Orders of the Day — Schedule 20

Part of the debate – in the House of Commons at 12:00 am on 4th July 1968.

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Photo of Mr Iain Macleod Mr Iain Macleod , Enfield West 12:00 am, 4th July 1968

At an appropriate point in what will be a short speech I shall make some reference to the extremely interesting point which the hon. Member for Salford, West (Mr. Orme) made about unemployment. He knows that I share his anxiety about this matter.

The Motion before the House is, "That the Bill be now read the Third time". One is tempted to ask, what Bill? We had to pass a special Motion this afternoon, contrary to our custom, to enable us to discuss a Bill which does not exist. The latest copy which I have has, for example, an interesting Clause 50 entitled, "Provision for a National Lottery", but the only Clause which was put to a free vote of the House was appropriately rejected and, presumably, will not appear in the final version of the Bill. We also this afternoon, at high speed, put in about 100 Government Amendments, and much of the Bill, including, in particular, one Schedule to which I shall refer, is not before the House. All this concentration is to meet the traditional deadline of 5th July, for today is, of course, the 4th. I have always thought that the Chancellor was wrong to attach any particular importance to this date, and I think it has now been shown that it is not a necessary part of our affairs.

I hold the view that the most boring of all debates are those in which Guillotine battles are fought all over again, and I propose to make very little reference to the question of who was to blame in this matter. The hon. Members for Heywood and Royton (Mr. Barnett) and Ashton-under-Lyne (Mr. Sheldon) have a simple answer. They say that it is my fault. I can never be sure whether the heavenly twins are really very simple people or whether they are very clever people who constantly affect simplicity. I suspect that it is the second of the two, but, if they will allow me to make one observation, it is that both of them came into the House in, I think, 1964, they have therefore only had the experience of sitting on the Government benches during Finance Bills, and as in the nature of things unhappily they will not be with us in the next Parliament, their education will remain somewhat incomplete.

It is a matter which, as a former Leader of the House, I have always taken a great interest in, and I respond to some'thing the Chancellor said earlier. I invite the House simply to consider for a moment one Clause and one Schedule. I refer to Clause 16 and Schedule 9. The Chair upstairs selected no fewer than 36 Amendments on this entirely non-controversial Clause and this equally non-controversial Schedule. I was horrified, but the Chair and its advisers were right. There is no question about it, and it is very difficult to see how even into a Guillotine timetable one can fit sensible discussion of that length. The discussions took the whole of a day and the whole of a night and, as a result, the Schedule was entirely rewritten and over 50 Amendments to it were put before the House this afternoon.

It is clear that we ought at least to look at special methods of considering Clauses and Schedules of that nature. It does not matter what solution we come to, but that sort of procedure—which was wholly right; the Chair both downstairs and upstairs was entirely right in what it did— cannot be tortured into a normal Committee such as we have upstairs or downstairs. My view, as is known to the House, is that the right and best solution is that all stages should be held on the Floor of the House. Nevertheless, I would wish to study what the Chancellor said today, because on Clauses like that which I have indicated—and there are some others—I can see a genuine case for special treatment, which might take the form of a division of the Bill. I do not want to go beyond that now. I will study the Chancellor's exact words in HANSARD.

Many recent Finance Bills have become quite irrelevant by the time they reached the Third Reading debate or, at any rate, the Recess. That was true of the 1966 Bill, which was completely overwhelmed by the measures of 20th July. It was true of the 1967 Bill, when "Steady as she goes" turned out to be a journey towards the rocks of devaluation. This Finance Bill, to which, if the House agrees, a Third Reading will be given tonight, has more relevance—and that would not be difficult—than any of the previous Bills that we have had to consider.

Yet my view of it and of the Chancellor's Budget statement remains basically the same as when I first spoke after him. I have consistently been less optimistic than he has, as he knows, and I would argue that all the developments—the new forecasts of the National Institute and the Chancellor's hedging this evining—make it clear that events have come closer to the view that I put before the House at the time of the Budget and the Second Reading debate than the view of the Chancellor.

The Chancellor misunderstands the point that we have made to him about forecasts. It is an excellent thing to make forecasts; it is absurd to be bound by them and to try to torture events to fit a forecast that has been made. If one makes a forecast in the great field of economic affairs with which the Chancellor deals and it comes out right, almost certainly it is an accident; almost certainly it is a combination of two or more errors cancelling themselves out. This is not an argument against making forecasts. In passing, I have always thought that the error of the National Plan was that it attempted to be precise about 1970 but was vague about the years until we got there, whereas any ordinary business forecast does exactly the reverse; it is precise about what is to happen in the next weeks or months and vague as the years go on.

The Chancellor seemed to think that there was something wrong in adjusting a forecast. On the contrary, I think that he should constantly adjust it, because if he does not he will torture events to make them fit the forecast.

I want to refer to two points, both of which the Chancellor mentioned and both of which I mention only in passing, because we may have an economic debate and it would be more appropriate to develop these points then. The first is the question of unemployment, to which the hon. Member for Salford, West referred. After some pressing the Chancellor told me that he expected the trend of unemployment to improve.

