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5.56 pm
Mr. Jeremy Browne (Taunton) (LD): There are two main ways in which a Member of this House can judge a Finance Bill, a Budget or, for that matter, a Government. The first is to ask whether the measure has a vision, a sense of purpose and a direction. The second is to ask whether it has what the Prime Minister calls a moral compass. That is the issue that has occupied us to the greatest extent so far today, and the one to which I will devote the largest part of my speech. It is the specific issue of the doubling of the 10p tax rate that is causing the greatest amount of grief and unhappiness among my constituents and among people right across the country.
First, however, I want to touch briefly on whether the Budget had a vision or a sense of purpose, and whether it told us what the Labour party seeks to achieve and what drives the Government. In this debate, we have been discussing a change that was made in the Budget of 2007. The 2008 Budget has escaped without being given much attention at all because it was the most puny, unambitious Budget in living memory.
During the parliamentary recess, I had the opportunity to attend a commemorative service in my constituency to mark the 40th anniversary of the assassination of Martin Luther King in Memphis, Tennessee, in 1968. During the service, I reflected that he had been a man of huge vision. He was an inspirational figure who had a dream and who had stood on the mountain top. He had seen the promised land. How diminished our politics seem by comparison today.
The Labour party, which was founded just over a century ago, was founded for entirely noble reasons. Many people in this House, not only those in the Labour party, will conclude that the formation of the Labour party was to the benefit of the politics of this nation and the many people who live in it. The Labour party was out of government from when I was eight years old until just before my 27th birthday. During that period—from the earliest that I can remember through to my mid-twenties—many people worked in the Labour party to try to make it fit to govern this country again. Many people, including those on the Labour Benches, when they heard this year’s Budget, will have been entitled to ask, “Is that it? Is that what it was all for? Is this what our great party has become?” It was the thinnest, most unambitious, managerial Budget that I can remember.
Another notable American politician, Barack Obama, is fond of saying that politics is becoming smaller just as the issues are becoming bigger. That is particularly true in relation to this Government, who seem to have no purpose or sense of direction left. Yet there are a number of visionary causes that they or any UK Government could adopt. After a massive expansion over the last decade, the Government are now spending £1,700 million every single day—in fact, the Government’s
daily expenditure is now more than the entire expenditure of the Foreign and Commonwealth Office for a whole year.
As I say, there is no lack of issues for the House and the Government to get to grips with; the question is not “How much?” but “How?” We are no longer in the area of talking about whether taxes and public spending can be endlessly raised; rather, we are in the area of talking about how we can spend that money more efficiently and achieve better value for money on behalf of all our constituents in order to achieve the objectives that we all share. The primary domestic objective must be to make public services more accessible and more accountable. How can we, as a group of politicians, ensure that people of all incomes can be empowered to shape their own lives? The big domestic challenge of the 21st century is to create health and school systems that are fit for our times—not just through extra public spending, but through meaningful reform.
Of course, the greatest challenge of all facing politicians of our era is how we can protect our planet from ruinous climate change. There is clearly an agenda there for a Government who have vision, a sense of direction and a sense of purpose—a Government who can grasp the scale of the threat and the opportunities and who have the imagination to respond.
Stephen Hesford: The hon. Gentleman is talking about vision, so has he not heard of the Climate Change Bill, which is going through the House? How does that Bill square with the idea of the Labour Government not doing anything about climate change? I simply do not understand the hon. Gentleman’s point, as we are the only Government in the world to introduce a Bill to deal with climate change.
Mr. Browne: I did not claim in my opening remarks that the Government had done nothing at all; I said rather that the scale of their ambition was far too puny, timid and lacking in ambition. That is very much true of the Climate Change Bill; in fact, I could not have come up with a better example if I had sat in my office and given considerable thought to the matter. That Bill is a proposal put forward by a Government who have been in office for 11 years, during which time the issue of climate change has become considerably more acute. It would be fair to say that my party was talking about environmental issues to a greater extent than the other parties in the 1997 election and before, but the Government have put this proposal forward and made some progress. The Bill, however, does not go far enough. Instead, we had a Budget that confirmed how small and how visionless Labour in government has become. If I were a Labour Member, that—beyond any specific proposals in the Budget package—would depress me most: the sense that the momentum of the whole exercise and the entire reason for being in government have come to a halt. The Government are petering out, running out of ideas for the future of this country.
