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Chris Grayling: The hon. Gentleman is making an extremely important speech. Some of his points about business regulation are very much on the mark. Is he aware that when the Queen's Speech refers to increasing opportunity in education for those aged 16 to 19, in reality that means substantial fee increases for those over the age of 19 taking level 3 vocational qualifications?

Mr. Purchase: I am afraid that the discrimination between the university sector and the further education sector has been with us for as long as I can recall. I remember the payments that were required when I went into further education. My employer met that cost. I believe that, with increasing levels of employment, employers will take more of the burden of fees where vocational opportunities are taken up. I hope that where employers have a commitment to the education and training of their employees, they will take on that entire
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burden. I understand the point that the hon. Gentleman makes. It is one that I hope that my Front-Bench team will take on board.

We are extending financial support for 16 to 19-year-olds. In my constituency that makes a great deal of sense. We were one of the pilot areas, and there is no doubt that the scheme has improved the staying-on rate, which was frankly pretty abysmal in my constituency and in the west midlands. Kids were leaving school at 16 because that was the thing that they did. We have seen some changes. In the 1980s and 1990s employment opportunities were simply not there so it seemed to make sense to stay on at school. We have now consolidated that and there is no doubt that financial support—it went as high as £40 a week for full attendance and good results—has played an important role.

I approve of the creation of the serious organised crime agency. It is right to recognise the importance of tackling serious crime, especially money laundering, which is at the root of the drugs trade and prostitution—things that worry me in my constituency. The police are working hard on it, but the problem goes underground and becomes taken as normal. I am afraid that the drugs trade, money laundering and prostitution are serious and growing problems. So I welcome the introduction of the serious organised crime agency, but I have to say that it sits pretty badly with the idea of introducing American money into casinos.

In the 1960s, Harold Wilson refused George Raft entry into the country because of his connection with gambling and organised crime. George Raft was a good square tango dancer, by the way, so we were disappointed not to see his talents, but we were not disappointed that the Government had the common sense to say, "To these shores and no further." Even only a dozen of those casinos will present opportunities for laundering the money made from drugs and prostitution. We really do not want that, so I urge caution on my Front-Bench colleagues. Of course, measures on drug abuse featured in the Queen's Speech.

I echo the words of my hon. Friend the Member for Knowsley, North and Sefton, East (Mr. Howarth) on the new offence of corporate manslaughter. I hope it does not take us as long to introduce those measures as it did to deal with fox hunting. I am sure that we will have learned some serious lessons from the way in which that debate was conducted.

I have a few words to say about Europe. Yes, we are to have a referendum, but whatever else is true, the events of the past three or four years in the middle east, especially in Iraq, have shown us—have they not?—that the power of the Americans is increasing and is likely to continue to do so unless there is a countervailing balancing force. That cannot be achieved anywhere on the planet without a strong European Union committed to peace and prosperity, and prepared to ensure that the work of the United Nations is carried out effectively, efficiently and with economy, supported across the world.

The UN may not be a perfect institution and it may need considerable improvement, but for the time being it is the best we have and we must, in everyone's interests, make it work. We shall best play our part not as a lone voice in the Security Council, but by combining
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with our European partners in a proper alliance. Initially, I voted against joining the then Common Market, because I honestly felt that the British Commonwealth offered a way forward in terms of trade, culture, understanding and international relations and that it was a force for real good; but when we rejected that, it seemed to me that the Commonwealth would make its own way, as it has done extremely successfully in many spheres.

We are part of Europe, but whenever a treaty comes along, we say how terrible it is and how awful it will be and that we shall never be free again, yet in the end we sign. The current treaty will be no different. We may reject it in a referendum but, ultimately, we shall sign up to the European constitutional treaty. It will happen and we will be part of it, and better sooner than later. We should get on with that as quickly as possible.

Finally, I want to speak about a constituency problem that many Members may share. I can see little reference in the Queen's Speech to local government, yet one of the major problems I hear about in my surgeries is the lack of new council housing. We have a shortage of council housing under a Labour Government. If more council houses were built in Wolverhampton, I could fill any number of them. I do not want to prejudice anything else that is being done, but we need a new approach and money for new building. Selling council houses does not particularly worry me, provided that we build more. If we adopt a policy—in the south, the midlands and the north—of ensuring a good supply of council housing, it will solve many, many of our problems.

