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Mr. Connarty: Will the right hon. Gentleman give way?
Mr. Jack: Perhaps the hon. Gentleman would be so kind as to let me make a little progress, in the light of your comments, Mr. Deputy Speaker.
I also welcome the fact that venture capital trusts will be used in inner cities. I still feel that it is an indictment on us all, in the 21st century, that we have some really bad spots of urban dereliction. We struggle to get to grips with them but they are often the centre of so many social and crime problems.
Finally, I welcome the Government's acknowledgement that some more money will have to be found in the Budget for social care. I hope that some effort will be made to ensure that some of that resource goes into child care, in the sense of being responsible for children. Like every other right hon. and hon. Member, I was shocked by the information that came out of the Victoria Climbié inquiry. We hope that this will never happen again but, to a certain extent, that is possible only if child safety is given the resource that it needs.
Mr. Connarty: I do not know the right hon. Gentleman's interests. It is possible that I may be called to speak next, but I would lose that opportunity if I left the Chamber and would then be debarred from speaking. The right hon. Gentleman has not declared his interests, so if he speaks in favour of or against something and has an interest to declare about a particular organisation, I would be grateful if he named it as he speaks.
Mr. Jack: If I had felt that there was anything so specific, I would have done, but I followed the precedent that has been followed throughout the debate of making it clear that I have business interests as a non-executive company director and as chairman of an agricultural consultancy company. I do not propose to say anything about that, or the business that the company trades in. Those declarations are properly and publicly made and we have all followed that precedent. I have made it clear to the House that I have business interests and am grateful to the hon. Member for Falkirk, East (Mr. Connarty) for allowing me to tell him a little more about some of the things that help to inform me about the real world in which I live. It illustrates the fact that many on the Labour Benches have little understanding of the world of business, because they have not been directly involved in it.
One of the areas that I hoped the Budget might touch on was Britain's responsibility in the world to deal with the sources of discontent that have given rise to some of the terrorist outbreaks that we have seen. Perhaps the Financial Secretary could consider giving some form of credit or tax allowance to encourage British companies to invest in those parts of the less developed world where the growth of good markets and good business may help to be an antidote to the discontent that manifested itself in the terrorist events of 11 September. Our private companies have a tremendous record of involvement in the less developed world. We can be proud of that role,
but we should give them some encouragement, especially in those hot-spot areas identified by the Foreign and Commonwealth Office. That would be of particular value.The detail of the Budget can be interesting. One note—Rev Bn 20—is entitled "Denying tax relief to bribes". Even when I was in the Treasury, I was not aware that we gave tax relief for bribes. In the fevered discussion about donations, the note may offer some interesting further reading.
Our debate has already touched on the tax burden borne by our citizens, and on the tax increases in this and previous Budgets under this Government. The Centre for Economics and Business Research has produced some figures that paint a rather different picture of the tax burden in this country. The centre found that, after deductions,
- "British families have only 68 per cent. of their total gross annual income left to spend."
I want to bring another matter to the Financial Secretary's attention. In 1981, as a Back Bencher, the present Secretary of State for Foreign and Commonwealth Affairs initiated an attempt to assess the impact of the Budget on the direct and indirect tax paid by individuals. The present Labour Government found the results deeply embarrassing when they came to power, and concocted a set of words to explain why they would not provide that information. They said that the request was unrealistic and that they could not meet it.
With respect to the Government, they must realise that it is legitimate for Members of the House of Commons to seek that information, and that the Labour party in opposition requested it first. Will the Financial Secretary say whether the Treasury will reconsider its position? The previous, Conservative Government provided the information, even though it was embarrassing to them. It would be useful if the Government continued to provide the figures.
It is all a matter of openness. In that connection, does not the Financial Secretary also think that more information should be regularly released about what is happening to the UK economy in cash flow terms? I keep tabling questions asking for projections of tax revenues, but am always told that the matter is too difficult. However, I am also told that 18 people in the Treasury are busy working on projecting tax revenue. If they are employed to make such projections, why cannot we—the representatives of the people and the taxpayers of this country—know what is happening to the cash flow of the economy? That information would give us more sense of the dynamics involved.
The question of what comes next has already been raised in the debate. Anatole Kaletsky's perceptive column in The Times this morning draws attention to the work being done by the Institute for Fiscal Studies. The institute has calculated that sustaining the real annual spending growth of 4 per cent. projected in the Red Book would require that an additional increase in taxation amounting to some £6 billion would have to be announced in each Budget of the next Parliament. That is the
institute's opinion, and I appreciate that much can change. However, the point is that more tax is in prospect, unless other factors—as yet unknown to us—change.The article, like others, points out that the rather subtle change in national insurance has allowed the Chancellor to get around his promise not to raise the higher rate of tax by sneaking in an additional 1 per cent. tax on all higher-rate taxpayers.
