---

Mr. Geoffrey Robinson (Coventry, North-West): Where does the money for private insurance and health care come from if not from taxpayers?

Mr. Whittingdale: The difference is that the taxpayer chooses to pay it. No one is compelled to put money into private health insurance: people choose to do it. That is something I thoroughly commend.

Almost as bad news as what was in the Budget was what was not in it. There was nothing to help to relieve manufacturing industry from the burden of the climate change levy. Indeed, the Budget tore away the fig leaf that Ministers have used in the past to defend the levy—that it is overall revenue neutral due to a compensating cut of 0.3 per cent. in national insurance contributions. It was never revenue neutral for almost all manufacturing companies; now they will have to pay the levy as well as higher national insurance contributions.

No wonder the director general of the Engineering Employers Federation said:

"Did the Chancellor help manufacturing? He did the opposite. He has done something negative at the worst time. It is the wrong thing to do."

Despite what the Secretary of State said, nor did the Budget do anything about the burden of red tape and regulation. On top of the £29 billion of extra tax that business now has to pay, the CBI has estimated that employment legislation alone has added another £12 billion. The latest red tape audit by the British Chambers of Commerce puts the total cost at more than £15 billion. Last week, I received a written answer stating that in 2001 the amount of time spent by businesses filling

22 Apr 2002 : Column 39

in forms issued by the Office for National Statistics was estimated to be about 617,000 hours—and that takes no account of all the other forms issued by Customs and Excise, the Inland Revenue and all the other Government agencies.

The result is that our international competitiveness is being slowly eroded. Having been a low tax, lightly regulated economy, over the past five years we have steadily become a highly taxed, highly regulated economy. We are no longer automatically the first choice for investment and our position in the international league tables of competitiveness is slipping. In the table produced by the World Economic Forum we have fallen from fourth to twelfth, in the Heritage Foundation's table we have slipped from third to ninth, and in the Centre for Management Development's table we have fallen from ninth to nineteenth. The Budget will do nothing to change that; in fact, it will make the position much worse.

Last Wednesday, the Chancellor claimed that the Budget would help enterprise, and this afternoon the Secretary of State said that it demonstrated the Government's commitment to enterprise. I can do no better than quote the economics correspondent of The Sunday Times, who said:

"With a tax hike on business like that, Brown's sixth Budget was about as enterprise-friendly as Stalin's sixth five-year plan."

The Budget represents a betrayal of industry and shows that the Government have learned nothing. They intend to go on pouring public money into the health service without undertaking the reforms that are vital if there is to be any chance of real improvement, and, yet again under this Government, it is business that has to pick up the tab.

Several hon. Members rose—

Mr. Deputy Speaker (Sir Michael Lord): Order. Before I call the next speaker, I remind the House that Mr. Speaker has placed a 10-minute limit on Back-Bench speeches in this debate, and that applies from now on.

4.43 pm

Mr. Tom Clarke (Coatbridge and Chryston): I suppose that it is inevitable and right that the debate on the Budget, certainly on the Labour Benches and among the public, has concentrated on the Chancellor's thinking on the crisis in the national health service and his proposals to deal with it.

Beyond the massive refinancing of the health service—the Chancellor's most welcome injection of £40 billion—lie other questions, which I should like to address in the short time that I have. I hope to be able to comment on the importance of training, on globalisation and on wealth and redistribution. I am sorry that the hon. Member for Maldon and East Chelmsford (Mr. Whittingdale) could not find time to cover any of those issues, but perhaps we shall hear Opposition Members' views in the course of the debate.

First, I want to deal with health. I realise that the hon. Member for Maldon and East Chelmsford is being disturbed by one of his colleagues, but as I am going to refer to him, and am even prepared in a 10-minute speech to give way to him, perhaps he could give me a few moments of his time.

