Tony Baldry: No, not at all. Stamp duty is simply a tax on mobility. It deters people from moving and is, in many ways, ludicrous and anachronistic. Frankly, if I were an officer in Thames Valley police wanting to move to Banbury or a nurse wanting to move to Oxford to work at the John Radcliffe, I would not be particularly happy that people in some parts of the country are being let off stamp duty while I would have to pay a hefty sum. As days go by, Labour Members will begin to regret the inclusion of such divisive measures in the Budget.
Mr. Kevan Jones (North Durham): Does not the hon. Gentleman recognise that in constituencies such as North Durham, where it is difficult to get certain sites developed, abolishing stamp duty will allow development that would not otherwise take place? Therefore, abolition will help to regenerate the economy of such areas.
Tony Baldry: For a number of years, I was a Minister at the Department of the Environment, and I had responsibility for the construction industry for four years. I am bound to say that I cannot recall a single occasion on which someone in the construction industry said to me, "We are not going to develop areas such as Durham, the north-east and elsewhere unless you remove or reduce stamp duty." That just did not happen.
It was widely predicted and widely trailed that national insurance contributions would rise. We now know that they will rise by at least 1 per cent.a tax hike. It is difficult to calculate by how much tax will increase as a consequence of the Budget, so we must look to page 14 of the Red Book. Through some swift maths, my rough and ready calculation is that the tax burden will increase by £8 billion in the financial year 200405 alone. That will not come out of thin air; it will be a burden of taxation on individuals and businesses.
Tony Baldry: As one of my hon. Friends said earlier in the debate, the only time the Labour party is really happy is on Budget day, because it can put taxes up. The hon. Gentleman clearly does not appreciate that taxes have to be paid for by someoneby businesses and individuals. Perhaps tomorrow he will appreciate that an £8 billion tax hike in a single year must be paid for, and will come out of the pockets of individuals and businesses in his constituency and in mine.
That leads me to the second comment by the Prime Minister that I found striking in the build-up to the Budget, when he asserted that we could not have world-class schools and hospitals unless we were prepared to pay for them. I suspect that over the next year we shall find that the real problem of the Budget is that the delayed and disfigured tax hikes will not provide a clear and delineable view of which taxes are spent where and when on public services, even with an annual report to Parliament. It will take some time for that money to get through to public services. People will expect public services to improve and I am sure that next winter I shall still be receiving as many letters from constituents in Banbury, Bicester and the villages of north Oxfordshire expressing concerns about cancelled operations, waiting lists and inefficiencies in the NHS. Those problems are not the fault of NHS staff, but next year people will feel even more frustrated because they will be paying more in tax but still not getting a better service.
Today's Budget raises taxation substantially, and much of the burden of that taxation will fall on businesses. Such taxes make businesses less competitive and less able to create jobs. No wonder the Prime Minister was so keen, at Prime Minister's questions, to trumpet the fall in unemployment. He knowsindeed, the Red Book tells usthat the Government now expect unemployment to increase. Never in the history of this country has the state taking more, taxing more, spending substantially more and controlling more led to greater individual and collective wealth and happiness.
I agree with my hon. Friend the Member for Chichester (Mr. Tyrie): the Budget is a turning point thatlet me return to my earlier analogy of a bingo Budgetin due course will mean that No. 10 is longer Tony's den.
Mr. Mark Hendrick (Preston): I welcome the Budget. As the Chancellor said, it has been drawn up in an environment of the lowest inflation and interest rates that this country has seen for 40 years. For families and home owners in my constituency, in Preston, Walton-le-Dale and Bamber Bridge, it is a tremendous boost.
Unemployment in this country is lower than in the rest of Europe, Japan and the United States. While there have been some job losses in manufacturing in my constituency, those jobs are being replaced by new jobs, and millions of pounds are flowing into it.
The Budget has shown that Labour is the party of enterprise. I am the first Labour Member in Lancashire to be an honorary vice-president of the central and west Lancashire chamber of commerce. I am as proud of that as I am to be a member of the GMB trade union.
Labour is also the party of fairness, and today's Budget is one for the public services. Millions of people throughout the country will benefit as we generate an economy that brings prosperity to the country as a whole.
The decision to give the Bank of England independence on interest rates was bold and courageous. As the Chancellor said, since then, there have been seven cuts in interest rates. Let us contrast that bold move with the recent statement by the right hon. Member for Wokingham (Mr. Redwood), who said:
Many people believed that the events of 11 September and the war against terrorism would cause a great deal of economic instability, not only in the United States but throughout the developed and developing world. What we have seen since then is a testament to the management of our economy by my right hon. Friend the Chancellor. Worries about future growth and stability have already all but disappeared. The world economy will grow, but stewardship of our economy has shown that it will grow more in the UK than elsewhere. In the past year, we have seen growth of 2 to 2.5 per cent. and we expect growth of 3 to 3.5 per cent. next year and 2 to 2.5 per cent. the following year. Those healthy low-inflation growth rates are consistent with a stable economy.