In each of the four months since then, the situation has got worse. We are now, with the June figures, perhaps at the peak of employment. It rather depends upon when the Scottish school leavers come in as to whether July will go higher. August certainly will. So the gross figures will increase almost from now on, with the possible exception of July. But what is more significant still is not just that the June figure is the worst since 1940, but that, seasonally adjusted, the wholly unemployed figure now, in June, is slightly higher than even the peak at the winter time of the 1963 figures and is perhaps the highest figure, except for peaks like a fuel crisis, since the war. It is this that worries the hon. Member for Salford, West.

Of course there will be something of a lift in exports, and this will help the unemployment situation, but there are, in my judgment, three factors which must be considered on the other side. There is the question of pit closures, there is the effect of the Budget, which has not had its full effect yet, and of course, there is the effect of S.E.T. in the autumn, which, in certain fields, can have a dramatic effect, as we know so well, upon unemployment. I leave that with an expression of anxiety, and will develop it further if we have an economic debate.

The other matter to which the Chancellor referred is the export-import balance. He now thinks that he will probably get at least his main forecast and that he may get his higher forecast. I think that that is a fair way of putting what he feels about exports, although exactly what it will mean in terms of new foreign currency coming into this country is not completely clear. But I have little doubt—again, I merely make the point and leave it for debate—that the propensity to import was considerably higher than the Government ever thought, and perhaps higher even than anyone ever thought. To that extent, the balance which they have been seeking between exports and imports is unlikely to be achieved.

it is for this reason that the Chancellor's forecasts for the second half of the year and for 1969 have been increasingly suspect, particularly from this side of the House. My hon. Friend the Member for Oswestry, (Mr. Biffen) was exactly right in what he said about the question of a re-stocking boom, for various reasons. That may still come.

I turn from the right hon. Gentleman's general point just to pick out one other. I want to elaborate the point made by my hon. Friend the Member for Worthing (Mr. Higgins), who referred particularly to the Chief Secretary, who I thought, in these debates, was the star of the Treasury team. We disagreed a good deal with him, but we were grateful for the way that he answered the debates. His hon. Friend the Member for Chislehurst (Mr. Macdonald) said on Second Reading, I think, that he wished that the Chief Secretary would take time off from his ceaseless pursuit of matters of tax avoidance and evasion.

I want to put it to the right hon. Gentleman that this obsession of his—I believe it to be an obsession—is doing infinite harm. It is odd that such an admirable activity should do infinite harm, but I am certain that it does. Anyone who listened—[Interruption.]—we will come to that in a minute. Anyone who listened to the debates, for instance, on close companies, and the Minister of State's replies, would gather that the Treasury Bench look on close companies as a sort of tax haven, whereas they are part of the true foundation of much of the nation's strength.

A number of references have been made to a brilliant speech recently delivered by Professor Wheatcroft and I will read just one extract from it, referring directly to the Chief Secretary. This is what Professor Wheatcroft said: I am fully persuaded that one of the main reasons why this country lacked growth in 1966 and 1967 was the pre-occupation of so many businessmen with tax. They had to come to lectures, read numerous papers and articles and consult professional advisers in order to understand how they sshould conduct their affairs in future, having regard to these new, complicated and obscure taxes. Instead of getting on with their normal task of producing goods or services at the lowest cost, they had to learn to re-adjust their activities in the light of the new taxes as otherwise they would quickly be out of business. I believe that to be exactly true, and I am sure that the Chief Secretary knows that Professor Wheatcroft's judgment will command respect.

The Chief Secretary knows very well that we have concentrated a great deal of our attack on the Bill on Clause 15 and Schedule 8. He knows very well that principally in that Clause we tried to secure compensation not just for the thalidomide cases, which we did, but for the breadwinner and those affected by broken marriages, for example. The answer which we were given, right up to last night, by the Chief Secretary, led one to the conclusion that he was thinking only in terms of tax evasion, as if people got themselves killed or divorced in order to avoid the payment of tax.

I quote from a letter which the Chief Secretary wrote to me on 25th June explaining why he could not meet a particular case, in relation to this issue, which I had put to him. He wrote: I recognise that this is not the answer for which you had hoped; but perhaps I could make two final points. Firstly, cases of this kind, on any basis, are likely to be pretty few. Secondly; what cases there are will consist mainly of older children. What an appalling argument to put forward to meet an admitted injustice! The Bill is full of injustices. It is full of petty meannesses. Throughout our opposition we have made that clear to the Treasury Bench, but they had not been ready to meet the cases which we put to them, particularly on Clause 15.

As I conclude, I give my warmest thanks to the team who worked with me in the various stages of the Bill. They are too many to single out, but it would be wrong of me not to mention my hon. Friends the Members for Worthing and Wanstead and Woodford (Mr. Patrick Jenkin), who have battled manfully and who have outgunned the Treasury team at all points.

We come to the last stage of the Bill. It was at one time unusual to vote against a Third Reading, but there have been a number of examples of such a vote in recent years and I have no hesitation at all in inviting my right hon. and hon. Friends to vote against the Third Reading of this Bill, not just because in a full year it will take £923 million, by far the largest sum ever raised in increased taxation in a Budget, from the people of this country, but more because it is a monument to the failure of the Chancellor of the Exchequer and of the Government, first, to control public expenditure in this country and, secondly, to encourage the flood of savings which we believe can be tapped for the benefit of the country. In our view the Bill is unfair. It enshrines policies to which we are bitterly opposed. I therefore invite my hon. and right hon. Friends to oppose it on Third Reading.