Orders of the Day — Budget Resolutions and Economic Situation

Part of the debate – in the House of Commons at 12:00 am on 16th April 1975.

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Photo of Mr Peter Fry Mr Peter Fry , Wellingborough 12:00 am, 16th April 1975

I promise not to take up the points made by the hon. Member for Renfrewshire, West (Mr. Buchan), and particularly his comments about wolves and the Secretary of State for Industry. I promise not to report the hon. Gentleman to the RSPCA.

In his Budget Statement the Chancellor used the word "fairness". I wish to test the Budget and the strategy, such as it is, that has been revealed by the Chancellor's actions in determining whether the Budget really is fair and whether the Government are being fair.

I am deterred considerably because I think that the Government do not realise that their own actions and inactions are causing greater difficulties and divisions, and a greater feeling of unfairness, than any previous Government have engendered. It is not true that all have paid themselves a lot more in recent years than they have earned. It may well be that many of us are living at 5 per cent. above what we have earned, but there are millions of people who have found themselves being left further and further behind because they do not belong to a power bloc that can gain them an increase in their incomes above the increases in prices.

My answer to those more Left-wing Members on the Government benches is that they do not realise that there has already been a great transfer in relative purchasing power just as there has been a transfer in absolute power. When I am considering those people who consider themselves unfairly treated I am not talking only about those who have retired or about those who live on fixed incomes, although those categories are included. There are many who have not been able to obtain large increases This applies to the self-employed, and particularly to the small shopkeeper. There are employees who are reaching the end of their working lives and find that they have little option but to stay put and accept whatever wage or salary increase their employers, be they State or private, decide to give them. Many employees are much younger people who are desperately trying to bring up a young family, to meet their mortgage commitments and to maintain a reasonable standard of living. Many people in that sector traditionally have tried to be thrifty. Many have been encouraged to buy their own homes and to put in central heating and the electrical gadgets which the nationalised industries in recent years have suggested they should buy. Those people at present view with absolute horror the fact that their income no longer matches price increases. They watch their expenses, rates, fuel bills, motoring costs rise to higher and higher levels, while they see other people, who they consider have fared better through the current set of wage negotiations, obtaining higher purchasing power.

I am referring to a section of our population who have been, and are being, hard hit by inflation and who are being squeezed to the last degree. They watch other workers in the new aristocracy, the trade unions, imposing their will on employers and on the Government of the day. That section of the community watches while lawlessness and violence too often appears to pay off in terms of a higher standard of living. They see savings which have been accumulated over many years being devalued. Their sense of moderation is going out of the window because that attitude was based on a feeling of stability. When that feeling goes they will cease to be moderate and will start to despair, and they themselves will look to more violent action. We need a degree of fairness, not just for economic reasons but to bring about political stability in future.

I should like to turn to some of the concrete proposals—or the lack of them—in the Budget Statement. How does the small or medium business man view the Budget in terms of fairness? How will he react to the demand for greater investment, to be ready for the boom which is supposed miraculously to appear some time in 1976? In listening to the Chancellor's speech yesterday, one might almost believe that the Government were trying to help private industry, particularly the firm that wants to get ahead and expand. But if in listening to those remarks we had reflected for a moment, we would immediately take the view that this was the same right hon. Gentleman as had imposed capital transfer tax and as will bring in the wealth tax. This was also the representative of a Labour Government who are pledged to protection of employment legislation which will put many firms out of business much quicker than will the CTT. This is why so many medium-sized businesses lack confidence. Those businesses are not ready to invest because they see no reason to invest money because the tax collector will take it from them in the not too distant future.

Their second worry relates to their feeling that the Chancellor is not being fair. Their view is that if inflation is not brought under control quickly, whatever the Chancellor says, they will not be ready even if the boom takes place next year to compete with rivals abroad who are experiencing a much lower rate of inflation. Employer after employer in my constituency has told me, "If inflation goes on at this rate, I cannot compete with the prices charged by Japanese. German and even American competitors." This is why the Chancellor's anti-inflation proposals will not satisfy many small and medium businesses.

The reason why I have stressed the situation of the small and medium business is that I believe that too often it is assumed that the life blood, and indeed the future, of the nation depends on the large concern. But that is not the situation. Our future depends on more people being willing to invest their own incomes in their own enterprises and their own businesses. That is the sector which has been most hard hit financially and in terms of the economy as a whole.

