Whittingdale). This has been a good debate with valuable contributions from Members on both sides of the House.
The Finance Bill marks yet another step on the road to delivering a stronger economic future for our country. Conservative Members laugh, but we know the legacy of unemployment and lack of productivity that we were left with and our task in dealing with it.
The Budget and the Finance Bill build on a strong foundation for economic stability. The Budget offers a better deal to business and delivers a better deal for Britain. The hon. Member for Maldon and East Chelmsford laughs when I talk about business. I know
that he has strong views on the burdens on business. I recently read an early-day motion that called for
The Budget continues to lock in the economic stability that the Government have delivered by keeping public finances under control. We have taken tough and decisive action with a new framework for monetary policy by making the Bank of England independent and setting up a new framework for the public finances based on tough rules. The excellent speech of my hon. Friend the Member for North Durham (Mr. Radice), the distinguished Chairman of the Treasury Committee, noted the effective co-ordination between fiscal and monetary policy. We are already seeing the benefits. Inflation is close to its target, mortgage rates are at their lowest for 33 years and we have cut borrowing by £29 billion in our first two years in office. That is why my right hon. Friend the Chancellor was able to deliver the Budget that the Finance Bill implements--a Budget that is good for those in work, good for families and, very important, good for business.
The Budget provides a platform for stability. We have as a country to raise our game, to deliver higher productivity for the long term, better skills, and greater innovation and competition. In contrast to the somehow golden legacy that the hon. Member for Chichester (Mr. Tyrie) spoke about, there is a productivity gap that we need to fill. There is a 40 per cent. performance gap between the United Kingdom and the United States of America. We have a duty to fill it. The measures in the Budget, including support for productivity, for research and development and for innovation, which were well emphasised by my hon. Friend the Member for Colne Valley (Kali Mountford), are aimed at just that. We have introduced a new 10p rate of corporation tax for small companies. That halves the tax rate for the smallest companies and benefits a great number of small and growing businesses.
The hon. Members for Gordon (Mr. Bruce) and for Kingston and Surbiton (Mr. Davey) suggested that, despite all the measures that I have mentioned, this was not a Budget for small business. But the Government feel very supported in their aims by the excellent comments of the hon. Member for Tunbridge Wells (Mr. Norman)--we recognise that he has a great deal of business experience--who said, immediately after the Budget statement,
A number of points were made during the debateabout savings. The right hon. Member for Wells (Mr. Heathcoat-Amory) and the hon. Member for South Dorset (Mr. Bruce) spoke about the new ISAs. Perhaps Opposition Members have not looked at the figures on the take-up of ISAs. In one week, one of the providers sold
0.25 million. When many people in this country--half the population--have little or no savings, that is a major step forward.
My hon. Friend the Member for Dudley, South (Mr. Pearson) and others spoke about the fuel escalator. It was interesting to hear what Opposition Members had to say. The right hon. Member for Wells is not in his place at the moment, but he said that if the Conservatives were fortunate enough to be returned to power they would abolish the fuel escalator; but when asked very tellingly what he would cut to make up the £1.5 billion shortfall, he could not answer. Perhaps that explains why he is not in his place.
The right hon. Member for Fylde (Mr. Jack) also spoke about the fuel escalator. He was asked by my hon. Friend the Member for Shipley (Mr. Leslie) about his position, because the right hon. Gentleman was a member of the Government who introduced the escalator. The right hon. Gentleman replied that, as Financial Secretary, he was not responsible for the fuel duty escalator imposed by his colleague the Chancellor of the Exchequer. I have heard about the previous Government's lack of collective responsibility, but this takes the biscuit.
Mr. Jack:
The Financial Secretary is being uncharacteristically inaccurate in reporting what I said in my defence. I was asked whether the escalator was my responsibility. I pointed out that it was not, but I also owned up to the collective responsibility that all of us in Treasury at the time had for taking difficult actions to put our public finances right.
Mrs. Roche:
Of course I accept completely the right hon. Gentleman's clarification, although I doubt whether it aids his cause with the House.
The right hon. Gentleman mentioned the documentation covering the Budget, as did the hon. Member for West Worcestershire (Sir M. Spicer). The hon. Member for South Dorset even used the expression "smoke and mirrors". The documentation accompanying this Budget gives the fullest account ever of the Government's objectives; every tax change has been clearly spelt out.
The right hon. Member for Fylde also mentioned transparency. I agree with him that transparency is important. That is why we have introduced the new monetary policy framework of which transparency and accountability are central elements. The Monetary Policy Committee is subject to parliamentary scrutiny by the Select Committee on the Treasury and by the House of Lords Select Committee on the Monetary Policy Committee of the Bank of England. Our Budget reporting is underpinned by the code for fiscal stability.
The hon. Member for Gordon spoke about cider. As he knows, the problems were identified by the Conservative Government in 1996 and the alignment was necessary to fulfil the commitment made by the United Kingdom. However, he did not mention a fact that might perhaps have supported the debate: that the National Association of Cider Makers has supported this Government's action throughout.
There has been much discussion about tobacco and the worrying problem of smuggling; for instance, it was referred to by the hon. Member for East Londonderry (Mr. Ross), my hon. Friend the Member for Barnsley,
Central (Mr. Illsley) and, towards the end of the evening, the hon. Member for Beckenham (Mrs. Lait). I was disappointed by the comments of the hon. Member for Maldon and East Chelmsford on that subject. The Conservatives, rightly, introduced the tobacco escalator. I remind the House that smoking kills more than13 people an hour and there is a particular problem among young. The hon. Gentleman's response to that is that there is a problem with smuggling.
Smuggling is rather a romantic name for what is organised crime, leading to great criminality in various areas, which hurts decent, law-abiding people. The answer of the Opposition--who used to pride themselves on being members of the party of law and order--is that, because there is a problem with smuggling, we should attack the duty. They attack the duty rather than the criminals. The Government have put resources into tackling that problem. My hon. Friend the Paymaster General has put a great deal of effort in working with Customs and Excise to that end.
"ministers within their respective Government departments whose brief includes deregulation to reinvigorate their laconic record".
I am sure that he agrees. The problem is that that motion was tabled against the Conservative party when it was in government by its own Back Benchers in 1996. He was one of its main signatories. It is not my policy to embarrass him. I want only to make him remember his past mistakes so that he can repent of them.
"Not a bad Budget for small businesses."
With recommendations like that, we know that we are on the right track.
| Next Section
| Index | Home Page |