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Who has benefited? It is no secret that I am over the age of 65. I never describe myself as a wealthy pensioner, although the capital value of my pension as a long-standing Member of this House is quite high, so I am fairly comfortably off. I have not done the exact calculation, but I think that I am substantially better off as a result of the Budget because I do not pay national insurance, nor does anyone else above the age of 65, so 2p off the standard rate is a useful benefit. Like everybody else, I have been getting more heavily taxed by the Chancellor, so any remission of that is gratefully received. However, I do not for the life of me
understand why people like me are benefiting at the expense of those on low incomes, who earn at the level where the 10p rate was important to them. There is no rationale for that. For political purposes, the Chancellor has made headline-seeking announcements, which have a fairly arbitrary effect on businesses and individuals. That is no way to set about improving this country’s public finances, and certainly not the best method of simplifying the tax system.
I object to the current form of the Budget speech. I hope that the next Chancellor will go back to being a little nearer the rules for Budget speeches. The old rules were quite strict and made for boring long stretches of speech, but they required all tax changes to be properly explained. I must admit that I got away from some of that a little, by leaving things that were of interest only to accountants with a handful of clients to the Red Book. However, I did not do what happens now. The Budget speech used never to be a political speech that was designed to give a totally misleading impression to the next morning’s newspapers. No Chancellor in the past attempted to gabble out figures at the rate that this Chancellor does, in a not unintended attempt to ensure that nobody can follow the Budget’s precise impact on the public finances. The Chancellor switches from cash figures to percentage figures. The dates all come out in a tumble. It requires a miracle for anyone in the House to follow the details of the speech, because he wants us to hear the headlines of 2p off corporation tax and 2p off income tax. He is determined that no one in the House or the Press Gallery will understand any of the downside by the time he sits down.
That is unhelpful and I fear for the Chancellor’s reputation when he becomes Prime Minister. His good friend the hon. Member for Coventry, North-West did his best to protect him as an individual, and I have always acknowledged that I do not dislike the Chancellor as a man, but his political style puts him in serious jeopardy as he embarks on his next job. He is not charismatic and never will be—I do not criticise him for that. He has the reputation with the public of being a political heavyweight. He scores well on trust and has been around for so long that he is almost part of the British constitution. He is a formidable figure in a Government of whom one cannot say that the entire Cabinet is composed of formidable political figures. However, the Chancellor’s reputation has been sinking recently and the public’s reaction to the Budget speech will be damaging to him. It was not the right farewell to his period as Chancellor to go in for a Budget that was a blatant attempt to mislead the public about what he was doing. Only the most loyal sections of the Murdoch press were inclined to buy it.
I was looking forward to a period of more straightforward presentation of public policy—a little less spin, to use the cliché—and less of the extraordinary manner whereby information comes out of the Government, but the Chancellor, under the pressure of events, the pressure from my right hon. Friend the Member for Witney, and impending responsibilities, is showing signs of taking up new bad ways of disseminating information. It will not work. If he continues in that way, I am afraid that I wish him a premiership that is much shorter than his tenure at the Treasury.
The Chancellor’s successor—I hope that the nationality of the Secretary of State for Trade and Industry is not fatal to his hopes—will have a miserable task in implementing what has to be done to the public finances. I trust that whoever it is will give us a much more straightforward and open Budget, with a candid account of what has to be done, this time next year.
8.45 pm
Mr. Jim Cunningham (Coventry, South) (Lab): I was interested to hear what the right hon. and learned Member for Rushcliffe (Mr. Clarke) had to say. It sounded to me as if he wished he was in a position to deliver what the Chancellor is delivering. There is nothing wrong with admiring the Chancellor. In fact, the hon. and learned Gentleman has had his admirers, too. When he said that he thought the Chancellor was average, could he have been describing himself? He mentioned the Prison Service, for example, and prisons are pretty full, but I remember when Lord Ferrers was in Stoke Aldermoor in Coventry: his attitude was “Bang them up”. That was the attitude of the ex-Chancellor’s Government and the general attitude to law and order.
