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Mr. Bercow: The hon. Gentleman really ought to do better than stick to a prepared script that ignores what I have said. I do not know about his educational attainments and other attributes, but let me explain my position in easily intelligible terms. If a tax rise has not yet taken effect, it should not be too difficult for him to grasp that the damaging employment consequence that I predict has not yet taken effect. Ordinarily, for his edification, the impact follows the policy; the policy will have an impact in due course. I am a charitable fellow, so if he is still in doubt and requires further illumination, I will happily go to any recess in the House later and give him a tutorial on that elementary point.
The hon. Gentleman implied that employers' national insurance is a tax on jobs and that increasing it will damage jobs. Does he think that employers' national insurance contributions are at an optimal rate, or should they be cut?
Mr. Bercow: That is a useful intervention. We shall set out our position on taxation levels with clarity and specificity well in advance of the next general election. The hon. Gentleman, who is a reasonable fellow, will accept the proposition that for a party which aspires to governmentI cannot credibly accuse his party of that
Andrew Selous (South-West Bedfordshire): Does my hon. Friend agree that the tax increase is particularly unwelcome for the plastics industry? I recently visited a plastics manufacturer in the automated components industry in my constituency. It faces the prospect of price reductions of 7 to 15 per cent. being forced on it by its customers. It is desperately trying to pare costs and is having some success, but is nevertheless confronted with a bill of an additional £70,000 to £80,000. It told me that the change is particularly unwelcome because it pays national insurance whether or not it is making a profit; I do not believe that the Government have realised that.
Mr. Bercow: My hon. Friend is correct; the cost is incurred, regardless of whether a profit is being made. The Government's message to companies in my hon. Friend's constituency and elsewhere can be succinctly encapsulated: "Thank you for trying to bear up under competitive pressures. Here's our solutionplease pay another tax so that it is more, rather than less, expensive, for you to employ people." The National Association of Pensions Funds has warned that more companies are likely to axe final salary pension schemes to recoup the cost of the 1 per cent. rise in employers' national insurance bills. It said that the change, which will cost companies about £4,000 million a year, would drive businesses to seek out ways of cutting costs. That is the considered verdict of people at the grass roots, not the self-appointed judges on the Government Benches.
John Mann: The hon. Gentleman has quoted various business spokesmen to support his case. The chairman of the Bassetlaw chamber of commerce, a small business man in a heavy manufacturing area, describes the Budget as fair. Why?
Mr. Bercow: I do not know. It must be something in the water in Bassetlaw. The hon. Gentleman and I served together on Lambeth borough council from 1986 to 1990. I thought then that the hon. Gentleman was a peculiar fellow, and I have never had any reason since to revise my opinion. Quite what caused the people of Bassetlaw to vest their faith and confidence in the hon. Gentleman I do not know, but I cannot be held responsible for the results.
Tax risesI know that Labour Members do not want to hear about the tax rises, but they will keep hearing about themmean that a house officer in the national health service will be £276 a year worse off. A nurse consultant will be £312 a year worse off. A specialist registrar will be £408 a year worse off. A senior house officer will be £516 a year worse off. A consultant will be £672 a year worse off. The Government are punishing the very people whom they disingenuously claim to support. The Chancellor stands exposed. Far from being a generous distributor of largesse, he is now seen in his true light as the nation's most outrageous pickpocket.
Just as older women have been singled out for discriminatory treatment, so too have those on modest earnings. A self-employed person on £20,000 a year, even after allowing for the offsetting effects of tax deductibility, can expect to pay an extra £143 a year.
Perhaps the most shaming fact of all is that those who possess the least must cough up the most. Over the past five years, tax on the poorest quintile of households rose from 38 per cent. to 41 per cent., as against a rise of only 1 per cent. for the highest quintile. The net result is that a 2 per cent. gap favouring the richest has risen to 4 per cent. since the party of Bernie Ecclestone and Lakshmi Mittal took office. [Hon. Members: "And Richard Desmond."] Indeed, and Richard Desmond, as my hon. Friends helpfully advise me from their sedentary positions.
What about the public sector? The cost of the employer increase to the police service, with just under 125,000 people, will be an extra £32 million a year. The cost to the teaching profession, with more than 361,000 staff, will be an extra £79 million a year. The cost to local government
Mr. Bercow: In a moment. The hon. Gentleman is spectacularly misnamed, in view of his speedy commitment to the abolition of our national currency and its replacement with another, but he is a jovial character, and I can resist him no longer.
Mr. Pound: I am reluctant to interrupt the hon. Gentleman's flow, and I can understand why, on public service broadcasting in America, he is already considered something of a cult. [Interruption.] Perhaps that lost something in translation.
May I ask the hon. Gentleman a couple of questions? Has there ever been a time in the proud and glorious mercantile history of this nation when any honest cordwainer or cooper has said, "Whacko! More taxes. I'm happy with that."? Has there ever been an occasion when people have not objected to taxation? Has there ever been a time when manufacturers in this country have not recognised that the health of the nation is essential to the productivity of the nation?
The cost to local government, which has been lumbered with more responsibilities than ever before and forced by Government to set the highest level of council tax since its inception, will be an extra £300 million a year. Perhaps the most depressing irony of all, in the context of a Bill which ostensibly is designed to bolster our national health service, is that the NHS itself will face a bill of an extra £200 million a year as a result of the increase in employers' national insurance contributions.
Look at the care home sector. [Interruption.] I know that the hon. Member for Rhondda (Mr. Bryant), who is chuntering to himselfa very worrying sign at this early stage in his parliamentary careerdoes not want to discuss this important matter, but I say to the hon. Gentleman and to the House that since 199697 almost 50,000 care home beds have been lost, creating personal
Yet the Chief Secretary claims that the Bill will bring about the improvements in health care that we all want to see. Of course, as my right hon. and hon. Friends are painfully aware, every year Ministers promise that reform and extra spending will go hand in hand, but every year that promise is broken. We see no reform; we see no change; we no improvement. We see only the higher taxes which are the instinctive response and the favourite sport of Labour Governments, new as well as old. Without change