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9 Apr 2003 : Column 359—continued
Mr. Tyrie : Could the hon. Gentleman explain why he thinks the Government did not do so?
Alan Simpson: I spent a few months working on the idea and I realise that all Governments have to catch up. Part of the problem has been the crazy flirtation with speculative free market economics, which has got us into precisely the mess that we inherited from the Conservatives when we came to government. Breaking from that set of economic blinkers is the biggest challenge that we now face as a Labour Government.
If we were to do so, all those elements that I just set out are within the Chancellor's reach, but he has to make a choice. It is a political choice. He can side with the savers, but in doing so he must challenge the speculators. He can deliver the schools, hospitals, houses and public transport services that the public want, but he has to do it by ending the private casino that has been allowed to play with your and my deferred wages, which have gone into those pension funds, Mr. Deputy Speaker. He can restore and secure pensions on the basis of an investment programme that he longs for, but only by ending the love affair with the free market economics that have dragged us into the various crises that we now face.
This is not a poor country, but we have become poor in vision and poor in political conviction. That is the challenge that I want the Chancellor to rise to.
6.7 pm
Rev. Martin Smyth (Belfast, South): We have heard an interesting speech from the hon. Member for Nottingham, South (Alan Simpson). It reminded me of a contribution from one of his predecessors. The former leader of the Labour party, Neil Kinnock, asked why more money from our national insurance contributions had not been invested in pensions. Perhaps no money was ever invested because Chancellors were frightened of speculative investment. The reality was that one generation's contributions paid for their fathers' pensions. It was living from hand to mouth.
The hon. Member for Roxburgh and Berwickshire (Sir Archy Kirkwood) made a valuable contribution. Following the hon. Member for Hayes and Harlington (John McDonnell), he said that at least the issues were being examined seriously in this debate. That sentiment was endorsed by the hon. Member for Nottingham, South when he referred to his hon. Friend the Member for Hayes and Harlington.
As I understood it, the Chancellor's contribution to the Iraq war came from the contingency fund. I did a little calculation as the hon. Member for Hayes and Harlington was adding up the sums. He estimated that there was about £3 billion, not for contingency reserves but for regular allocation. That is one of the issues that every Government will have to face as they try to produce a Budget that will deal with day-to-day issues, but will also have something in the contingency reserve.
The contributions to the debate have been useful and stimulate our thinking. Budgets must always be treated with caution, particularly given the modern trend of
spin. They are prone to contamination by gimmickry and re-announcements, as was demonstrated with the introduction again today of child trust funds, which the Government made known some time ago. People out there, however, who might have missed such an announcements will think that the proposal is a new one. It is not fair to create that impression. Against that background, our reaction must be guarded. Budget announcements tend to unravel in the fullness of time as the facts emerge from beneath the spin.The Budget is less dramatic and more anaemic than others from the Chancellor, but some of its contents are certainly welcome. I agree with those who have already welcomed such things as abolishing the penalisation of elderly people through deductions from their pension while they are in hospital. That change is long overdue.
I welcome the extra £100 for the heating allowance for people aged over 80. However, I should have liked a greater increase for all pensioners, although we need further examination of how that could best be achieved. Means-testing may be the best way to target the less well-off, but it might be simpler to make benefits universal as the money can be clawed back in taxes from those who are well off. I am not sure that means-testing is the answer.
Mr. Kelvin Hopkins (Luton, North): I am following the hon. Gentleman's speech with interest. If the minimum income guarantee was the basic state pension, would that not solve the problem that he describes? In that way, we could get rid of means-testing and link pensions with earnings.
Rev. Martin Smyth: That is a worthwhile suggestion. However, it is argued that the minimum income guarantee is the only way to ensure that money goes to the people who really need it. I disagree, but that is the argument that we shall have to face. I hope that Ministers on the Treasury Bench have heard the hon. Gentleman's point.