Under the stewardship of the previous Government, we certainly remember the lack of policemen, whereas this Government have increased police numbers. We can debate whether they are at the right or wrong levels, but we have increased the number of policemen on the streets, just as we have increased the number of wardens and assistant police officers on the streets, particularly in the inner cities.
The right hon. and learned Gentleman mentioned opinion polls. Well, he alleged that this side of the House was obsessed with them, but his new leader is also obsessed by opinion polls and image. Reductions in tax were mentioned, so let me remind the right hon. and learned Gentleman about debates on 17 per cent. VAT on fuel. We had many a debate in the Chamber on a Friday morning about the £10 winter allowance, which the previous Government did not do much to putup. We should also remember the Conservative Government’s record on the pensions link—they actually broke the link. To hear Conservative Members on their high horses tonight, nodding their heads when people talk about restoring the link, is, quite frankly, nothing short of hypocrisy when they were the party that took it away.
Mr. Graham Stuart: Will the hon. Gentleman travel back in time to 1980 when the link was broken? At that time, this country was economically on the floor after years of failed socialism, so the Government were forced into making that cut. Will he at least recognise that Conservatives have for many years been campaigning—I certainly have—to restore the link before 2012?
Mr. Cunningham:
What I remember about the 1980s is the destruction of the manufacturing industry of the west midlands, the 3 million unemployed, the capping of local government’s capital programmes, schools being left to decay through lack of repairs and the loss of council houses. The hon. Gentleman should therefore be very careful about who he lectures about the 1980s. It is always worth reminding Conservative Members exactly
what happened then. If the hon. Gentleman still wants to talk about the 1980s, let us talk about 15 per cent. interest rates and negative equity.
Even more importantly, when Conservative Members get on their high horses about pensions issues and try to blame the Chancellor for present pensions problems, let me remind them—and particularly the hon. Member for Beverley and Holderness (Mr. Stuart), who brought up the issue of the 1980s—about the mis-selling of pensions. I recall companies such as Rolls-Royce spending a lot of money trying to encourage people to leave SERPS and go into private pension schemes.
Mr. Geoffrey Robinson: Would my hon. Friend care to comment on another aspect of the issue raised by the Opposition: that after they broke the link, they failed to restore it in the following 17 years, whereas the Labour Government are committed to restoring it after nine, not 18, years in office?
Mr. Cunningham: I certainly agree with my hon. Friend about that.
When we talk about the mis-selling of pensions and the present crisis, I believe that one of the best things that the Government have done is to introduce the pension protection scheme. It is one of the most fundamental things that the Government have done, whereas the previous Government presided over a pensions disaster. So when we look at what this Government have done for pensions, the pension protection scheme is well worth taking note of, because 120,000 people will be able to benefit from it to the tune of 80 to 90 per cent. of their pensions. Certain companies such as Rover could have been excluded, but they are now going to be included. When people want to talk about who did what in the ’80s and ’90s and probably into the new century, they should be careful about what they say.
I welcome the fact that we have one of the highest growth rates in Europe, no matter how people try to play with the figures. I also welcome the fact that there are more nurses and doctors now; although we have had difficulties in the health service, the situation is not as diabolical as the right hon. and learned Member for Rushcliffe tried to make out, because we can overcome the present problems. One of the problems in the health service is the change in the way in which finances are administered. We are going from an old culture to a new culture, which is payment by results. That will take time to feed through because we are changing from an old culture, which involved running deficits, to a new culture, where people get paid for what they buy. That is a fundamental difference and it will take time to come through. I welcome the fact that we have more schoolteachers than we have ever had, that they are better paid than they ever were, and that we have more new schools. We could go on all night about what the Government have or have not done, and other hon. Members have outlined the Government’s achievements.