Rob Marris:
May I suggest that the hon. Gentleman is simply in the position of not sharing the Government’s vision? There is a Government vision. The hon. Gentleman talks about the NHS; there is a Government vision based on more autonomy for hospitals, foundation trusts, “choose and book” and so
forth. The Government have an agenda on school education, which involves empowering parents, as recent announcements show, and they have an agenda on what goes on in schools and further education colleges—training, diplomas and so forth. There is also a Government vision in respect of higher education and—
Mr. Deputy Speaker (Sir Michael Lord): Order. That is sufficient for the time being.
Mr. Browne: I am grateful for that intervention. I would not disagree that there is a list of Government policies, but I would disagree that they amount to a vision. I was not present at the parliamentary Labour party meeting—obviously, because I am not a member of the parliamentary Labour party—but I heard reports, which the hon. Gentleman might like to confirm, that Labour Back Benchers told the Prime Minister that they did not know what he stood for. At least with Tony Blair as leader, people felt that there was a sense of direction; they may not have liked it, but they were not left confused about what the Government were trying to achieve. Many people in the Labour party and beyond it no longer know precisely what the Prime Minister and the Government stand for.
That brings me on to my second and larger point, which is the Government’s moral compass and the doubling of the 10p tax rate that was in the Budget of March 2007. People in my constituency and elsewhere are entitled to ask what took Labour Back Benchers so long. Seventy three Labour MPs have signed early-day motions critical of the change, but the Budget was on 21 March 2007—precisely 13 months ago today—when the Government Benches were full of Labour MPs waving their Order Papers and braying at the electoral triumph just laid before them by the man who is now the Prime Minister. It has taken them an awfully long time to look at the details of the Budget.
Mr. Russell Brown: Perhaps the hon. Gentleman should not read too much into the number of Members who have signed early-day motions. I, for one, have not signed an early-day motion on this matter, but I can assure him that within two to three weeks of last year’s Budget, I was sitting at a table with our Prime Minister, then Chancellor of the Exchequer, expressing my severe reservations about the announcement.
Mr. Browne: We “Browns” must stick together to ensure that the main “Brown” is put in his place. [Interruption.] I keep hearing sedentary interventions, asking whether the hon. Gentleman was satisfied with the conclusion of his negotiations with the current Prime Minister. I will gladly give way to him again if he will tell me whether he feels that the current arrangements are to his satisfaction.
Mr. Russell Brown: If the hon. Gentleman hangs around and I manage to catch Mr. Deputy Speaker’s eye, he may well hear what I have to say about that.
Mr. Browne: That sounds a tantalising prospect. The next four hours will fly by.
I remember that, on 21 March 2007, the Labour Benches were awash with a sense of euphoria that the then Chancellor had paved the way to Downing street with no contest, as no one would stand against him. The leader of the Conservative party rose to his feet—we have to remember, of course, that my constituents pay more in their taxes for the salary of the right hon. Member for Witney (Mr. Cameron) than they do for any other Opposition MP, so we are entitled to think that he will stand head and shoulders above us all in respect of his ability to analyse the Budget—but unfortunately, he did not notice the doubling of the 10p rate. In fact, in the first line of his speech, the leader of the Conservative party said the following words on behalf of the 5.3 million people who were losers in the Budget:
“Well, the Chancellor has finally given us a tax cut.”—[ Official Report, 21 March 2007; Vol. 458, c. 829.]
Mr. Hammond: Just for the record, the reason my right hon. Friend the Member for Witney (Mr. Cameron) did not notice that is that it did not appear in the Chancellor’s speech. We had to get the Red Book and plough through its tables to understand precisely the sleight of hand that the Chancellor had used.
Mr. Browne: I am grateful for that intervention, which brings me perfectly to the next speech that was delivered on that occasion, which was by my right hon. and learned Friend the Member for North-East Fife (Sir Menzies Campbell), the then leader of the Liberal Democrats— [Interruption.] Indeed, he is not our leader now, but he made a speech that would have informed both Labour and Conservative Members if they had taken the opportunity to listen to it. If you will indulge me, Mr. Deputy Speaker, I will cite what he said at some length. In the same debate as the leader of the Conservative party welcomed the tax cuts, my right hon. and learned Friend said:
“The Chancellor told us as he sat down, to waves of applause, that he would cut the basic rate of income tax from 22p to 20p. On the face of it, that is a Liberal Democrat proposal and a welcome one. But if one looks carefully, one sees that the revenue to justify that reduction will be obtained from the abolition of the 10p rate. To fund the reduction, income tax will be increased for many taxpayers. One could say that we will be asking the poor to subsidise the rich. That is an example of the sleight of hand that the Chancellor has demonstrated in the past.”—[ Official Report, 21 March 2007; Vol. 458, c. 834.]
