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I started my speech by commending the firemen who died over the weekend, and I also pay tribute to our servicemen and women who are fighting in Iraq and Afghanistan. The whole nation—all of us—must do more to honour the commitment of our servicemen and women. Without going into the detail of the military covenant and criticising the Government where I think that they have broken it or not done enough, as a nation and on the media level, and perhaps at the Government, Opposition and prime
ministerial level, we are failing to recognise the sacrifice that those men and women are making.
If the body of a dead serviceman that has been returned to Dublin can receive a full military funeral, why cannot I see such a funeral on our television? Perhaps parents and relatives do not want that, but we seem collectively to be playing down the commitment of those men and women, which we should not do. This is not a particular criticism of the Prime Minister, but the approach must be Government-led. The Government must show at the highest level that they are honouring the bodies coming back home and those who are still out there fighting, in which case the media would do more. We are not giving such matters enough public attention, and the media should do a lot more to show the commitment of those men and women, particularly those who have been killed.
Those servicemen and women who have been seriously injured should be taken care of properly and appropriately for the rest of their lives. Today, we have discussed the millions of new houses that the country needs, including affordable housing and social housing, and I happen to believe that our servicemen and women should have the finest housing that the state can provide.
Soldiers want to know two things before they go into battle. First, they want to know that there is good casualty evacuation to get them out if they are injured. They are willing to take the risks—you do not think that you will get shot, because you think it will be somebody else—but they always believe that the British Army will get them out and give them good casualty treatment, if they are injured. Secondly, they must believe that their wife and kids are being well taken care of and that their family back home will be okay if something happens. Rightly or wrongly, they do not have that confidence at the moment, which is not necessarily only the Government’s fault.
Collectively, as a nation, we are turning a blind eye to Afghanistan, where we will have to remain for some time. We cannot cut and run from Afghanistan, because that problem will pursue us around the world if we do. We are there, and we must see it through properly for some time. We must also ensure that our forces are not overstretched and that we commit the necessary numbers.
This year’s Queen’s Speech is gravely disappointing. It does not include the measures that I want to see to tackle some of the problems in this country, and for that reason I will not support it.
7.8 pm
Tony Baldry (Banbury) (Con):
We were told earlier in the summer what was going to be in the Queen’s Speech, but we were not given an opportunity for a debate. Since then, we have had the pre-Budget report and the announcement of the comprehensive spending review for the next few years, but again we were given no opportunity to debate those matters. This debate is in reality the first opportunity seriously to examine the Government’s performance since the Prime Minister moved into No. 10 Downing street and ceased to be Chancellor of the Exchequer. The Prime Minister’s first few months in office have shown him to be weak, ineffective and indecisive. He is desperate that we
should all forget that he oversaw the nation’s finances for 10 years as Chancellor of the Exchequer, and it is instructive to consider the strength in the economy now and compare it with the performance of the economy in 1997.
As my hon. Friend the Member for Sevenoaks (Mr. Fallon) has said, the Government have been in office for 10 years. When my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) was Chancellor of the Exchequer in 1997, economic growth was 3.2 per cent.; today, 10 years later, it is down to 2.9 per cent. In 1997, central Government borrowing was 0.8 per cent. of GDP; today, after 10 years of this Government, it is up to 2.5 per cent. of GDP. In 1997, borrowing as a percentage of GDP was 0.7 per cent.; today, it is up to 2.4 per cent. In 1997, net borrowing was £6.1 billion, but today it is a staggering £34 billion. Public debt in 1997 was £352.9 billion, but under this Government it is predicted to be a staggering £638 billion in a couple of years’ time. The proportion of national wealth in GDP taken by tax in 1997 was 34 per cent.; today, that is up to 36.8 per cent.
Particularly telling about what 10 years of Labour Governments have done is that in 1997, the UK economy was ninth in the International Monetary Fund yearbook ranking; today, it languishes at 20th place. Effectively, on average, every year for the past 10 years we have slipped behind yet another competitor country in the global economy. We are falling further and further behind as a consequence of the Government’s policies; every single economic indicator is going in the wrong direction.
Incidentally, the statistics that I have mentioned are not mine, but the Treasury’s. If anybody wants to check on how badly the UK Government are performing in respect of the economy that they inherited in 1997, that person has only to look at www.hm-treasury.gov.uk/economicdataandtools/financespendingstatistics/pubsecfinance/psfstatistics.cfm—it is all there. The Government’s own statistics tell them how badly they are doing.
Those Treasury statistics show that all is not well with the British economy. Real living standards are falling and disposable incomes are being squeezed. As a consequence of the Chancellor’s recent pre-Budget report, families will pay some £2,600 more tax every year. To see that, one has only to look, again, at the Treasury’s own figures. The total tax paid now by the country’s 31.6 million taxpayers is £550 billion; according to Treasury figures, that bill will increase to £724 billion in five years, increasing the average family tax bill—in my constituency and everywhere else—by £2,600. Taxes are going up.
David Taylor: Will the hon. Gentleman give way?
