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Mr. Maude: This is a pathetic abuse of one of the most serious parliamentary occasions of the year. If the Chancellor wants to have it confirmed that I believe that we should resume the steady, very gradual downward path over time of the share of the nation's income taken by the state, yes, I confirm that. That is what we achieved over time when we were in power, and I believe that we should resume it.
That illustrates a stark difference between us. The Chancellor used to speak about how important it was to restrain the size of the state. What he has shown by what he does, rather than what he says, is that the share of the nation's income taken in tax and spent by the state is rising inexorably year after year.
Mr. Brown:
This has been one of the most illuminating debates that we have had. We have a shadow Chancellor who refuses to tell us what he would do about the Bank of England, the minimum wage, the working families tax credit or the new deal. Now we have a shadow Chancellor who does not deny his statement on the record in 1995 that he wants to reduce public spending as a share of national income to 25 per cent. I notice that he did not deny what the health spokesman was saying around the country about private medical insurance, non-urgent operation outside the NHS and more charges in the NHS. Does he want to deny that now?
Mr. Garnier:
I am glad to have an opportunity to speak in the debate, now that the Chancellor has resumed his seat.
Mr. Deputy Speaker:
Order. [Interruption.] Order. Once I am on my feet, the hon. and learned Gentleman must resume his seat. It is becoming unclear, even to the Chair, whether the Chancellor has finished his remarks. If he is giving way, he must indicate, if only for my guidance, to whom he is giving way.
Mr. Brown:
As you know, Mr. Deputy Speaker, I have been happy to give way many times during the debate. I volunteered to give way to the shadow Chancellor.
Mr. Desmond Swayne (New Forest, West):
On a point of order, Mr. Deputy Speaker. Is it in order, even for the Chancellor, to make a second speech without first seeking the leave of the House?
Mr. Deputy Speaker:
I do not need such a contribution in the present situation.
Mr. Brown:
Today's debate has been revealing. We now know that the shadow Chancellor does not deny his long-term plan to reduce the share of national income taken by the state to 25 per cent. We now know also that he is not prepared to repudiate the shadow Health Secretary on privatisation in the NHS. He has created another dividing line between us for the coming campaigns in Britain.
We are the party of stability. The Opposition, because they will not make the difficult--
Mr. Brown:
I shall not give way. You, have urged me to press on Mr. Deputy Speaker, and I have offered to give way to the shadow Chancellor on many occasions.
These are the dividing lines. First, Labour offers and achieves stability, while the Opposition offer only a return to stop-go. Secondly, Labour's commitment to the new deal will yield 170,000 job opportunities in the long term to young unemployed people. We shall continue to expand the new deal, while, as must be clear from today, the Opposition are determined abolish it. Thirdly, we are committed to the working families tax credit, from which 1.5 million people are benefiting. Furthermore, 1 million people have telephoned to inquire about taking it up. That shows that many of them are considering taking jobs and getting back into work, while the Opposition are determined to impose an average tax rise of £24 a week on those who would lose the working families tax credit. Finally, we are committed to Britain's public services, while people are now in no doubt that the Conservative party is the party of privatisation.
Mr. Matthew Taylor (Truro and St. Austell):
I congratulate the Chancellor. He is overseeing a good position in Britain's macro-economy, on which he deserves congratulation. The Conservative party's amendment is bizarre in not recognising that in any form. The way in which the amendment is written makes one think that Conservative Members have not noticed the last couple of years and are attempting a criticism of their own record.
The Chancellor should recognise that that achievement has been built upon three foundations. The first is the golden rule, a sensible approach to public spending and balancing the economy, for which we argued before the general election. The second is independence for the Bank of England, for which we argued and which the Chancellor opposed before the general election. The third important element is the success of the American economy, the present growth within the other European countries and the quite remarkable bounce back of the Asian economies and the signs of growth in Japan. That has provided a good basis for the Government's management of the British economy. Nevertheless, the Chancellor has made important and right decisions, which we welcome.
However, there are real issues of concern within the economy and I want to touch on five--the complication of the tax regime; the difficulties of exporters hit by the high pound, who are well represented in my constituency; public spending, which I believe is set to follow a boom and bust pattern--just as the Chancellor attempts to avoid it in the wider economy he makes that very mistake in his handling of public spending; the environment; and preparation for the euro.
I do not want to say too much about the complication of the tax regime, simply that the increasing plethora of levels of personal taxation--the introduction of small
schemes which the Chancellor says back entrepreneurs but which newspapers aimed at those very entrepreneurs, such as the Financial Times and The Economist, say overcomplicate the tax regime and are of no real benefit to entrepreneurs but are a real disbenefit to a simple, clear tax regime within which people can operate--is perhaps the Chancellor's single worst legacy as a detail manager within the Treasury. That is the opposite of the approach taken by Lord Lawson who, in some respects, the Chancellor criticises but who, in other respects, he admires. One thing which deserves admiration is the way in which complications in the tax regime were dealt with then. Perhaps it took money from accountants, but it helped small businesses, for which complication is not a benefit. Even if there are tax allowances, chasing them wastes time and energy in companies that cannot afford much outside expertise. They certainly cannot afford to use managers' precious time in chasing a few tax allowances.
Mr. Fallon:
To which tax breaks does the hon. Gentleman have the greatest objection?
Mr. Taylor:
One example is the complication of the capital gains tax regime. We argued that it would not help, and that it was not only over-complicated but that it tied people in unnecessarily for too long. The Chancellor acknowledged that in the pre-Budget report. [Interruption.] I could give many examples, but I do not want to delay our proceedings because I have greater points to make on other subjects, and I do not want to take up Back Benchers' time. I do not know whether the hon. Member for Sevenoaks (Mr. Fallon) wants to take part in the debate later.
I want to consider exporters and the strong pound. Does the Chancellor have a policy on exchange rates? What does he consider to be an appropriate exchange rate? Does he recognise the genuine difficulties that are caused by the Monetary Policy Committee's concerns about the housing boom in the south-east, which is leading to an increase in interest rates that is inappropriate for conditions in much of the economy elsewhere? It is important to know whether the Chancellor has a policy on those linked issues. Higher interest rates help to keep the pound high; keeping the pound high contributes to hitting manufacturing industry in the most depressed parts of the country. In my constituency, there are price-sensitive exporters in heavy engineering and especially in the china clay industry. Therefore, I know how direct the knock-on effect of the high exchange rate is on job losses, which have been continuing and will go on, according to their management, if the pound stays so high. There are other examples of that around the country.
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