Charge of Income Tax for 1987–88

Part of Orders of the Day — Finance Bill – in the House of Commons at 4:30 pm on 29th April 1987.

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Photo of Mr Ian Wrigglesworth Mr Ian Wrigglesworth , Stockton South 4:30 pm, 29th April 1987

I cannot stand the Conservative party propaganda that is presently pouring out from Tory Back Benchers. To suggest that 20 per cent. of the manufacturing capacity of Britain was completely lost simply because firms were inefficient is unbelievable.

The hon. Member for Croydon, South should look at the history and talk to some of the managers in the manufacturing industries. The Conservatives should accept that firms went bankrupt because of the exchange rate and interest rates—they were crippled by them and could not remain in business. During 1979–82, the exchange rate against the dollar was $2·40. We then went almost to parity with the dollar and now the rate is $1·60. How can businesses try to organise their planning, marketing, manufacturing or investment when there are such fluctuations in the exchange rate?

I believe that the Government should use their resources to benefit the Health Service. Recently, we have heard a number of boasts about how much the Government are spending on the Health Service. However, when the Government talk about the resources that are being spent on the Health Service, they never tell us about the demands that are placed on those resources. We believe that we must spend an extra 2 per cent. a year on the Health Service to sustain it at its present level.

We are all aware that we have an increasingly ageing population who need more care. Modern technology in the Health Service means that it is becoming more expensive to treat people. To sustain the hip replacements and other operations that are presently carried out, we must increase expenditure by 2 per cent. a year.

What is happening to the Health Service today? The Government are demanding productivity increases from the hospitals and are demanding that the health authorities pay for an element of the pay increases that the Government have agreed. They tell district health authorities that the Government will increase nurses' pay—they have said this for the past three years—and will increase Civil Service pay, but they will not give the money to pay for those increases.

I concede that the Government are giving almost all the money to meet the recently announced nurses' pay increase, but an element of that increase must be found by the Health Service from other resources. That is leading to a dire financial crisis for the North Tees health authority. A deputation from that authority will shortly meet the Minister because of that crisis. It cannot sustain the present level of health care unless the Government are prepared to make extra funds available.

The North Tees health authority has an excellent record of efficiency and productivity. There is one general hospital in Stockton — just outside my constituency —that serves the North Tees district, which covers my constituency. It has an excellent record. However, it cannot increase efficiency and productivity—that health authority has been cut to the bone. It is impossible for that authority to find the resources within its budget to meet the nurses' pay increase and the increase in civil service pay agreed by the Government. Therefore, cuts in clinical services must be made. It is a sick joke to my constituents to be told by the Chancellor that they should welcome a 2p cut in income tax. Such problems do not affect Stockton and North Tees alone; they affect district after district.

I agree that, as the Chancellor said, "as and when it is prudent" taxation should be cut. Against the background I have described, we believe that it is not prudent, nor is this the time, to make taxation cuts. If it is possible, we shall achieve our priorities without increasing taxation.

The Chancellor tried to goad me earlier about our position on tax cuts. We shall make our position absolutely clear before the general election, when our studies are complete. If we believe that we can achieve our priorities on unemployment, on the Health Service, on education and on industry without going back to the old rates of tax, we shall certainly do so. We shall publish more detail and more information, as we have done about all our Budget proposals for the last three years, than any other Opposition party, including the Conservative party when it was in opposition. We have given more details and more costings of our proposals than any other party has given.

Before the election, we shall publish full information for everybody, whether political parties or the public, to examine. We have published credible policies that could help get industry back on its feet, that could help to take care of those who have been hardest hit by the recession and above all that could start to get people back to work. Because the Government are not prepared to face up to those priorities, we shall vote against the clause.