[Interruption.] I hear sedentary interventions once again, but there is a difference between being the official Opposition and being an effective Opposition; just being numerically superior in the House of Commons does not make Members more able to stand up on behalf of their constituents. [Interruption.] We will come on to the Conservative party in more detail in a few moments, as its tax policies deserve greater scrutiny.
Mr. Hammond: Just for the record, there is also a difference between having to respond to the Chancellor from the moment he sits down and responding to him after having had the benefit of perusing the Red Book for half an hour.
Mr. Browne: If the Conservatives cannot stand the relative heat of being a smaller Opposition than Michael Foot was able to muster, they are obviously not quite the Government in waiting, as they have come to style themselves in recent weeks.
Let us go back to 21 March 2007. Labour MPs, who were hugging themselves with joy because their re-election had been confirmed on the backs of more than 5 million people who were losing out, rushed off to the Tea Room to gossip excitedly about what had just been announced. As a matter of courtesy, as well as of self-preservation, they would have been well advised to stay and listen to the leader of the Liberal Democrats. Of course, the London media commentators in the Gallery all rushed off as well, back to their computers. As a result, the warnings that the Liberal Democrats gave on Budget day, within minutes of the Chancellor sitting down, were not heeded by those Labour MPs, media commentators and others.
The media continue to describe those who are losing out under the March 2007 proposals, which are just being implemented, as low earners. Low earners are affected, but not just low earners. In many communities around the country and in constituencies such as the one I represent, a salary of up to £18,000 does not constitute low earning, although it may sound like low earning to some in the London media commentating classes. Such wages are typical in places such as Taunton, in Somerset and right across the country. Right across my constituency, people such as farm labourers, hotel receptionists and those who work in service industries are adversely affected by the proposals that are being introduced.
People in the House and elsewhere should not delude themselves that we are talking about just a small number of people who are marginally oppressed. We are talking about millions of people who are contributing to the community in every constituency represented here.
Mr. Brian Binley (Northampton, South) (Con): I am most grateful to the hon. Gentleman for giving way, because I wonder whether he can explain why that paragon of virtue—that quick-on-the-draw man—was rejected by his party as leader and why he is not standing here now, continuing with those great virtues. Did the hon. Gentleman support that particular paragon of virtue?
Mr. Browne: I did, although he chose to relinquish his post. However, it reflects well on our party that we have managed to find another person of equal talent—some would say even greater, but that is for other Members to conclude.
I am confident that at the next general election, when the leader of the Liberal Democrats, assisted by my right hon. and learned Friend and others, puts his case to the electorate, the voters of this country will not be impressed by a Labour Government who have left more than 5 million people on low and low to middle incomes worse off.
The Prime Minister is now in a state of absolute denial about the effect of his changes. According to reports that I hear second hand—I am happy to take interventions from Labour MPs on this—he is telling the parliamentary Labour party that nobody will lose
as a result of the changes made in his final Budget, when we know, and as has been confirmed this afternoon by the Chairman of the Select Committee on the Treasury, the right hon. Member for West Dunbartonshire (John McFall), that more than 5 million people will lose as a result of the changes announced in 2007. No wonder Lord Desai, a distinguished economic commentator on the Labour Benches in the House of Lords, said:
“Gordon Brown was put on earth to remind people how good Tony Blair was”.
We have a complete disintegration of discipline in the Labour party. We have the Prime Minister, waiting in an anteroom in the west wing of the White House for his audience with the most powerful politician in the world, having to divert his attention to emergency phone calls to a Treasury Parliamentary Private Secretary—not a PPS from another Department, but a PPS from the relevant Department—so that he could plead with her, “Before I have an audience with George W. Bush about issues of global magnitude, please, please will you not embarrass me by resigning as PPS to the Chief Secretary?” It is a pitiful state of affairs.
