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Mr. Mark Francois (Rayleigh) (Con): Before my hon. Friend concludes what has been a good speech, may I take him back briefly to stamp duty land tax, on which he is not a pedant, but most certainly an expert? Did he notice the article that appeared in The Independent on the morning immediately after the Budget, which mocked the Chancellor for effectively presenting the measure to reduce the relief for disadvantaged areas as a productivity measure? The article said that even this Chancellor of the Exchequer could not argue that that tax increase was actually a productivity measure. Does my hon. Friend have any sympathy with that sentiment?

Mr. Prisk: I have come to learn that the Chancellor and indeed the Prime Minister can argue anything that they wish. They can certainly have a conviction, but it might be a different conviction today from what it was yesterday. I agree with my hon. Friend that the article is another sign that people are beginning to see through the smoke and mirrors of the current Chancellor. When he gets to the awkward figures, he has a lovely way of rushing through them. When he gets to the tricky parts, one notices that there is a subtext in the clause that one must read an hour later with a wet towel around one's head in a dark room. I am afraid that I must describe his presentation, especially when he speaks in front of his party, as the incomprehensible lecturing the innumerate, and that is all too often the nature of his Budgets.

The Bill has been poorly drafted and ill considered, although not for want of our trying. It was very generous of the Government to leave the open green acres in front of us where their 400-odd Members could have been sitting—sadly they must have something else to do, although I cannot imagine what. We have tried our best to draw out some of the details of the Bill, so we look forward to the full and frank explanation that I know the Financial Secretary will wish to give us.

3.49 pm

Mr. Andrew Tyrie (Chichester) (Con): I refer the House to my entry in the Register of Members' Interests.

Last time there was an attempt to rush through a Finance Bill in one day, which was in 1992—I have had more time to look at that than I have at the Bill itself because it has been produced at such short notice—proceedings were interrupted by a fire.

Mr. Boateng: I remember it well.

Mr. Tyrie: I vaguely remember that a Labour Member—it might even have been the Chief Secretary—accused the Conservatives of having started the fire. There has been no such disaster in the House yet, but there has been a huge power cut just south of the river. Disasters seem to accompany attempts to rush through Finance Bills, but so far, so good. We have not had any trouble yet.
 
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I associate myself with the good wishes that have been expressed for the Chief Secretary's proposed career move to South Africa. I hope all goes well, if it goes at all. I note that not a single Labour Back Bencher has felt the need or the urge to say anything about the Bill. I find that pretty extraordinary.

Mr. Prisk: Perhaps I can help my hon. Friend by offering a possible explanation. It has been suggested to me that either Labour Back Benchers do not like the Budget or they are desperate to hold on to their seats. Which does he think is true?

Mr. Tyrie: Those are two interesting options, and we can all make up our own minds.

Despite the fact that no Labour Back Bencher has been present, we have not been short of interesting contributions by Opposition Members. We had an interesting speech by my right hon. Friend the Member for Charnwood (Mr. Dorrell), who mentioned the Institute for Fiscal Studies study. He made the relevant point that for the first time since the early 1990s, real disposable incomes have fallen. That is because of the increases in taxation pushed through by the Chancellor since 2001, despite promises not to do so.

My right hon. Friend also correctly alluded to the distributional effects of freezing personal allowances, also mentioned by the IFS. As a result, 7.5 million more taxpayers are paying tax at a higher marginal rate than they would have done had allowances been indexed. That is a crucial point. Of course, the tax burden is going up and up, and it will carry on doing so. Labour used to try to conceal that in the Red Book. Now, the graph just shows the upward trend, which can be found on page 255.

My hon. Friend the Member for Sevenoaks (Mr.   Fallon) made an important point about how Finance Bills are inadequately scrutinised. I completely agree. He is a member of the Treasury Committee. This is not the appropriate time to expand on this, but the Select Committee should play a much larger role in the scrutiny of Finance Bills. We should come to this place and debate what needs to be done on the basis of detailed scrutiny produced by the Committee before we go through the Bill clause by clause. We have moved in the opposite direction today, and there has been virtually no time to prepare for adequate scrutiny.

My right hon. Friend the Member for Fylde (Mr. Jack) also made some very important points, in a typically engaging and lucid speech. He mentioned ISAs and the extent to which the Government have eroded the attractiveness of the incentive to save throughout the tax system. Of course, that is only one of the causes of the fall in the savings ratio. There are a number of others. Financial scandals have not helped, especially Equitable Life. The Government have done their best to sweep that under the carpet and to avoid paying compensation for it.

