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14 Apr 2003 : Column 676—continued

7.12 pm

Mr. Bill Etherington (Sunderland, North): Because of the two important and encouraging statements and the ten-minute Bill that preceded this debate, according to my calculations only 11 Labour Members will be able to speak. I am extremely grateful for my chance to do so.

I congratulate the Chancellor. As in earlier years, he has produced an excellent Budget. Year after year we have heard the same complaints from businesses, well expounded by their handmaidens on the Opposition Front Bench. Year after year they have been wrong, and I am sure that they will be wrong this time.

I am pleased that there has been no reduction in public expenditure. Again, time after time the Opposition have criticised all our services and the way in which things are run; but whenever efforts are made to improve the situation, the same people object to the provision of money for the purpose. I am sure that the public are beginning to realise that, because they are becoming extremely stale.

In the early years of the Chancellor's reign, he brought about a significant reduction in the national debt, which allowed more public expenditure without the need for increased taxes. Probably his greatest asset is his talent for obtaining revenue. If I needed to raise money quickly, as I hope I never shall, the first person I would go to would be the Chancellor. He has performed miraculously in obtaining money and making it available for investment in infrastructure, and in making a better life for people.

Many Opposition Members are grinning. The public will tell them that the last six years have been the best in the past 25 for the vast majority of people: there is no denying that.

I hope no one will assume that because I am sometimes a little critical of what business organisations say, I am against business. I am not. I understand enough about economics to realise that the only way in which wealth can be produced is through various types of business—large, medium-sized and small. When I talk to those running small and, often, larger businesses, they are not as critical of the Chancellor or the Government as Opposition Members. I say that in all sincerity, and I meet quite a few businessmen.

What does concern me is the possibility that my right hon. Friend is rapidly running out of options for what are sometimes called stealth taxes. I think that stealth taxes have been marvellous. They are one of the best things that have ever happened in this country, and they have led to much better lives for the citizens whom we

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are supposed to represent. Let me point out to the Opposition that we are supposed to represent everyone, not just businesses.

Although it emanated from my own party, one of the most rubbishy sayings I ever heard was "If it is good for business, it must be good for Britain". That is not necessarily true. It is true to a large extent, but sometimes things that are good for business are bad for the rest of society. It must never be forgotten that businesses are only a small part of society, albeit an important part. I make that point because I do not want to be accused of being anti-business just because I have spoken the truth.

If we want to go on improving life in this country, we must eventually revisit the whole issue of personal taxation. My view, and that of the Government, is that the fairest form of taxation always has been, and always will be, progressive personal taxation. Those who make the most from society must be required to put the most back into it. It is an old-fashioned concept: it is called socialism. I believe in it, I do not believe that it is out of date, and I believe that its time will come again.

In the future, my party may well have to revisit that issue. We shall have to explain to the public that whatever they want must be paid for—and, in the long term, the only way of paying for a decent infrastructure and decent services is obtaining the necessary revenue through tax. We do not need to be John Maynard Keynes to realise that—a fairly elementary knowledge of economics makes it obvious—yet time after time there is opposition to any increase in public expenditure from the same people who demand better services.

David Burnside (South Antrim): Will the hon. Gentleman give way?

Mr. Etherington: I am sorry, but I am not giving way to anyone. I mean no disrespect. I have only eight minutes in which to speak.

Although the NHS, for instance, has received a tremendous amount of extra resources, it is felt that nothing is being received as a result. France, I believe, provides a slightly better health service than ours with approximately half the number of staff serving a similar population. It is not a simple matter: the United States, which spends almost twice as much GDP as us on health, does not provide a better service.

Earlier, an Opposition Member mentioned pensions. Some Opposition Members should be ashamed. The architecture of the current problems in private pensions was Conservative party legislation that tried to denude good occupational pension schemes and put them into the insurance sector. We have never recovered from that. As a consequence, various companies decided to take contributions holidays. When I hear of so-called raids on pension funds, I wonder how much has been lost from those funds by employers and companies giving themselves such holidays. Yes, there is a shortfall, but it would have been a lot less if so much had not been taken from pension schemes—immorally in my view, although, unfortunately, legally.

I happened to be reading The Daily Telegraph on the way here today. I am sure that the Opposition appreciate that it is not a paper that generally goes out

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of its way to praise Labour—indeed, I think no one would deny that—and it was interesting to find on page 33, along with the usual bellyaching and moaning from business about the Budget, a little article tucked away with the headline "British venture capital tops EU league". It reports

So I do not know why we need all the doom and gloom. It continues:

Nobody has mentioned that tonight. It goes on:

From what we have heard from Conservative Members tonight, it would seem as if it were almost impossible to set up a company in this country. It is about time that we heard rather more forthrightness and honesty from the Conservative Benches.