The hon. Member for Sheffield, Hillsborough (Ms Smith) was not the only rebellious PPS—we have a full-scale revolt: the hon. Members for Sittingbourne and Sheppey (Derek Wyatt), for Blaydon (Mr. Anderson), for Barnsley, East and Mexborough (Jeff Ennis), for Hove (Ms Barlow), for Stafford (Mr. Kidney) and for Ealing, North (Stephen Pound), and, no doubt, many others, whose unfavourable comments I have yet to read in the newspapers. The Chancellor used his Budget to tell us that he would crack down on carrier bags; the Labour Chief Whip is now having to crack down on the bag carriers.
It is an extraordinary state of affairs that it has taken Labour MPs so long to realise the consequences of doubling the 10p rate. That proposal was not only in last year’s Budget, which took place on 21 March 2007, because only a month ago, on 18 March 2008, during the Divisions in the House on the Budget resolutions, we yet again had a vote on the 10p rate. The Government’s position was carried with the support of precisely those Labour MPs who are now making such a fuss, because, as I understand it, they had not then had the opportunity to talk to their constituents and they had not canvassed for the local elections. [Interruption.] As is being said from a sedentary position, it is amazing what an opinion poll or two will do to refocus minds and allow people to rediscover their consciences.
Rob Marris: I am grateful to the hon. Gentleman for his generosity in giving way. I am a PPS and I have expressed reservations to the Government. I did so in the House on 30 April last year.
I caution the hon. Gentleman. I take some of his points about equality and fairness for the lower-paid, but before he goes too far down this line, he should remember that two years ago his party was making proposals for swingeing increases in green taxes, some of which would be counterbalanced by drops in other taxes. The hon. Member for Eastleigh (Chris Huhne), speaking for the Liberal Democrats on those matters, made it quite clear that green taxes would be ratcheted up and up and up. Given that those measures would have been there to change behaviour, they would have affected the lower-paid badly.
Mr. Browne: I do not want to go too far off the beaten track, but the point that we have consistently made, and which the Government have not heeded, is that there will be public support for environmental taxation only if that taxation is offset by reductions in other taxes, most notably income taxes.
I am in a strange position. I took an intervention from one Labour Back Bencher, the hon. Member for Wirral, West (Stephen Hesford), who said, “Look at our environmental credentials; they are greater than you claim they are,” and I am now hearing that the environmental credentials of the Liberal Democrats are excessively ambitious. Yet again, the lack of any sense of purpose and direction in the Government becomes obvious.
I was listening to Radio 4 on the evening of Friday 18 April, and when asked what would happen as a result of the growing rebellion in the Labour ranks over doubling the 10p rate, a Treasury Minister said, “Watch this space.” Well, we watched it today, and unless I missed something the Chief Secretary said no changes were possible. In fact, over the weekend, she took to the airwaves to damp down any speculation that that other Treasury Minister might have been suggesting or hinting at imminent changes.
Labour MPs need to realise that there is no great salvation coming from the No. 10 bunker; they are on their own. In the bunker, all is dither and meltdown. If they want to save their lower and lower to middle income-earning constituents from taking a big tax hit precisely when their food and other bills, council tax and fuel bills are going up, that will not be achieved by this Prime Minister and this Chancellor. Labour MPs will have to act alone to try to represent the interests of their constituents.
Mr. Russell Brown: I thank the hon. Gentleman for giving way once again. If Labour Members are looking for some kind of saviour and an answer to the issue, we did not get one from the main opposition party. Can he give an indication of what his party would do? I honestly believe that this issue is far more complex than some individuals understand.
Mr. Browne: I am again grateful for an extremely helpful intervention, because it is my party’s policy to reduce income tax rates on the lowest earners. Hon. Members must remember that the Labour party and the Conservative party are committed to offering identical levels of taxation at the next general election. I hope that my party will have the scope to offer even more than we already propose to help some of those people on the lowest incomes in this country, who in my view are paying far too great a proportion of their income in taxation.
The hon. Gentleman has also brought me neatly to the Conservative alternative to the proposals in the Bill. As I said earlier, the Conservative party leader did not notice the doubling of the 10p rate, so I must rely on quotations from other Conservative Front Benchers for guidance.
On 16 April, while the House was in recess, the shadow Chancellor of the Exchequer in a national newspaper wrote:
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