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Mr. Swinney: On the issue of the Scottish Parliament and its development, does the hon. Gentleman have a view on an issue that has reared its head in the opinion polls recently? The majority opinion in Scotland is that the Scottish Parliament should have more powers and, in particular, greater fiscal freedom. Does he support arguments in favour of fiscal autonomy and would he lend his voice to those arguments in the House tonight?
Mr. Home Robertson: I know that the Scottish National party is interested in breaking up the United Kingdom and in establishing Scotland as an independent country, but I do not agree with that. There are immense benefits to be achieved by the partnership of the United Kingdom. Scots should be warned about the obvious costs of separatism, which include the costs of establishing a Scottish army, navy and air force. Moreover, where would our embassies be located if independence were to take place? That is absurd, so the answer to the hon. Gentleman's question is no. I believe that our purpose should be to make the devolution settlement work. I am determined to work with the majority of my colleagues in the Scottish Parliament to ensure that that happens while maintaining the integrity of the United Kingdom.
I was about to make a couple of points about rural issues. First, I wholeheartedly endorse the policy of eradicating foot and mouth disease, which can be achieved only by the rigorous implementation of the slaughter policy. It is a grim process, and I hate to think what it will cost. No doubt Treasury Ministers are turning their minds to that at present, but the alternatives are unthinkable and will certainly be far more expensive. We must persevere with the policy.
In passing, I must say that I am apprehensive about the prospect of a general election at a time when vast tracts of rural Britain are virtually under seige. For example, I do not know how postal votes can be processed when direct postal deliveries are seriously disrupted in many areas. It is a difficult issue, and it is one that my right hon. Friend the Prime Minister will have to take account of along with other considerations. However, I strongly support the action that has been taken by my right hon. Friend the Minister of Agriculture, Fisheries and Food in the difficult task that he faces.
The second point on a rural issue is slightly more personal, but it is relevant to--although at the periphery of--this debate. I would like to comment on my exclusion from agricultural responsibilities when I was a Scottish Executive Minister in 1999. That happened apparently as the result of collusion between the civil servant then in charge of agriculture in Scotland, Mr. Tony Cameron, and the president of the National Farmers Union of Scotland. A new interpretation of the ministerial code was triggered to prevent me, as the Deputy Minister for Rural Affairs, from even seeing papers about agriculture on the ground that I might be perceived to have a personal--
Mr. Deputy Speaker: Order. I am sorry to interrupt the hon. Gentleman, but I must remind him that this is a debate on the Budget resolutions. I am having difficulty in connecting what he is now saying to the main subject before us.
Mr. Home Robertson: I apologise, Mr. Deputy Speaker, but I was hoping for a little leeway, given that this will be my last speech in the House. The point that I want to make is relevant to economic policy.
We now have an interpretation of the ministerial code that prevents people who might be perceived to have interests or even experience in particular industries from holding ministerial office in certain Departments. That trap was sprung on me, and I want to draw it to the attention of the House. If it applied to me as a Minister in the Scottish Executive, it could apply to Ministers in other parts of the United Kingdom. Frankly, that is silly. Members should be aware of the issue, but I shall leave it at that.
The time has clearly come for me to shut up after 22 years in the House. I would like to leave a final message and do so, quite happily, in the presence of the hon. Member for North Tayside. Scottish nationalism is a risk rather than a threat, and the only thing that could aggravate that risk would be to interfere with the formula for distributing the UK Budget between the devolved Administrations. Devolution is all about enabling different parts of the UK to address different priorities in different ways. The House should have the confidence to let that diversity develop, and this mother of Parliaments must always resist any temptation to abuse its power on the distribution of resources in ways that could undermine the vital partnership of the UK.
This is an excellent Budget, which will increase resources for every part of the United Kingdom and for all our vital services, while reducing the burden on taxpayers and businesses. Our economy is going from strength to strength, and we shall be able to take advantage of even better trading opportunities when we are able to join the euro currency zone in the near future. These are historic achievements for a Labour Chancellor. It will be a pleasure to cast my last vote in the House in support of this Budget. I congratulate my right hon. Friend the Chancellor of the Exchequer, and I wonder whether he may yet be destined for even higher office.
Mr. David Ruffley (Bury St. Edmunds): This was a Budget for complexity. We know that the Chancellor is addicted to complexity in the tax and benefits system and he got yet another fix last Wednesday. His new Labour
The benign economic conditions, which were largely bequeathed to the Chancellor by my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), have masked the serious harm that the Chancellor's last five Budgets have done to the country's competitiveness and productivity. All economists of all political persuasions understand that productivity is the key driver of strong economic growth, economic growth that will deliver sustainable rises in public spending and downward pressure on unemployment.
We should all therefore be very concerned by the figures for worsening productivity under the new Labour Government. The documents published by the Treasury itself highlight the worrying state of the UK's productivity performance. I also came across a rather chilling statistic from the National Institute of Economic and Social Research last week, which said that, in 1999, the average working hour in the United States was 38 per cent. more productive than an average working hour in the UK. That figure had worsened from a mere 28 per cent. in 1996, so we have evidence of a widening gap with the United States. That story is reproduced in terms of the gap between ourselves and France and Germany.
