Orders of the Day — Finance Bill

Part of the debate – in the House of Commons at 8:12 pm on 6th July 1983.

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Photo of Mr Bill Walker Mr Bill Walker , North Tayside 8:12 pm, 6th July 1983

—and there is no doubt that he spoke with some passion about the haves and the have-nots. I suppose that, in terms of world categories, he comes from the haves and I come from the have-nots. It is always fascinating to hear people constantly remind me of the problems of poverty, but who may not believe that I have had first-hand experience of what poverty means. I do not doubt the sincerity of his comments, but he should be a little more selective in putting forward his points.

It was interesting that the hon. Gentleman believed that during the election campaign the real matters that worried the British people were not debated. He said that was because Polaris and defence were the main issues. However, I remind the hon. Gentleman that the Conservative party did not make them issues. They became issues because the Labour party manifesto said that a Labour Government would break the tradition of eight successive Governments. A party that decides to break from something that has been common policy for many decades is bound to attract interest—at least from the media. Once the media become interested in a topic, they keep kicking it around because it helps to sell newspapers or magazines. If the nation spent much of its time talking about defence, it was because the Labour party manifesto mentioned it. The fact that most of us believed that the proposals were bonkers and irrelevant to the real world was reflected in the election results.

I was surprised to hear the hon. Gentleman say, because I know his area well, that not many people who move there because of their jobs take out mortgages in excess of £25,000. I almost moved there some years ago, but I could not afford a property. One must always try to recruit people of the highest calibre to run companies in an area where there is great need to stimulate more interest in business. We can stimulate interest only if there are the right people in top management. We cannot bring about change at the bottom. A company must bring into the area people who are carving a progressive career, but they are usually hard up. If one is climbing the ladder, one must live in a house that is in keeping with the job, which normally needs a fairly large mortgage. That has been my experience, and I am sure that it is the experience of everyone who has attempted to climb the slippery ladder of promotion in the business jungle. Therefore, it is right to grant some benefits to those who may need a mortgage of up to £30,000.

It is sad that the Labour party has not realised that those who need such mortgages are articulate managers who talk to their workers. Every time they move home, they take a risk. If they are unsuccessful, they fall flat on their faces and no one cares too much. It is important to move into the sort of property in which one's workpeople expect one to live in order to provide them with the leadership that they seek. The workers more than anyone make the assessments, and they expect their managers to look and play the part. That is vital if one is to provide leadership.

If we are to retain top management, our tax structure should provide the rewards so that the best people are kept in Britain to do the vital and important jobs. The shortage of managers affected many businesses, not just the likes of ICI. In the main, Britain's industrial problems were caused by two simple factors. First, we did not have the right people managing, and, secondly, we had ghastly industrial relations due to the attitude of the trade unions in wanting to keep things as they were. 10, 20, 30 or 40 years ago.

We need good, effective and capable management to bring about changes in work attitudes. That is management's job and responsibility, but we were losing such people. They went to other parts of the world where the rewards for such risk-taking were more commensurate. To bring about change, these individuals must be risk-takers. If they are not, change will not be brought about. Instead, they will play safe, do nothing, maintain the status quo, and eventually, like the dinosaur, our industry will die.

My hon. Friend the Member for Wells made an oblique reference to the need for change in the Civil Service. The lesson is that if civil servants are ever to change, they must also learn that that means risk-taking in Government service. If the civil servants play safe and stick only with the status quo, there will not be change.

The hon. Member for Cunninghame, South (Mr. Lambie) mentioned the Select Committee on Scottish Affairs inquiry into free ports. He was concerned that the mandarins in the Civil Service and the Treasury were determined to kill this off because they had been against it from the outset. I hope that is not true. Although I had considerable reservations about free ports, I and other hon. Members substantially changed our position as a result of the inquiry. We looked at free ports abroad, particularly in the United States, which is a modern, developed country, and found that the free ports there had much to offer. That could not always be measured in financial terms, because much of it was packaging and marketing in management, which had a great deal to do with the drive that brought about additional business.

I hope that my right hon. and hon. Friends on the Treasury Bench, when looking at free ports, will look beyond the financial considerations to what can be done, because image is important. Image is not what one thinks of oneself—it is what others think. Too often—this is certainly true of politicians — we begin to believe the image that we project. That is dangerous, because it is what others think that really matters. That is equally true of business. The image of the free ports in the United States was brought home to me. I went there not exactly sold on the idea. In fact, I was somewhat cool about it.

I have already referred to the increase in the mortgage ceiling from £25,000 to £30,000. I have shown that that links to the changes that we shall make in the tax bands. I have always recognised that in those two measures we were not helping the majority of people directly. I have accepted that from the outset, but I also acknowledge that unless we help those who create wealth and jobs through incentives and encouragement, we shall never be able to help those further down the ladder. We must always start with those who make things happen — the risk-takers, the organisers, and managers.

I hope that is only a beginning. It should not end there. I should like to see the policy continued so that there are considerable improvements in the tax bands.

As to the poverty trap, we must all be concerned about individuals who in many instances find that they are better off not working. They work for their pay, but, after the deductions are made, they find that they are no better off than those who are on the dole. If that happens, there is no incentive to work. I find that very disturbing.

I have never felt that the answer was to penalise those who were out of work. I believe that the answer lies in dealing with those who are in work. There are many more people in work than out of work. Therefore, one has to acknowledge that it is more difficult to do something meaningful and positive for those who are in work than for those who are out of work.

At one time, we considered changing the tax system to ensure that those in work would always be guaranteed a minimum wage. Different terminologies have been used. The idea was that the Exchequer should so balance its books that those who were working should be given a guarantee that their income would not fall below a certain level. It does not matter whether the aim is achieved by means of tax credits or in some other way. I hope that the Government will consider that possibility again, although I do not expect miracles at a time when the world is suffering from a great economic depression.

I make no apology for drawing attention again to the tourist industry, which is one of the largest employers in Scotland and vital to the Scottish economy. The tourist industry in Scotland employs 92,000 people. More people work in that industry than in industries, such as mining, about which we hear a great deal more. I should like to remind my right hon. and hon. Friends on the Front Bench that one can encourage people to visit tourist areas only by providing incentives. Scotland has beautiful scenery and marvellous facilities, but we cannot guarantee the weather in Scotland any more than in London. We must make the best use of our assets. The Government should carefully consider how, in future, we should tax the income derived from holiday cottages and other tourist facilities, which are often the only means of generating cash flow in the highlands.

We should also consider how we tax petroleum products, particularly petrol, because petrol duty is regressive for those who live in rural areas. The further one travels from the main centres of population— and my constituency is about as far away from them as one can get — the fewer petrol pumps there are and the more expensive petrol becomes. However, local people have no choice, because there is no public transport. Originally, cars were a luxury for the few. Because petrol was cheap in the days before the OPEC countries hiked the price up, cars gradually became available to the many. People were forced into acquiring cars at the time when costs were low. Costs are now high, and wages in the highland rural areas are very low because the bulk of the work is in agriculture, in small businesses, such as garages, and in hotels. I advise my right hon. and hon. Friends on the Front Bench to remember for many people in my constituency the car is not a luxury but a necessity. They need cars in order to get to work.

I do not want my right hon. and hon. Friends to think that I do not consider this to be a good Finance Bill. I think that it is a satisfactory Bill. It will be a small contribution to the change in emphasis that we called for in 1979 and have been working towards ever since. I welcome the Bill, and it will be well received in my constituency. Unlike the hon. Member for Workington, I hear many people talk about the mortgage provisions and the tax bands. That is because the small firms in my constituency hope that in future they will be managed by people who can afford to live in that part of the world.