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Baroness Hogg: My Lords, I am grateful to the Minister. Was he including in those figures the effective increases in indirect taxes?
Lord McIntosh of Haringey: My Lord, yes, of course. I would have said "direct taxes" if I meant direct taxes.
I turn to business taxes, which took up much time on the Opposition Benches. Corporation tax receipts are expected to be £32.1 billion, which is £2.3 billion less than last year and £3.2 billion if one excludes corporation tax from North Sea revenues. It is well recognised that there have been greater cuts in corporation tax for small and medium-sized enterprises. The proportion of tax revenues which come from business--that is, all business taxes--is down from 31.4 per cent of tax revenues under the Conservatives to 30 per cent today. This is a government who cut taxes for business.
There has been so little attack on the Budget in practice that I have to cut out large chunks of my speech. I wanted to defend what we are doing about productivity but no one has attacked us on that.
Noble Lords: Tell them anyway!
Lord McIntosh of Haringey: My Lords, of course, I recognise that we have a long way to climb. The noble Lords, Lord Woolmer, Lord Taverne and Lord Haskel, made that point most effectively. But even if we take the labour productivity measure--I understand the point made by my noble friend Lord Desai about taking capital productivity--according to the latest data, year-on-year whole economy productivity growth was 2.6 per cent in the third quarter of last year; manufacturing productivity was up by 5.4 per cent to December 2000; and there are encouraging signs of increasing productivity growth. Many of the detailed provisions in the Budget, and in the Budget speech, addressed that point.
The noble Lord, Lord Sheppard of Didgemere, made an interesting speech to which I cannot respond because it is outside the scope of what has been covered. However, the Government are consulting on a new tax credit for community investment to encourage private investment in enterprises in disadvantaged communities. I know that that is close to his heart.
I must qualify part of what I said to the noble Baroness, Lady Hogg. The figures I gave were for personal tax. It is not a question of the difference between direct and indirect tax, as I think she suggested, but of personal tax as opposed to business tax. I hope that that was clear in what I said because I then moved on to the separate subject of personal tax.
None of these issues was criticised, but I shall pick up two points about the environment and transport. The noble Lords, Lord Strathclyde and Lord Northbrook, profoundly misunderstand the nature of the climate change levy, which they describe as being an additional burden. It is not an additional burden in fiscal terms; the climate change levy is neutral. It is balanced by the reductions in national insurance contributions.
As regards particular points which were raised in the debate, the right reverend Prelate the Bishop of Hereford would like the grants for repairs to listed places of worship to include also unlisted places of worship. We might consider listed buildings other than listed places of worship before we went on to unlisted places of worship. The right reverend Prelate is in danger of us giving him an inch and wanting a mile--
The Lord Bishop of Hereford: My Lords, I am grateful to the Minister for giving way. The request was directed at places which could be used for community purposes if work was done to convert
them. That is at the heart of the matter. I was not referring to other places of worship regardless of the factor of community use.
Lord McIntosh of Haringey: My Lords, that is an interesting suggestion and I believe that I addressed it in my response to the noble Lord, Lord Sheppard.
There was no significant criticism of what was stated in the Budget about employment opportunities and the success of the New Deal. If there had been criticism, I would have hastened to reply to it from a very comprehensive and overwhelmingly convincing brief. We are taking a whole range of measures to make work pay. I am a little disappointed that the noble Lord, Lord Harris of High Cross, describes it as fiddling to address social issues. What he regards as fiddling we believe to be a virtuous circle. We are doing something which is socially just, because it makes poor people better off and encourages them to go back to work. One then reaps the sensible economic reward in that, by the way, it increases tax revenues. We are told that there is something deplorable about that.
But the Budget goes much further to provide support for families with children and to help to tackle child poverty. I have heard no criticism this evening about the children's tax credit and the measures on maternity and paternity pay. They mean that over the Parliament as a whole, following the Budget the tax and benefit changes introduced will lift over 1.2 million children out of poverty. There has been no comment on that from the Opposition Benches, nor any recognition of that element of social justice and common decency.
What we have seen over too many years in this country has been chronic under-investment in schools, services, transport and law and order. The noble Lord, Lord Taverne, believes that we could have made an earlier start to put it right at the risk of the kinds of results experienced in Ireland. I do not share that judgment. One had not only so many years of under-investment but also the chaos in public finances inherited in 1997. I refer to the double debt of £28 billion of borrowing. It takes time to turn round a tanker of that kind.
We have taken a responsible approach to public finances which allows us to allocate substantial new money to key public services--£43 billion over three years--as part of the 2000 spending review. The money will start to come on stream from next month. In the Budget--I shall not repeat these figures because they have not been criticised--over the next three years over £2 billion will be focused on health, education and tackling drugs and drug-related crime.
The plans announced in last year's spending review and this year's Budget provide for sustained, and sustainable, high growth in the British people's priority services. From 2001 there will be a real annual average growth of 5.4 per cent for education, 5.6 per cent for UK health, 20 per cent for transport in England--14 per cent for the UK--and 4.2 per cent for the criminal justice system in England and Wales. The noble and learned Lord, Lord Howe, called that
extravagant; the noble Lord, Lord Blackwell, said that it was an "unnecessary bad". The Conservative Opposition have said that they will stick with these plans, but they cannot have it both ways.In your Lordships' House there are radicals, or true Tories (if I may so describe them). The noble and learned Lord, Lord Howe, the noble Lords, Lord Stewartby and Lord Blackwell, and the noble Baroness, Lady Hogg, have joined together in forecasting doom about the future of the economy over the next few years. I have been doing this job for nearly four years. The opposition parties have been forecasting doom in each of those years but in none of them has the doom occurred. I respect the true Tories, including the noble Lord, Lord Harris. I do not know whether the noble Lord likes that description. I believe that he is the Real IRA as compared with the Provisional IRA.
Look at the scale and nature of the attack on this Budget from the Official Opposition. They have not attacked any of the fundamental propositions which the Labour Party has placed before the country this year and in other years.
Lord Sheppard of Didgemere: My Lords, I do not know whether I qualify as a true Tory. I am encouraged by the Minister's remarks. Do I understand that we shall not receive word until next month about real expenditure on the London Underground?
Lord McIntosh of Haringey: My Lords, the London Underground is a matter which depends not only on the Government but also on a number of other factors on which I do not believe that it would be appropriate for me to comment in the middle of ongoing negotiations. In the circumstances, how timid has been the attack of the Conservative Front Bench and how neutered its approach to public expenditure and taxation. It has been neutered because noble Lords opposite want to say that they will provide lower taxes and, at the same time, maintain public expenditure on what they know to be the priorities of the British people. They know that they cannot make those two objectives meet each other. Their pathetic attempts to defend what they describe as the gap of £8 billion--which would be at least twice that--make it clear that they have no answers to the economic problems which face this country.
7.36 p.m.
Lord Strathclyde: My Lords, I thank all noble Lords who have spoken, particularly for their congratulations to me on initiating this debate. We have proved that to hold a debate as soon after the Budget as possible is an extremely worthwhile exercise. I very much hope that the next government, of whatever complexion, will adopt the suggestions made by the Liberal Democrats and ourselves in opposition: that there should be a debate in government time properly organised by the government to debate the Budget. When the Finance Bill is published at the same time perhaps we should adopt some of the suggestions
of my noble friend Lord Saatchi and have a separate debate on the complexities thrown up by that process and be able to table amendments so that the Chancellor of the Exchequer can take them more seriously.
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