Amendment of the Law

Part of Budget Resolutions and Economic Situation – in the House of Commons at 8:20 pm on 10th March 1992.

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Photo of Mr Gary Waller Mr Gary Waller , Keighley 8:20 pm, 10th March 1992

Whatever the electoral considerations referred to by the hon. Member for Greenock and Port Glasgow (Dr. Godman), I assume that you, Madam Deputy Speaker, will still be a Member of this House in the new Parliament. For me there cannot be too many Yorkshiremen and Yorkshirewomen in the House. Therefore, regardless of any party differences, I look in that sense to your return.

I had hoped that I might be called while your colleague the right hon. Member for Woodspring (Sir P. Dean) was in the Chair, if only so that I could refer to the great friendship, kindness and courtesy with which he has always treated me and other hon. Members. Of course, similar considerations apply to Mr. Speaker, whom we shall also greatly miss. I hope that you will be able to pass on to your colleagues, Mr. Deputy Speaker and Mr. Speaker, our feelings of regret at their departure from the House and our good wishes for their future retirement.

A highlight of the debate so far was the speech by the right hon. Member for Plymouth, Devonport (Dr. Owen). As always, his comments were extremely thoughtful. His departure will also be a considerable loss to the House. He spoke of the need for prudence at this time. Judging by what he said, the Budget as presented this afternoon complied with the requirement that he set out. It was certainly an imaginative Budget. It dealt with the short-and medium-term problems of recession, but at the same time it did not introduce short-term measures or gimmicks to give an artificial stimulus to the economy. I am sure that the Budget is all the better for that.

When I listened to the speech of the Leader of the Opposition, which followed that of my right hon. Friend the Chancellor, it seemed that the right hon. Gentleman found himself in some difficulty. We asked whether he supported or opposed the measures in the Budget. I have to say that when he sat down I did not know whether he supported them or not. But perhaps we shall find out more in the days to come.

The Budget was certainly a Budget for recovery. Therefore, inevitably it had to be a Budget for business and industry and especially for small businesses. It is worth remembering that since the present Government came into office in 1979 more than 1 million people have become self-employed. I am sure that there will be considerable relief among many who saw or heard the contents of the Budget as they became apparent today.

The fairer treatment of value added tax will be counted as a great advance by many. The penalty regime was resented by many small business people. They felt that any minor error was treated on the same basis as a major breach. I hope that in future that will no longer be the case. I know of many small shopkeepers and other small business men who have had sleepless nights because they made a minor error and felt that they were treated as criminals. They, too, will welcome the change in inheritance tax and the increase in the relief for business assets from 50 to 100 per cent. I am sure that they, too, hope for the return of a Conservative Administration.

No one should underestimate the importance of the announcement on the uniform business rate. The change to the UBR that came about recently is often confused with the effects of the revaluation that occurred simultaneously. Listening to the hon. Member for Hemsworth (Mr. Enright), it was clear that he was confused about those two factors. He decried the impact of the uniform business rate on small businesses. Of course, there can be no doubt that the UBR as such was a great benefit to small businesses because by statute any increases are linked to inflation.

The revaluation caused enormous anxiety and was a great blow to many firms simply because it had been postponed for up to 17 years after the previous revaluation. When the increases came about they were an enormous shock. When my right hon. Friend the Chancellor announced his cap on increases in 1993 I was worried for a moment because people in manufacturing industry in the north of England have felt for a long time that they had already suffered a comparative disadvantage for far too long as a result of the delayed revaluation. But my right hon. Friend the Chancellor quickly demonstrated that he had taken that point on board by announcing that the gainers would receive their full benefit more quickly. Many retail and commercial premises in West Yorkshire, which lost out as a result of the revaluation, will also benefit from the UBR cap. So they will share in the benefits implied by my right hon. Friend's announcement.

The dramatic reduction in the special car tax was by any account a bold step. I hoped that there would be a reduction but had not anticipated that it would be so large. I am delighted that my right hon. Friend the Member for Birmingham, Northfield (Mr. King) has come into the Chamber. Only recently he became chairman of the all-party motor industry group. It is a remarkable tribute to his leadership that after only a few weeks he has prevailed on my right hon. Friend the Chancellor to make such a dramatic reduction, which will reduce the average price of new cars by about £450. I have no doubt that that will provide a great stimulus to the British motor industry and that the benefits will percolate through to the many firms that are linked with that industry.

For instance, the machine tool sector, which is well represented in my constituency, and the component industry will certainly welcome the change and the stimulus that it will give to the British motor car industry. There will undoubtedly be enormous benefits in future. Environmentally, it is an extremely beneficial move because it will encourage the replacement of old cars by new environmentally green vehicles. I am sure that that point was not far from my right hon. Friend's thoughts, bearing in mind the great importance which the Government attach to environmental issues.

The centrepiece of the Budget is the new lower rate income tax band. There was some opposition to an income tax cut from many of my constituents who made representations about the Budget. They said that there should not be a straight cut because it would benefit wealthier people. In response, I pointed out that it depended on how any reduction in income tax was distributed. Of course, I am delighted that the formula that my right hon. Friend the Chancellor has adopted will direct the most assistance to low-earners. That measure has left the Opposition hypnotised. They do not know whether to support or oppose it. Certainly, if they oppose it, it will demonstrate to all that Labour is the party of high taxation.

I greatly welcome the improvement in the rules for personal equity plans. From April, people will be able to invest up to the full £6,000 in qualifying investment and unit trusts. Like my hon. Friend the Member for Cambridgeshire, South-West (Sir A. Grant), I have long had a great interest in the wider share ownership movement and the Wider Share Ownership Council in particular. One of the most significant changes that have taken place under the Government is the great increase in the number of shareholders. I am delighted that the Wider Share Ownership Council has been given a new lease of life as the Share Ownership Movement with considerably enhanced resources.

Although the ideal must be a wider share-owning democracy, whether people own shares in their own companies—one hopes that in future Budgets one will see even more encouragement for share ownership in the companies for which people work, as I have no doubt that that produces great benefits for such companies and for the economy generally—or whether people own shares in British industry generally, for many people investment in unit trusts and investment trusts represents a first step into share holding; it is a better vehicle for many small savers. Therefore, I hope that my right hon. Friend's announcement on PEPs will provide a stimulus to savings and encourage the wider share-owning democracy that we wish to see.

The Budget will also help charities and voluntary giving. There were many representations about the need for VAT reliefs to help charities. It is difficult for my right hon. Friend the Chancellor to take big steps in that direction, but some extensions to VAT reliefs have been announced. That the minimum gift to attract tax relief will be reduced will also be of benefit in stimulating charitable giving.

My right hon. Friend the Chancellor also spoke of the importance of GATT. I share his concern to the utmost. Many industries, not least the textile industry, which employs many people in my constituency, have great anxiety that a failure to bring about an early agreement on GATT could lead to a stultification of trade and to increased protectionism. Of course, that threat is greater when electoral considerations in the United States are so significant.

The Budget will be of great value to the country. As I left the Chamber earlier, I overheard an Opposition Member say to another, "We've lost." Who knows? He was a northern Member and he recognised the impact of the Budget in the north of England. The Budget is good not only for the country but for the Chancellor and for the Government. I look forward to supporting it in the next Parliament.