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Mrs. Barbara Roche (Hornsey and Wood Green) (Lab): Like my hon. Friend the Member for Leicester, East (Keith Vaz), I shall start by telling my right hon. Friend the Chief Secretary that we wish him well in his new post and that we shall miss him a great deal. Speaking as someone who has known him for more years than I care to remember—we have known each other for a very long time—I know that he will be missed by the Labour party in London. I am grateful for his contribution as a London Member to our capital city.
Looking across the Chamber, I see in his place one of my neighbouring north London MPs, the hon. Member for Chipping Barnet (Sir Sydney Chapman). He and I have had an extremely friendly relationship ever since I became a Member, and I know that he will be greatly missed in this place. All hon. Members will want to wish him the best for the future. As I said, we have had extremely cordial relations as neighbouring MPs.
We also heard today a speech by the right hon. Member for South-West Norfolk (Mrs. Shephard). She has been a mentor and friend to many women who have entered Parliament and she will be missed by Members on both sides of the House.
I want to focus my brief remarks on an important subject in this year's excellent Budget, which has been warmly welcomed by my constituents in Hornsey and Wood Green. I refer to black and ethnic-minority businesses. We all know that small businesses play a vital part in the economic life of our country. Indeed, they are the lifeblood of our economy and should be encouraged. When we look at the figures on business start-ups, we note a tremendous disparity between the richest and poorest areas of the country. One way to remedy the problem is by encouraging many more people in the minority ethnic communities to become entrepreneurs by starting up and running successful businesses.
More than two-thirds of black and minority ethnic communities live in England's 88 most deprived local authority areas. When I was a Cabinet Office Minister,
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I was proud to produce a strategy unit report that examined black and ethnic minority communities and the labour market.
Mr. John Taylor (Solihull) (Con): Perhaps the hon. Lady shares my experience as a junior Minister at the Department of Trade and Industry, when I was probably the only person there who had run a business with fewer than 10 employees. As chairman of an enterprise agency, I learned that the real handicap to starting a new business—I applaud the hon. Lady's emphasis on ethnic minorities—was not the absence of a business plan or enough money, but the problem of finding affordable premises. That turned out to be one of the greatest obstacles that hindered small business start-ups.
Mrs. Roche: The hon. Gentleman, who speaks with a wealth of experience, is right, but the other barriers—from a lack of access to finance to a lack of awareness of programmes—are also major issues.
I welcome the Chancellor's emphasis on the new centres of vocational excellence for entrepreneurship, which will be helpful in developing businesses. Many businesses start, but it is important that they flourish beyond three years. If they do, they can employ other people, creating wealth and opportunity.
I am pleased that the Government are looking at promoting the incorporation of race equality in public procurement within the current legal and policy frameworks. We ought to take a leaf out of the American Government's book and take public procurement and contract compliance very seriously. An emphasis on making public money work in deprived areas will produce a greater reward. We should look at what can be done under current regulations and the European framework to ensure that money is used wisely. If businesses flourish, that assists employment and wealth creation.
I am pleased that the Chancellor has placed great emphasis on Islamic-compliant products, to which my hon. Friend the Member for Leicester, East referred. Alongside the Phoenix fund—created by the Government to provide venture capital for small businesses—I would like to see Islamic-compliant funds. These would be open not only to the Muslim community, but to every business seeking to invest and would be ethically based. They could give an emphasis to mentoring, which fits with established good business practice. If those funds were used for regeneration, we would see more businesses in our most deprived areas. From excellent businesses and projects run in my constituency by women who are Muslim, I know that such a fund would make starting a business more attractive to others. That could be done easily and simply and would be open to everyone else. It would also promote the notion that the way to develop good business practice is to have a good business plan and to ensure that mentoring and advice are available.
It is important today, when our subject is trade and industry, to continue the emphasis on small businesses. I said earlier that they are the lifeblood of this country's economy, but they are often ignored. All right hon. and hon. Members know that they can be centres of innovation and creativity and can promote spin-off
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companies, which sometimes come from very small companies. They must be encouraged. If we encourage start-ups and the prosperity of those businesses, not only will our economy prosper in constituencies such as mine, but our national economy will prosper. That is why I welcome the Budget.
6.16 pm
Mr. Edward Leigh (Gainsborough) (Con): I am delighted that the Chief Secretary is in his place and I apologise for missing the early part of this debate—I was detained on other business in the House. I want to tell him before he retires from office that I hope that he and his successor will work closely with the Public Accounts Committee to root out waste and incompetence in the public sector. That can unite both sides of the House and is becoming increasingly central to the debate on the Budget. Whatever our different ideological positions, there are many opportunities to save public money and ensure that we get more bang for our buck.
