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Mr. Bercow: The hon. Gentleman is making a thoughtful speech, and I am enjoying listening to it. However, given his interest in thrift and prudence, and the inevitable and perhaps desirable fact that people will themselves always have to contribute to the pot from which they draw on retirement, would he in principle endorse the notion that we should abolish tax on savings for basic rate taxpayers?
Mr. Burgon: Not at this stage. I think it would be financially irresponsible to do so.
Let us consider what the Labour Government have already done. I said that we should see everything in context, and there are things that I never forget--and never forget to remind pensioners about when they speak to me in the street, whether in a friendly or in an abrasive manner. We have provided winter fuel payments of £200 in every household containing someone over 60; we have provided free television licences for those over 75; and we have given pensioners the right to free eye tests. In June, we will introduce a national bus scheme for pensioners guaranteeing at least half-price fares. The fares will be 20 per cent. of the full amount in Leeds, so we are not doing badly. We have reduced value-added tax on fuel to 5 per cent. We have introduced the home energy efficiency scheme, which gives pensioners grants of up to £2,000 to install central heating and insulation. We estimate that that scheme will benefit some 400,000 pensioners over the next three years, and we hope to hit our target of ending pensioner fuel poverty by 2010.
In our dialogue with our constituents, we must also present the alternative, because a choice may have to be made in a year or less. When considering the Conservative party's approach to pensioners, we must take account of three or four key facts. Under the Conservatives, the gap between the poorest and the richest pensioners grew to its widest since 1960. They allowed the value of the basic state pension to decline throughout their years in office: by 1997, one in three pensioners lived in poverty. They scrapped free eye tests, and cut free travel passes. They condemned more than 4 million pensioner households to fuel poverty.
I can offer the Conservative party a way out. [Interruption.] It is not suicide, as someone has just suggested from a sedentary position. On Saturday, I was in Kippax, Garforth and Wetherby. An old couple came up to me in Wetherby--traditionally, a rock-solid Conservative bastion--pushing a trolley, and nearly knocking me down with it. In the course of our subsequent conversation, they told me that they had never been so well off: they were doing really well under this Government. I replied that it was brilliant to hear that, because quite often a certain group of pensioners did nothing but give me a hard time. They said "Mr. Burgon, they will only be happy if you give them a gold pig." I offer this advice to the Conservative party: the only way back to power lies in offering every pensioner a gold pig.
There is no doubt that the buzz on the ground is that Labour has delivered a very positive Budget. I know that the Chancellor did not have one eye on the election,
because he is not like that: his strategy is quite different. However, I am delighted that a by-product of the great effort that he has put in is the laying of the groundwork for a Labour victory.7.35 pm
Sir David Madel (South-West Bedfordshire): In his Budget speech, the Chancellor made a glancing reference to farming industry. He referred to
- "farming--an industry essential to Britain, which today faces immediate and long-standing difficulties".
The hon. Member for Elmet (Mr. Burgon) said that he had offered advice to the Conservative party. In return, I offer the Labour party some advice: if it has a big domestic crisis on its hands, the public expect Labour to solve it rather than running to the polls. We went through all this in February 1974. I vividly remember the reaction on the doorstep, and believe you me, if an election is called a year before it is necessary during a full-scale crisis in farming and the tourist industry, the party concerned will receive a pretty hostile response on the doorstep.
My advice to the Labour party is that of Mr. Harold Macmillan, who used to say that the time to call an election was in the autumn, when the charabancs had rolled back from Seville. I must update that now, and say that the time to call an election is when the airlines have safely delivered all their passengers to Luton airport after the summer peak time. Hon. Members will know why I make that particular point. I have no shares or other interest in easyJet, Britannia, Monarch or any of the others, so the sleaze-buster will not be upset by my reference to them.
Budgets always involve grand ideas and lots of detail. I agree with my right hon. Friend the Member for South Norfolk (Mr. MacGregor) that this Chancellor hugely prefers detail. To me, the test of the Budget is whether unemployment will fall further and whether it will stay down, whether the 2.5 per cent. economic growth target will be met, what the effect of the United States slowdown will be on this country as Americans start to save rather than spend, and what will happen--the Chancellor mentioned this--if oil prices suddenly become volatile.
There are two grand schemes mentioned by the Chancellor to which I want to refer. In relation to unemployment, he said:
- "For the hard to employ, those still left behind, we are proposing from 1 April, at a cost of £200 million a year, a new regime built around more intensive coaching and stronger sanctions for the over-25s."