As someone with my eye firmly on the conditions for joining the euroI look forward to a referendum in this countryI am pleased to see that debt is now considerably less than 40 per cent. of GDP. Given that debt stands at 30.4 per cent. of GDP and that the Government have repaid some £37 billion of debt, we are in a tremendous position and will be the envy of many of our European partners. I was struck by the concern of the hon. Member for Banbury (Tony Baldry) about exports. I share that concern but believe that if we joined the euro, we would win considerably more exports and see an even greater recovery in manufacturing.
The Chancellor announced £4 billion extra in public expenditure. That will help Preston, which is a new, proud city that is central to the provision of public services for the whole of Lancashire. Its first-class hospital will benefit from increased NHS funding, and it has some first-class schools and an excellent police force. Preston is looking to the future. However, that money will need to be matched with expenditure on modernisation and reform. Despite the good provision of services in Preston and the rest of Lancashire, there is no room for complacency. We must have modernisation and reform to make those services even better, and I look forward to seeing that in my constituency.
Business investment has increased from 10 per cent. of GDP to 12 per cent. That shows business confidence, and confidence in the Government's handling of the economy. Corporation tax has gone down from 33 to 30 per cent. Research and development tax credits will bring some £400 million extra to our R and D companies. As a former scientist and engineer, I recognise the importance of R and D to the development of new products, trade and economic growth. My constituency has people employed in aerospace, nuclear power, software and computing, and
My constituency also has many small businesses, and their tax rate has gone from 23 per cent. down to 21 per cent., 21 per cent. down to 20 per cent., and, now, down to 19 per cent. As the Chancellor mentioned, the starting rate is now not 10 per cent. but 0 per cent. Capital gains tax has also been cut. I am sure that small firms in Preston, Walton-le-Dale and Bamber Bridge will all welcome that.
I was surprised to hear comments from Opposition Members about red tape when, today, the Chancellor has again made proposals for simplifying VAT that will benefit all businesses. The flat rate will not just be for companies with turnovers of less than £100,000 but for those with turnovers of less than £150,000. The flat-rate system will greatly reduce the amount of form filling, and the deferred VAT payments will significantly reduce the complexity of making VAT claims. Firms are to be encouraged to go onlinee-finance, which is known in Lancashire as "ee ba gum" financeto which I am sure firms in my constituency look forward. The introduction of 2,000 identified enterprise areas, which will receive 0 per cent. stamp duty status, will be a tremendous boost. There are still many areas up and down this country, which were and still are industrial areas, that need investment.
I also welcome credits for firms developing green technologies. The university of Central Lancashire has done excellent work in that area, and I am sure that firms around Lancashire will do a great deal in it in future. Beer duty will be halved for small breweries; although there is no small brewery in my constituency, I shall still have a celebratory drink in the Strangers Bar afterwards.
The working families minimum income guarantee for full-time workers will be increased to £237, which is £70 more per week than income support. That is a tremendous change. We are now looking forward, for the first time, to a three-figure state pension for a single person, which will be a tremendous psychological and financial boost to pensioners up and down this country. For those with occupational pensions, personal allowances will be raised, and we look forward to tax credits for future pensioners, too. The Chancellor has provided £2.5 billion for familiesLabour is now firmly the party for the family.
On public services, huge direct payment increases will go to every school. That will be good for schools in my constituency such as Moor Nook primary school, which I visited a few weeks ago. I was shown photographs by the head teacher of what it looked like six years ago, and, seeing it now, it has undergone a total transformation. Schools such as Corpus Christi high school will also benefit, as ambitious construction work is being carried out there.
I was surprised to hear from Conservative Members that they do not agree that there should be a consensus on the national health service. That consensus has existed since the war, and the Conservative party agreed to it, at least until the election of Mrs. Thatcher. That national consensus will come backpeople want investment, reform and a five-year programme of high growth. The criticism that too much of the NHS is centralised is
The financial incentives, the reform of care for the elderly and the money going to primary care trusts are important. The independent audit and scrutiny of the performance of the health service is also important, for two reasons. First, as I said in an intervention, we need to make sure that we get value for money in the health service. Secondly, it will debunk all the myths thrown out by the Conservative party, which wants to denigrate the services provided in this country and the people who work in them and to leave an impression that things are far worse than they really are.