Tony Baldry:
I shall gladly give way to the hon. Gentleman, whose attendance is usually assiduous. However, he is about the only Labour Back Bencher present, and he drifted in about 10 minutes ago in a slightly dilettante way. It is sad that there are more Ministers on the Treasury Bench than Back-Bench Labour MPs who have bothered to turn up for the whole of this opening day of the Queen’s Speech
debate. It is pretty pathetic that those on the Treasury Bench cannot succeed in getting more Labour Members of Parliament to take part in the first day of debate on the Gracious Speech; apart from anything else, it is rather insulting to Her Majesty.
David Taylor: I am grateful for the hon. Gentleman’s courtesy and compliments.
Why did the hon. Gentleman omit from his litany two crucial economic statistics that are perhaps more important than those that he cited? First, there is the proportion of aggregate debt relative to GDP in 1997 and 2007. Secondly, why did he not say that during the 11 and a half years of Mrs. Thatcher’s Governments, the average tax-to-GDP ratio was 43.5 per cent., and that in the 10 years and a little of Mr. Tony Blair’s Governments that ratio was 39 per cent.? Why does the hon. Gentleman not include those figures in his condemnation of the Government?
Tony Baldry: The hon. Gentleman’s most ingenious special pleading will not persuade my constituents that taxes are not going up and services are not going down—they see rising taxes and declining services every day. They see that Government borrowing is going up. If the hon. Gentleman had bothered to come in earlier, he would have heard the excellent exposition of my hon. Friend the Member for Sevenoaks, who sits on the Treasury Committee. There is absolute chaos; the Government cannot even manage the major economic factors and systems involved in running the Bank of England and managing our banks. Owing to the Government, we have had the first run on a national bank since—
Tony Baldry: Since 1878. So a little more humility from the hon. Gentleman would be appropriate.
To add to our woes, not only are the nation’s finances out of control, but unemployment is also increasing; in the past year, it has risen faster in Britain than anywhere else in the western world. Real unemployment—the number of people out of work and on benefits—is now at more than 5 million. Last week, the Sapa group, one of the UK’s biggest aluminium producers, announced that it is to close its plant in Banbury, with the loss of 337 jobs. That is a tragedy for every person who will lose their job; it is also a particularly sad time for Banbury, as the Alcan site has been part of the town’s soul ever since the aldermen of the borough of Banbury raised the money to buy the original land to attract Northern Aluminium to the town early last century.
As companies such as Sapa struggle with increased competition from low-wage economies such as China and Malaysia, what is the Chancellor doing? He is adding to the burdens of business. After 15 years of global growth, we should be running a surplus; instead, we are entering what the Chancellor himself admits are difficult times—the Government’s borrowing is out of control and they are having to raise ever more taxes.
Next year, the Chancellor wants to raise a further £2.5 billion in taxes. According to a rule of thumb, £1 billion is about equivalent to a penny in income tax. How is the Chancellor raising that extra tax? He is doing so by hammering businesses, particularly small
and medium-sized businesses, and by increasing council taxes. There is an effective 80 per cent. rise in capital gains tax for smaller business—it is little surprise that the Federation of Small Businesses said that the pre-Budget report was
“bad news for small business, adding to the tax burden. The chancellor’s statement is a huge disappointment for most small businesses still reeling from the increase in corporation tax announced in the last budget.”
The rise in CGT hits particularly hard the owners of the 4.5 million UK firms that employ fewer than 20 staff and contribute half the nation’s GDP. It is little wonder that the Minister for Trade Promotion and Investment, Lord Jones of Birmingham— [Interruption.] The hon. Member for North-West Leicestershire (David Taylor) may scoff, but the Prime Minister brought Lord Jones into the Government’s “big tent”. I should be interested in running a sweepstake with the hon. Gentleman on how long Lord Jones remains a member of this Government. I wager that not many months into next year he will resign or find it difficult to keep up collective responsibility, given the Government’s economic policies.
It is little wonder that Lord Jones acknowledged that companies regarded the new capital gains tax changes as terrible. He should know, because as the head of the CBI, he warned the Government; as a newspaper article headlined it, “CBI warns Brown: do not tax your way out of slump”. However, that is exactly what the Government appear to be doing. What a pity that the Government did not take Lord Jones’s advice, given all his experience of business.
Even the Chancellor now realises that he has cocked up on CGT and he is trying to think of ways to sweeten the pill. As Richard Lambert, the CBI director general, has observed:
“There are many other businesses and investors who need help as a result of these ill-thought out pre-budget changes.”
The Government’s changes to CGT attack business and enterprise. As the Institute of Chartered Accountants in its parliamentary briefing says:
“This change will create a considerable number of winners and losers. The losers are businesses...The winners appear to be holders of non-business assets, for example second homes, and particularly those who have held non-business assets for a short period”.
So there is a crazy situation, in which the Government are hitting business and those who create jobs and employment and rewarding those who have held non-business assets for a short period. The businesses in my constituency being hit with more tax still have to cope with the ever-increasing burdens of pointless red tape. I hope that the Government will pay careful attention to the Public Accounts Committee’s recent report, which demonstrates, for example, how ridiculous it is that owners of new businesses are badgered by numerous different parts of Her Majesty’s Revenue and Customs all wanting the same bits of information. It is not surprising that the rate of new business start-ups has fallen since 1997. What is the point in the Queen’s Speech of the Government saying:
“A Bill will be introduced to reduce regulatory burdens on business”,
when the Public Accounts Committee clearly shows in its report that they are stifling business with ever more red tape?
