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18 Nov 2002 : Column 404continued
Mr. Howard: The hon. Gentleman should take heed before he rises to his feet. Those are not my words: they are the words of the director general of the Confederation of British Industry. That organisation has estimated that the combined cost of the burdens on business over the past five yearstaxes and red tapecould be as high as #15 billion a year.
Rob Marris: The right hon. and learned Gentleman talks about rising taxes. Does he think that that is a more undesirable way to proceed than doubling the national debt, which is what happened when he was in government?
Mr. Howard: I fear that the people of this country are much more interested in what is happening today and in the damage that the Government are doing to our economy than in the hon. Gentleman's mistaken and misleading history lesson.
The Secretary of State for Trade and Industry has gone one better. I am sorry not to see in her place, although she was here earlier. Not content with telling Britain's business leaders that they are wrong, she has informed them that they are incompetent too. She said:
Mr. Howard: The question that the hon. Gentleman poses completely misses the point. [Laughter.] I shall answer his question in a moment. It is the cumulative consequence of 4,642 regulations that is so damaging. He asks for an example, and I shall give him one. I suggest that he look at new part L building regulations, statutory instrument 2002, No. 440. He may not know what that does; it forces building firms and traders to pay new charges to be allowed to install windows, conservatories, roof lights, roof windows and doors. If the installer is not registered, building regulation consent and a fee to the council is required, which costs a minimum of #150 for new windows. I suggest that the hon. Gentleman ask small builders in his constituency what they think of that regulation.
No one is denying that some of the decisions that the Government have taken on the economynotably their reforms to the Bank of Englandwere the right ones. I have fully acknowledged that on a number of occasions. The Government inherited a golden legacy[Interruption.] Labour Members who doubt that should wait for just a moment. Thankfully, unemployment, inflation and mortgage rates are still low. But, now, clouds of uncertainty are gathering and it is when times are less good that the foundations of the economy will be tested.
The Government do not want to face that reality. After more than five years in office, business is getting fed up with Labour, fed up with Labour's red tape and regulations, fed up with Labour's new business taxes and fed up with Labour's inability to improve public services such as health, transport and education that are vital to a first world economy.
Of course it was not just on business that the Chancellor made promises against which he will be judged. Five years ago, he criticised our low level of national saving and announced new measures that he said would
Far from alleviating this problem and encouraging people to save, the Chancellor has done precisely the opposite. It was the Chancellor who brought in the #5 billion a year pensions tax. So far, that has taken #25 billion from our pension funds. Some #400 is removed in tax every year from every single contributing member of a pension scheme. Another #130 is taken every year through the miserly uprating of the contracted-out rebates. When the Chancellor introduced the pensions tax in July 1997, he tried to justify it by saying that pension funds were in surplus and companies were enjoying pension holidays. In June this year, the Prime Minister defended the policy by claiming that the stock market was Xup massively" on where it was five years ago. Alas, the pension funds are no longer in surplus and, unlike the American stock market, our stock market value is now lower than when the Government came to office, yet the tax continues to drain money from our pensions at the rate of #5 billion a year.
Nor have the Chancellor's other measures encouraged savings. The replacement of personal equity plans and tax-exempt special savings accounts with individual savings accounts was complicated and unnecessary. The last pensions Green Paper said that stakeholder pensions were likely to be taken up by Xmany people" but they have been such a dreadful flop. Help the Aged has said that pensions have faced
The Chancellor also promised a transparent system. Indeed, that was the first of his five so-called Xprinciples of fiscal management". In December 1998, Parliament approved his code for fiscal stability, which said that there would be
Those deals do not feature in the accounts at all, not even as a note in the Red Book. They would send the Chancellor's debt ratio closer to 40 per cent. than the 30 per cent. of which he frequently boasts. Indeed, if we took the PFI liabilities into account, it would be well above 40 per cent.so much for transparency in the publication of the public accounts.
Next week, the Chancellor will deliver his pre-Budget report. We look forward to hearing what he has to say about his growth forecasts and revenue forecasts but most of all we look forward to how he responds to the concerns of taxpayers and of business. Will he start to mitigate their burdens? Will he start to address the economic imbalances that his policies have exacerbated? Will he change direction on the public services or will he continue his policy of spending without reform? Will spending continue to grow faster than the economy year after year? Will taxes continue to go up and up? Will he carry on taxing and spending and failing?
Those are the questions that the Chancellor must start to answer: questions about the long-term effects of his policies, about the sustainability of his approach to taxes and spending, about the way in which we are sleepwalking to decline. After five and a half years, it is time to start judging the Chancellor and his colleagues against the promises they made. That is the basis on which we and the nation will hold them to account.