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Orders of the Day — Budget Resolutions and Economic Situation

– in the House of Commons at 4:13 pm on 12th March 1992.

Alert me about debates like this

[Relevant document: European Community Document No. 10212/91 and COR2, the Commission's Annual Economic Report 1991–92.]

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

I should tell the House that Mr. Speaker has not selected the amendment standing in the name of the hon. Member for Southend, East (Sir T. Taylor).

Photo of Michael Howard Michael Howard Secretary of State for Employment 4:42 pm, 12th March 1992

I begin by welcoming the fact that the hon. Members for Dunfermline, East (Mr. Brown) and for Sedgefield (Mr. Blair) are to speak for the Opposition in today's debate. We had originally understood that the lead speaker for the Opposition was to be the hon. Member for Livingston (Mr. Cook), the shadow Secretary of State for Health. Fresh from his triumph over David Frost on Sunday morning, the hon. Gentleman, who is a noted horseman, was no doubt anxious to speak today on the time-honoured principle that, if one has had a nasty fall, one must get back in the saddle as quickly as possible.

But the hon. Gentleman has been unceremoniously booted aside. The fact is that 48 hours have now passed since the dismal performance of the Leader of the Opposition on Tuesday. As the awfulness of that performance has sunk in, Labour's business managers have realised that since the shadow Chancellor spoke yesterday, they have got to give equal time to their other two leadership candidates—the hon. Members for Dunfermline, East and for Sedgefield.

The hon. Member for Dunfermline, East will, no doubt, put his usual doom-laden gloom on the Budget, on this morning's retail sales figures, encouraging as they are, and on any other piece of good news that he can get his hands on. The hon. Gentleman is a happiness hoover, the gloom-monger in chief. When the story is grim, and the policies are dim, one knows that "It's got to be Gordon."

Four weeks today our nation will go to the polls. The people will be deciding on the future course of our country and they will entrust their support to my right hon. Friend the Prime Minister and the Government whom he leads. They will choose a Government who believe in free enterprise as a matter of conviction, not electoral convenience. They will endorse an approach which involves leaving people with more of their own money, not less. They will back a leader who has steered the country with great skill through 16 difficult months and who has a clear vision of the future that he wants to build.

Tuesday's Budget has set us on course for election victory. It is a Budget that will increase incentives, encourage enterprise and help employment to grow. It is a Budget for industry, a Budget for enterprise and a Budget for jobs. It will help to accelerate the end of the recession and advance the progress of steady and sustained recovery.

The framework for recovery is already in place. We have: low taxes, the lowest of any of the G7 countries; low inflation, lower than the EC average; and lower interest rates, four and a half points lower than we had 18 months ago. We have created the conditions in which enterprise can thrive and jobs can be created— as they were during most of the 1980s. Today, there are still more than 2 million more people at work than there were in 1983; we have a greater proportion of our work force at work than any other EC country apart from Denmark; and there are more women at work than in any other European Community country.

The Budget will reinforce the conditions that have made these achievements possible. Its measures to assist small firms are particularly significant. My right hon. Friend's proposals will encourage the creation of more small firms, and enable existing ones to grow.

The Government will help those who have to pay higher rates because of the revaluation of business properties and accelerate the benefits of those who gain from these changes. We shall take action to speed up the payment of bills. We shall relieve business of the worst effects of inheritance tax. Those measures have been warmly welcomed.

Photo of Mr Dale Campbell-Savours Mr Dale Campbell-Savours , Workington

Will the right hon. and learned Gentleman answer a question to which I am having great difficulty getting an answer? I was looking at the Red Book yesterday and I noticed that the public sector borrowing requirement—the high level of borrowing that we have this year, which will increase next year—goes on right through till the year 1995–96. That suggests that the Government intend to borrow substantially—about £110 billion—over the next six years. However, we are repeatedly told that this borrowing is being undertaken to take us through the cycle and carry us over the recession. Are the Government saying that the recession will last until the mid-1990s? Is that what they are planning for by ensuring that the PSBR is maintained at that level until almost the end of the century?