Another cause of the fall in the savings ratio is the fall in the stock market, but that is not separate from the fiscal concerns, because of course one of the causes of the stock market falls was the Government's £5 billion raid on pension funds. When £5 billion is taken from
 
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pension funds, what is the effect on share prices? Answer: all things being equal, share prices fall. Therefore the origin of the market fall, often described as a separate cause of the fall in the ratio, lies partly with the Chancellor of the Exchequer.

My right hon. Friend also commented on the fact that the Government have not produced an estimate of the effects on carbon emissions of changing the structure of VED rates. He also talked about biofuels, on which he is an expert—indeed, he is the leading expert on that subject in the House of Commons, a result of his time as a Treasury Minister and a Select Committee Chairman.

My right hon. Friend described the effect on taxpayers of successive Budgets in a pertinent phrase, "the pinch has come on the mass of taxpayers". He is quite right. That pinch has taken some time to come on, for reasons that he and others have explored. The savings ratio has roughly halved, although that is a net figure. The other side of that ratio is the increase in borrowing—people increased their borrowing to maintain their spending, which delayed the onset of the pinch. Now, they are finally beginning to think about how to pay back that borrowing, so the pinch really is coming on. The two points that my right hon. Friend made at the beginning and the end of his speech are therefore closely connected. He also made some excellent points about inheritance tax. I shall not repeat them, but they were important and powerful points.

My hon. Friend the Member for Grantham and Stamford (Mr. Davies) made a characteristically erudite and forceful speech in which he drew attention to the shoddy nature of some of the Finance Bills that we have been expected to consider. When I picked up the Bill this morning, it was described to me by the man who passed it to me from the Table Office, not as the Finance Bill or even as the revised Finance Bill, but as the draft Finance Bill. I replied that as I had to try to speak to it this afternoon, I wanted the final version. It is pretty disgraceful that we have to scrutinise legislation in such a fashion. My hon. Friend made several other trenchant points, not least about the damage done to the pensions industry in recent years and the reasons why final salary schemes have got into difficulties. One of the main reasons is, of course, Government policy.

My hon. Friend the Member for Hertford and Stortford (Mr. Prisk) correctly pointed out that we saw the revised Bill only this morning. He also alluded to the importance of listening to experts before we attempt to scrutinise a Bill in detail. A key part of the Finance Bill process is that we are able to draw on the considered views of others. Presumably, they too have been passed this bundle of papers on a Treasury tag and been told that it is a draft Bill. They are now expected to get their points across in the brief period available to us before the debate ends—indeed, they have been trying to do so.

Next, my hon. Friend talked about stamp duty, and when he talks about stamp duty, I listen. He knows a great deal about the subject. He correctly pointed out that the Government only want their money—the extra revenue—and are not really interested in making stamp duty work better or more effectively. As he said, every time the Government reform stamp duty, the paperwork burden seems to increase. That will almost certainly be the result of the latest proposed changes.
 
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The House and the country have grown accustomed to the way in which these things happen. The Chancellor announces a Budget, then a Finance Bill is introduced, which we discuss in the Chamber. We start with bluff and bluster. There is a firework display from the Chancellor on Budget day that no one can understand, but everyone thinks it sounds okay. We are thrown dozens of statistics in a wholly indigestible form, then we are expected to try to work out what is going on from a Red Book—I have the two most recent Red Books with me today—that increasingly owes more to party propaganda than to an explanation of economic developments in the country. Despite the Chancellor's best efforts to cover his tracks, in most years, although the Budget receives a good reception for a few days, it soon becomes a one-week wonder. The paint starts to peel off as people have an opportunity to study the detailed press releases. As soon as the Finance Bill is published and they have a chance to look at it carefully, they realise that a bit more paint deserves to come off.

This year's Budget was not a one-week wonder, and not even a one-day wonder. It can best be described as a one-hour wonder, because it took only minutes to flip through the Red Book and discover, for example, that the £200 allowance for the over-65s to compensate them for a huge increase in council tax over the past eight years will be implemented for one year only. When the Chief Secretary was challenged on that very point in an interview on, I believe, Budget day, he said, "Well, all our measures are only for one year." [Interruption.] I do not have the transcript with me, but if he would like to deny that that was the purport of his remarks, I am happy to give him the opportunity to do so. He does not seem to want to do so. He effectively said, "Don't trust us to implement any of the later years stuff in the Red Book. It's all for one year only. Don't worry, it's not just the £200 that you can rely on us to implement for one year but everything." Perhaps he did not say so—he is welcome to deny it at the Dispatch Box.

