Finance (No.2) Bill

Part of the debate – in the House of Commons at 6:17 pm on 26th April 1988.

Alert me about debates like this

Photo of Alan Beith Alan Beith Shadow Spokesperson (Treasury) 6:17 pm, 26th April 1988

I said at the outset that I would try to keep to Mr. Deputy Speaker's injunction.

The Budget is also profoundly worrying on the issue of inflation. The Government have not helped their own case by imposing on nationalised industries price rises that they did not regard as necessary and which bear heavily on some sections of the community. In a number of areas of the economy the Government seem to be fuelling the very inflation that they believe they should be trying to control. I mentioned the example of mortgage tax relief. In the course of this year, there will be not only the continuing effects of higher rate mortgage tax relief but the short-term push to house prices, particularly in London, from the changes that the Government are making in the multiple tax relief on a single property—changes for which I accept there is justification. Nevertheless, the alteration will fuel price increases.

Other parts of the Finance Bill deserve considerable examination in Committee and show that the Government seem to have failed to take the steps they should have taken. It is impossible to understand why the Government should seek to allow the real price of alcohol to fall year by year. That is particularly true of spirits, on which the Government have imposed no increase. It is difficult to square that with the activities of the Leader of the House in his ministerial committee on alcohol policy. The proposal on low-alcohol drinks in the Budget was meant to be a gesture towards that ministerial activity, by trying to get a concerted policy on alcohol. It is difficult to see the logic in that, given that the Government believe that alcohol consumption needs to be reduced or controlled —so why reduce its real price year by year?

Although we share the Government's objective of wider share ownership, I continue to argue that the Government maintain a hopelessly inadequate personal equity plan scheme. They could have reformed it in the Budget if they had wanted to. It does not draw in new investors to any significant extent. Its main attraction is to those who have used up their other tax reliefs and want the additional tax relief that the scheme offers. It is not a great attraction to investors.

There will be a great deal of examination of the business expansion scheme proposals on rented housing. There is no reason in principle why the Government should not take steps to encourage private capital into housing. With the problem as desperate as the housing problem now is —and it had got worse—we should be foolish as a nation if we did not try to attract private capital into the solution of the problem. But there are serious worries about the scheme. It is difficult to argue that relief at the higher tax rates is necessary for an investment that is primarily in property, which gives considerable security. It is difficult to imagine that the investment could be secured only by having tax relief at the higher rates.

Secondly, it is worrying that the whole scheme must be geared to the Government's new assured tenancies with no additional protection for the levels of rent charged or against any of the other worries that tenants have. It looks as if, without some modification to the scheme, it could attract capital into unsatisfactory forms of rented housing, in which the tenant is exploited. If that happened, it would be an unfortunate step to take at a time when the housing crisis is so severe.

Many people in this country want an enterprising society with a fair tax and benefit system and good quality public services. It is essential to have all those things, but they are not all provided by the Budget's strategy. Take, for example, good quality public services. It is an insult to the nurses to imply, as the Chief Secretary did, that by providing a much better pay increase for them than that of previous years, and fully funding it, the Government have dealt with the whole of their grievance. Many nurses took to the streets in orderly demonstrations in their own time not only because they were worried about nurses' pay but because they were worried about the state of the Health Service.

I have found, during my visits to hospitals, that I am much more likely to be challenged and questioned by nurses about the level of staffing in the wards and their back-up in the job than about nurses' pay. I have had far more queries from nurses about the standard of service that they can give than about their own pay. That is a sign of their dedication and professionalism.

Because it fails to meet the needs of social justice and decent public services, this Finance Bill will take the people of this country further from, not nearer to, the objective of a successful society with social justice and good public services. Inequity gives enterprise a bad name. That is tragic. It is vital to get across the fact that the benefits that we need to bring to those who are worse off in society cannot be achieved if society is not successful economically. But what is the point of economic success if it is not accompanied by an attempt to tackle those social problems?

If an advertising agency had been hired to tell the Government how to get their message across, it would have told them to repeat it day by day in a similar form. That is what the Government have done. On day one, they gave us a Budget which expressed a message of unfairness. On day two, they gave us the social security changes, which bring home in harsh terms to many hundreds of thousands of people the Government's message of unfairness. On day three, they brought before the House a poll tax, which is perhaps the unfairest tax devised for centuries. The message has got home. It is a sad message for a society which has an opportunity to combine success with social justice.