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Orders of the Day — Finance Bill

Part of the debate – in the House of Commons at 4:30 pm on 6th July 1983.

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Photo of Mr David Howell Mr David Howell , Guildford 4:30 pm, 6th July 1983

The House may have had the opportunity of discussing a Finance Bill in an earlier part of the year, but, for various reasons, I did not, so I am grateful now to have the opportunity of joining in the cut and thrust of discussion on financial matters.

I join my right hon. and learned Friend the Chief Secretary and the hon. Member for Blackburn (Mr. Straw) in paying a tribute to the former right hon. Member for Heywood and Royton, Mr. Joel Barnett. He and I spent many long happy and unhappy hours, as did the Chief Secretary, dealing with the miserable and ill-starred capital transfer tax, which was, and remains, a job-killing tax. Of all the measures put on the statute book in the last decade, far from being a great instrument of social justice, it has probably done more to deny jobs to the younger generation of school leavers and to prevent the emergence of new business than any other new measure of the previous Labour Government. We wrestled with it day and night in the 1970s. I am delighted that my right hon. and hon. Friends in the previous Conservative Government —I hope that the good work will be continued —succeeded in removing some of the appallingly anti-social and anti-job effects of that tax.

The former right hon. Member for Heywood and Royton also wrote an excellent book, which was a gold mine for those seeking to destroy the already flimsy intellectual case of the previous Labour Government, so we have many reasons for being grateful to him and for missing him now in this House.

I shall not comment at length on the speech of the hon. Member for Blackburn, except to say that his speeches seem to be a shade less uncongenial and wild than those of the right hon. Member for Bethnal Green and Stepney (Mr. Shore). The hon. Member used the word "obscene" only twice, showing great moderation. Nevertheless, his speeches are equally wrongheaded and muddled, as I shall seek to show.

This Finance Bill, like the one introduced earlier in the year by the then Chief Secretary to the Treasury, my right hon. and learned Friend the Member for Richmond, Yorks (Mr. Brittan), is, as was explained to the House, designed to increase incentives and competitiveness and thus, presumably, to help in the search for those expansionary forces which are clearly needed to help along the very welcome but patchy and fragile economic recovery which is now beginning to emerge. If that is its aini—I am sure it is—the Bill is right, as are the Government in their policy, to rule out straight away any tax measures which would lead to a larger Budget deficit than planned, and to rule out any tax measures which would accelerate inflation.

Nowadays, a higher Budget deficit is a contractionary force in the economy. It is not — as it was, or was alleged to be, in the post-war years— a stimulus, but almost certainly a contractionary force. Therefore, when Opposition spokesmen propose measures which would lead to a higher Budget deficit, they are once again proposing measures which would lead not to greater economic activity and more jobs but to lower levels of activity and fewer jobs. The Finance Bill is right to eschew any approach of that kind, and the Government are right to rule out measures which might have an adverse effect on inflation because, as we know, that too is the great job destroyer, the killer of jobs and opportunities, which has done so much damage to Britain and its people in the past.

The House will not hear advocated from this seat or this Member anything in our financial debates which leads to higher deficits and borrowing, which leads tc higher inflation, which leads to raising taxes and rates against business, or which weakens financial confidence and therefore investment in new enterprises. Those four measures are the ones which we know from experience will lead to higher, not lower, unemployment and destroy, not create, jobs. They are the four horsemen of the unemployment apocalypse, and one can hear them clattering by every time speeches are made from the Opposition Front Bench on what we should do about the economy and unemployment. Nevertheless, having said that, I believe that there are things—