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10.37 pm
Mr. Quentin Davies: We have had some very effective contributions in this debate. My hon. Friend the Member for Arundel and South Downs (Mr. Flight) spoke extremely persuasively about the stealth tax policy of the Government. That is the hallmark of the Government, of the Budget and of the Finance Bill, which I hope the House will shortly be rejecting.
My hon. Friend the Member for Lichfield (Mr. Fabricant) spoke with his usual vigour about how disingenuous the presentation of fiscal and economic policy has become under the Government. The Budget speech is no longer a serious occasion when the light and the shade, the pluses and the minuses are presented. All the unpleasant news is either entirely passed over in silence or is hidden with a few glib phrases supplied by a spin doctor from Millbank. Such has been the decline in our proceedings and in the standards of parliamentary presentation that the Government have sadly brought about.
My hon. Friend the Member for Gainsborough (Mr. Leigh) spoke extremely well about the children's tax credit. He is a recognised authority in this country on social security matters. I add only that the children's tax credit brings with it the extremely negative historic
achievement in our tax policy that it destroys the principle of independent taxation. That principle was introduced under a Conservative Administration in the 1980s by Lord Lawson, as he now is. That great achievement is the pillar of a fair and just tax system in a modern society. It is now being destroyed as a by-product of this ill-thought-through policy.
The hon. Member for Kingston and Surbiton (Mr. Davey) made a good speech, but confirmed that the Liberals are to the left even of the Labour party. They are the highest tax-raising party in the country. They are welcome to that position, and I hope that they enjoy it.
The most striking feature of the debate this evening was not the effective and often interesting speeches to which I referred, but the complete silence from the Government Benches. The most revealing--because it is entirely objective--aspect of the debate has been the utter failure of the Government to generate the slightest enthusiasm among their own supporters for their taxation measures and fiscal policy.
I remember that when I entered the House in the 1980s, I looked forward to intervening from the Back Benches in support of the momentous Budgets of the time. I was proud to do so. Not a single hon. Lady or hon. Gentleman spoke this evening from the Government Back Benches, and my goodness, we all know that there are far too many hon. Ladies and hon. Gentlemen on those Benches. We shall have to wait a couple of years to get rid of most of them. Not a single one could muster the slightest enthusiasm for the Government's proposals. Many of them must have had the greatest difficulty in hiding their deep embarrassment.
The cracks are appearing in the apparently bright facade of the new Labour Government. They are appearing in the areas of tax policy and economic management as much as, or more than, in any other field. Let us consider the growing rift in public expenditure between the Government's promises, to which my right hon. Friend the shadow Chancellor rightly referred--promises to spend more money on desirable public services such as health and education--and their total failure to deliver the other half of that commitment: to make savings in social security expenditure.
Mr. Christopher Leslie (Shipley):
Will the hon. Gentleman give way?
Mr. Davies:
The hon. Gentleman has had plenty of opportunity to take part in the debate. He knows that I like taking interventions, including those from him, and I often take them, but it is a pretty poor show that Labour could not muster a single speaker tonight. Now, because Labour Members are so pained by my strictures, they put up the hon. Gentleman to try at the last minute--and after time--to remedy the obvious deficiency of the parliamentary Labour party in the debate. That will not wash. The hon. Gentleman will have to do better next time and get in during the debate, as he could so easily have done.
If a rift is appearing in the Government's public expenditure policies and the facade of new Labour, that facade is crumbling to dust on the revenue side of the Government's tax policies. We all know that their behaviour has been characterised by a series of stealth taxes. They started right away with the dividend tax
credit. We have lost count, but I am sure that someone in Conservative central office is keeping a record--he or she must be employed full-time adding the number of stealth taxes introduced by the Government.
Several of those stealth taxes were revealed in this evening's debate, not least that nasty little trick of bringing to an end the married couples allowance one year, then waiting a full year before introducing its supposed replacement, the children's tax credit, thereby taking hundreds of pounds surreptitiously out of families' pockets. What a sickening thing to do, when the Government continue with their rhetoric about supporting the family. They are doing no such thing. They are making an entirely cynical and opportunistic attempt to take money out of households with children while pretending to do nothing of the kind.
Many Government policies are in shreds.
Mr. Geraint Davies:
Will the hon. Gentleman give way?
