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5.33 pm

Mr. Jonathan Shaw (Chatham and Aylesford): I am pleased to follow the right hon. Member for North-West Hampshire (Sir G. Young) with whom I spent many a day on the armed forces scheme, both in this country and abroad.

The right hon. Gentleman referred to social services. Part of health expenditure goes to social services departments; for example, the winter pressures money. That mechanism is jointly organised locally, in much the way he advocates; there are already many examples of social service expenditure that reflect his suggestions.

Additional money has been allocated for children leaving care, many of whom do so far too early, at the age of 16 or 17. The relevant age is to increase to 21. Such young people make up only 1 per cent. of the general population, yet 30 per cent. of them are in young offender institutions. It is a damning indictment of public policy that such damaged individuals have to leave their home so young. Young people will now be able to leave care at 21. Provided that they stay in education or training, they will be able to stay in care until they are 24. That is a huge departure and a big improvement for a vulnerable group in society, and it is an example of the differences between the Labour party and the Conservative party.

The right hon. Member for North-West Hampshire welcomed the increases in expenditure on health and education, but later in his speech, he said that they were unsustainable. The Conservative party cannot have it both ways.

I welcome the Budget; it builds a strong economic base for my constituents and all constituencies across Britain. Unemployment has fallen in Chatham and Aylesford, and youth unemployment has fallen by more than 80 per cent. Interest rates are down and inflation is firmly under control. We are seeing the benefits of public expenditure and public investment in schools and hospitals throughout my constituency.

I want to talk about industrial matters later, paying particular attention to the paper industry, but I shall make some more general points before doing so. Teacher recruitment is problematic in the south-east. I welcome the announcements made by my right hon. Friend the Chancellor in that regard, because we have to consider creative ways to be more flexible and to entice people back into teaching. There is a pool of teachers out there who choose not to teach, for a variety of reasons. I come from a family full of teachers, so I know that if flexible arrangements and incentives for teachers are introduced and used in the way in which head teachers want, it will provide a plank to overcome that difficulty. The £6,000 grant to teachers who enter college represents further

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assistance. We have recently heard about more money for people willing to go into the areas of particular shortage in secondary education.

There are more books, more computers and brighter classrooms. Standards are rising thanks to the additional funds and the hard work put in by teachers. I pay tribute to the hard-working teachers and the learning support assistants at the schools in my constituency. I often visit schools and people introduce themselves, saying, "I'm only a learning support assistant." I always take issue with them because they form an important part of the education provided at those schools.

I am a school governor, and our school has employed many more learning assistants to help pupils, especially those with special needs. That is possible because of the additional resources made available by the Labour Government. Before 1997, we used to have to try to find where to make savings in our budgets every October. That simply does not happen any more.

I pay particular tribute to head teachers, whose leadership is central to raising standards and who deserve our gratitude and thanks for the hard work that they do.

I should like to refer to a couple of examples of how the additional expenditure is helping children's education in my constituency. Chatham South is a popular high school, and it was my pleasure to speak at its prize-giving recently. The head teacher was pleased to inform parents that, after waiting 26 years, the school was to get a hall. Work will begin later next month not only on a new school hall, but on seven additional classrooms and a refurbished canteen--again made possible by £1.24 million of additional money from the Government.

St. Mark's school is a small village school in Eccles. It was built in the 1880s and has slightly more than 100 pupils. Its head teacher, Mrs. Celia Smith, told me that the additional money that it was receiving for resources was fantastic but that the school has no room to store the equipment. Mrs. Smith is not concerned about that, however, because £1.5 million has been allocated to build a brand new school. That money comes from the new deal, which the Conservative party is pledged to scrap. What should I tell my constituents in Eccles? The work should begin in May and the bills will be finalised in March 2002. So if they vote for a Tory Government, there will be no new school, and they will remain in the 1880s, because the Tories have pledged to scrap the new deal. After years of waiting, there is to be a new school. The Tory party has accused us of introducing stealth taxes: their cuts would be certainly be stealth cuts.

I have lived in Kent all my life. I am a Kentish man from the west of the county. The hon. Member for Rutland and Melton (Mr. Duncan) talked about his website and about negative equity. I have no information about negative equity on my website, nor have I written a theoretical piece about that episode in our history, but I experienced it, like thousands of others who bought their first house in the late 1980s. Many people in my constituency, in Walderslade, Lordswood, Larkfield and Snodland, who purchased houses at that time aspired to get on to the ladder because they were concerned that, with rocketing house prices, they would not be able to buy a house if they did not move quickly. My wife and I were both local government workers and we purchased a house when we thought that the time was right. We got it completely wrong, as did thousands of my constituents

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and many more people up and down the country. If only we had waited. Like many of my constituents, we experienced the Tory bust of the 1990s. It hit us. Not only did people lose their jobs and their homes, but when they had to sell their home, it was worth less than they had paid for it. People are still having to carry with them a negative equity millstone of up to £15,000. My constituency is one of the youngest in the United Kingdom, so my constituents were particularly affected by the negative equity problems in the south-east.