I have sat on the PAC for five years. We have interviewed more than 600 senior officials and have had more than 250 hearings. The Gershon review has been central to our work and many of its recommendations have figured in PAC reports. It hopes to save £20 billion a year and my right hon. Friend the shadow Chancellor hopes to achieve even more. I must tell my hon. Friend the shadow Chief Secretary and the Chief Secretary that much unites both sides of the House, but improvements in the delivery of public services are not materialising or are taking place too slowly. There is often a failure to apply more widely the lessons learned in one part of the public sector or to transfer them to another part of the public sector. Mistakes are repeated in the public sector, even after causes have been identified. There is often a failure to exploit commercial opportunities and slow progress in making the most of opportunities offered by developments in technology. We see that again and again in report after report.
The numerous reports of the PAC, which I am honoured to chair, have highlighted practical ways of achieving financial savings for the benefit of taxpayers. Many of our recommendations do not require radical change, but involve basic housekeeping and good management. We could save money in so many areas—the figure could be obtained by reading the Committee's numerous reports. Given the scale of public spending a 2 per cent. improvement in the use of resources would generate savings of about £8 billion per annum. That is what I am offering to the Government. We could save £8 billion per annum if projects were more efficient. That would pay for 50 large hospitals and is equivalent to 2p on the basic rate of income tax. We could do that today without any change of policy simply by reducing complexity and bureaucracy, improving public service productivity, being more commercially astute, strengthening project management, tackling fraud and having better and more timely implementation of policies and programmes. If we did that efficiently in the public sector, we could save up to £8 billion.
I hope that that is a helpful offer from the Chairman of the Public Accounts Committee in the closing moments of Back-Bench contributions to this debate.
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6.19 pm
Mr. Oliver Letwin (West Dorset) (Con): May I begin by congratulating the Chief Secretary on his admittedly provisional appointment? No one could deny that it has been a long-term aim on his part. In his acceptance speech in the 1987 election, he said:
I hope that he will now consult the works of the American historian, Will Durant, who tells us:
The Chief Secretary has been an adornment to the House and I wish him well in whatever role 6 May may bring him.
I also wish to pay tribute to my right hon. Friends the Members for North-West Cambridgeshire (Sir Brian Mawhinney), who spoke in an earlier debate and for South-West Norfolk (Mrs. Shephard), who received a touching tribute from Opposition Members, and my hon. Friend the Member for Chipping Barnet (Sir Sydney Chapman). Alas, in all three cases they have probably given their last speeches in this House. They have served the House for many years and made distinguished contributions. We will miss them.
I thank my right hon. Friend the Member for Charnwood (Mr. Dorrell) and my hon. Friends the Members for Ashford (Mr. Green), for North Dorset (Mr. Walter) and for Gainsborough (Mr. Leigh) for their contributions to the debate. I also thank, of course, my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), who was an enormously distinguished Chancellor and knows more about Budgets than most people in this House or outside it.
Two phrases have been used to describe the Budget. The first is that what the Chancellor gives with one hand, he takes back with the other. The second is that this is a vote now, pay later Budget. It is certainly the case that what was given with one hand was taken back with the other. For example, let us take the case of the £200 allowance for the over-65s. When the Chancellor announced it, he did not highlight the fact that, unlike our permanent 50 per cent. discount for the council tax bills of the over-65s, it will be for one year only. There was a blissful moment on a television programme when my hon. Friend the Member for Tatton (Mr. Osborne), the shadow Chief Secretary, faced the Chief Secretary himself, who ventured the idea that every change in the Budget is for one year only. That is odd, because the Red Book shows that that is by no means the case. It is proof that when it comes to anti-terror legislation, the Prime Minister has to be dragged, kicking and screaming, to accept a sunset clause, but when it comes to tax cuts he is happy to see a sunset clause after just one year. It is a clear case of giving with one hand and taking back with the other.
The Chancellor made the welcome announcement that he would raise the threshold for stamp duty. However, he did not draw attention to the fact that he had frozen thresholds year after year, as house prices have risen. I checked Hansard to ensure that I had not missed any bits of the Chancellor's eloquent speech, but he did not draw attention to the fact that he had raised the top rate of stamp duty from 1 per cent. to 2 per cent., then to 3 per cent. and finally to 4 per cent. Indeed, there may come a time when children are taught to count by listing the rises in stamp duty from this Chancellor.
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Above all, the Chancellor did not draw attention to REV09 in the Inland Revenue notes that accompany the Budget, but people now know that they have to read them. They show that the Chancellor will raise £340 million—£90 million more than he is giving in stamp duty changes—by getting rid of the disadvantaged area relief, which we heard about earlier in the debate today. It was mentioned by my right hon. and learned Friend the Member for Rushcliffe and my right hon. Friend the Member for Charnwood, and it was also debated with the Liberal Democrat spokesman, the hon. Member for Twickenham (Dr. Cable). It may be appropriate to get rid of that relief, but I wonder why the Chancellor did not major on the advantages of doing so. Could it be because he introduced it in the first place? That may be a connected phenomenon. The fact is that the Budget gave with one hand, and took back with the other.