Many of the usual targets raided by the Chancellor have been frozen or held to rises in inflation. I am especially glad that air passenger duty has been frozen and that fuel duty has been frozen until October. Even so, any increase in the duties is unfavourable to Northern Ireland, which is the only part of the United Kingdom that has a land border. We suffer from the aviation tax, although it will, sooner or later, affect everyone.
I am pleased about the moves to help small businesses by reducing some of the regulation and red tape that burden them. Small businesses are essential in most of our constituencies, and certainly in south Belfast where we do not have many large industries. Local communities will benefit from the changes.
I have long advocated more Government help for small businesses through economic and rating policy. We are suffering a complete revamp of rating in Belfast and throughout Northern Ireland. One nursery found that its rates bill rose from £1,000 to £20,000. That had nothing to do with the value of the property; the valuers had estimated that if it was let as offices, it would raise more money. But what will happen to the young married couples who are paying for child care while they continue their professional careers, as the Government,
in other ways, encourage them to do? Some of those couples will find it extremely difficult to meet the increased nursery charges and that will result in another downturn in our economy.As the hon. Member for Roxburgh and Berwickshire pointed out, the Government will have to look into the whole insurance business, which has gone haywire throughout the kingdom. In Northern Ireland, only four insurance firms provide cover for the construction industry and other industries. Small charities and community and voluntary organisations are under extreme pressure, mainly because insurance companies say that 9/11 made such a difference. Others say that the problem has been caused by the downturn in investment in stocks and shares. Whatever the reason, I suspect that insurance companies are ensuring that they cream off money from people irrespective of the hardship that that causes them in carrying on their business.
On the international stage, I welcome the £240 million in humanitarian aid for Iraq. That announcement is particularly apt on the day when the Iraqi people are joyously reacting on the streets of Baghdad, as the realisation sinks in that the days of Saddam's reign are over. However, although I welcome what the Chancellor has been trying to do and rejoice in some of his successes in international aid, along with those of the Secretary of State for International Development, I would press him to do more on the concept of trade justice. The larger countries are erecting barriers or trying to break them down to suit themselves, but they are hindering the development of small countries and developing countries that cannot meet the tariffs so often imposed on them.
I would argue that trade justice is one of the best ways to help people and to allow them to produce goods in a way that develops their economies, rather than simply protecting our own. I hesitate to say that the United States is a nation that should think a little bit more about lowering some of the tariffs so that the rest of the world can compete. I do not join those who talk about a level playing field, for I have never played on a level playing field, but trade justice would make things a little more equitable and help those emerging countries.
I trust that we shall follow the argument of the hon. Member for Dumbarton (Mr. McFall) on that score, but we got into a little contretemps about productivity. There are those who think that training and education will improve productivity. It ought to—I would encourage it—and I regret the fact that so few people go beyond even NVQ1 and that others stop at NVQ2. Individuals and businesses must be encouraged to increase their knowledge, but having said that, we have to re-establish in our country the concept of a work ethic. It has been put to me, quite seriously, that some firms are moving their production to developing countries not because labour is cheaper there, but because people have jobs and are in work.
As I said jocularly to a colleague near me on the Bench in an aside, the tragedy is that many in our work force today spend more time discussing the results of the Manchester United-Real Madrid match last night—or perhaps for the younger folk, what happened on their latest date—than doing the work for which they are paid. Dare I mention the presence of mobile phones?
People receive phone calls during their working time—there is no difficulty about taking those calls—but they are not paid to do their private business in working time. If we are to increase our productivity, we certainly have to raise the skills of our people, but we also have to remember the work ethic.In 1983, I visited Taiwan and Hong Kong. I came back amazed because I discovered that people in Taiwan had turned round a firm that manufactured televisions in England and made it a productive entity. I discovered that firms in Hong Kong were using computer-aided design technology when our firms were still labouring in the old style. We have to improve all that, and I trust that the Chancellor's decision to try to spread technology through the regions will develop because I speak for a region that has been put down often as the poorest. I have often thought that we would love to be like the south-east region, which gets Government subsidies for research and development, Government buildings and so on. We would much prefer to have such things in our constituencies, rather than handouts and people not getting jobs.
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