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Mr. Deputy Speaker: Under Standing Order No. 51, the first motion, entitled "Provisional Collection of Taxes", must be decided without debate. The version that I will put to the House is on a single sheet, headed "Revised", and not the one in the main booklet of resolutions.

Provisional Collection of Taxes

"Motion made, and Question,

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    (c) Vehicle excise duty (rates for goods vehicles etc.) (motion No. 17):

    (d) Disposal of assets for which a VAT repayment is claimed (motion No. 19)--[Mr. Gordon Brown.]

put forthwith, pursuant to Standing Order No. 51 (Ways and means motions), and agreed to.

Mr. Deputy Speaker: I now call on the Chancellor of the Exchequer to move the motion entitled "Amendment of the law". It is on that motion that the debate will take place today and on the succeeding days. The remaining motions will not be put until the end of the Budget debate next week, and they will then be decided without debate.

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Budget Resolutions and Economic Situation


Motion made, and Question proposed,

4.25 pm

Mr. William Hague (Richmond, Yorks): As ever, I congratulate the Chancellor on his delivery of his speech. Last year I seem to remember that I compared him to meeting a man in a pub who says, "Lend me a fiver and I will buy you a drink." This year, the Chancellor actually did borrow a fiver to buy his breakfast this morning in the Treasury, and that makes a serious point--much of the money that people pay in taxes disappears into the Chancellor's pockets without being used for any practical benefit for anyone else. I have no doubt that we will see more of that happening after today's Budget.

The Chancellor's Budgets have tended to follow something of a pattern, in which he gives his account of the Budget which--to put it charitably--is often incomplete, as we have discovered on previous occasions. All his hon. Friends behind him then play the role of the useful idiot, cheering in the naive belief that they have got the full picture. Then it turns out, a few hours or days later, that the full picture is rather different.

This year, we have seen elements of the Red Book in the past few minutes, and they show many things to which the Chancellor did not allude in his speech. For instance, he did not give many figures on the tax burden in the speech that he just delivered. [Interruption.] Well, he said it was falling last time and that turned out not to be the case, as the Prime Minister's press secretary has now revealed. There is no point the Chancellor now claiming that the tax burden is falling.

From the figures in the Red Book, it turns out that the savings ratio has been revised downwards again, and that after being 5.75 per cent. this year, it will be 5.5 per cent. in the next year. That is much less than forecast in the pre-Budget report. Of course, that is one of the reasons why interest rates are higher than they would otherwise be, why the pound is higher than it would otherwise be and why the balance of payments deficit is higher than it would otherwise be. The Red Book shows, but the Chancellor failed to inform the House, that that deficit is set to grow from £15.5 billion to £28.25 billion over the next three years. There was a time when such figures would have featured in the Chancellor's speech when he

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gave the Budget to the House, but they do not feature in the speeches of this Chancellor, who gives a selective account of the Budget to the House and to the nation.

It was interesting, too, that when the Chancellor gave the forecast figures for growth over the next two years and referred to business investment growing by 7.75 per cent. this year, he then did not read out the figures for next year. That is because the growth falls from 7.75 per cent. to 2.5 per cent. next year. Why was he curiously unable to read out that figure, having read out the comparable figure for the next year on every other parameter on which he chose to comment? That shows productivity growth slowing down and business investment flattening out and declining as a share of gross domestic product, after six years of growth. One thing we know for sure is that the account of the totality of the measures that we have heard is incomplete, and the most cursory, momentary analysis of the booklets that are produced with the Budget show that to be the case.

The Chancellor stood up to address the House as a tax-raising Chancellor, and he sat down as a tax-raising Chancellor. He sat down as the stealth Chancellor who taxes more and delivers less. Nothing he said in his speech will stop the £4.5 billion of new taxes set to hit people next month, which have already been announced in previous Budgets--or at least in the documents that accompanied them. That is a £4.5 billion total of new stealth taxes heading people's way in a few weeks' time. Of course, those come on top of a lot of previous tax announcements. Any reductions announced today pale into insignificance beside the huge increases that are already in place or in the pipeline. The Chancellor is like a mugger who grabs someone's money and then wants that person to thank him for providing the bus fare to get him home. At the same time as he has done that, hospital waiting lists have risen, police numbers have fallen, class sizes have increased, asylum controls have collapsed and the transport system is at a standstill.