Photo of Michael Howard Michael Howard Secretary of State for Employment

The Government are not saying anything of the kind, but I can understand that the hon. Gentleman, who has come to these notions of fiscal prudence somewhat late in life, finds it difficult to grasp the essentials. It is not surprising that the hon. Gentleman, who belongs to a party that has consistently espoused high borrowing throughout the time that he has supported it, should fail to grasp those points.

Photo of Mr Dale Campbell-Savours Mr Dale Campbell-Savours , Workington

The right hon. and learned Gentleman would do well to recall that, for the past seven years, I have been a member of the Committees examining the Finance Bills. Every year, I involved myself in debates on public expenditure matters and on the PSBR.

Photo of Michael Howard Michael Howard Secretary of State for Employment

And after all those wasted hours, the hon. Gentleman still does not understand the basic principles that govern these matters. As I was saying—[Interruption.]

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

Order. Even on the eve of an election, we do not conduct our affairs by bellowing across the Floor of the House. Labour Members will have adequate opportunities to put arguments in rebuttal.

Photo of Michael Howard Michael Howard Secretary of State for Employment

These measures have been warmly welcomed. I understand that the Labour party is reluctant to listen to these words of welcome, but it will have to.

The Union of Independent Companies has said: The greatest thing in the Budget is the encouragement to the owners of independent businesses that they can keep their companies intact". The Forum of Private Business has said: The Chancellor has tackled some of the most important obstacles facing small business. The National Farmers Union has said: This is a substantial help for the farming industry and something we will welcome". The chief executive of the Forum of Private Business put his finger on it when he said: Many businessmen and women are motivated because they are working to leave something for their family". We recognise that fact. We welcome their enterprise; we want to encourage their endeavours. What a contrast with the Labour party. While we want to reduce taxes on income and inheritance, it wants to increase them both. It intends to introduce proposals to secure the effective taxation of wealth". Labour says: The key to the most effective action is to tax wealth when it is transferred through gift or inheritance. Labour will not own up to the form that tax would take or come clean on the levels at which it would bite. But one thing is clear: instead of encouraging the owners of independent businesses, Labour would clobber them; instead of removing the obstacles facing small firms., Labour would increase them; and instead of motivating people who want to leave something to their family. Labour would punish them. That is the attitude of the Labour party to inheritance and transfer.

Photo of Mr Derek Fatchett Mr Derek Fatchett , Leeds Central

How would the Secretary of State explain to those running small businesses that he was the Minister who introduced the uniform business rate?

Photo of Michael Howard Michael Howard Secretary of State for Employment

Small business people recognise that the uniform business rate offers them a guarantee of keeping increases, once revaluation has come into effect, to no more than the rate of inflation. The hon. Gentleman should have chosen his ground much more carefully before intervening.

We listened with great interest to the Leader of the Opposition when he spoke after the Budget statement of my right hon. Friend the Chancellor of the Exchequer on Tuesday. The right hon. Gentleman welcomed the measures which my right hon. Friend proposed to take to limit increases in the UBR, which he had provided for in his Budget. It would be impossible for the Labour party to do anything of the sort. It wants to let these things rip. It wants to put them in the hands of local authorities, with no control, no capping and no restrictions of any sort. The Leader of the Opposition was welcoming a measure that was proposed in the Budget that he would not have the power to put into effect because of the policies that he is putting before the British people. That is the truth of the matter.

Photo of Mr Derek Fatchett Mr Derek Fatchett , Leeds Central

Will the right hon. and learned Gentleman give way?

Photo of Michael Howard Michael Howard Secretary of State for Employment

If the hon. Gentleman wants to get up after that, I shall happily give way again.

Photo of Mr Derek Fatchett Mr Derek Fatchett , Leeds Central

The Secretary of State seems to have forgotten his role in introducing the UBR. When he introduced the measure, he said that it would be in the interests of British industry, especially small businesses. He said also that the system would work in a way that would cause no injustices and no anomalies. Why is it that, within two years of the introduction of the UBR, the right hon. and learned Gentleman has had to announce that changes will be made to it and has set out the measures that the Government would take? Does this not show that the Government failed in the first place, that the right hon. and learned Gentleman was responsible for that and that a great burden has been imposed on small businesses?

