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Keith Vaz (Leicester, East) (Lab): I will be brief, and raise only a couple of points. First, I disagree profoundly with what was said by the hon. Member for Ashford (Mr. Green)—but I imagine that he had to say such things, as we have had such a wonderful Budget.
I congratulate the Chancellor on yet another superb Budget. When I returned to my constituency last weekend, the reaction of the people of Leicester, East was as positive as it has always been when the Chancellor has managed to tell us how well the economy has been doing over—in this case—the last eight years, while also pointing out that much more needs to be achieved if we are to stay on track. It is that stability, that security, that has meant so much to my constituents. I congratulate the Chancellor on yet again producing a Budget that is good for the people of Britain, but does not do what some have suggested Chancellors should do before an expected general election—although, of course, none of us knows when the election will take place—which is to indulge in a spending spree in an attempt to encourage people to
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support one party or the other. The Chancellor has not done that. He has kept to his script, taking care to be prudent but also to help certain interest groups.
This is very much a Budget for pensioners, and those who were most delighted to receive the Chancellor's news last week were the pensioners in my constituency who live on the outer estates in Leicester, such as Thurnby Lodge and Netherhall. His desire to ensure that pensioners can use public transport in the way that he envisages has delighted my constituents who suffered during the brief period when the Liberals and Conservatives controlled Leicester city council—that brief period when many of the gains made by previous Labour administrations, in the form of implemented policies that benefited pensioners, were taken away.
Also well received was the Chancellor's decision to increase the threshold for inheritance tax. I would have liked it to be raised a little higher. Having just completed, after nearly two years, the administration of my late mother's estate, I know how complicated these form-filling exercises are. But the Chancellor is moving in the right direction. The raising of the threshold will allow people on modest incomes to leave something to their families, having accumulated that money over a lifetime. It is important for them to be able to pass on their legacies. I understand the need for taxation, but it must obviously be graduated.
I welcome a third step—the changes made by the Chancellor to encourage Islamic banking. I know that he will address the Muslim awards dinner tomorrow night, and that he is the first British Chancellor to attend a function of that kind. I welcome his proposal to help those who wish to deposit their money in banks like the Islamic bank, a branch of which opened recently in my constituency. We should be able to provide financial services that meet the needs of different communities, and I thank the Chancellor for what he has done.
Overall, the Chancellor has achieved stability and prosperity, the two hallmarks of this Administration. I remember that when I first entered the House 18 years ago, people questioned whether the Labour party could manage the economy. Such questions are no longer asked, because the economy has been managed and organised so well.
Let me, in passing, pay tribute to the Chief Secretary to the Treasury, my right hon. Friend the Member for Brent, South (Mr. Boateng). We have heard a number of valedictory speeches from Conservative Members. I hope that this will not be mine, because I intend to stand again, and subject to the wishes of the people of Leicester, East, I may be elected. However, my right hon. Friend has announced that he is retiring from domestic politics to take up his post as the new high commissioner in South Africa, and this will be his last speech as the Chief Secretary. I pay tribute to him for all the work that he has done for his constituents in Brent, South who will miss him greatly, especially the Swaminarayan Hindu mission—I know that he was a frequent visitor to it. I pay tribute also to his contribution to the Government in the various posts that he has held. He has been an excellent Minister and is going out at the top. I hope that he will ensure that the furniture is polished in Pretoria because I know that a number of colleagues and I will be visiting him in South
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Africa. He will be a spectacular success there, as he has been in every job that he has had, in government and before. I wish him well.
I have another point about one aspect of the Budget that the Chancellor did not dwell on. I say this is in a friendly way, but if I had not listened carefully to what the Chancellor was saying, I would have missed his comment on the latest assessment of the euro. I want to conclude my comments by mentioning the euro, because it is a vital part of the Budget debate.
When the Government announced after taking office in 1997 that there would be a referendum on the euro, giving the people of this country the chance to take that crucial decision, we decided under our rolling timetable to see whether we had met a number of key economic tests. When the Chancellor announced that three out of the five tests had been met—I think in the Budget before last—he said that there would be a rolling assessment of whether the other tests had been met. He was very brief in his description of that assessment when he spoke last week.
I understand the situation fully, and this is not a criticism of Treasury policy—who would seek to criticise the Treasury when it has produced such a wonderful Budget? However, the fact remains that we have a commitment to examine the issue from Budget to Budget and in the autumn statement. The autumn statement was brief on the matter, and the Budget was even briefer. I accept the Chancellor's judgment, and I do not want to substitute my judgment for that of the person whom I regard as one of the finest Chancellors that we have ever had and certainly the finest in the past 100 years. However, it is important for us to be clear where we stand on the two remaining tests, and there is no harm in telling the House on a regular basis—once a year, because that is how often we have the Budget—what has happened to those tests. I am sorry that we did not have the opportunity of hearing whether we had met the other two tests. It is important that we get a timetable from the Government for the next time that we have those tests.
Mr. Damian Green: Does the hon. Gentleman think that the Chancellor is avoiding telling the House about the results of those two tests because we have passed them or because we have not passed them?
Keith Vaz: The point is that we do not know. I do not think that he is avoiding telling the House, but there is a feeling that we should not dwell on the issue because it is not exciting. However, it is important that we know, and when my right hon. Friend the Chief Secretary winds up—of course, he will be able to speak from the Dispatch Box without being held to account because he is going to South Africa—he will perhaps let us know the Government's view.
I do not mind what that view is as long as we know the timetable: will we have another assessment in the pre-Budget autumn statement, or do we have to wait a further 12 months, until probably the time of the European constitution referendum? We cannot ignore the issue, so let us be clear about it. Believe me, I accept the Chancellor's judgment: whatever he says I will accept absolutely, because I think that he is best placed to tell us whether the tests have been met. All I ask is to be told when the timetable will be set out. I do not think that enough was done last week to tell us about that.
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I understand the problems of the stability and growth pact, and I know that the Chancellor fought a successful battle yesterday in explaining to our European colleagues that more had to be done in that regard, and that he was not satisfied with the new rules that had been decided on by the EU, simply because they would affect our budget and our financial prospects. My right hon. Friend was very cautious in that regard, and I am happy for him to be cautious, but there is a tendency to forget the contribution that the European Union makes to our economy. Eight of our top 10 trading partners are EU members, for example, and the enlargement of the EU on 1 May gave us the largest single market anywhere in the world. Contrary to the view expressed by some Conservative Members—not those who are in the Chamber today—such as the shadow Home Secretary, that the arrival of the eastern Europeans would cause problems for our economy, those countries have benefited our economy. So let us treat Europe in a proper way in our Budget statements, and remind ourselves that it has a contribution to make.
Nothing that I have said today about the euro should detract from the huge success of this Budget and of the Chancellor. We have a stable, prosperous economy and the people of this country will be able to pass their verdict, whenever the election takes place, principally because of our economic success. I thank the Chancellor for what he has done.
5.51 pm
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