7.20 pm

Mrs. Gillian Shephard (South-West Norfolk): The hon. Member for Sunderland, North (Mr. Etherington) could never be accused of not being straightforward. It is a delight to follow him and his straightforward expression of the ideas of old Labour. I would also like to congratulate my hon. Friend the Member for South Suffolk (Mr. Yeo), who opened the debate for the Conservatives, on his successful exposure of this hope-for-the-best Budget, not to mention the Panglossian statements of the Secretary of State for Trade and Industry.

I wish to devote my remarks to one particular, and particularly disappointing, aspect of the Budget. If the Chancellor had chosen, as he could have done, to make a convincing reduction in duty on biofuels—instead of re-announcing his pre-Budget report figure of 20p per litre as if it were new—he could have moved closer to his own Government's environmental targets. He could have tackled the issue of fuel security, which he has himself described as of increasing concern. He could have given a much-needed boost to the decline in manufacturing, about which we have heard much from the Secretary of State this afternoon. Most importantly of all for my constituents, he could have given real hope to the future of the agriculture sector, which has endured a 50 per cent. reduction in its incomes over the past year alone under the present Government.

Ministers will know from early-day motions, from speeches in the House, from meetings with hon. Members and from the fact that the Select Committee on the Environment, Food and Rural Affairs is to examine the future of biofuels, about the strength of the all-party support for a further reduction in biofuel duty. Indeed, I see some supporters on the Government Benches. Sadly, it is not clear that any one Department is crusading for that cause—certainly not the Treasury. That is strange, given the obvious contribution that a reduction in biofuel duty would make to the Government's oft-repeated commitment to the reduction of greenhouse gas emissions and carbon dioxide emissions. A reduction would also contribute to

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meeting the target for renewables by 2020. Given that road fuel emissions constitute 25 per cent. of the total requirement, I wonder how the Government think that they will realise their objectives without including biofuel measures. I do not believe that they can.

The rest of us are aware of the many other advantages of biofuels, even if the Treasury is not. The public want access to environmentally friendly fuels without the expense of having to switch to hybrid vehicles or those that have to be adapted. Biofuel duty reduction is supported not only by Members of all parties, but by organisations as diverse as Friends of the Earth, the National Farmers Union, the Country Land and Business Association and several major industries.

Independent research by Sheffield Hallam university demonstrated that CO2 emission reductions from conventionally produced bioethanol would be more than 60 per cent., whereas British Sugar believes that, with the efficient generators in its factories, the figure could be increased to more than 70 per cent. Whatever the precise level of emission reduction, it is clear that a 20p duty reduction is not enough to encourage investment in biofuel production without the security of knowing that there will be a sustainable market for bioethanol. Without that, there will be no investment by British Sugar or any other manufacturer to produce the fuel. Meanwhile, other countries have got the message. Brazil has a minimum mandatory 25 per cent. bioethanol blend in all gasoline fuels and in the US 12 per cent. of cars are powered by biofuel blends. The Government also have to face the demands of the EU biofuels directives.

Encouragement for greater use of biofuels would help manufacturing, especially in rural areas, about which the Secretary of State seemed so enthusiastic this afternoon. It would help the Government to achieve their environmental targets and would contribute to fuel security, but for rural economies it could make a life-or-death difference. As the Government's policy commission on the future of food and farming states,

What a carbon copy of the examples provided by the Secretary of State this afternoon: the only difference is that this one is real and the Government are doing nothing about it.

The House will need no reminding of the current plight of agriculture. In East Anglia, the staple crop of sugar beet faces becoming, in effect, a non-food crop by 2006. In Norfolk alone, 10,000 jobs depend on sugar beet. If farming is to continue, the Government must provide more adequate encouragement for the alternative use of food crops. It is worth noting that production of sugar beet or cereals for bioethanol would fall completely outside the current common agricultural policy support system. Sugar beet production has an excellent environmental record and the majority of cereal feedstock would be drawn from the current UK surplus. Both crops would be grown extensively, not intensively. British Sugar has said that it would take only 22 months to convert its existing plants to produce

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biofuels from cereal and sugar beet, but it will not contemplate doing so without an assured market. That can only be brought about by a more realistic duty reduction.

The Treasury has to balance its books, as we will be told later, by setting an increased biofuel duty reduction against the benefits to the economy that would result. In this Budget it may have had to do that because of its own forecasting and economic mistakes, but what is being done across government to establish the case? What is DEFRA doing to press the case? How is it that the only research being conducted across government is being undertaken by the East of England Development Agency and how does that vacuum of research, evidence and Government resolve square with the boasts of the Secretary of State earlier?

I submit that if the Government had been serious about meeting their environmental commitments, about fuel security and, above all, about the future of manufacturing, agriculture and the countryside, they would not have left that vital work to a development agency but done it themselves—across Departments and in time for this Budget, not the next. Members of all parties must ensure that next time the Government heed their own words, work toward meeting their commitments and give some assurance about the future to people in agriculture and rural communities, which they sorely need.

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