Photo of Michael Howard Michael Howard Secretary of State for Employment

I am astonished by the hon. Gentleman's intervention. He represents a Leeds constituency, and businesses in Leeds have benefited from the introduction of the UBR. The measures introduced by my right hon. Friend the Chancellor will let them have the benefits even earlier than would otherwise be the case. The hon. Gentleman does not know what he is talking about.

No one should be surprised by the sheer ignorance that the Labour party brings to its consideration of these matters. The truth of the matter is that the Labour party still does not have the faintest idea how a free enterprise economy works. It remains a party in thrall to economic illiteracy. I make this offer to the shadow Chancellor of the Exchequer—who, sadly, it not with us at the moment—the shadow Secretary of State for Employment and the shadow Secretary of State for Trade and Industry. After the election—when we have won—I shall personally see to it that they are offered training places on a programme that will teach them the basic principles of free enterprise. But I cannot promise them the prawns. My right hon. Friend the Secretary of State for the Environment has banned them. After the election there will be no more prawns for the right hon. Gentlemen and their friends.

The most economically illiterate policy of the lot is the proposed introduction of a national statutory minimum wage. Every independent expert who has looked at Labour's proposals has come to the conclusion that it would destroy jobs. James Capel concluded that a minimum wage would result in higher inflation, which deteriorates competitiveness and profitability and ultimately results in an increase in unemployment". Goldman Sachs has said that a minimum wage can be expected to raise both inflation and unemployment". It added that Labour's policy "is unambiguously bad news". The Reward Group has reported: a national minimum wage would create havoc in some regions. The West Midlands' industrial base would be desperately hard hit by the increased costs … it is likely to create further job losses in the areas with the highest unemployment rates". Every expert is agreed that the introduction of a minimum wage would result in an increase in unemployment. It is a question not of whether jobs would be lost but of how many. Under stage 1 of Labour's proposals, Nomura Securities estimates that 145,000 jobs would go; UBS Phillips and Drew predicts that 400,000 would go; and the university of Liverpool forecasts the loss of 500,000 jobs.

But that is not the limit of Labour's ambitions. Labour is committed not only to introducing a minimum wage but to increasing it. Stage 2 of Labour's policy would result in even higher increases in unemployment. UBS Phillips and Drew believes that 1·25 million jobs would be lost. The university of Liverpool has put the figure at 1·4 million. Economists in my Department have calculated that 200,000 jobs would be destroyed even without any restoration of differentials. If differentials were restored in full, up to 2 million jobs would be in jeopardy.

The extent to which differentials would be restored is crucial in determining the cost and employment implications of the Labour party's policy. Only last week the CBI estimated that, excluding any attempt to restore differentials, the Labour party's proposals would add £2·5 billion to the annual costs of employers and destroy 150,000 jobs. If full differentials were restored, the extra costs would soar to £50 billion a year.

Photo of Mr Bob Cryer Mr Bob Cryer , Bradford South

Will the Secretary of State confirm that the figures from the university of Liverpool are from Sir Patrick Minford, a notorious right-wing extremist? Will he confirm also that all the people making these predictions are on rather more than the basic minimum wage? Does he not think that it is particularly distasteful that well-paid Cabinet Ministers and well-paid Tory Members, who are busy lining their pockets with parliamentary adviserships and directorships by the score, will vote against the poorest of the poor?

Photo of Michael Howard Michael Howard Secretary of State for Employment

The hon. Gentleman should know that the Labour party's proposals will not help the poor, as I shall demonstrate. It is a rum approach to economic forecasting—the new approach that the Labour party urges upon us. It is that we should accept forecasts only from those who earn less than the minimum national wage. It is extraordinary. We have an interesting proposition from the hon. Gentleman and it deserves very careful consideration.