22 Apr 2002 : Column 40

I believe that Government's responsibility to industry and commerce is to set the climate for discharging responsibilities to the people of this country, including providing essential services such as the NHS. A healthy approach to the economy such as that taken by the Government means that we tackle the problems of manufacturing, consider the opportunities of a technological age, and take our chances in marketing to spread our products throughout Europe and the rest of the world. In doing that, we should give ourselves the opportunity to invest in the health service and other services in a way that has not been done previously.

Does the hon. Member for Maldon and East Chelmsford genuinely believe that large and small industrialists and companies, concerned—as we all are—about the health service, are so unfair and limited in their view that they ignore the Government's economic successes? Does he want to return to the days of high interest rates and inflation, when negative equity was a regular factor? That did not help anyone's health or British industry. He cited the CBI. I put it to him bluntly that he should consider the problem of absenteeism from which industry in Britain suffers. One newspaper today reported that it costs the country £23 billion a year.

The hon. Gentleman quoted Mr. Digby Jones of the CBI, and made his views on national insurance contributions clear. The country is entitled to know where the Conservative party stands. The hon. Gentleman and his colleagues have had time since the Budget to think about it. We know that they do not like it, but I will give way now if the hon. Gentleman answers a question. If the Conservative party forms a Government, will it repeal the measures in the Budget? There is no response; I shall explain why. He knows that not only the country but, according to the Sunday press, to which he referred, the vast majority of Conservative supporters support the Budget. There is therefore no incentive for him to repeal the Chancellor's measures.

Does the hon. Gentleman believe, even in the context of the comments of Mr. Digby Jones, that people do not notice that the Government have dealt with low income earners, for example, by introducing the minimum wage? But are the Opposition considering those in the top income brackets? There is not much sympathy for the fact that, for example, the principal of St. Andrews university, who earns £145,000 a year and will get a rise of 11.5 per cent., will be asked to pay a limited amount to help our health service. The hon. Gentleman, through his comments and his quotes from Mr. Digby Jones, showed that some people live in a time warp. It does not help to talk Britain down. The G7 nations would not be impressed with a member country that did not believe in investing in the health service, which is so vital to every aspect of our nation's welfare.

I want to deal briefly with globalisation and wealth distribution. How effectively is the United Kingdom being prepared to compete and prosper in globalised markets? How effectively is wealth being redistributed? I believe that the British people are fair-minded, and the answers to my questions tell us something about the economy and society that we are becoming.

I desperately want the Government to continue to challenge poverty at every level and for every group in society. That includes the poverty of ambition, which is why I want to focus on the crucial issue of training. I welcome the fact that there has been a growing and

22 Apr 2002 : Column 41

intensifying recognition within Government of what the Secretary of State for Education and Skills has called the nation's long-term failure to raise skills.

Even after so many years of strong and focused regional policy in the United Kingdom—and I see this in my own county of Lanarkshire—it remains the case that not enough of tomorrow's skills are being put into the hands and the heads of tomorrow's work force. In some regions, only around 10 per cent. of the labour force have degree-level qualifications, while 20 per cent. have no formal qualifications at all. I do not see that as being competitive, so the Government are right to invest in education again and again.

As a matter of priority, the Government have to address what is now known, in the inevitable jargon of the times, as the low skill equilibrium. That is all the more true if we are to make a decision on the euro, and the Chancellor hinted at that in his Budget speech. One of the arguments about the benefits that could arise from that relates to the commitment to improve our skills and training. We would not gain the full benefit of harmonisation if we did not set ourselves that priority.

I welcome the initiatives in the Budget, and I am not alone in that, despite the views of the Opposition. Mike Brewer and Alissa Goodman of the Institute for Fiscal Studies said:

"If the Government had chosen to monitor a poverty line fixed at its 1996 level, instead of a relative one, it would now be able to claim that child poverty had fallen by around 1.3 million."

That is a tremendous achievement. A lot more remains to be done, but on that and on many other aspects of his Budget and his policy, the Chancellor is entitled to be congratulated and we are entitled to feel proud. We are entitled to commend the Budget to the British people and, when we debate international development on Thursday, to examine the lessons that we offer, in our priorities, to the rest of the world.

---