My constituents want stability. For most of us a house is our most expensive purchase. Today's Bank of England announcement is a ringing endorsement of my right hon. Friend's stewardship and management of the economy. Not only have interest rates not been increased, despite the increase in public expenditure, but the fact that the decision has been made so early on is a ringing endorsement. We shall not see interest rates held down artificially as we did before.

I welcome the VAT reduction for empty properties. I have been campaigning for that for a long time and have initiated Adjournment debates and introduced 10 minute-rule Bills on it. We will be able to get more out of what we already have. It is crazy for VAT on a run-down property to be charged at 17.5 per cent.

We need to recycle more. The Government have set targets of 25 per cent. for local authorities. Paper is the largest single commodity that we can recycle, yet the three newsprint mills that reprocess paper are full to capacity. If we are to increase recycling, local authorities have to have somewhere to take the waste paper. It is all very well to ship it abroad, and for a period we shipped it to Asia, but now Germany's paper is cheaper and our paper is stored by merchants. Companies do not want to collect it from the local authorities because the price has gone through the floor. We need increased capacity and assisted investment in a large mill that can start to reprocess paper.

I pay tribute to my local authority of Tonbridge and Malling, which has increased its recycling by 16 per cent. with the introduction of a green box system. Every resident across the borough has a green box and there is plenty of information. This is an important issue, and we need to take people with us if we are to increase the amount of recycling.

Members have mentioned manufacturing industry, where gas prices have doubled in the past year: they have risen by £10 million a week. I raised this issue with my hon. Friend the Minister for Energy and Competitiveness in Europe in an Adjournment debate, and I am pleased that the Government have persuaded the European Commission to hold an inquiry into the matter. However, the Office of Fair Trading should also conduct an inquiry here in the United Kingdom.

The Budget will go a long way to assist hard-working families and pensioners in my constituency. It will also help those who have found it difficult to get off benefit and into work. The new deal, the working families tax credit and the children's tax credit will help the people who need our assistance. They will make a real difference to their lives. Improving the quality of life and creating firm foundations are what the Budget has delivered. I look forward to our building on it in future Labour Budgets.

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5.46 pm

Mr. Nicholas Winterton (Macclesfield): I am pleased to have the opportunity to make a brief contribution to the debate. The House has heard some excellent speeches.

I was particularly taken with the views expressed by the hon. Member for Clydebank and Milngavie (Mr. Worthington), who raised several issues which one would not necessarily have expected to be raised in a Budget debate. The matters are of deep concern to him, to people outside the House and to hon. Members on both sides of the House, not least Conservative Members. He described what I shall call an insurance fraud perpetrated by a company, and explained how people who are dying from asbestos poisoning could be deprived of the compensation to which they are entitled. I hope that the Government will consider the issue carefully and seek to intervene in the industry. Perhaps the industry could produce a life-saving package to help those who have suffered because of the conditions that they experienced at their place of work. Only recently have we realised the long-term damage that asbestos can cause.

My right hon. Friend the Member for North-West Hampshire (Sir G. Young) made, as usual, a thoughtful and positive speech, identifying elements of the Budget that Conservative Members could welcome and, carefully and sensitively, pointing out where he disagreed with the Government and believed that action should be taken.

The speech of my hon. Friend the Member for East Yorkshire (Mr. Townend) was a tour de force. I regret that it is likely to be his last in the House before retirement. He has been a good friend and a good parliamentarian. The House will most certainly miss him.

I know of the interest that the hon. Member for Chatham and Aylesford (Mr. Shaw) takes in the paper and board industry. If he examines some of the steps that the Government have taken, however, he will realise why several industries--not least the paper and board industry--are concerned about the Government's failure to appreciate the impact of their policies on manufacturing.

I congratulate the hon. Member for Corby (Mr. Hope) on his thoughtful speech. He spoke with great clarity and demonstrated his commitment to the points that he made.