The second "grandish" scheme features in another part of the Budget statement. The Chancellor said:
- "Today we issue proposals and will consult on the best way to extend a research and development tax credit to the larger companies."
I mentioned the Chancellor's devotion to detail. My right hon. Friend the Member for South Norfolk mentioned the problems over IR35. Let me give a particularly muddled example. I have been in contact with the managing director of a company in my constituency, who said:
- "I have at long last managed to get a credible answer from the Inland Revenue to the question which I raised in November . . . whether an employee who has acquired a more-than-5 per cent. interest in my company through membership of an employee share scheme is subject to tax on her entire fees if she works on a time-and-materials contract which falls within the scope of clause 1(1)(c) of Schedule 12 to the Finance Act 2000."
- "if the person alluded to in your letter is as you have stated an employee of your business being paid through the payroll the provisions of IR35 will not apply."
- "remarkably similar to Dawn Primarolo's response to you"--
- "If the person . . . is . . . an employee of"
- "then that person should already be on"
- "payroll and the company should already be deducting PAYE and National Insurance Contributions from money earned. If that is the case, then the 'ir35' legislation will not apply."
- "Yet now, after repeated prodding, I have the following statement from the same Inspector who sent me the first reply:
'I can confirm that if the work that your employee undertakes under any given contract were to fall within the scope of clause 1(1)(c) of the Finance Act 2000 then by virtue of the fact that a more-than-5 per cent. interest in the Company share capital has been acquired, as per clause 3(1)(a) and clause 3(4)(a), a liability would arise under IR35.'"
- "IR35 mistakes made under the self-assessment arrangements could prove to be a ticking time bomb. If errors are made, they could lie undetected for years only to detonate in the future at huge expense to the individual or company concerned."
- "I propose to raise the allowance, so that no tax will be charged on estates up to almost £¼ million--a threshold of £242,000. Ninety-six per cent. of estates will pay no tax."--[Official Report, 7 March 2001; Vol. 364, c. 298-304.]
I also do not understand the reasoning behind some aspects of our tax system. When someone dies and something has to be done about the house, payment of tax is the first thing that must be done. The house cannot be sold until probate has been granted, but probate will not be granted until the tax has been paid. Surely we can change the system so that, when someone dies and leaves a house, the first charge on the money that is raised is for the taxman--who will be the first in the queue. I certainly do not believe that people should have to borrow to pay the notional tax on a house that has not been sold because probate has not been granted. I should think that that tax reform would appeal to the Chancellor's sense of detail, and that it should be introduced very quickly indeed.
The Government have another looming, detailed problem. Ministers have made much of help for the family and child minders and help with child care. I have a constituent who is a single mother with three children, aged six, three and one. She must pay £100 per week to the child minder and £12 per week to the play scheme which the middle child attends. My constituent gets back 70 per cent. of the £12 that she pays to the play scheme, but gets back nothing for the £100 per week that she pays to the child minder, because the child minder looks after the children not in her own house, but in the mother's house and is therefore classed as a nanny and not as a child minder. That particular child minder--just to make the situation more interesting--works in the play scheme looking after the middle child at certain times of day. The only reason why she is able to do that is that she has the necessary qualifications.
It is a detailed muddle. I do not understand why my constituent cannot claim back money because the child minder looks after her children in her own home. If I have encountered that problem, other hon. Members will have done so too. The National Association of Citizens Advice Bureaux and those who advise on tax credits advised that constituent to see me, which she did on Saturday morning.
Like my right hon. Friends the Members for Huntingdon and for South Norfolk, I found some good things in the Budget. In South-West Bedfordshire, we have had the tremendous shock of Vauxhall's decision to stop building cars at Luton next year. I was heartened when a statement from management this week stated:
- "Vauxhall management will continue to take all reasonable steps to avoid any compulsory redundancies as a result of the restructuring".
- "undertaking to pursue new business opportunities in the UK."
This speech--like those of my right hon. Friends the Members for Huntingdon and for South Norfolk--will pretty definitely be my last in this Chamber. I echo everything that they have said. However, the greatest privilege for me has been to represent my constituents in this place for almost 31 years. Above all, I want the employment base to become strong again in South-West Bedfordshire, after some horrific shocks over the years. I want us to remain an industrial area. We want a hand up from the Government, not a handout, and that entails immediate improvements to our infrastructure. When I leave the House of Commons, I want above all to be able to say to my constituents that action has been taken to reduce unemployment and to retain my constituency as a powerful industrial base.
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