I will finish on a local issue in Coventry, where the Royal Mail is to move its sorting offices to Northampton. As the hon. Member for Northampton, South (Mr. Binley) knows, I have nothing against him, but there is concern in Coventry about the quality of
service that can be delivered from Northampton to Coventry, the times of postal deliveries and whether the 600 employees will keep their jobs. I do not think that the Royal Mail even has a site earmarked for a sorting office in Northampton. Conservative-controlled Coventry city council suddenly flipped its lid today, because it decided to support those Royal Mail workers, whereas it had been neutral.
I shall finish with this thought about what the Conservatives might do if they were to get back into power. Coventry city council has withdrawn the £3 a day payment to people who have disabilities and are doing jobs. That gives people a good idea of what we can expect after the May elections and, more importantly, what might happen if the Conservatives were to return to power.
8.52 pm
Mr. Edward Leigh (Gainsborough) (Con): It is a pleasure to follow the hon. Member for Coventry, South (Mr. Cunningham).
This is the last day of the last Budget of the present Chancellor. I was interested to note a few comments made in William Gladstone’s first Budget speech on 18 April 1853—comments which are strangely relevant to the present day and to what the Chancellor should be trying to achieve:
“These are the proposals of the government. They may be approved, or they may be condemned, but I have at least this full and undoubting confidence, that it will on all hands be admitted, that we have not sought to evade the difficulties of our position—that we have not concealed those difficulties either from ourselves or from others; that we have not attempted to counteract them by narrow or flimsy expedients...While we have sought to do justice to the great labouring community of England by further extending their relief from indirect taxation”.
Those are useful lessons from some time ago for the present Chancellor. I wonder whether the House is absolutely convinced that the present Chancellor has not used the “flimsy expedience” to which I have just referred and that he has managed to make an effective cut in indirect or, indeed, direct taxation on what William Gladstone called “the labouring classes”, namely all of us now—perhaps not all of us, but most of us.
The Public Accounts Committee was founded four years after that speech, so we are celebrating our 150th anniversary this year. Even in those days, and I hope even more so now, people appreciated the importance of parliamentary audit of the public finances as a key component in driving out waste and ensuring economy and efficiency. Over the years, I have attempted to convince others of my personal mantra. Sometimes it has been a lonely battle, but I remain convinced of its truth: in a growing economy with modest and costed efficiency gains, which are achieved through proper parliamentary audit, it is possible to deliver better public services and sustained and real tax cuts. That is my personal mantra. In a few minutes, I shall show how we might deliver that.
For a couple of minutes, I want to leave our problems of affluence, as we are sometimes too self-regarding in this country, and focus on the problems of the poorest of the poor in Africa. I was reminded of that at a meeting here today at which I listened to Archbishop Ignatius Kaigama of Nigeria,
who was talking about some of the problems that his country faces. The meeting was not that well attended—only three other colleagues were there—and was part of the Catholic Fund for Overseas Development’s campaign, “Live simply so that others may simply live”. We all applaud what the Chancellor has done conscientiously and correctly in the Budget to increase the amount of money that we, as one of the richest countries in the world, contribute to overseas development.
The archbishop was telling us about what happens to our money—that is where parliamentary audit is relevant, because the audit of public moneys in Nigeria is notoriously weak—when it gets to Nigeria. He spoke of £100 million a year of our taxpayers’ money going to Nigeria. Despite Nigeria’s being the sixth largest oil producer in the world, and despite the generous provision for help that, once again, we will make to it today, the poor in Nigeria are getting poorer. They are getting poorer even in the Niger delta—despite and often because of overseas aid—as a result of massive corruption, which is leading increasing numbers of people in this country to doubt the value of overseas aid. Rather than simply colluding with and congratulating the Chancellor on spending more on overseas aid, the Conservative party and others should put more pressure on him to ensure good civil governance, and that the money is properly spent.