This is clearly a Budget for a general election. As always, it was well presented by the Chancellor of the Exchequer, but he simply gave back to the people of this country--I emphasise the term "gave back"--a fraction of what he had already taken from them in the previous four years. Research carried out by the Centre for Policy Studies--not by the Conservative party--shows that the Labour party has imposed 45 stealth taxes since it came to office four years ago. At the last election, the Labour party claimed that there had been 22 tax rises under the previous Conservative Government. So it has more than doubled that number of tax rises.

I was somewhat confused by the Chancellor's statement. His Budgets appear to get more complicated as the years go by. It is not what he says that is important, but what he leaves unsaid. Figures in the Budget's small print show that the tax burden in the United Kingdom has risen from 35.2 per cent. of gross domestic product when the Labour party took office, to 38.2 per cent. of GDP this year. Therefore, we have a Government who have increased the amount of taxation that they raise from our people. They have raised, as part of the tax burden, about

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£28 billion, which is equivalent to 10p on the basic rate of tax. Even if the measures that were announced yesterday are equivalent to 1p off income tax, the right hon. Gentleman has turned out to be a 10p up, 1p down Chancellor. Other people have said that, and I am sure that it will be repeated many times between now and the election.

Labour's stealth tax strategy has led it to impose a disproportionately heavy tax burden on the business community. The hon. Member for Chatham and Aylesford talked about business and industry. I know of his commitment to the paper and board industry, which is the major employer in his area. For some years, I was a non-executive director of a paper company, so I know the industry well and I am aware how important energy is to it. The industry is vulnerable to any increase in energy prices, whether they are introduced by the energy providers--the hon. Gentleman mentioned gas--or as a result of any climate change levies, which tax energy. Such price rises or impost from Government make it less competitive in a highly competitive worldwide industry.

Labour has imposed a disproportionately heavy tax on the business community while trying to conceal its tax rises from the general electorate, who will vote on election day. According to the Confederation of British Industry, businesses are struggling to cope with paying £5 billion a year in extra taxes. In addition, the Institute of Directors believes that there is an extra £5 billion of regulatory costs. Both bodies represent industry, business and commerce in this country.

The small businesses forum, which represents many smaller companies, has made a number of criticisms of the Government. The Chancellor and other Labour Members have expressed considerable concern about such businesses. However, the proof of the pudding is in the eating, and business is carrying a bigger tax and social cost burden, which makes it less competitive. If the Government were serious about helping business, they would repeal the £1 billion energy tax which will hit businesses, especially manufacturers, from 1 April. I refer of course to the climate change levy.

In an intervention, I mentioned a textile company that I know well, which employs some 300 people. It is highly successful in what is perhaps the most competitive of all industries in the world because so many companies have set themselves up in developing countries, where labour and social costs are much less than in the United Kingdom. That company has spent £1 million on energy conservation and introducing energy generation and production methods that will emit less and less pollution in the form of carbon dioxide into the environment, yet it advises me that it could well face a bill for between £60,000 and £80,000 a year from 1 April as a result of the climate change levy.

I have been in touch with the British Apparel and Textile Confederation. There are about 4,000 companies in the United Kingdom in that sector of our economy. Only 150 of those will benefit from the climate change levy rebate. One of my disappointments is that yesterday, faced with growing evidence from industry of the damage that the energy tax will have, the Chancellor did not decide that it should be cancelled. There are other, better ways of reducing pollution in the environment than the

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one that the Chancellor has adopted, which is making industry less competitive in the global market in which we operate.

Under the Labour Government, petrol and diesel taxes are the highest in Europe, but has that money been invested in better roads and transport infrastructure? No. Since May 1997, the price of a litre of petrol has increased by 20p, but more than 15p of that rise is directly due to the Government's fuel tax increases. The balance is due to the rise in crude oil prices. More Labour stealth taxes will soon hit our towns and cities, with Labour perhaps taxing people who park at work or drive into town centres.

It seems that the Government have got things the wrong way round. Let them first improve public transport. Let them put in systems whereby people can get to work efficiently, quickly, securely and at a reasonable price. When they have done that, they can by all means introduce some penalty for driving, although I believe that it is wrong to deny people mobility. The Government will learn the lesson, as they did in the autumn, that people want mobility, and the car provides them with it.

In return for all the taxes that they have raised from the driver, the Labour Government have delivered what some people call a standstill Britain. They have slashed roads programmes. One of the first things that they did in my constituency was to remove from the priority roads programme the Poynton bypass and the Manchester airport east and west link roads, which are vital if my constituency is not to be submerged in traffic and people are to be able to get to Manchester international airport. The airport is now blessed with a second runway, which I supported because of its economic benefits to the country and the north-west.

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