I never thought that I should agree with the hon. Member for Renfrewshire, West, but I agree with his view about the effect of the increase in the road fund licence. I thought that the motorist had had a pretty rough deal, and I half hoped when listening to the Budget Statement that the motorist would escape the Chancellor's proposals. However, the Government are continually extracting more and more money from the motorist, not realising that the people who are hardest hit are often those who can least bear the cost. It is estimated that 40 per cent. of private cars are completely privately owned and their owners have no kind of business connection or mileage allowance. They are the people who will be severely hit by the increase in the licence. Perhaps the Chancellor should look at some other way of raising money rather than by hitting the motorist every time.

It must by now be realised that the motor car has become an increasingly essential part in our lives. As we see the deterioration or collapse of public transport services, particularly in rural areas, we realise that many people cannot get to work or obtain the necessities of life unless they have a car of their own. The people who make fierce speeches criticising money spent on roads and who believe that this is the wrong area in which to direct public expenditure obviously do not fully appreciate the problems facing many parts of the nation. This is a problem that will not just go away. The Government's Transport and Road Research Laboratory's forecast of vehicle traffic in Great Britain was revised as recently as the end of 1974, and that, of course, was after the oil crisis and the increase in petrol prices. That document shows that by 1985 the number of vehicles is likely to rise by 30 per cent., and that the number of miles per vehicle run in the year will increase by 25 to 30 per cent. This means that 10 years from now our roads will be carrying 50 per cent. more traffic than they are carrying today.

The hon. Member for Meriden (Mr. Tomlinson) was quite wrong in one part of his remarks. Of course public expenditure has to be cut back—but nobody is suggesting that there should be no public expenditure. If we are considering cuts we should examine the areas in which they are being made and the use to which public money is being put. I have no hesitation in saying that we have devoted too little of the revenue extracted from the motorist and road user—a total of £2,500 million this year—to road construction and maintenance. I do not make this plea because I have any financial interest in the road construction industry, because I certainly have not. I make this comment because I believe that for far too long there has been an under-investment in transport as a whole, and particularly in the building of roads. I believe that we sadly need a much better road structure and a far better transport system.

The sums of money which are being expended should give a far better return. If the Chancellor believes that our economic revival depends on investment in the future, it is true to say that the efficient functioning of our industry and our export drive also depends on correct investment in transport. If anybody thinks that I am merely putting forward this point of view without having considered my remarks, I should like to inform the House that I have examined the situation in the great ports of Europe. If we examine the situation in the ports of Antwerp and Rotterdam and examine the road systems which back up those ports, we can appreciate the sort of competition which our exporters are facing, and will face in the years ahead.

Next year, when we shall remain in Europe as a result of a favourable outcome of the referendum, the eight-hour rule will be applied to our drivers. We must compare the time taken by a driver from the constituency of the hon. Member for Meriden (Mr. Tomlinson) to reach the East Coast ports with that taken by a person driving from the Ruhr to the ports of Western Europe. That is the competition which we face in transport. However, we are not meeting it.

Due to the cutback in the plans for 1973, it will be 1980 before we reach the same level of expenditure. Next year there will be a further cut-back of £91 million on all roads and £74 million in capital expenditure, out of a total road building programme of £319 million for trunk roads and £277 million for local roads. Far from being ready for the boom in 1976, we shall be lucky if we are ready for the boom of 1985. That is how far the country has fallen behind.

I make one criticism of the priority and fairness of the Government. I agree that public expenditure must be cut back and that there must be severe restrictions on local government expansion. This week I learnt from the Secretary of State for Employment of the scheme to double, or more than double, the size of the largest town in my constituency. Such a development is unnecessary. It is an encouragement to the local authority to expand and spend more of the ratepayers' money. Such decisions make nonsense of what the Chancellor said yesterday. If the Chancellor meant what he said, he will have to control his colleagues more firmly as regards local government.

In the long run this Budget will not be regarded as fair. I do not believe that the Chancellor thinks it is fair. I have the impression that he is waiting with crossed fingers. He is so nervous about the future that he is sitting with his legs crossed. If he sits for too long he will discover that it is difficult to move from that position. If he tries to get up he will probably fall flat on his face.