Part of Orders of the Day — Finance Bill – in the House of Commons at 12:00 am on 13th July 1978.

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Photo of Mr Nigel Lawson Mr Nigel Lawson , Blaby 12:00 am, 13th July 1978

It is certainly encouraging to have such a full House at such a late hour on the Third Reading of the Bill after the long hours we have spent on it in Standing Committee and on Report. In many ways it has been a historic Finance Bill, not merely because it is the last such Bill of a dying Parliament and of a dying. Government but because this is a Bill which began with the basic rate of income tax at 34 per cent. and in which it now stands at 33 per cent.

Never before have an Opposition succeeded in bringing down the basic rate of income tax. In addition to that profound and unprecedented change, it is worth recalling that we also succeeded in raising the thresholds of the higher rates of tax by £1,000 in deference not merely to the needs of the country and the wishes of the people but to the expressed desire of the Chancellor of the Duchy of Lancaster, who had pointed out how grossly exorbit ant were our high rates of tax and how they needed to be reduced at the earliest opportunity. We took that opportunity.

Those important and unprecedented changes followed the changes which the Opposition forced in last year's Finance Bill, when we substantially raised, and indexed, the thresholds—another historic event. The two Finance Bills together have undergone changes which I think no Finance Bills have undergone before.

There have also, this year, been a large number of minor changes of significance, in addition to the two major ones I have mentioned. Two Opposition amendments were accepted by the Government in Committee, and one Opposition new clause and two amendments were accepted on Report—one of them in the debate which has just ended. One Government new clause was added in Committee and 13 on Report, of which 11 were in response to points we pressed in Committee. No fewer than 87 Government amendments were introduced on Repoirt, of which the overwhelming majority were in fulfilment of commitments made to the Opposition in Committee.

That, of course, is why we have Committee stages, but it is a remarkable fact, and very rare, that over 100 clauses and amendments have been added and made to the Bill in response to pressure from the Opposition. Thus we have succeeded in improving the Bill far beyond what is appreciated outside the House.

We have also seen, as we have become accustomed to seeing in the summer months in recent years, the eruption of a major financial crisis, with bank rate hoisted to 10 per cent. and a savage curb on bank lending—all the usual paraphernalia of the credit squeeze in response to a financial crisis caused by the Government's improvidence. This crisis came at a time which, with curious accuracy, punctured the myth that all is well with the economy.

Indeed, the Prime Minister still likes to tell his audiences at home that all is well but he tells a different story in Bremen and other places abroad. There he says that the British economy is so weak that we cannot join with our Community partners unless they give us handouts. He goes with a begging bowl, complaining about the weakness of the same British economy whose strength he seeks to parade in this Chamber. Regrettably, it is the account the right hon. Gentleman gives overseas which is the truthful picture.

Today marks the end of an era—an era of four years, 14 Budgets and six Finance Bills, which together have done untold damage to the economy, to industry, to commerce, to firms, to farms and, above all perhaps, to the individual's will to work, on which so much else depends.

We have been able to mitigate some of the worst evils of tht past two years, but to set the country on the right fiscal course something more than a new clause will be needed: it will need a new Government. Fortunately, we shall not now have long to wait. Fortunately, it is to that new Government that responsibility for next years' Finance Bill will fall.