Amendment of the Law

Part of Ways and Means – in the House of Commons at 6:09 pm on 17 March 1987.

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Photo of Mr David Knox Mr David Knox , Staffordshire Moorlands 6:09, 17 March 1987

I am not sure whether my hon. and learned Friend believes that I have some responsibility for that, but I can assure him that I have not. However, I agree with him that that is very strange.

Hon. Members on both sides of the House would wish to give a warm welcome to a number of the measures in the Budget. The change concerning VAT will be particularly warmly welcomed by businesses. Easing the rules for the payment of VAT should help to overcome the problems which firms experience with late payers. For some time that has been a considerable problem for many firms in my constituency and elsewhere. My right hon. Friend the Chancellor has made a real contribution to overcoming that problem and easing the lot of many people who contribute a great: deal to the economy of this country.

I also welcome the tax reliefs that will affect profits-related pay. Profits-related pay has an important part to play in strengthening the economy. If we can move along in that direction, that will encourage greater flexibility in pay bargaining and will also help to relate the level of pay more closely to the prosperity of individual companies. The lack of flexibility in pay bargaining has caused immeasurable problems in the post-war era in Britain and is largely responsible for the situation that has arisen so frequently of income-cost inflation in conditions where there was no demand-pull inflation. Although I do not expect miracles—and no doubt my right hon. Friend does not expect miracles—I am sure that this is a step in the right direction.

I warmly welcome what my right hon. Friend the Chancellor did with regard to excise duties. My hon. Friend the Member for Uxbridge (Mr. Shersby) referred to this point. I am sure that in the pubs tonight smokers and drinkers will welcome the fact that probably for the first time in living memory there was no increase in this Budget in the duty on cigarettes and alcoholic beverages.