Overall, I commend the Queen's Speech. There is much that is good. It is an election manifesto writ small—for the moment—but I am quite sure that the twin themes will emerge as our major campaigning tools and I am confident that much of what we have heard today will ultimately make its way into legislation.

4.54 pm

Sir Michael Spicer (West Worcestershire) (Con): It is a great pleasure to follow the hon. Member for Wolverhampton, North-East (Mr. Purchase), particularly as he stays in my constituency from time to time, and he is very welcome when he does. I did not agree with all that he said, but I did agree with him when he talked about the difficulties faced by small businesses in his constituency, when they find that unnecessarily burdensome regulations are imposed on them. However, much of that comes from the European Union, which he seemed to extol the virtues of in the latter part of his speech.

This is a phoney Queen's Speech because its programme will be aborted by a general election, as the hon. Member for Wolverhampton, North-East has just implied. In fact, it is more a manifesto than a plan for legislation. The theme is clear: if it moves, ban it; if it does not, tax it. According to the Queen's Speech, there is a new menu for banning. We will apparently ban certain lottery causes, as well as goods and services that do not conform to certain religious beliefs. We will promote rural heritage, but we will ban the thing that symbolises rural heritage: hunting. I do not know why
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the Queen's Speech does not mention of banning the smoking of cigarettes in public places because we will apparently go ahead with that as well.

Certainly, taxation and private and public borrowing will be major issues at the next general election. The Queen's Speech talks of promoting economic stability, but not for a very long time has credit been so bloated. Various economists, such as Professor Congdon, have pointed out for some time the threat that that poses to economic stability, particularly given the prospect of inflation. They are saying that we cannot live for ever on borrowed money. That is as true of our economy as, for example, the American economy, where, as the House will know, the currency is now suffering under enormous pressure.

In our economy, the effect on house prices of heavy borrowing has been sharp and immediate, not just because of recent increases in interest rates, but because the speculative bubble, blown up by credit, has now been pricked. A downward spiral has begun, as people hold back from buying property and sellers begin to feel the pinch of a much higher debt-to-asset ratio, and they in turn pull in their horns. Given the nature of the British housing market, the recessionary process can be very rapid, and the shock is greater because people have become unused to recessions in this country.

The expansion of the British economy has been almost continuous for a quarter of a century. Its roots lie in the Thatcher reforms of the 1980s, particularly in the stabilisation of industrial relations; in the taming of trade union power; in the insulation of Britain from the worst excesses of EU regulations, which were referred to in the previous speech; and in the limits imposed on excessive taxation. All that added up to a British economic miracle, which was certainly the envy of the rest of Europe, if not the world.

The attempt by the Labour Government to keep in place key Conservative policies, which they defined as new Labour, was, in retrospect, bound to fail, although the pretence was kept up for most of the last Parliament. Tax policy produced the early cracks in the foundations. The £5 billion tax on pensions was introduced as early as July 1997. That was quickly followed by new health insurances taxes and swingeing increases in stamp duty. By early 1998, a further 13 taxes had been introduced, including a cut in married couple's allowance. A steep rise in national insurance contributions came in early 1999, as did the total abolition of married couple's allowance and mortgage tax relief, together with a further 15 rises in taxes. The big increases in national insurance contributions were made in 2002, and were followed by 10 increases in taxes in 2003–04.

The total effect has been to increase the net tax and social security burden as a percentage of gross domestic product from 34.8 per cent. in 1996 to an estimated 36.5 per cent. in 2004–05, all of which has happened during a period of rapidly rising GDP. The effect on individuals, especially those in low income tax brackets, has been dramatic. The number of people who pay taxes has increased by 4.2 million—a dramatic figure—between 1996 and 2004. The number of taxpayers has risen from 25.7 million to an estimated 29.9 million this year. When taxes go up, the evidence from around the world is that the poorest off are the hardest hit.
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