When that £200 was announced in the Budget speech, I was watching members of the Government carefully. The Secretary of State for Work and Pensions formed his fingers into the shape of a gun, which he pointed at the Conservatives, as if to fire a bullet. It made a good image for television for an hour or so—as I said, the Budget was a one-hour wonder—but by the evening the more alert broadcasters had removed it from their clips, because they realised that the £200 was available for one year only. A good number of pensioners in my constituency have already written to me, and like pensioners across the country, they have twigged that the £200 is for one year only. In the coming campaign, I shall make sure that every pensioner knows about that Labour measure. I will tell them that Labour has offered them £200, but that if the party is re-elected, they will lose it next year. It is a spectacular own goal from Labour. To put it another way, the Work and Pensions Secretary would have done much better to point that pistol at his own head.

Nothing better illustrates what has been wrong with Labour over most of the past decade than that measure, which is designed to create a specific impression, and is public relations spin over substance. We have heard the same story on stamp relief—relief for disadvantaged areas will be ended while at the same time in the Budget
 
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speech there was a pretence that some extra relief will be given. There has also been a hidden raid on oil companies, and a good deal more.

In a few weeks' time, we will present a Budget that can be trusted. We will publish a Red Book that can be understood, and we will ensure that the Office for National Statistics, made fully independent by an incoming Conservative Government, publishes figures on which we can all rely for the first time in almost a decade. We will use forecasts that have been put together independently of the Government, under the supervision of the Comptroller and Auditor General of the National Audit Office. I have argued for over a decade that we should move in that direction, and I am pleased that in a few weeks we shall have the opportunity to do so.

It is high time that we ended the disgraceful gerrymandering of the statistics that has taken place. The fiddling on the private finance initiative, the attempt to reclassify working family tax credits and much else in the accounts was a scandal, and we ought to bring it to an end. When the tax revenues were pouring in, it did not matter so much, because the Government felt sure that they were well within their fiscal rules. Now the shoe is beginning to pinch. Now it looks as though every little bit is vital to enable the Government to meet their fiscal rules. That is where the Government will come under pressure in the next few weeks.

At the heart of the Finance Bill is the issue of trust. Why should the electorate trust the Chancellor and the Prime Minister when they tell us that there will be no further tax rises after the election, should they win it? There are two overwhelming reasons why the electorate will not trust them. The first is that we have been there before. We have heard it all before. Before the 1997 election the Prime Minister said that he had no plans to raise taxes at all. What happened immediately afterwards? Tax rises for everybody. Then there was the 2001 pledge. The Prime Minister said words to the effect that it would be reasonable to conclude that national insurance contributions would not go up. What happened after the election? They went up. That is the first reason why the public will not trust what the Government are saying about the economy.

The second reason has already been discussed extensively. The Financial Secretary did his best to handle the situation by plucking Goldman Sachs out of the hat, up against about 20 commentators, including the International Monetary Fund, which is extremely cautious about the statements that it produces. I know how the IMF operates, and I know that it checks its statements with the country's Finance Ministry before putting them out, and invites the Finance Ministry to challenge the detailed methodology that lies behind its calculations. Even the IMF concluded that there is a black hole in the accounts, which will have to be filled somehow. The Government's history shows that if they get the chance, they will fill it through higher taxation.

The Government have consistently overestimated corporate tax revenues. The Institute for Fiscal Studies asked the right question the morning after the Budget when it said:

"The key question confronting whoever is Chancellor after the election remains the same . . . is it plausible to expect the current budget balance to improve by 2.2 per cent. of national income . . .
 

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by 2009–10? . . .is it prudent to expect revenues to go up by £27 billion over the same 5-year period without fresh tax raising announcements?"

That was the correct and crucial question. As I pointed out in the Budget debate, the IFS answered its own question. It said:

"We think that to achieve these forecasts requires the Chancellor to raise taxes . . . by £11 billion a year."

The Opposition are not in the forecasting business, and we do not intend to get into it, but we are listening to outside forecasters. They tell us there is a structural deficit—a black hole in the accounts. The choice for the electorate is clear. If people vote Labour, the black hole will be filled by higher taxes, but there is much more at stake than merely a tax rise.

The Bill, even though I have not had a chance to read it properly—I do not think that any Opposition Member has, because we have had it for only a few hours—illustrates the bigger problem. Successive Finance Bills have ended up reducing wealth creation—complicated, difficult to understand, loading enforcement costs on a range of wealth creators in the country. I cannot do better than to end with the words of the Prime Minister's former chief economic adviser on exactly that point. [Interruption.] Someone shouts "Who?" across the Floor of the House, as if by doing so they can somehow expunge this fellow from history—a sort of latter-day painting-out of Trotsky from the photograph of those who did all the hard and dirty work in Nos. 10 and 11 these past days. I am referring to the former chief economic adviser to the Prime Minister, who said:

"Britain's economic arteries are slowly being furred up by a higher and more complicated tax system, excessive regulation and . . . endless micro-management."

I could not have put it better myself.

4.11 pm

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