I have cited the estimates of the City experts of the consequences of Labour's policy. It may be that the shadow Secretary of State for Employment sees himself as essentially a provincial figure, a man of the people, keeping his distance from the City circuit, distrustful perhaps of its estimates in these matters. If so, let me help him. Some of the employers in his own constituency have been making their views known on the subject of the minimum wage. The managing director of Filmco Euroform, for example, says that there would be a problem with differentials. The proprietor of the aptly named Walworth Castle hotel is quoted as saying: Labour's plan would be nothing short of disastrous. It would be ridiculous to believe we would be able to maintain our staffing levels if the minimum wage was introduced. We would be talking about redundancies and lay-offs". So there you have it, Mr. Deputy Speaker. Every independent expert proclaims that it would cause job losses. Employers in the hon. Gentleman's own constituency spell out the consequences.

Photo of Miss Emma Nicholson Miss Emma Nicholson , Torridge and West Devon

Would my right hon. and learned Friend care to comment on the east end of London trade union convenor who told me only two weeks ago that this time around he would vote Conservative because the Labour party's spending policies would not soak the rich but would take money from the pockets of people such as him and his union's members?

Photo of Michael Howard Michael Howard Secretary of State for Employment

I am not in the least surprised by what my hon. Friend says. The trade union leader to whom she spoke is not alone in his view. There will be many more like him who see the evils of the Opposition's policies.

Photo of Jim Wallace Jim Wallace , Orkney and Shetland

The Secretary of State knows that I share his opposition to the statutory minimum wage and think that it would result in unemployment. The right hon. and learned Gentleman has given the likely unemployment figures that would result from a national mimimum wage. Will he estimate whether unemployment will rise or fall and by how much as a result of the Chancellor's Budget on Tuesday?

Photo of Michael Howard Michael Howard Secretary of State for Employment

I have made it clear that over a period, as we put in place a framework to encourage the creation of jobs, as they came forward in unprecedented numbers in the 1980s, so we would see job creation again in the 1990s.

Photo of Michael Howard Michael Howard Secretary of State for Employment

I must get on.

In the face of all that evidence, the hon. Member for Sedgefield says that not a single job would go. His approach to statistics makes the hon. Member for Livingston look like the epitome of respectability in these matters. It is not as if the hon. Gentleman and his hon. Friends have not been warned about the consequences of their policies. This week the veil has been lifted on the way in which the Labour party makes such decisions.

This very day, Eric Hammond's autobiography is published. On the minimum wage he says: I have told Kinnock it simply will not work. So has Gavin Laird, the AEU General Secretary, among others. Everyone in the world of work is paid and expects to be paid extra as they develop additional skills. They are not going to allow any government to diminish their earnings as part of a Utopian dream to guarantee a minimum to all. Employers will be dissuaded from taking people on. It will create more unemployment and chaos and conflict on the shopfloor. Already, the backtracking has started with news that Tony Blair says the scheme will exclude youngsters. It should include nobody. I have warned Neil Kinnock of the electoral consequences of pursuing a policy foisted upon them by unskilled unions not capable of doing their own job of representing lower-paid workers. They want it all to be settled by law. There is one particularly revealing passage. Mr. Hammond says: At Labour's 1990 Blackpool Conference, they deliberately exluded me from speaking on the National Minimum Wage … However, I did rather redress the balance the next day. BBC television asked me to join a panel reviewing the day's conference with John Edmonds and Tony Blair. Instead of dealing with that day's events, I launched into an attack on the National Minimum Wage. It upset Mr. Edmonds and caused Tony Blair to have a long discussion with me afterwards. I don't think he had fully understood our objections. As he stormed out of the studio, Edmonds said to me with all the pomposity he can muster, 'Thank you very much for that.' Blair obviously had not thought through the effects of the policy on skilled people like ours.

Hon. Members:

More, more.

Photo of Michael Howard Michael Howard Secretary of State for Employment

It is a very good book and I commend it to my hon. Friends.