To return to parliamentary scrutiny and public audit in this country, efficiency gains are increasingly the key element in our debates. I am proud that the Public Accounts Committee has tried to play a part in that, in its modest way, over the past few years. The Committee is surprised that further efficiency gains were claimed in the Budget so soon after the National Audit Office report mentioned by the hon. Member for Twickenham (Dr. Cable). That impartial report by Parliament’s auditors questioned the credibility of the figure previously claimed—the relatively modest figure of £13.3 billion. Therefore, if the Gershon claims are not in the bag, how credible is the Government’s claim that they will have saved an additional £26 billion by 2011? How ambitious is even that claim given that, as we are repeatedly told, the public sector as a whole spends well over £550 billion?
May I give one bouquet to the Government, and particularly to the Chief Secretary? I went to see him last year with the right hon. Member for Swansea, West (Mr. Williams) and a delegation from our Committee, and we requested more transparency. On 21 March, I received a letter from the Chief Secretary, in which he told me:
“We discussed last year transparency in the programme. Departments already account for their programmes and progress in their regular departmental reporting cycle. Reflecting the Committee’s suggestion, I have decided at this time to publish a consolidated breakdown of departmental performance across the three areas of the programme (efficiency gains, workforce reduction and relocation), and to break this down by workstream and cashable element.”
I am grateful to the Chief Secretary, as we have got more transparency, which is important. If we are talking about £26 billion, let us think about what that could achieve.
Mrs. Villiers:
Is my hon. Friend concerned that some of the Gershon programmes have impacted negatively on service quality? In particular, I am thinking of his
Committee’s report on the number of calls that went unanswered at the Department for Work and Pensions following the switch to call centres as part of the Gershon programme.
Mr. Leigh: Yes, that is a problem; it relates to an issue to do with cashable and non-cashable gains. We could have an entire debate on that. We need to have a serious debate on the impact of some of the Gershon reforms on public sector efficiency. If I may give a brief advertisement, let me say that there will be a Public Accounts Committee debate in a couple of weeks’ time at which we can talk further about this important point, and I am grateful to my hon. Friend for raising it in her intervention.
I was talking about the savings of £26 billion. That is an exciting promise—or promissory note—given to us by the Government. It could reduce the basic rate of income tax by up to 8p in the pound—a real reduction of 8p in the pound. Of course, the actual amount of that reduction would depend on the state of the economy at the time, but I offer that figure as a headline figure to show what could be achieved by efficiency gains—promised by this Government and audited by the Treasury. If we did not want to reduce income tax by 8p in the pound, we could build 860 schools or 130 hospitals, or use the money to reduce borrowing considerably. So that is an exciting claim.
Efficiency gains are an essential aspect of the debate. They are becoming increasingly important, and they are doubly important because we need to restore public trust in respect of what is happening to all the extra money that we have put into the public services. A recent King’s Fund study—a reputable study—showed that of the £19 billion that we the taxpayers have put into health, £6.6 billion went on pay, £2.2 billion went on the rising costs of drugs, £1.6 billion went on hiring more doctors to comply with new European Union employment laws, £1.1 billion went on new buildings, £1 billion went on medical equipment and £600 million went on negligence law suits. It showed that of the £19 billion, only £5.9 billion went on
“direct improvements, which included reduced waiting lists, greater use of day surgery, larger numbers of doctors, nurses and consultants, and elderly patients spending far less time in hospital”.
The debate has therefore changed, and it continues to change. We should be aware of that—I say that especially to my party. The public are becoming increasingly dubious about the claims of politicians that such large amounts of their own money are making a real difference. Indeed, we know that productivity in the NHS is declining.
I pay tribute to my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke)—a former Chancellor—for making a brilliant speech. It was a dissection of the Budget which I shall not even attempt to emulate because there is no need to, as the case has been made so well by him, and also by my hon. Friend the Member for Tatton (Mr. Osborne), the current shadow Chancellor. There is no need for me to repeat everything that has been said about matters such as the sleight of hand in the Budget—about the giving and the taking away.
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