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Mr. Purchase: In Sweden.

Rob Marris: Indeed. To simplify, Sweden, Denmark and Norway, which is, of course, not a member of the European Union—I am open to criticism, because I do not know all those countries intimately—all have high-wage, high-social- safety-net, high-taxation economies, and what do we find? On the UN's happiness index—I hope that hon. Members will forgive me, but I do not know exactly how that index is created by the UN—those countries, presumably on the basis of how happy people are there, come out higher on the smileometer than we do and higher than countries that have that wonderful, low-tax regime, because they have a social security net, which certainly all Labour Members and, I hope, all other hon. Members wish to see.

We must bear it in mind that the measures in the Bill—they are broadly decried by the two main Opposition parties, both of whom, I am saddened to know, have said they will vote against the Bill—are intended to make us more of a caring society, where we have continuing opportunity, prosperity, economic stability and dignity of work for those who can work. We are continuing to lay down the seedcorn for the future, by educating our young and giving them skills, as well as making training available to older people, particularly those who are not currently in work. That is the way we will counteract globalisation.

When I set it out in three sentences like that, I agree with the House that it sounds quite platitudinous. Often the simple things in life—the right things to do in life—are platitudinous. If one said, "I think that people should show respect for other people", I suspect that all right hon. and hon. Members would put up their hands and say, "Oh, yes, you should show respect for other people"—something that I passionately agree with—but it does sound platitudinous. However, the platitudes are sometimes worth saying. They do not come out of thin air, and simply talking the talk, as it is now called, is not sufficient.
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The building blocks of a modern civilised society, as most hon. Members would call it, do not drop out of the sky. Unfortunately, some electors seem to think that they do, but they come about because of political decisions taken for ideological reasons by the Government, as manifested in things such as the Budget. That is not to say that the Budget and the Finance No. 2 Bill are perfect, but they are a concrete realisation of ideological positions taken by a majority of hon. Members. Unless there is such a concrete manifestation, it all remains talk. To talk is cheap, as we all know—although with the amount that we get paid, one could argue that it is expensive—and it must be put into action.

The Opposition are simply taking a few pot shots at the Bill, by saying, "Oh, we're not going to vote for it", knowing full well that, on past trends, it is very likely to pass tonight, because, fortunately, the Labour party, of which I am a long-standing member, has a majority. That is a cop-out by Opposition Members. The Bill is not perfect, but it contains a large number of measures that are steps forward on the road to building the kind of—for shorthand—Scandinavian economy and society that I should like to see in the United Kingdom; a route on which the Government have been engaged for the past nine years, and long may they continue on it.

7.8 pm

Sir George Young (North-West Hampshire) (Con): It is not so much a pleasure as a relief to follow the hon.   Member for Wolverhampton, South-West (Rob Marris). The beginning of his speech was very moving, when he spoke about green issues and the environment, and he carried the House with him in his remarks at the inception of his speech. With respect, he began to lose the House, as he plodded through a rather tedious list of regulations, but as he and I are both members of Friends of the Earth, I will spare my criticism of him. I was going to say that, as he exhibited some independence of thought, I wish that he might serve with me on the Standing Committee, but having listened to him speak for an hour, I am not quite so sure that I want to spend the next two months closeted in a Standing Committee with him. My remarks will last a small fraction of the time of the hon. Gentleman's.

It is some 10 years since I last spoke on a Finance Bill. As I was the then Financial Secretary to the Treasury, the Finance Act 1996 has my fingerprints all over it. I think that the Paymaster General served on that Standing Committee. It was the only Finance Bill that I had anything to do with. I was appalled by the complexity and the length of the Bill. For three months, I had a good understanding of what it was all about. That information has now sadly decayed. However, I recall some gentle banter from Labour Members about the size and complexity of the Bill. I revisited it: it had 408 pages. In the intervening 10 years, matters have deteriorated: the current Bill has 475 pages and the language is even less comprehensible than it was 10 years ago. I was relieved to find one clause that I could understand without turning to the explanatory notes. It was the last clause—clause 181—which states:

I want to focus my brief remarks on an area of the Bill that no one else—apart from, very briefly, the Chief Secretary—has touched on: clauses 103 to 146, which set
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up the real estate investment trusts or REITs. I refer to my interest in the register as a director of McCarthy and Stone, which builds retirement flats, which could end up within a REIT.

The first question that I want to ask the Government is: why has this modest reform taken so long? When we left office some 10 years ago, most of the spadework for REITs had been done. We consulted the Council of Mortgage Lenders, the British Property Federation and the City and the response was positive. There was all-party support for that sensible fiscal reform. There were models for it in other parts of the world. Indeed, this country had pioneered investment trusts and a REIT is, in effect, an investment trust for property. The transplant should have been straightforward and yet it will be nearly 10 years—1 January 2007—before we get the first REIT. I hope that whichever Minister makes the winding-up speech will have a plausible story to explain to the House why the reform has taken so long.

The second issue that I want to raise about REITs is more fundamental. There is a shortage of good housing in this country. Every constituency MP must know that there are people who need decent homes. The original thinking behind REITs was to promote investment in residential property. I remember because I was Housing Minister at the time the debate got under way in the mid-1990s. What we wanted was a vehicle to enable institutions and private investors to invest in property for rent, in the same way as they could invest in shares through an investment trust. At that stage, the vehicle was not called a REIT; it was called a HIT—a housing investment trust.

HITs were envisaged as the last stage of a series of reforms to promote the increased supply of good quality rented housing. We introduced assured shortholds to put tenancies on a viable basis. Once we had that underpinning the private rented sector, there was going to be a new fiscal framework to get serious, respectable, long-term institutional funds into property for rent. If quoted companies invested in rented property, that would bring institutional funds into a market that needed—and still needs—more supply, and private investors could buy shares in those companies. Also, institutions that find it difficult to get exposure to residential property in their portfolio would be able to do that through REITs.

The clauses contain the necessary changes to introduce that measure and I welcome that—it avoids double taxation. However, something has happened in the intervening period that I find very worrying. Instead of housing investment trusts, they are now real estate investment trusts. As I will show in a moment, the emphasis is very much on commercial property and the original idea, if not abandoned, is certainly no longer centre stage. There was never an equivalent argument for REITs for commercial property, compared with residential property. If one wants to invest in commercial property, there are listed property companies and one can do that with great ease. There is no shortage of institutional capital to invest in shops and offices, whereas in many parts of the country, as I said, we need more good quality new accommodation for rent.

Stephen Hesford: I am somewhat confused by the point that the right hon. Gentleman is making. In terms of commercial property versus residential property, in
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my constituency, there has been a five-year fight to prevent McCarthy and Stone from developing a certain plot, because it is inappropriate development. Many of my constituents see McCarthy and Stone, and other companies like it, building property simply on a speculative basis. Many of those properties are built and remain empty for years after. I am surprised that he is speaking for a vehicle that would increase development, because I understood that his party's view is that the south-east should not be concreted over.

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