As usual, the Budget included one or two reannouncements, such as the 1p reduction in the rate of income tax. The Chancellor enjoyed reannouncing that. But what about reannouncing the abolition of the married couples allowance, which will cost people £200 a year from next month? What about reannouncing the abolition of tax relief on mortgages, which will cost families £225 a year from next month? What about reannouncing that millions of single-earner married couples with a mortgage will be paying more income tax next year even with the cut in the basic rate? What about reannouncing the imposition of national insurance on benefits in kind such as health insurance? What about reannouncing all the other new taxes that people are now paying as a result of the right hon. Gentleman's activities--for example, the pensions tax, increased savings tax, fuel duty increases, taxes on charities, rises in stamp duty, the abolition of tax relief on health insurance for pensioners, higher taxes on smokers and drinkers, increases in gaming duty and increased taxes of many other sorts? Where were they? Why did not they feature in the right hon. Gentleman's speech?

The Chancellor talks, seemingly with great authority, about e-commerce, the internet, promoting enterprise and competing in the internet age. However, his new stealth tax on self-employed contractors is destroying all that.

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That tax did not appear in this Budget or in the previous one. It is known as IR35 because it appeared only as Inland Revenue press release No. 35. It is a £475 million tax on our future that is driving many high-tech businesses abroad.

I received a letter the other day from a person with such a business, who wrote--[Interruption.] I will send the Chancellor the letter. He wrote that he was in the process of closing down the company because IR35 had damaged his business to the extent that it was not worth continuing any more. It is--[Interruption.] The right hon. Gentleman is not listening because he does not like to listen to the truth about what his policies do to people. He should listen to people who are in business because he has not worked in a business for one day in his life.

The business man who wrote to me said:

The right hon. Gentleman is the first person since Lord Healey to create a brain drain in this country. He talks about e-commerce and the internet but he taxes businesses in those areas and drives them out of Britain. He talks also about charities, and of course I welcome his decision to increase tax breaks for charities. As ever with the right hon. Gentleman, we shall need carefully to examine the detail.

It speaks volumes about the Chancellor and the Government that even charities have found that while he gives with one hand he has taken more away with the other. In the light of the tax increases on charities, dividend tax credit changes and other tax rises, the chief executive of Barnardos has said:

For everyone else it is a new age of giving, but for the Chancellor--taking together his Budget and its impact on charities--it is an age of taking, and taking again.

Last year, the Chancellor announced the abolition of the married couples allowance. He announced that it would be replaced by the children's tax credit, and he made further announcements about that today. Yet the replacement arrives a year after what it is replacing has gone. The Chancellor has done nothing to address that problem. We now have a new definition of the gap year: it is a gap year for parents and children. Even the Deputy Prime Minister would not be very happy with a train operating company that phased out the 9.15 to Waterloo a year before it phased in the replacement bus service. However, that is now the Chancellor's method.

The Chancellor is taxing more and delivering less. That is why taxes are increasing, and no amount of weasel words, Government spin and stealth taxes can disguise the truth that the tax burden is rising and will continue to rise. The Organisation for Economic Co-operation and Development now describes it as the fastest-rising tax burden in the industrial world. The Institute for Fiscal Studies has stated that

Even the Fabian Society has said that the

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    Government may like to emphasise its headline tax cuts, but in fact the overall burden of taxation has risen since it came to power.

The Chancellor said, just after I started my speech, that the tax burden is falling. However, he has been saying that for the past three years, and we know that it is not true. No amount of fiddling the official figures can hide the fact that the overall tax burden is much higher than when the Government came to power.

The Chancellor claimed today to be cutting taxes and increasing spending on public services. That will come as news to the Prime Minister, who said for months that it was impossible to do both at the same time. He has therefore torpedoed the argument that the Prime Minister often uses in the Chamber--but perhaps he was only getting revenge for what the Prime Minister and his press secretary did to him a few days ago.

Whenever the Chancellor was in trouble previously, he claimed--as he did a few moments ago--to be cutting taxes. However, the Prime Minister's press secretary last week blurted out the truth. Thanks to the decision to hold Lobby briefings on the record, I have a transcript from last Tuesday. The press secretary began by saying,

In that, he takes a lead from his boss, the Prime Minister. When figures were put to him showing that the tax burden was rising, he came clean, and his actual words are worth listening to. He said:

    Yeah . . . those are the figures as set out in their last the PBR--either Budget or, whatever, red book, the projections, Tory projections had they been--yeah--I dunno--whatever.

That is how the Prime Minister's press secretary conceded that the tax burden was rising. It is no consolation that the real Deputy Prime Minister is no more eloquent than the official one. That is what he actually came out with.

Let us examine some of the other proposals in the Budget. The Chancellor made a lot of announcements about public spending on health and education. To prevent the Government distorting the Opposition's position in the future, I state that the Opposition unambiguously welcome the new money for hospitals and schools--new money that the Conservative Government were always able to find.

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