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Mr. Fallon: The House will be grateful to my hon. Friend for putting that point on the record so clearly. We hope to hear more from him later this evening, or in tomorrow's debate if he catches your eye, Mr. Deputy Speaker.

The facts on tax are now coming out. For so long the Chancellor and his colleagues first tried to deny that the tax burden was rising at all, then they claimed that it had risen but was planned to fall. Now, on the record in their own tables in the Red Book, we see that the tax burden has risen for the first three years. Whatever their plans are, we can be clear about what has actually happened: the tax burden has gone up. We are therefore entitled to ask where the money has gone and why it is not getting through.

It is interesting that today's debate, inaugurated by the Secretary of State for Education and Employment, has concentrated on teacher shortages and the difficulty of recruiting teachers. Given the billions of extra revenue and the billions that the Government have boasted of giving to the education service, why have they failed to get enough teachers into our schools?

When I visited Swanley school in my constituency on Thursday morning, the head teacher had to excuse herself from our discussion. She had to go and teach English--not a shortage subject--because the school was unable to recruit enough English teachers. Why is there a shortage of hospital staff, despite all the tax revenue and all the billions that have been allocated? Why is the money not getting through to front-line services?

The money is clearly not getting through. As is plain from last year's Budget, the pre-Budget report and the Budget last week, the Chancellor keeps topping up a settlement that he said was comprehensive and fixed for three years. Departments, he said in 1998, should not come back for more: the settlement would allow them to plan for the next three years. But in each successive year--in each successive mini-Budget and Budget--the Chancellor has to top it up to try to ensure that the money gets through. Now he is saying that he will give money directly to schools each year--money that is clearly not getting through under the existing system.

Mr. Ruffley: I wonder whether my hon. Friend's experience in his Sevenoaks constituency is similar to mine in Bury St. Edmunds, where police numbers have fallen, there are waiting lists for the waiting lists at local hospitals--longer than they were in 1997--and secondary-school class sizes are larger as a result of the gerrymandering at the bottom end in primary-school class sizes.

Mr. Fallon: That is an excellent example of the way in which Government targets, schemes and policies have distorted allocations. Two things are happening. First, money is not getting through to the front line--to the area police commanders, the NHS trust chief executives and the head teachers. Secondly, when it does get through it is distorted by centrally fixed priorities that dictate to the people running local services how those services should be run from the point of view of Whitehall. Our hospitals

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and schools are ending up as branch offices of the great Departments of State in Whitehall, doing the Secretary of State's bidding.

Something is wrong with the way in which the Government have been allocating their spending. That is proved by the fact that they keep coming back to announce further allocations in some desperate bid to get the money through before people notice at the general election.

So much for the framework; let me now turn to some of the specific decisions in the Budget. Of course, I welcome some of the Chancellor's measures for entrepreneurship. It is certainly refreshing to have a Chancellor who claims to believe in entrepreneurship: that is not something to which we have been accustomed in the case of previous Labour Chancellors. I welcome, for instance, the extension of the enterprise management incentive scheme, the changes in capital gains tax and the help for small businesses. As I hope the Financial Secretary agrees, however, it is important for those moves to be followed up.

On the one hand, the Treasury accepts the case for share ownership in binding employees more closely to their companies and encouraging company loyalty; on the other, it is not prepared to go further and cut the costs of share dealing in this country. If the Government firmly believe in share ownership, they should ask themselves why it is so much more expensive to deal in shares in the United Kingdom than it is elsewhere in Europe or in America.

The Chancellor's proposals on capital gains tax and small businesses raise similar issues. It is no use the Government exempting more small businesses further up the turnover scale from VAT when they are simultaneously piling on to those businesses more of the social red tape and other regulation to which we are becoming accustomed. If Ministers believe in exempting those businesses from VAT, why are they also piling on extra regulation? The Government's entrepreneurship proposals need to be followed through much more consistently if we are to believe that there really has been a conversion in the Treasury to the cause of entrepreneurship.

The Chancellor's decisions can be characterised under four headings. First, there is far too much fiddling about with the provision of small tax credits here and there. The credits are all intended to deal with ostensibly worthwhile causes such as community investment, research and development and persuading people to build flats over shops. However, I warn the Treasury that there are always deadweight costs in introducing such incentives for people who may well have made those decisions regardless. There are certainly bureaucratic costs in processing all those applications and ensuring that they are dealt with. I also doubt whether, ultimately, such incentives change behaviour in the way that the Treasury hopes they will.

