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David Taylor: The hon. Gentleman is describing globalisation as an unalloyed good, in a way, but does he accept that it is grinding into poverty many countries in the least well-off quintile of countries on the globe in the absence of fair trade, rather than the free trade that often exists? Does he accept that there are constraints and caveats in respect of what he has said about globalisation?

Peter Viggers: It is interesting that the hon. Gentleman referred to less-developed countries. China's growth has been 9.5 per cent. in the past year and India's growth has been 7.3 per cent., while sub-Saharan Africa has had two years of growth rates above 5 per cent. This year, the growth rate in sub-Saharan Africa is 6 per cent., which is the best for 30 years. It is possible for growth to be shared and spread.

I take the point that there are many countries whose populations have not benefited immediately from globalisation, but I maintain that one of the main reasons they have not shared in the benefits is that their Governments are corrupt and fail to allow the benefits to be shared. I do not believe that protectionism is the answer. I believe in fair trade and the growth of trade, and I urge that more effort be devoted to ensuring that the benefits are shared well among the populations in less-developed countries. That means bringing pressure to bear on their Governments, many of whom are seriously corrupt and remove prosperity from those countries.

Compared with that worldwide prosperity, what is our position—the position about which the Chancellor of the Exchequer preens himself so much, with glutinous self-satisfaction? Last year, our growth rate was 1.8 per cent., and this year may be as much as 2.5 per cent., but
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there are some bad signs around. Unemployment is up by a quarter percentage point to about 5 per cent., and business investment, which is a key number,

That is a quotation from the Governor of the Bank of England, speaking, I think, to the Treasury Select Committee. Business investment has not been good. The situation in this country is not as good as in much of the rest of the world, because the Chancellor of the Exchequer and the Government fail to realise the key importance of the private sector and the growth-making part of the economy.

Has the Chancellor done everything wrong? Of course not. He has done four things right. First, he set up the Monetary Policy Committee to set interest rates, and it has been very successful in holding down interest rates in this country. Secondly, he has not joined the euro. Increasingly, the inflexibility of the euro has been unhelpful to its members. For example, Italy's unit labour costs have risen by 20 per cent. relative to those of Germany, while its exporters are more vulnerable to low-cost producers. Last week, the Lex column of the Financial Times said:

but it went on to talk about what would happen if Italy were to come out of the European monetary union. The collapse of the euro cannot be utterly and completely ruled out.

The third thing that the Chancellor has got right is following for his first few years the public spending plans of the former Chancellor of the Exchequer, my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke). Fourthly, the Chancellor promised independence for the Office for National Statistics, which I think would be very beneficial. I have myself seen from within the Treasury the way in which statistics can be used selectively by many people, including the Treasury.

What has the Chancellor got wrong? Here, there is a much longer list. The first thing that he has got seriously wrong is a high level of taxation. If we look at the European model of taxation and its lack of growth, and at the social costs of employment in much of Europe, we can see that that economy has failed to grow because it has not had the flexibility and freedom of much of the rest of the world. Taxes and red tape are the things for which this Chancellor of the Exchequer will be remembered. The tax to GDP ratio is forecast to stabilise at about 38.7 per cent. from 2007 onwards. That is quite high. The Treasury Committee was told in evidence that in 1997 the UK would have been about

and now we are approaching halfway, so we are over-taxed.

That is unhelpful, but perhaps even more damaging than over-taxation is insidious Government intrusion through micro-management and means-testing. A very great deal of the Bill is micro-management and the piling of detail upon detail. No wonder there is incompetence in the national health service, for example, when
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reorganisation follows reorganisation. Scarcely is one structure in place before it is reorganised again. I maintain that Government intrusion is, if anything, even more damaging than high levels of taxation.

That follows when a Government have very little    experience or understanding of business or management. I drove the Financial Secretary to distraction during the Budget debate, when he screamed at me that I was criticising charity workers. I am not criticising any part of our community—teachers, charity workers, people who care for the elderly, Members of Parliament or members of the armed forces—when I say that the fact is that they do not add to national growth. What the Government should do, but do not do, is recognise the unique contribution made by those who contribute to national growth.

The third major blunder made by the Chancellor—he was told at the time, but ignored it and carried on—was to sell gold. He sold 395 metric tonnes to raise $3.5 billion, and the current value of the gold that was sold is $7.9 billion—a loss of $4.4 billion. He was told at the time that it was a bad mistake by many people, including me, but he did it anyway.

The fourth blunder is in pensions. Some people lay all the responsibility with the Chancellor of the Exchequer, but I do not think that that is fair. The main fault in pensions is longevity, on which the actuarial profession was asleep on watch and failed to realise that it was using outdated models and that pension funds would not match their requirements. The second reason for failure in pensions is stock exchange weakness. Thirdly, there were changes in pension funding and accountancy requirements, and in long-term bond interest rates. Fourthly, it was of course the Chancellor of the Exchequer who, instead of seeing that the pensions industry was facing a major problem, came blundering in with the £3 billion a year net impost on pension funds from 1997 onwards. He has caused what must be described as a pension crisis.

The fifth area in which the Chancellor of the Exchequer has got it wrong and there is a mistake in the Bill is environmental taxes, which have fallen as a proportion of overall tax in every year since 1999 except 2002. In 1999, environmental taxes amounted to 9.8 per cent., while in 2004 they amounted to 8.3 per cent. Tax receipts from air passenger duty have fallen from £931 million to £856 million, while chargeable passenger miles have increased by 35 per cent., at a time when greenhouse gas emissions have increased by 10 per cent. That is another mistake.

My final point is about trusts. What on earth has the Chancellor been playing at? There was a brief reference in the Budget, but when we get to the Finance Bill, we see clause 157, as implemented by schedule 20, which is 18 pages long. The Chancellor says that he is seeking to    prevent tax avoidance in accumulation and maintenance trusts, and in interest in possession trusts. He said that that is a tiny proportion of the top 1 per cent. and that it is expected to raise £15 million a year. In trying to reassure people on that point, a Treasury official stated:

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There is massive uncertainty as to how many trusts will be involved.

Many years ago, I was a solicitor. I am still a solicitor by qualification and still on the solicitors' roll, although I would not dare to conduct a legal action because I am rusty. When I wrote wills, with the exception of the occasional kindly, elderly person who wanted to make a special gift to a home of some kind, every single one included a trust. The standard procedure is that one leaves one's money to one's wife, husband or partner, or, failing that, to one's children. If one is predeceased by one's children, then the money is distributed per stirpes, and the child who has been left an orphan shares a proportion of the benefit of the money left, which means that a trust is invented. In almost every case, the testator, on advice, wants to leave the money to the young person so that it is inherited at 25, not 18.

When the Chief Secretary discussed his vision of when adulthood starts, he pointed out that people can serve their Queen when they are 18. I know, because I have been there and done that, but the fact is that there is a big difference between succeeding to funds at 18 and succeeding to funds at 25. For instance, if one examines insurance rates for motor vehicles, the insurance rate for under-25s is much higher than other rates, because insurance companies know that younger people live a different kind of lifestyle and that, when they reach the age of 25, they tend to mature and adopt a rather more mature lifestyle.

The Government are wrong to say that inheritance must take place at 18, because the law will mean that the only way in which to avoid taxation is to allow beneficiaries to take control at the age of 18. I see that as a malicious attempt to prevent inheritance which will ensure that inheritance will be squandered. In my experience—this point does not apply to my family, because we do not have that kind of money—more young lives are damaged, sometimes irreparably, by the receipt of money at the age of 18 than they are when money is received later in life. Far more young people go wrong because of too much money rather than not enough money.

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