| Previous Section | Index | Home Page |
Mr. Bercow: My hon. Friend is right to educate the Minister of State in the distinction between tax rates and the tax burden. Frankly, the Minister ought really to be aware of that distinction. In considering the tax burden, does my hon. Friend agree that we ought properly to take account of the proposed climate change tax, the company car tax, the fuel tax, the vehicle excise tax, the windfall tax, the abolition of the tax credit on dividends and the huge hike in national insurance contributions? The cumulative impact of the Government's imposts is, as Sir Clive Thompson, the president of the CBI recently pointed out, to increase the tax burden on businesses by £20,000 million in the lifetime of this Parliament.
Mr. Duncan: My hon. Friend is absolutely right and proves--as if proof were needed--that he is rather more firmly rooted in real life than the Minister.
Mr. Ian McCartney: I am quite enjoying this debate. I apologise to the hon. Gentleman for failing to mention
one tax--the windfall tax. We introduced an increase in tax on the profits of the privatised utilities. It has led to a huge investment in small and medium-sized companies in the private sector to take on new labour. It has enabled us to reduce by half youth unemployment and get more than 100,000 young people, who under the Tories were walking around the streets with their hands in their pockets, into work, giving them a future and a sense of self worth. We have reduced long-term unemployment by 50 per cent. as well, so one taxation increase has produced massive opportunity for the business community in Britain and helped a generation of young people and older workers who the previous Government had abandoned.
Mr. Duncan: I apologise to the Minister, because when I say he is not firmly rooted, I should not be so rude to the bonsai tree.
Businesses also have to cope with the national minimum wage, which some estimate will cost firms £8 billion over the lifetime of this Parliament and the working time directive, which could cost more than £6 billion and the loss of up to 200,000 jobs.
Mr. Butterfill:
I am anxious not to restrict my hon. Friend's flow of rhetoric as he is making an interesting speech, but before we leave the issue of tax rates, can we look once again at the effect of the changes to advance corporation tax and the timing of the payment of tax? Does my hon. Friend agree that most investment by companies is funded out of retained profits and that, over the next two years, changes in the timing and the payment of tax will have robbed British industry of retained profits to invest? The Government do not seem to understand that.
Mr. Duncan:
I am grateful to my hon. Friend as he has put that point much better than I did. He always speaks good sense on these matters and perhaps that will help the Minister upskill himself in a proper understanding of those matters.
Mr. Duncan:
I must make some progress, as I have been generous in taking interventions. I shall happily take some more in a moment.
One key issue that the Minister did not touch on is the vexed question of compulsory trade union recognition. In many respects it is a litmus test for the Government's conversion. Are they just saying what they feel people want to hear but doing something different behind the scenes, or are they genuine converts to the cause of enterprise and innovation? If they are genuine converts, they will remove the measure that would compel businesses compulsorily to recognise a trade union. Does the Minister share my view that small businesses should not have that requirement thrust upon them?
Mr. Ian McCartney:
I put that down not to the hon. Gentleman's anti-trade union views, but to his job. The Employment Relations Bill includes an exclusion from the dispute resolution process which can lead to recognition by a ballot. Companies with 20 or fewer employees are
Mr. Duncan:
The Minister will know that the matter was the subject of a Government defeat in the Lords. Will that be overturned when the measure returns here?
Mr. McCartney:
The matter in the Lords did not relate specifically to the principle of union recognition; it was a technical amendment concerning the process. We are considering whether or not the amendment was effective and in due course the Government will decide whether to change that amendment or to remove it. It was not a defeat on the principle. The hon. Gentleman should realise that the Conservative Opposition did not move an amendment on principle against the concept of union recognition. If they did that and defeated the Government, we would certainly reverse that decision.
Mr. Duncan:
We look forward with great interest to seeing what the Government finally decide to do about that.
Mr. Bercow:
I am sorry to trouble my hon. Friend further. Is he aware that the Minister was the victor against the forces of modernity in his Department on trade union recognition? For the purposes of the Employment Relations Bill and trade union recognition, there is an exemption for firms of fewer than 20 employees. Does my hon. Friend think it extraordinary that for other purposes, such as the legislation on the late payment of commercial debt, the Government opted to define small firms as those with fewer than 50 employees? Why the inconsistency?
Mr. Duncan:
As always, my hon. Friend is well informed and makes the point clearly--a point that the Minister is unready to admit. The Minister is also unready to admit the truth about the withholding tax. He refused to answer questions from my hon. Friend the Member for Buckingham and from me about whether that tax would be bad for business and whether he is against it. He equivocated in response to three interventions. He talks of principle and he gives us fudge. Will he give us a clear undertaking that the withholding tax will not be introduced and will he clearly admit that if it were introduced it would be harmful to business? I do not--
Mr. Duncan:
Oh, I have caught a fish.
Mr. McCartney:
The hon. Gentleman has not caught a fish. I have explained the issue until I get to the point of boredom. The Tory Opposition do not have a case. The Government are not only ahead of the game, but four-square in defending the interests of the City in all circumstances. We are also providing leadership in dealing with the issues that are important to the City. As a consequence, European policy has moved towards ours.
Mr. Duncan:
The Minister has just done for a fourth time what he had already done three times. Would he veto the withholding tax? He will not say. Would it be harmful to business? He will not say. Is he against it? Would he bring it in? He will not say. All that we get is fudge.
Mr. Gareth R. Thomas (Harrow, West):
On the question of fudge, will the hon. Gentleman clear up where he stands on the independence of the Bank of England? He has written about the need for an independent Bank of England. Will he give us an unequivocal statement that he still supports the independence of the Bank of England? While he is clearing up that issue, will he also tell us whether he intends to campaign within his party in favour of the abolition of the national minimum wage?
Mr. Duncan:
I am pleased to say that I support my party's policy in both respects.
The state of the economy is mixed. The Minister declined to admit that manufacturing was having a difficult time. There is a big squeeze on profits and orders. We have a double-headed economy in which some sectors are doing well and others are having a hard time. We are in the middle of a technological revolution. Fifteen years ago, I thought that I was a big shot because I had a car in my phone. [Laughter.] Sorry, a phone in my car. I wanted to check that the Minister was still listening. I was pressing the test button and it worked. That is good.
Mr. Duncan:
I shall allow the Minister one waggish witticism as a final salvo.
Mr. McCartney:
If it is such a big phone, perhaps in the interests of competitiveness we could share it.
Mr. Duncan:
I was clearly wise to give way. I look forward to our many encounters in the months ahead.
Conservative policies over the past 20 years have allowed Britain to keep ahead of many other countries and up with the United States in the fast-developing technologies. The UK has been made attractive for business and investment. Only Conservative policies--to which the Government now seem half committed--have made that possible.
Some of the Government's policies are putting a lot of that at risk. Inland Revenue press release IR35 threatens a crucial part of the progress of high-tech industries. A new pattern of employment is developing, with a dramatic shift away from big manufacturing concerns with lots of unionised employees clocking on at nine and clocking off at five. Big companies now look to little entrepreneurs for crucial support in the development of ideas and software--people with fantastic brains who do not need much plant and can do their work with a computer, a laptop and knowledge. They sell their services at a high price to add significant value to large corporate concerns.
| Next Section
| Index | Home Page |