Why is that occurring? My right hon. and learned Friend the Member for Rushcliffe and others have put their finger on the answer, which is the increasing complexity of the tax and benefits system and the sclerotic state of the British labour market that has resulted from rules and regulations and from the gold plating and the new impositions from Brussels that the Chancellor willingly embraces.
The working families tax credit has been increased in the Budget, but it is turning businesses into outposts of the Department of Social Security. Employers, as well as employees, have to fill in forms. Employees wishing to claim the working families tax credit have to answer interesting questions, such as, "Are you the director of a limited company?". When employers fill in the form, they have to make calculations for each individual employee and pay the credit through the pay roll monthly. At the end of the month, they have to tot up everything that they have paid out and get a rebate from the Inland Revenue. That is all at a cost--we know the cost because the British Chambers of Commerce has told us--of about £300 per employee.
We also know that the working families tax credit, in the labyrinthine form that the Chancellor has introduced it, deters the creation of employment at the margin. We know that because the National Association of Citizens Advice Bureaux said in a recent report that the credit had
Mrs. Mahon: I have many small businesses in my constituency. If the working families tax credit is such a terrible burden on employers, can the hon. Gentleman explain why I have not received a single complaint from them? I would have expected a postbag-full.
Mr. Ruffley: I hesitate to venture that individual businesses in the hon. Lady's constituency might not feel that they would get a sympathetic hearing from a Labour Member of Parliament. I have had many complaints from companies in my constituency. The British Chambers of Commerce has received many complaints, and my remarks about that are on the record. Even the National Association of Citizens Advice Bureaux has made the point that the working families tax credit is damaging the interests of the people whom it is most meant to help.
The children's tax credit has risen to £520 a year in the Budget. Some 10 million couples in receipt of married couples allowance temporarily thought that the CTC would be a replacement, but only 5 million of those couples are eligible for it. We discover that only 3 million of them have bothered to claim. Why might that be? First, a family with two earners who each receive a salary just below the top-rate tax threshold--for example, £30,000 a year--will receive the full credit, but if one working partner earns over £41,375 a year, the family will not receive the credit at all. However, if one partner earns less than that, but more than the top-rate tax threshold, the family will, depending on the increase in their income, receive a tapered relief, giving them a fraction of the full amount. That is a complex issue, as well as being unfair.
Secondly, the Inland Revenue will have to check whether couples who are claiming the CTC are cohabiting. Finally, the working families tax credit interacts with the children's tax credit. As a constituent pointed out in my surgery last week, that means that she will be no better off, even assuming that she is able to find her way through the thicket of rules and regulations.
We must fear not, however, because the Chancellor of complexity is here to help. He will abolish child benefit, working families tax credit and children's tax credit and replace them, in 2003, with something called the integrated child credit. We must not forget that that will run in tandem with the new employment credit. That complexity is nothing short of a disgrace, and it is all down to the Chancellor of complexity.
The Chancellor's magical mystery tour of the tax and benefits system has also given us the infamous minimum income guarantee for pensioners, which was increased in the Budget. A pensioner who wants to claim that benefit currently has to fill in an intrusive 43-page form. It contains such gems of questions as, "Are you pregnant?", "Are you on strike?", "Are you on parental leave?" and, intriguingly, "Are you in possession of a credit insurance policy covering your credit card?" It is little wonder that more than 500,000 pensioners who are eligible for the
Disgracefully, the minimum income guarantee has increased the percentage of old-age pensioners who are now subject to a means-tested benefit from 38 per cent. under the previous Government to almost 60 per cent. when the pensioner tax credit is taken into account. Those figures come from Age Concern, which helpfully reminds us in its briefing that the increase is in contravention of what the then shadow Chancellor said in 1993 about ending means-testing for old-age pensioners.
We must also remember that the minimum income guarantee saps personal responsibility and an individual's dependency on their own savings. The savings industry tells us that the stakeholder pension is now a busted flush because it is simply not logical for individuals to save under the stakeholder pension with the MIG set at its existing level.
The Chancellor of complexity's Kafkaesque odyssey extends even further, beyond the MIG, the CTC and the working families tax credit to the corporate sector. The Chancellor's earlier Finance Acts contained two major reorganisations of capital gains tax, and another has been announced in this Budget. It is getting to the point where chartered accountants cannot easily, on their first attempt, calculate accurately the CGT liability of a small business or even an individual. More than 3,000 major new regulations that affect business have been introduced since 1997, which is a post-war record. The Chancellor has done nothing about that and appears not to care or to see the significance of that increased red tape. "Tolley's", the tax bible, which I was privileged enough to use when I was a legal practitioner many years ago, has now almost doubled in size as a result of the last five Brown Budgets.
Economists understand that the tax and benefits complexities of which I and other hon. Members have spoken are not merely an irritation or an inconvenience; they damage the national economic performance of UK plc and, ultimately, the living standards of all. That catalogue of complexity is all down to one man--the Chancellor. The Labour-dominated Treasury Committee published a report in January on the Chancellor's stewardship of the economy which said that