| Previous Section | Index | Home Page |
5.54 pm
Mr. Robert Syms (Poole): This Budget is just more talk, more taxes, no change and no difference, and the British people deserve better.
Mr. Bryant: That is what the hon. Member for Buckingham (Mr. Bercow) said yesterday.
Mr. Syms: The hon. Gentleman will hear it again and again, because basically it is true. As some of my colleagues have suggested, we have witnessed a big change, in that politics is returning to tax and spend. People are happy to pay more tax if they feel that such spending will deliver better services, but the difficulty for this Government is that, although they have demanded substantially more money, they do not know how to make the NHS or other public services work better. In the past five years, taxes have risen but in many instances public services have got worse. Britain deserves world-class public services, but I am afraid that this Government seem to tax more, waste more and fail to deliver. Often, as they fail to deliver, they move the goalposts—they change the means of assessment—or introduce new targets and plans for 10 years or much longer. People will judge this Government in terms of delivery, and unless they seriously reconsider how they deliver many public services, I am confident that at the next election the British people will re-evaluate their support, and they may well determine that the Government have run their course.
I should have pointed out at the beginning of my speech that I am a director of a family building business that may be affected by Budget measures. That interest is declared in the Register of Members' Interests.
The national insurance surcharge will hit business hard. As many of my hon. Friends have pointed out, it will be paid by all businesses, regardless of whether they make a profit. Reduced rates on company taxation are somewhat hypothetical if, just to stay in business, the amount of money going out of a business has to go up. A figure of 1 per cent. may not sound much to Labour Members, but such an increase can sometimes determine whether a company stays in business. The Government have hit business hard through that increase.
The national insurance increase imposed on many of those in the public sector is also significant. A nurse consultant on £34,000 a year will be £24 a month
worse off; a police inspector on £37,000 a year will be £27 a month worse off; and an employee on £20,000 a year will be £13 a month worse off.
Mr. Bryant: We have just heard all those figures.
Mr. Syms: If the hon. Gentleman had listened in the first place, perhaps he would appreciate that hard-working people who are trying to deliver better public services are being taxed higher through this increase. Indeed, as my hon. Friend the Member for Maldon and East Chelmsford (Mr. Whittingdale) said, this Government have taken £29 billion off business. In terms of the economic outlook, they inherited a golden legacy from the previous Government, but if they continue to load taxation on business, this country's competitive position will prove much more difficult to sustain in the long term. When a downturn does occur—I do not believe that this Government have abolished the business cycle—the cost of keeping people in employment will prove substantially higher than is necessary, leading to high unemployment.
This Government seem to be in favour not only of higher taxes, but of more red tape. New regulations are introduced every 26 minutes of the working day. UK companies are spending more time filling in forms, and less time managing their business. Even before the Budget, £6 billion-worth of extra taxation was in the pipeline, along with extra regulations costing some £5 billion. Meanwhile our competitive position is declining. In 1997, Britain was ninth on the world competitiveness scoreboard, but this year we have fallen to nineteenth. Britain's productivity growth has slowed under Labour. Under the Conservatives, average growth in the UK was faster than in the US, but under Labour the reverse is true.
In the first four years of the Labour Government, the UK's economy grew at a rate slower than America's, and slower than during the last four years of the previous Conservative Government. Britain's share of world exports has fallen from 5.1 per cent. in 1997 to 4.5 per cent. in 2000. The Chancellor had little to say in his Budget speech about the appalling, and apparently growing, balance of payments deficit.
Research carried out by the Library also shows that 4,642 new regulations were introduced in 2001—the highest figure on record. Many of those regulations have to be implemented by the owners of small business, who spend more time form filling and less time managing their businesses. Despite the Government's protestations about what they are doing for manufacturing, 400,000 manufacturing jobs have been lost since 1997. The economy has kept growing, but that has concealed the fact that so many businesses and sectors of the economy have suffered.
The Conservative party believes in the ideals of the NHS, but I am afraid that we are moving further away from them as time goes by. Last year, 250,000 people without insurance paid for their own operations. I suspect that all hon. Members have seen people in their surgeries who have been faced with either waiting lists or mortgaging their homes to pay for an operation that may well ensure that they live longer. None of us who believes in a service free at the point of delivery can be complacent about that.
All that my hon. Friends and I are saying is that we ought to be a little bit open-minded about how we deliver health services. I believe that health care will be delivered
principally through the tax system in future, but that does not mean that we cannot consider the methods adopted in other countries—in particular, those on the continent—to discover whether there are other funding alternatives that will increase the pot so that we can deliver what we want: decent health care for our citizens.The fact of the matter is that the national health service employs more than 1 million people. It is not an easy service to manage, so we should consider ways in which to ensure that the service is more creative in future, and many of those in the NHS to whom I have talked appreciate that. One of the biggest frustrations of working in the public sector is that those involved want to deliver a better service, but they sometimes feel that the system conspires against them. If we could unlock the potential of NHS staff, I am sure that we could deliver better health care outcomes for our citizens.
North sea oil has already been mentioned. The North sea oilfield is now moving towards maturity, so it is important to ensure that we get the most out of it by encouraging firms to maintain investment. It was widely thought that a stable tax regime had been agreed, so that people knew where they were and could invest in the future. But the Government are desperate to raise some money, so they have hit what they consider to be the soft option. Instead of one possibility of raising money from motorists, they have decided to go for the oil companies. As the hon. Member for West Aberdeenshire and Kincardine (Sir Robert Smith) said, the oil companies employ many people in his constituency and are going through a rough time at the moment, but they will go through a rougher time because of the decisions taken in relation to the North sea industry.
