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Mr. Dorrell: I am grateful to the hon. Gentleman for giving way to me again. This is a relatively old potato.
Matthew Taylor: The answer to that is that we would treat this income flow in exactly the same way as the Treasury now wisely treats its overall income flows. It plans on the basis of long-term growth in the economy rather than short-term swings up and down. If it undershoots on its growth figure this year, as it is, it will not cut expenditure because it knows that, provided it remains in line with the 2.5 per cent. growth forecast, it will get the revenue back in future years.
That is not a difficult process, and it is one that the Government have already introduced. The real issue is whether we can find ways of reconnecting the electorate to the tax that they pay and the decisions that are taken about it. The population are cynical about politics at the moment, and do not believe that the money they pay goes where the politicians claim it will go. Our proposal represents a way of addressing that problem, and of reconnecting people to the spending decisions being made.
The Conservative Opposition seem to be in the most appalling position at the moment. They are denying the NHS the money that it needs now for doctors and nurses, to back a policy that they have not even invented yet and will not be able to introduce for at least three years. If that policy turns out to be about tearing up the NHS, they will not be able to introduce it in the lifetime of any of those on their Benches, because I do not believe that the public would support the break-up of the NHS. The Conservatives also have to get over the problem that people remember just how badly they treated the NHS when they were in office. People remember the destruction and underfunding of services and the appalling treatment that patients received over many years. If there are problems now, they are in large measure the inheritance of what has gone before.
We know the excuse that the Conservatives make, because we heard it yesterday from the shadow Chief Secretary to the Treasury, the hon. Member for Buckingham (Mr. Bercow). When questioned on an event in 1995not that long agoduring their last term in office, he said:
Mr. Tom Harris (Glasgow, Cathcart): Thank you for calling me to speak in this debate, Madam Deputy Speaker. I had the good fortune to be here yesterday during all seven hours of the debate on the Finance Bill. I would like to take this opportunity to take to task some of my hon. Friends who told me afterwards that it was a
The hon. Member for Aylesbury (Mr. Lidington) has, apparently, been talking to a great many public servants, including nurses and police officers, who are appalled at the content of the Budget and who are absolutely opposed to the proposed increase in national insurance contributions.
I am sure that every hon. Member has shared my experience of being identified by friends and family, immediately after being elected to this place, as a spokesperson for a party or for the Government. After I was elected, I received not only congratulations, but much criticism and many appeals from friends, some of whom work in the health service. They pleaded with me to use my considerable influence with my right hon. Friend the Chancellor to get him to increase taxes or national insurance contributions to bring about a huge investment in the NHS. That view is reflected in opinion polls.
I spoke to nurses in my constituency before and after the Budget. Before the Budget they said, "Please give us the extra money. We don't mind paying extra taxes", and after they Budget they said, "Congratulations. Fantastic. That is such a welcome Budget." I have never experienced such popular support for any Budget.
Mr. Iain Luke (Dundee, East): Does my hon. Friend accept that that view is held not only by workers in the NHS, but by 74 per cent. of the general population? The majority of Conservative voters also believe that this is a good Budget.
Mr. Harris: My hon. Friend is correct. I am somewhat bemused by the hostile reaction of Conservative Members to a proposal that enjoys great support among their dwindling band of supporters.
I should like to refer to the comments of the hon. Member for Truro and St. Austell (Matthew Taylor). There is an old story, which is worth re-telling, about the person who phones the Liberal Democrats' headquarters one night, gets the answer machine and is told to leave a message after the high moral tone.
The Liberal Democrats constantly criticise the Government and the Conservatives for being dishonest. Me thinks that they protest too much. We know their strategy. We have all been involved in by-elections and we have seen the way in which they behave during campaigns. It is purely a device to allow them to take the moral high ground. They take every opportunity to criticise the honesty of the Labour party and the Conservative partyI am not defending the Conservative party: I will leave that to Conservative Members. The hon. Gentleman, by the language he uses, tries to create and encourage the electoral cynicism that he criticises and that is a major problem in society today. I do not accept that he does that with the correct motives.
The Budget, especially the increase in national insurance contributions, was described by many commentators as representing a sea change in the direction that the
Madam Deputy Speaker (Sylvia Heal): Order. I remind the hon. Gentleman that the debate is about national insurance contributions.
Mr. Harris: I appreciate your direction, Madam Deputy Speaker. I pay tribute to my right hon. Friend the Member for Llanelli (Denzil Davies), who managed to bring the euro into the debate. That was very impressive, but I shall try to keep to the subject.
The rise in national insurance contributions is a redistributive measure. There is no doubt about that. Some Labour candidates have to say "redistribution" in a lower voice than they may have used in previous years, but I am delighted to see my hon. Friend the Financial Secretary nodding when I describe the Budget as redistributive. [Interruption.]
The Budget and the national insurance contribution rise have been welcomed by many of my constituents. I am interested and fascinated to learn that the Conservatives will vote against this measure. They have compared it with a 1 per cent. increase in the bottom, middle and higher income tax brackets. Thus, I assume that, instead of supporting the national insurance rise, they will propose a 1 per cent. increase in the bottom, middle and higher rate of income tax. I am sure that at some point in the next three years we will know whether that comes to pass.
If Opposition Members have a copy of the 2001 Labour party manifesto to handI am sure they all doI challenge them to say now where it refers to our keeping national insurance contributions at the existing level. The fact of the matter is that the Government made a commitment to keep the basic and upper rate of income tax at 2001 levels.
Dr. Andrew Murrison (Westbury): Can the hon. Gentleman explain the difference between income tax and a tax on income?
Mr. Harris: The hon. Gentleman is well aware that national insurance contributions are a tax on earnings, not on income. The hon. Member for Truro and St. Austell pointed out that many pensioners would not have to make national insurance contributions if they were earning money from their savings. There is an obvious difference between the two mechanisms, which is one reason why I am delighted that the Government have chosen this one.
Mr. Lidington: Does the hon. Gentleman think, then, that the hon. Member for Streatham (Keith Hill) was straying off message when he said on 4 June 2001
Although yesterday's debate was not about increases in national insurance contributions, it focused on the Budget and national insurance was mentioned. My hon. Friend the Member for Dumbarton (Mr. McFall), the Chairman of the Treasury Select Committee, said that the reason why the increase was on the cards was the NHS. I disagree with one thing he said, however. He said we should be trying to recreate the consensus between the two parties in favour of the NHS. In 1948 there was no consensus in the House for the creation of the NHS, but there are close similarities between the position now and that in 1948.
Like the Attlee Government, the present Government face a Tory party that will always side with the vested interests of the medical profession rather than with patients. They face a party that opposes the public financing of the NHS, and has yet to commit itself publicly to an NHS that is free to all at the point of use. If the hon. Gentleman wishes to commit his party to that aim, I shall be delighted.