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Mr. Flello : When, in my dim and shady past, I was a tax adviser, it was commonplace for the legal profession, with whom we worked, to say that clients should review their wills every couple of years anyway and rewrite them if necessary, which is what happened regularly. Does the hon. Gentleman recognise that scenario?
Dr. Taylor: Yes, people do keep their wills up to date, and this will force them to do so.
I am an avid supporter of a tax-funded NHS. I am not altogether surprised by the Chancellor's lack of mention of the NHS in the Budget, because having put so much extra money into the NHS, there is a tacit admission that the deficits are in large part due to mismanagement by the Department of Health. If it was my decision, I would abolish some of the charges in the NHS.
Mr. Flello: Today, the Audit Commission issued a public interest report saying that in my part of the country, the mismanagement was very much a local issue and nothing to do with the Department of Health.
Dr. Taylor: There was probably local mismanagement in some areas, but the larger problem arises centrally as a result of the top-down reforms and changes that have been repeatedly inflicted on the NHS and, in many cases, not costed accurately.
I was about to revert to the Paymaster General's point and outline some ways in which the middle rich should pay more. It is ridiculous that they receive the winter payments, which they do not need. Postmen know exactly what is in the mail that they deliver and my postman made wry comments that made it clear that he did not believe that I deserved my winter payments. It is ridiculous for the super-rich and the middle rich to receive free prescriptions for which they could pay. In the public meetings during the Health Committee inquiry, it was clearly told that the only way effectively to replace the money that would be lost through
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banning prescription charges was increased taxation. Increasing income tax would be the only genuinely fair method.
I should like to take hon. Members a little way back in history. Political historians and some people of my age will remember Stafford Cripps, Clement Attlee's extreme left Chancellor of 1947–50. They may remember that, when he was ambassador to Russia, Churchill wrote to Stalin of him:
I wonder whether there are squirrels at war in our current Chancellor. I shall not guess about that because it may be unparliamentary. However, when Stafford Cripps rejoined the Labour party and was appointed Chancellor, he instituted a capital levy, which hit the super-rich. I do not suggest that we should return to that, but perhaps it would be more acceptable than the back-door, backdated proposal, which may hit surviving spouses or partners with a triple whammy of unexpected tax unless their spouse or partner is among those who are aware and can make the changes.
If an unacceptable loophole for the middle rich is perceived, by all means close it. However, I plead with the Government not to make such action retrospective. I join other hon. Members in appealing for an increase in the threshold for inheritance tax commensurate with the rise in house values.
8.31 pm
Jeremy Wright (Rugby and Kenilworth) (Con): I want to start by accepting the invitation of the hon. Member for Wirral, West (Stephen Hesford) and by being as positive as I can, at least at the outset of my hopefully brief contribution. I shall consider aspects of the Bill that I welcome and believe to be positive.
The Government have shown their intent to penalise, through vehicle excise duty, vehicles that are the most heavily polluting—a worthwhile aim. It is also worth while to pursue a 0 per cent. rate for the least polluting vehicles. It would be an even more generous offer if any such vehicles were available but, none the less, I commend the intent.
Like the hon. Member for Wirral, West, I welcome the news that the Government intend to tackle the serious and growing problem of intra-EU missing trader frauds. I approach the matter from a former legal perspective, and I have seen first hand the way in which those frauds have grown. It is important that the Government take action to make such fraud less attractive and feasible. I am glad that they are attempting to do that.
I also welcome the Government's attempts to support research and development, which is so important. I accept that the tax relief offered to those who conduct such activity is welcome. However, tax relief on research and development and aspects thereof is valuable only if the financial benefit that can be gained is not outweighed by the administrative effort necessary to obtain it. Ministers know that a great deal of time is already lost, and that there is already huge pressure on those who conduct research and development to complete all the administration involved. Not only are domestic rules to blame. For example, the European clinical trials
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directive must accept much of the blame. However, the Government can do more, not only by offering greater, but— crucially—simpler tax relief.
What is true for research and development also applies more generally and I revert to the theme that many hon. Members have raised. The tax system that the Chancellor created is buckling under the weight of its refinements. The system's complexity goes beyond simply causing inconvenience. It now risks damaging the welfare of not only our businesses but the most vulnerable in our society. Businesses, especially small businesses, in my constituency—and, I suspect, those of many other hon. Members—spend far too much of their time trying to calculate their financial obligation to the state. That time could be spent much more profitably on generating wealth and employment which would go towards the sustenance of the state in any case.
I am glad to see the Paymaster General in her place this evening, because she is the Minister responsible for the Government's efforts to assist the most vulnerable people in the tax system through tax credits. I cannot be the only Member of the House whose postbag is full of complaints from those who have been overpaid, underpaid or in some other way wrongly paid through the tax credit system—indeed, I know that I am not; I recall the hon. Member for Falmouth and Camborne (Julia Goldsworthy) saying that she had a similar problem. The problem is that the mistakes that the system has made cannot be corrected, sometimes for months or even longer, because even those employed by the Government to run the system cannot find their way through the maze of rules and regulations that the Government have created. The difficulty experienced by my constituents is that the complexity of the system is not helping those who most need its help.
Ms Sally Keeble (Northampton, North) (Lab): Does the hon. Gentleman not recognise that the tax credit system has taken millions of children out of poverty and made it possible for many women to go back to work? Will he not also acknowledge that the Chancellor's Budget proposals will take away some of the difficulties that the system has encountered?
Jeremy Wright: I recognise the Government's intent in establishing the tax credit system. However, I am afraid that the Chancellor cannot resist the inclination to add layer upon layer of complexity to everything that he does. That is why the Government's very worthwhile intent—I entirely accept the hon. Lady's point on that—is being consistently undermined by what they are actually engaged in doing.
I shall give the hon. Lady an example. I have a constituent who has contacted me a number of times. She is being repeatedly overpaid by the tax credit system, and she has repeatedly contacted the tax credit offices to tell them that that is happening. Their response is to say, "We know you're being overpaid repeatedly, but we can't fix the system so that you will stop being overpaid repeatedly." That ridiculous state of affairs, of which the Government should be thoroughly ashamed, has been brought about by an over-complex system. My constituents would have been delighted to see a
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simplification of the tax regime in the Finance Bill. Instead, however, it is once again being made more complicated.
But the situation is even worse than that. Despite the Bill's 475 pages, 181 clauses and 25 schedules, certain measures are still missing from it, including any genuine attempt to assist first-time buyers. I am sorry to have to tell the Government that an increase in the stamp duty threshold from £120,000 to £125,000 will do precisely nothing to bring the dream of home ownership any nearer for those I represent in Rugby and Kenilworth.
There is no mention in the Bill of what the Government are going to do about NHS deficits, or about restoring incentives to save for one's retirement, which is a huge problem entirely of the Government's own making, as my hon. Friend the Member for Gosport (Peter Viggers) has already made clear. Nor is there any mention of an extra £200 to assist pensioners, as I pointed out earlier in an intervention on the Chief Secretary. Pensioners' need for Government support has not changed; in fact, it has grown in relation to assistance with paying their council tax. All that has happened is that the Government's need for pensioners' support has changed this year, compared with last year, and the Government have quite cynically removed that assistance from them. There has been no credible explanation for that decision.
I agree wholeheartedly with the hon. Member for Falmouth and Camborne that the Budget presented an opportunity to assist first-time buyers, pensioners and even the NHS. It was certainly an opportunity to make the tax system and the tax benefits system simpler, and thereby more effective. In every respect, however, it was an opportunity missed.
8.39 pm
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