Opposition Members have inquiring minds and will be asking why the Chancellor engaged in so much give and take—giving with one hand and taking back with the other. Labour Members are probably also wondering the same thing, although not many are in the Chamber at the moment as they do not want to hear too much about the Budget. I wish that I could offer an enormously subtle and complex answer, but it is—alas—terribly simple. It is that the Chancellor has run out of money.
That is what every independent economic commentator has noted. The Institute for Fiscal Studies, the International Monetary Fund and the Organisation for Economic Co-operation and Development all say that the Chancellor is borrowing and spending too much. They say that, on his plans, he will have to raise taxes after the election because there is a black hole in the public finances. That is why he had to engage in taking away with one hand what he gave with the other. It is also why this is a vote now, pay later Budget.
The problem is not just that the Chancellor has run out of money. That might be called an oversight, but such things happen to Chancellors from time to time. The nation might forgive the right hon. Gentleman if he had been spending the money in an enormously appropriate way. The nation might be willing to help him out with some tax rises after the election. People might want to elect him to impose those rises if they felt that he was getting value for money.
However, the terrible problem for our country is that the Chancellor has run out of money not because he has spent it well, but because he has failed to get value for it. He has created vast bureaucracies, with 250,000 extra posts created. Those extra bureaucrats are busy. So busy are they that some need to have stress counselling. What do they do? They create 15 new regulations every working day. That is enough to keep those bureaucratic postholders very busy indeed.
In the midst of that vast expansion of the bureaucracies, what has happened? It is what always happens when Governments grow too big—the spending in those bureaucracies moves out of control. I pay tribute here to my hon. Friend the shadow Chief Secretary, who has asked a marvellous series of very simple parliamentary questions on this matter. I also pay tribute to the Chancellor as, unusually, many of his questions have been answered.
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We have discovered fascinating insights into how our bureaucracies work. Today's debate was opened, eloquently, by the Secretary of State for Trade and Industry, but she did not say much about the potted plants in her Department. Had she done so, she would have had to admit that £120,000 has been spent on those plants over the past four years.
It is also true that the Budget debate has not been adorned by the Deputy Prime Minister—he of the two Jaguars, as hon. Members will recall. My hon. Friend the shadow Chief Secretary has asked an interesting question about the use of hired cars in the Office of the Deputy Prime Minister. A most interesting result emerged. From the amount spent on car hire in the ODPM, we have calculated that over the past two years it would have been possible for Department staff to circumnavigate the globe 250 times in hired cars. That is an example of spending that is out of control.
However, the real problem is that the huge increase in bloated bureaucracies is making the public services not better, but worse. People do not have to take the word of politicians for that, as our chief constables are queuing up to say the same thing for us. Just a few days ago, the chief constable of Nottinghamshire said that his force was "reeling" from excessive bureaucracy.
Labour Members were not shy, but they stepped forward and said that the Nottinghamshire chief constable was not as good as he had been made out to be. Alas for them, just last Sunday the chief constable of Surrey joined the fray. He said that only for about 10 or 12 per cent. of their time are police officers
"doing things that I feel constables should do . . . about 32 per cent. of a constable's time is pure bureaucracy—it's clerical work",
which he said had increased "exponentially".
That is the problem. There is waste, spending is out of control and there is a huge bureaucracy. I grant that the Chancellor and the Chief Secretary would like to achieve an improvement in public services, but those factors are making those services worse. That is why we are not getting the cleaner hospitals, the school discipline and the police on the streets that our country deserves, needs and wants.
Even the Chancellor half admits that fact. He is endlessly making promises to remove bureaucracy and red tape—the very bureaucracy and red tape that he has created. If he did not believe some of what I have just said, why is he always telling us that he is trying to remove it? But the problem is that it never happens. A year ago, we were told that about 104,000 civil servants would be removed. What did we discover in the Budget? Just 12,000 civil servants were removed—5 per cent. of the added bureaucratic posts created during the past seven years.
The record on red tape is very interesting. In 1998, the then Secretary of State for Trade and Industry said:
By 1999, there was a new Secretary of State for Trade and Industry—there have been several; the Chancellor does not seem to be happy with any of them for long—who said:
Then we come to 2001 and a new Secretary of State for Trade and Industry—[Hon. Members: "Ah."] Yes. She said that
"the Regulatory Reform Act 2001 will give the House the opportunity and power to sweep away unnecessary, out-of-date, entangled old regulations".—[Official Report, 25 June 2001; Vol. 370, c. 483.]
The Chancellor was not satisfied with that because then he started saying things—
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