The restrictions on film industry tax relief were not mentioned in the Budget statement. The tax reliefs introduced under the last Conservative Government were greatly enhanced in the 1997 Budget and thereafter. Indeed, the Government improved the tax position of many of those in the film industry, but they have found that the policy has been so popular that it is costing them much more than they expected, mainly because television companies have taken advantage of the film tax regime, so the Government have cracked down.
As has been said, the Chancellor spent a lot of time mentioning the Budget's impact on microbreweries, but he did not mention the crackdown on the film industry tax regime. Although that change will raise only £15 million in the current year, it will raise £225 million and £295 million in the two years thereafter. Those large sums did not so much as rate a mention in the Chancellor's speech.
I would give the Chancellor more credit for providing tax relief for the climate change levy if he had not introduced it in the first place, because it did great damage to much of our heavy industry. It is one tax that our European competitors do not impose, and I am afraid that it impacts heavily on the United Kingdom and has a regressive effect on our competitiveness.
There is no doubt that the Budget will have an impact on local authorities. Poole borough council—
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I am afraid that the hon. Gentleman has had his time.
6.4 pm
Huw Irranca-Davies (Ogmore): I venture to suspect that my hon. Friend the Member for Bexleyheath and Crayford (Mr. Beard) has been dropped from Digby Jones's Christmas card list, as I may well be at the end of my speech. We shall see.
As has been said, this is without doubt a defining moment, and there is now clear water between us and the Opposition. I am not sure whether it is blue or red water, but the simple fact is that there is now an ocean between us in our approach to remedying the ills of the NHS. Despite what Opposition Members have said, I am confident that, coupled with the record funding and the reforms that have already been put in place in the NHS, we will see the benefits. I suspect that Opposition Members will still be sitting in the same place in a few years' time and that they will have to make a good lunch of the words that they have just spoken.
People in any constituency often see headlines about job losses and company closures, but behind those headlines, we find the headline figures. In my constituency, there has been a 47 per cent. drop in unemployment since 1997. The decrease in long-term youth unemployment is even more significant at 62 per cent. Those figures are not to be sniffed at. We are talking about youngsters getting jobs through the new deal and having realistic expectations of long-term careers. That is to be welcomed. New business set-up and survival rates are improving. That stands in stark contrast to what we saw before 1997: boom-and-bust economics and a lack of the stability that employers want.
During my daily reading, I looked at the Financial Times the day after the Budget, just as many people in Ogmore do when they sit down to their breakfasts. I took exception to the fact that its editorial referred to
- "the idle poor who take their pleasure in bingo halls and clubs."
The Financial Times also referred to the welcome news of the research and development initiative. Ian McCafferty, the CBI's chief economic adviser, and Rob Margetts, the former chairman of the Royal Academy of Engineering, welcomed the research and development tax credit. Peter Cotgreave of Save British Science said:
- "UK firms invest less than their competitors in research."
We need to encourage more investment and innovation because that is the way to turn around areas such as my constituency. In contrast to what the Opposition parties are saying, Stephen Plender said:
- "Competition policy has been an unexpected strength of new Labour."
I welcome the measures for communities such as mine. The community investment tax credit is specifically geared towards disadvantaged areas. The disadvantaged areas stamp duty relief will provide us with more investment in premises. I also welcome the streamlining of the VAT regime for small firms.
Ogmore is almost a constituency of two halves. The M4 corridor has rightly received massive inward investment, but other areas have been left behind because the Conservative turned their back on them when they were in power. Labour Members welcome the investment in research and development and in deprived communities, and I hope that Opposition Members will welcome them as well.
Investors in People is to be encouraged for small firms. Small firms are important in places such as Ogmore because we have to turn back the culture that the Tories instilled in those communities. The Tories said that they were not worth it and that they could not live up to the expectations of other areas. We are clearly saying that we have confidence in people, so they will be able to turn their communities around, and we have put in place the economic measures that will allow them to do so. Small companies corporation tax has been reduced by 1 per cent. to 19 per cent. Those who quibble over 1 per cent. should remember that the starting rate has been cut from 10 per cent. to zero—not halved or reduced to 2 or 3 per cent., but cut all the way down to zero.
All that has been done on the basis of a Labour Government who have developed economic stability. No wonder people have totally lost faith in the Conservatives' ability to deliver on the economy—they have seen the Labour party do it 10 times or 100 times better. We have low inflation, stable interest rates and continuing economic growth. The distant nightmares of Tory boom and bust, of unemployment being a price worth paying in my communities, and of "on your bike" policies that forced people to travel away and turn their backs on where they were brought up are—please—long gone.
I mentioned that we have reached a pivotal point, and it is a seminal point not only for politics, but for the society in which we live and for business. Now comes the question that will get me struck off the CBI's Christmas card list. Would it not be nice to read in the headlines of the Financial Times, The Guardian and The Observer that the CBI had said, "We take responsibility for our stake in society as well. We are willing to put the money in as well, because the health of this nation goes hand in hand with the wealth of the nation."? The enterprise economy has nothing to do with cutting people off in the business jungle and saying, "Let them get on with it. It's a hard game out there. Let them do their own thing." Businesses have a stake in civic society, just as Labour Members of Parliament, the people back in Ogmore, and every citizen of this country do. Let every person play their part.
As for the 1 per cent., it will not break the back of every company in Britain. Let me tell hon. Members what it will do: it will help the Labour Government to turn the national health service around, invest properly in public services and build the sort of future for our communities that the Conservatives were never interested in.
| Next Section
| Index | Home Page |