My favourite line in the Budget is the announcement that the Government will

All I can say to Treasury Ministers is that I doubt that people will suddenly abandon their motor cars--or that the commuters of Sevenoaks will suddenly leave their

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Mercedes or Volvos at home and cycle down to Sevenoaks station--simply because VAT has been abolished on cycle helmets. That is not how people behave in the real world.

Mr. Ruffley: Does my hon. Friend agree that that is the unacceptable face of the new Labour nanny state?

Mr. Fallon: That is an uncharitable view.

More fully, the sentence states that the Government will

The Government are therefore reducing VAT on cycle helmets to improve road safety. I do not quite follow that. Nevertheless, that sentence demonstrates all the overweening ambition and the futility of fiddling about with the tax system and thinking that, on 1 April, because a couple of pounds have come off the price of cycle helmets all the cars will be left at home and millions of people will be happily cycling to work. It really doesn't work like that.

The Chancellor's decisions can be criticised as quite clever packaging--like the "new and improved" formula that one sees in the shops. Not only has the decision on VAT on church repairs already been announced, it has already been blocked. Now, Ministers are trying to find a different way of producing the same money.

We have also already heard about the children's tax credit being increased to £10. The Government were consulting on that proposal and--surprise, surprise--people said that they were in favour of it. That change was reannounced again in the Budget statement. In his clever packaging, there were some measures that the Chancellor did not include. He did not remind us of the increase in national insurance contributions. Although that had been announced before, he did not trouble us by reannouncing it.

On Thursday, the Paymaster General was rather caught out and with some embarrassment had to explain to the House that Ministers had not provided hon. Members with the press notices with which we are usually provided and which explain some of the changes, including the one on the application of VAT to spectacles. Some of the notices were not even included in the Budget bundle. I think that the hon. Lady tried to convince the House that that was standard practice. It certainly has not been standard practice. In the old days, the Budget bundle included all the press notices and hon. Members did not have to ring up the Treasury or plug into the website to try to obtain more information.

My third criticism of the detail of the Budget is that there are, again, costs to business. Right hon. and hon. Members may be surprised to hear that, because the Budget was in general presented as one that cut taxes. However, maternity leave has been increased and paternity pay has been introduced. Even if the cost of those changes does not fall directly on business, it will do so indirectly. Business ultimately funds the changes through increased costs or it has to accommodate itself to the changes. That is particularly true of very small businesses which may have only three or four key people. Nevertheless, the Government tell them that they must provide so many weeks maternity leave and paternity leave. All those changes pile extra costs on business.

My fourth and final criticism is that the Budget perfectly demonstrates just how far the Chancellor has strayed from Treasury matters into all kinds of areas. I do not know whether the Financial Secretary has had time

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yet to read the Treasury Committee's report on the role of the Treasury, which clearly shows that the Chancellor is involved in almost everything. He is involved in welfare policy--he is running the welfare system. He is involved in family policy. As we have just heard with regard to road safety, he is involved in transport policy. He is involved in education policy, in getting the money directly to the schools, helping to bypass the local education authorities. He is also involved in many other policies. Indeed, the Chief Secretary has become involved in something quite different. According to a Treasury press release, the right hon. Gentleman has announced an award for the most outstanding public building. So the Chancellor is also into architectural policy and has announced a new design award scheme. What does architecture have to do with the Treasury? The Chancellor simply cannot resist meddling in anything and everything--welfare, families, cycling and transport, education and now public architecture.

The bigger issues are neglected. The Treasury has issued another consultative document to puzzle out why our productivity is still slipping behind that of our major competitors and why it seems that the gap between us and the United States cannot be bridged. There are issues at which the Treasury should be looking. For example, why do the Americans pay less tax but seem to work harder, for longer hours, and take fewer holidays? Why do our medium-sized companies find it so difficult to train and retain their work force?

After productivity comes the tax code. It is quite striking that commentator after commentator has gone on about the complexity of the tax code and the need for simplification. It is bad for individuals and complicated for business. Of course, I welcome the rewrite project and the work of those who are attempting tax simplification, but the structure is far too complex. It is time that the Treasury addressed these criticisms and came up with at least a commitment to taking an interest in simplifying the tax code.

In conclusion, this is not a very successful Budget. Taking the past four years as a whole, the Chancellor put up taxes quite massively for two years and then, in the past two years, reduced them slightly. As a result, taxes are much higher, but spending, as I have demonstrated, is no better. It is said that the Budget will benefit those with babies. It will certainly not take in those who were not born yesterday.

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