I am grateful for the opportunity to contribute to this debate and I shall be brief.
I wish to echo the criticisms of the Budget that were admirably made this afternoon by my right hon. and learned Friend the Member for Monklands, East (Mr. Smith), the shadow Chancellor. When I heard the Chancellor say that the Budget was to be a reforming one I, in common with my colleagues, listened in anticipation to learn what would be forthcoming. If one looks at this Budget, one is extremely disappointed.
Let us consider, for example, the treatment of the rich and the poor. The abolition of the higher rate tax will cost the country £2·1 billion this year. I believe that that money could have been better spent on the Health Service or on research and development, which is sadly lacking in this country.
I listened to the Chancellor talk about some of the taxes and perks that he intended to scrap. He said that he was going to scrap tax relief on covenants, but then went on to mention how they are used by individual families to finance student support. I wonder how many students are financed in that way. I believe that the Chancellor was talking about a tiny minority. Perhaps his friends or friends of Conservative Members finance their children's grants in that way, but most students rely on the grant that they receive and, over the years, that has been steadily undermined. I hope that, in the future, the Chancellor will give much more thought to incentives and opportunities for student finance than he appeared to do yesterday.
If the Chancellor was considering perks, why did he not scrap the share option scheme? That is ripe for scrapping as it benefits a very few people who do not need such benefit or incentive. Indeed, is it not the case that, very often, the people on the lowest level of income desperately need the incentive of more cash? It has already been said that it is they who find it most difficult to better their positions because of the penalising, marginal rates of tax. I believe that those at the lower end of the economy should be given the incentives rather than those at the top.
I also wish to register my protest about the business expansion scheme. The Government are to encourage and give licence to people to make money out of those at the lowest end of the income scale. I believe that that is quite shocking. From experience in Edinburgh, I know that there have been scandals about bed-and-breakfast accommodation and I am shocked that people will be able to use such establishments as a tax shelter at the same time as exploiting the most vulnerable and, economically, the most weakest people within our society.
Let us consider the effects of the Budget. Someone earning £60,000 year will be £128 a week better off. At the other end of the scale a married man, with two children, earning £115 will be 32p a week worse off. That demonstrates the disparity within the Budget. Surely, the unfairness of flat rate taxes occurs to the Government. With regard to income tax, there is a great deal to recommend a tapering system that reduces the difficulties that we face with high marginal rates, but is, at the same time, fair. We oppose the poll tax because it is grossly unfair and pays no regard to the ability to pay. I believe that the Chancellor's drive to reduce taxes will demonstrate similar unfairness. I am especially concerned about that.
I am also greatly concerned about his threat—I mean a threat—to reduce the basic rate of income tax to 20 per cent. in the not-too-distant future. That bodes ill for the public services within this country because it suggests that public spending will be cut even further.
What will the effect of the Budget be on our balance of payments? It appears that our current account deficit is now £4 billion. In November it was forecast at £3·5 billion and it appears to have increased in the past few months. If it was not for oil this country would face a major balance of payments crisis. A spending spree, without corresponding investment in the country, will mean that more foreign goods will be sucked in. It would have been nice if the Chancellor had paid some heed to the ravages of those missing years of Conservative ideology, 1979–81. Those years are never quoted when considering the country's growth or anything else; they are rather like Stalin's missing years.
The Chancellor must address the major problem of the balance of payments, because if he does not, the result will be that the only people cheering at the end of the day will be our European and other foreign competitors.
In common with most of my colleagues I am extremely concerned about the Americanisation of this country. In America a cruel deception is perpetuated year after year: everyone, no matter what their station, can somehow make it and they should remember they live in the land of the free and in the land of opportunity. We know that that is simply not true. In this country, the vast majority will remain at the bottom of the heap and those that have will be able to better themselves because they have the financial ability and other advantages to do so. Those at the bottom will be denied that opportunity. In this country those who have money are able to exercise choice and improve their standing in many ways. We need to ensure that all the people have the power to choose rather than some of the people.
We cannot run an economy whereby those living in one part of the country have the necessary opportunities and incentives whereas the vast majority—those who live in Scotland, the north, Wales. Northern Ireland and so on—are constantly disadvantaged. The reason for yesterday's anger—an anger that will continue—is that the Budget is for those that have. It is for the rich man, a champagne Budget. No wonder there was much cheering in the stock exchange last night and the cracking open of champagne bottles. On the other side, the dispossessed have every reason to fear for the future and fear for the welfare of their families. That is why the Budget is bad. It is about short-term gains for the few. For that reason we shall oppose it throughout this long summer.