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Sir Michael Spicer (West Worcestershire): I want to ask the Economic Secretary a brief question. Does clause 122 really apply only to the possibility of expenditure by the Commissioners on taxes that are likely come out of stage 3 of EMU, or is it possible that it could also apply to taxes that are emerging irrespective of stage 3?
We know that a mass of taxation is beginning to emerge in the existing legislation to which we are attached. The Government are conniving and contriving to increase the pace of that taxation at a remarkable rate. Luckily, they have been caught on the hop in regard to, for instance, the withholding tax. Commitments have been made. An answer that I received this week from the Paymaster General stated that not only eurobonds but all other forms of savings would be included, which is good news. Nevertheless, we all know that a mass of taxation is beginning to emerge, irrespective of stage 3.
What does the Economic Secretary think of all the taxation that is beginning to emerge? Is it not right that the amendments should apply, so that at least we know a little more about that taxation and any expenditure that is likely to be incurred by the Commissioners? Is the Bill
giving the Government powers to anticipate the panoply of taxation that is beginning to emerge, irrespective of stage 3?
Of course, it is true that, in relation not just to harmonisation, but to increased expenditure, under stage 3 of EMU, there will be a massive increase in taxation, to which the clause and amendments apply. We all know why that is to be. Under EMU, wages will not be flexible, but prices will be very much on the move upwards and there will have to be a massive transfer of funds from the northern, rich parts of Europe to the southern parts and, therefore, an enormous new system of taxation. If we enter EMU, there will be enormous increases in taxation. Therefore, the clause is applicable.
One can perhaps understand, although it is highly unsatisfactory, why the Government want to prepare for the massive increase in taxation that would occur under stage 3. The real issue before Parliament, however, is whether what we are really doing is passing a clause and a Bill that will give the Government power to create expenditure in anticipation not of stage 3, which the Government seem to be running away from anyway--which some of us think is good news--but of other bad news: what Lord Denning called the on-rush of European legislation, the tidal flow down our rivers and estuaries, which goes on and on. That applies to taxation as much as anything else.
Therefore, it is legitimate to ask: will the clause apply well before stage 3 is entered into? Are the Government not conniving, both implicitly in the clause, and explicitly in the Councils of Europe, in a massive taxation regime, to be imposed on this country, irrespective of stage 3 of EMU?
Mr. Peter Luff (Mid-Worcestershire):
It is natural that high emotions should attach to any debate on economic and monetary union, the single currency and any aspect of it, because people feel strongly on the subject. A variety of emotions have already been expressed by Conservative Members.
I declare myself with my right hon. Friend the Member for Fareham (Sir P. Lloyd), who says that he expects the people of this country eventually to vote no when the referendum is held. I also express the hope that they will vote no, but one does not need to get terribly worked up about the issue to suggest to the Economic Secretary that the amendment is thoroughly pragmatic and sensible and its rejection would be literally incomprehensible.
I agree with much of what has been said by my right hon. Friend the Member for Horsham (Mr. Maude), the shadow Chancellor, but forget all that for a minute. I understand what the hon. Member for Twickenham (Dr. Cable) said about the ability of Parliament to scrutinise the matter, but I do not understand why the amendment should do anything other than commend itself to the Government. I am sure that they have nothing to hide, but a rejection of the amendment would certainly suggest that they did.
The job of the House of Commons is to scrutinise the Executive. That would be made easier by the passage of the amendment, whatever other mechanisms already exist. I am sure that the Government have no wish to conceal from us any aspect of their expenditure in preparing to take us into a single currency--a move that is likely to be rejected anyhow by the majority of the British people.
I ask you, Mr. Deputy Speaker: do you think thatany Chief Secretary to the Treasury would conduct negotiations with another Government Department which asked for a few tens of millions of pounds for something and, on the basis of a bland assurance, say, "Oh that is fine, Fred. Have a few tens of millions for that"? We know that that is not the way in which such negotiations are conducted, but, so far, a bland assurance is all that the House has been offered. The Treasury notes on clauses simply say:
My right hon. Friend the Member for Horsham said that it was a debate between pragmatism and dogmatism. He is right. The amendment offers the pragmatic view. What is wrong with exposing the information to public scrutiny? It is simple dogmatism to reject it. It will be dogmatism that makes the House and the country suspicious of the Government's motive in seeking to conceal the information from the House and the people.
The Government have laboured mightily to bring forth their freedom of information proposals and they have been widely criticised. Surely, they do not want to hide information, but they are acquiring a reputation for doing so. Rejection of the amendment will enhance public scepticism about the Government's true motives.
I understand the problem for the Government, and for the Prime Minister in particular. On the single currency issue, as on many others, one could never accuse them of sitting on the fence. They come down firmly on both sides of it. The Prime Minister says that he is the friend of the pound, but, privately, he is an enthusiast for the euro. He says both things to different audiences to confuse the enemy and opposition, but the changeover plan shows where the Government's heart really lies. The Government owe it to the House and to the people who put them in office to explain how much money they are spending on trying to persuade the public to vote against their instincts and for membership of the single European currency.
How much money do the Government intend to spend as a result of the clause? A reference to tens of millions is not good enough for the House. No parliamentarian should go through the Lobby tonight to allow the Government, according to some vague estimates, to spend tens of millions of pounds on something as important as the single currency. No parliamentarian worth his salt should even contemplate allowing the clause to go unamended on to the statute book.
Yesterday, the Government rejected tens of millions of pounds of help for pensioners when there was the option to change the taxation of savings. We estimated that the cost would be £85 million, which is backed by
independent analysis, but a wild figure of £1 billion was thrown out from the Dispatch Box. A few tens of millions of pounds would have made a great difference to those pensioners. A few tens of millions of pounds would make a great difference to the Worcestershire social services department, which could do with a few tens of hundreds of pounds, never mind tens of millions, to help it out with its difficulties.
I have the great honour to be Chairman of the Select Committee on Agriculture. Last week, we had before us the permanent secretary of the Ministry of Agriculture, Fisheries and Food. Clearly, MAFF is scratching around for every odd pound that it can find here and there because of the incredibly tight settlement that was imposed on it during the comprehensive spending review.
"the revenue departments may need to spend some tens of millions of pounds on preparations for possible UK entry to the single currency prior to a referendum".
I am against writing blank cheques in the House at any stage, never mind on a matter as controversial and important to the future of the economy and this country's constitution as the single currency. Does the Economic Secretary really think that she could conduct negotiations, if she were ever to be Chief Secretary, on the basis of assurances from her spending Ministers that they would live within their settlement--within the odd tens of millions of pounds here or there?
8.15 pm
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