The Chancellor has done something else that is significant: he has ended the contributory principle of the national insurance fund. Most people pay national insurance contributions because they think it a good thing to do so. The most recent report from the Government Actuary found that 0.9 per cent. of the national insurance fund goes to the national health service. That proportion will now be much larger.
We have witnessed the true birth of hypothecation under this Government, but at the same time the end of the contributory principle. Other hon. Members have noted in this debate that the Government from now on will use the national insurance fund as some sort of cash milch cow.
The Red Book contains a whole list of the Government's tax measures. One of the items that I was interested to note was the amount of money that will be paid for the research and development tax credit. It will rise from £200 million in the current financial year to plateau out at £400 million for the next two financial years. What is the reason for that plateauing? Do the Government not think that the measure will suck in more and more investment to be relieved? In business terms, the changes in employers' national insurance are comparable with putting another 3p back on corporation tax.
There are also some other interesting things. I am delighted that the Government have come to their senses and ended their love-in with the film industry in their changes to film tax relief. That, at least, is a note of realism that I applaud. The Government will get some flack from the City, however, in response to some of the changes, particularly in terms of foreign companies. The Government were right to consider that question, but they will find some difficulties there.
The other mysterious thing is the oil fraud strategy. We all know that there may be some funny goings-on in relation to red diesel, but the build-up in the countering of fraud seems to be incredibly slow, given that, in year three, according to the Red Book, a projected £550 million will be put in as a result of this exercise. It will be very interesting to learn more about that matter.
I am surprised, too, that we have not heard anything from Ministers about the National Audit Office's observation that VAT fraud amounts to some £6.4 billion to £7.3 billion of lost revenue. If that nut could have been cracked, the Government would not have had to raise the national insurance contribution by anything like the amount by which it has been increased. I admit that exercises are under way in relation to fraud, but if £6.4 billion to £7.3 billion is going missing and there is no discussion on the Treasury Bench about additional resources to go into that area, that says something about where the Government's priorities lie.
I shall comment briefly on expenditure on health. I was interested in the observations of Patience Wheatcroft, whose column in The Times I have grown to enjoy.
She contrasts Mr. Fred Goodwin with Mr. Wanless, from whom he took over as chief executive of NatWest bank, and writes that Mr. Goodwin would have been harder than Mr. Wanless—rather than giving the money away first, he would have got the reforms. I want to share with the House the thought that, in delivering this health care package, one of the problems that the Government will face will be actually getting people in for treatment.The Wanless report gives us some counsel. First, it points out that it is difficult, in various scenarios, for spending growth of between 7.1 per cent. and 7.3 per cent. to be spent wisely on the health service; that is pushing it. It is not surprising that paragraph 5.54 of the report refers to the problem of the shortage of doctors, which it predicts for after 2005:
- "If 20 per cent. of GP and junior doctors' work were shifted to Nurse Practitioners, this would eliminate any potential capacity constraints in doctor numbers."
- "On this basis, the demand for nurses would increase by around a further 10 per cent. This could be filled if 12.5 per cent. of nurse workload could shift to health care assistants (HCAs). But on the basis of a transformation rate of 1.5, this would require additional recruitment of almost 70,000 HCAs in addition to the projected increase in demand of 74,000. Although there is scope to increase the number of HCAs, it may be difficult to recruit this many HCAs on top of the current workforce of around 350,000."
I hope that some of the money will contribute to relieve the wait to see consultants. Under the current arrangements in my area, as far as the Blackpool Victoria hospital is concerned, since January 2000, large numbers of specialties have vastly increased waiting times, which are well above the Secretary of State's current target of 15 weeks—soon to be 13 weeks for the first consultant appointment, I think. In only those disciplines in which clinical priority was changed by the waiting lists initiative has there been any decline in waiting times. The worst-case scenario is neurosurgery; someone with a brain problem has to wait 72 weeks to have it sorted. That is unacceptable, but I hope that the problem will be solved. I also hope that the policy will mean that the Blackpool Victoria hospital will get an additional CT scanner. I say that because I fight for the health care interests of my constituents and because I am personally dependent on the national health service. We want rapid progress.
I draw attention to another contrast. I talked to the new chairman of our primary health care trust who was involved with the primary care group until this month. He told me that it had taken him nine months of battling to try to get more chiropody services into the local health authority. No one could understand why what he described as "foot care maintenance" mattered. Now that he is the chairman of the primary health care trust, he says that he will change that. However, people have had to wait nine months to receive chiropody services, and we have all received letters from elderly people who desperately need help. This issue illustrates the problem and the complexity of the task of trying to put the health service right.
My right hon. and hon. Friends are right to examine alternatives. We should not be criticised because we have the courage to consider different approaches. We share
the common agenda of wanting better health care in this country. I am glad that we at least share such common ground, and I am grateful to have had the opportunity to contribute to the debate on the Budget.
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