The other group hit by the Government in getting more taxes are council tax payers. This is all pretty cynical on the Government’s part. In short, the Government give local councils less grant knowing that they will have to put up council taxes as a consequence; they then hope that local councils and councillors will be blamed, not them. I do not think that people will be conned—they will understand that their local council has been short-changed by the Treasury. Local government has had the worst settlement from the Government in a decade, and that is bound to lead to above-inflation increases in council tax bills.
Andrew Stunell (Hazel Grove) (LD): I think that I heard the hon. Gentleman say that it was the worst local government settlement for a decade. Would he like to tell us which Government were in power when that last awful settlement happened?
Tony Baldry: The hon. Gentleman, who, like many others, has just wandered into the debate, would do rather better if, rather than making a point, he sought to identify with the many council tax payers throughout the country who, as a consequence of the Government’s local government settlement, will have to pay considerably more of their disposable income in council tax, especially those on low and fixed incomes—but the Liberals do not seem to be particularly concerned about them. One of the interesting things about the opinion polls at present is that they suggest that we can hope to be spared that sort of cheap jibe from Liberal Members in the next Parliament, as we will have fewer of them. More seriously, I hope that the hon. Gentleman, who occasionally seems to take an interest in issues concerning the elderly, would concede that not only has local government been left with a terrible settlement but there is still a substantial hole in funding to care for the elderly—but perhaps he also finds that a matter of mirth.
Tony Baldry: I will not give way to the hon. Gentleman again.
Counties such as Oxfordshire are getting increasingly hacked off that we are paying an ever-increasing amount in taxes and getting an ever-decreasing level of support from the Government. On average, every one of my constituents in north Oxfordshire pays £2,000 more in taxes to the Treasury than the Government spend on providing services to people living in Oxfordshire. In short, we are paying more and getting less. One phrase in the Gracious Speech that my constituents will find particularly offensive in that regard is:
“My Government is committed to providing a healthcare system organised around the needs of the patient.”
Horton general hospital in my constituency is facing the threat of a serious downgrading of services whereby, for example, consultant-led obstetric services are to be removed and taken to John Radcliffe hospital. We will no longer have a special care baby unit or 24/7 children’s services, notwithstanding the fact that they were introduced following a public inquiry when Barbara Castle was Secretary of State. I do not see how the Government can possibly convince my constituents
that a serious downgrading of services at the local general hospital is in some way an improvement in the NHS and a health care system organised around the needs of the patient.
It is also irksome when we see the Government wasting substantial sums of money locally. On Thursday, the National Audit Office, following a request by me, will publish its report on how the Home Office managed to waste, on its own figures, a phenomenal, staggering £36 million on the project to build an asylum centre at Bicester for 750 asylum seekers. This was always a crazy project condemned by every organisation interested in the welfare of refugees, and it is not surprising that eventually the Government came to their senses and scrapped it. What is surprising is that they squandered millions of pounds on this aborted project, where neither a single brick was ever laid nor a single sod ever turned. The Ministry of Defence site where the centre was going to be built is exactly the same now as it was before the Home Office acquired the land. How could it possibly have spent, and wasted, £36 million on doing no work at all? We will probably never know the full truth because, despite the NAO inquiry, it conveniently managed to lose several of the papers relating to where the money has gone, so the NAO was unable to examine them. Like most of the Government’s immigration policy, it is a complete shambles. We could have done a considerable amount locally with £36 million. No one can any longer have any confidence in what the Government do on asylum and immigration; they simply have not got a grip. As Martin Wolf observed in The Financial Times at the weekend,
“the government seems to have little idea how many immigrants are in the country. It has just had to admit that the number of foreign born workers who arrived since 1997 was 1.5 million. Since 1997, foreigners also seem to have filled more than half of the additional jobs created since 1997”.
How can the Government get the figures so wrong?
It was somewhat pathetic for the Prime Minister, at the Labour party conference, to bleat about British jobs for British workers. Rather than bleating such meaningless platitudes, he would be better advised to get a grip on skills provision in this country. The consequence of globalisation, as shown only too brutally last week in Banbury with the experience at what everyone locally still considers as Alcan, is that even skilled and experienced workers here are having to compete with Chinese or Malaysian workers, and low-skilled or unskilled workers can no longer find a job because their factory’s production has effectively shifted to China.
The Leitch report on skills made devastating reading, yet the response of the Government and the Prime Minister has merely been confusion at the heart of Whitehall. In a constituency such as mine, much of the training for work is done by the local further education college, but following the Prime Minister’s reorganisation of Whitehall, Oxford and Cherwell Valley college of further education remains uncertain as to where FE stands. Is it the responsibility of the Department for Children, Schools and Families or of the Department for Innovation, Universities and Skills? I wrote to both Departments asking them who is responsible for FE and received identical letters saying:
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