Mr. Davies:
I have already explained why I will not--[Interruption.] I am sorry, but if Labour Members lack either the courage or the conviction to take part in debates on these important budgetary matters, and if they do not have a good word to say about the Finance Bill or the Government's tax proposals, I am afraid that I shall rub it in by deliberately not taking interventions from them. As the hon. Member for Croydon, Central (Mr. Davies) knows, I am making an exception by not taking interventions, but tonight's events have been striking. Although no hon. Member will have missed the significance of the silence of Labour Members on the Finance Bill, it is important that the public realise what is going on and how little conviction Government policy carries even among Labour Back Benchers.
The Government's taxation policies are already unravelling and many are in shreds. Only pigheaded obstinacy--or a desperate desire to save face at any price, including the national interest--is holding up the concessions that everybody knows are required and must be delivered. The Opposition have pressed for them during proceedings on the Bill. We must have a change in the annuity rule to get rid of the 75-year rule so that people's pension savings are not thrown away on an annuity that will accrue hardly more interest than that which they would receive from putting their money on deposit or in the gilt market. We must allow draw-down indefinitely and the Government must think again about our proposal to abolish the 75-year rule.
The situation in respect of personal equity plans and individual savings accounts has made the Government a laughing stock in every section of our society that follows financial matters. Every independent financial adviser in this country would endorse that. The Government came to power and destructively decided to get rid of extremely successful policies only to replace them with a colossal failure. The sooner they recognise that, and get rid of the mini ISAs in particular, the better.
As my hon. Friends have said so clearly throughout proceedings on the Bill, the Government have come to the end of the road on the fuel duty escalator as well. Increasing the rate to 6 per cent. was extremely foolish and unsustainable, and the escalator must go. Above all, they have come to the point at which they can no longer
defend what they are doing on personal tax. I made that point yesterday, and it is going to be made again tonight, but we have had not a single response.
Mrs. Roche:
After that performance, let me assure the hon. Member for Grantham and Stamford (Mr. Davies) that I managed to hear his every word. I remember his record on Finance Bills from when I was in opposition, and it was very helpful to us. Given his views on Europe, he will continue to be of use to us.
I thank my hon. Friends on the Back Benches who so ably supported us and spoke so frequently in Committee--unlike Conservative Members, who, during their years in power, never spoke on Bills.
I want to correct a few of the comments made by Conservative Members. The right hon. Member for Wells (Mr. Heathcoat-Amory) alleged that social security spending is out of control. How wrong can he be? The forecast of real growth is 1.9 per cent. a year over this Parliament, compared with 4.1 per cent. during the previous Parliament. The rate has halved, but we are still providing extra resources for the poorest in society. Once again, that is absolute proof that a Labour Government are much better managers of the economy.
The right hon. Gentleman had the cheek to allege that savings were less attractive under a Labour Government. The real enemies of savers are instability and high inflation. The Government have no intention of returning to the sky-high inflation rates of the Tory Administration. The savings ratio fell to 3 per cent. in 1988 under the Tories, and we will not let them forget that.
The hon. Member for Lichfield (Mr. Fabricant) poked fun at the 1100 cc cut-off for vehicle excise duty. He had the temerity to call it a joke. Drivers of 1.8 million cars will benefit from a £55 cut in the annual VED, and they will not regard it as a joke--and neither will members of the public in the hon. Gentleman's constituency when he goes into the Lobby tonight to vote against the Bill.
The hon. Gentleman spoke about the road haulage industry. The total tax burden on UK hauliers is lower than that in other major EU states, and is below the EU average. The Government have been able to achieve that because we support business. [Interruption.] Conservative Members may mock, but we remember what happened to businesses when they were in power. Under the previous Government, a business went bust every three minutes.
The hon. Member for Gainsborough (Mr. Leigh) referred to the child tax credit and the taper. The taper works according to an individual's income, so if one
person in a couple is a 40 per cent. taxpayer, the taper will bite, but if neither of them is, they can each earn about £32,000 and the taper will not bite. During that debate, there was a split between the hon. Member for Gainsborough, who made a plea to abolish independent taxation, and the hon. Member for Grantham and Stamford who, only a couple of minutes later, made an even more passionate plea to save it. That is why we like the hon. Member for Grantham and Stamford.
The Budget builds on a strong foundation of economic stability, advances a modern framework of efficient public services and encourages a dynamic Britain of enterprise and fairness. That is what the country said when people heard the Budget proposed by my right hon. Friend the Chancellor. The Budget and the Finance Bill that implements it are about building a better Britain and a better economy for all our people. I commend the Bill to the House.
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