While the Government are looking to leave people with more of their own pay, the Labour party's policies would leave people with no pay at all. Its minimum wage would hit the very people whom it is intended to help, wantonly increasing the level of unemployment. The minimum wage makes minimum sense.

Today we see the ultimate in the ridiculous. We see the Labour party proposing a minimum wage, ostensibly to help the low-paid, while planning a tax increase for the low-paid to help foot the bill. What Labour would give with one hand, it would take away with the other.

Of course there are people in low-paid jobs who need help, and we help them. We help them in a sensible way through family credit. We shall not introduce a law which, according to the Institute of Fiscal Studies, would help the richest third of the population more than it would help the poorest third.

Photo of Michael Howard Michael Howard Secretary of State for Employment

I shall give way in a moment. I hope that the hon. Gentleman will particularly take the opportunity to comment on this observation by the director of the Institute of Fiscal Studies: If the point is to avoid people being poor, then this is an extraordinarily stupid way of doing it.

Photo of Tony Blair Tony Blair , Sedgefield

The point is not the difference between Labour's national minimum wage and the status quo but the difference between the national minimum wage and the Secretary of State's plan, which he will carry through if re-elected, to abolish the wages councils altogether. If that is what he intends and there were a pay cut, even of as little as 30p per hour, I million catering workers, 1·25 million retail workers and more than 60,000 of those who work in hairdressing shops will lose more than £600 per year if they are full-time employees.Is that right or wrong?

Photo of Michael Howard Michael Howard Secretary of State for Employment

We have made our position on the wages councils clear time after time. We shall keep their position under review although we see no permanent place for them in our system. We have said that before and we shall say it again. That is our position on the wages councils.

Photo of Michael Howard Michael Howard Secretary of State for Employment

I have answered the hon. Gentleman's question. I shall give way to him if he will answer the charge made by the director of the Institute of Fiscal Studies. Will the hon. Gentleman answer that?

Photo of Michael Howard Michael Howard Secretary of State for Employment

Yes, the hon. Gentleman says. Let us see how he answers.

Photo of Tony Blair Tony Blair , Sedgefield

I do not agree with the Institute of Fiscal Studies on that point. But the right hon. and learned Gentleman is rather unwise to mention the Institute of Fiscal Studies since it has also said that the 20p tax band is not the way to help the low-paid. Can we have a firm undertaking from the right hon. and learned Gentleman that he will not abolish the wages councils and lose protection for those 2·5 million people, mainly women, who are covered at present by the wages councils—yes or no?

Photo of Michael Howard Michael Howard Secretary of State for Employment

I gave the hon. Gentleman a clear answer on our position in relation to the wages councils. There is no change. We have made it clear time after time.

Photo of Michael Howard Michael Howard Secretary of State for Employment

I am not giving way to the hon. Gentleman. I have answered his question repeatedly.

The mischief of the minimum wage is not simply that it would destroy jobs; it would cause havoc in many other ways. No doubt one reason why the hon. Member for Livingston was pulled out of the debate was that the Labour party was afraid that he might be asked about his admission that the minimum wage would cost the national health service half a billion pounds—half a billion pounds without any improvement in patient care.

Let us look at the effect of the minimum wage on Labour's so-called recovery package. The centrepiece of that package is supposed to be an extra £800 million for training. It is supposed, so we were given to understand by the hon. Member for Dunfermline, East on "World at One" today, to stem the rise in unemployment, to lower interest rates and to achieve a miraculous transformation in our economic circumstances. What the hon. Gentleman did not mention was that £630 million of the £800 million would go towards those people who are currently on training schemes because Labour insists on paying them the rate for the job instead of benefit plus £10, which they currently receive. Therefore, £630 million —80 per cent. of the total training portion of the recovery package—would be spent without providing a single extra training place.

In "On the Record" last week, the hon. Gentleman pledged himself to the introduction of a work experience programme with a throughput of 150,000 people a year. It would not be introduced "as resources allow" or "over the period of a Parliament"; it was not accompanied by any of the other weasel-worded formulae of which the Labour party is so fond: it would be introduced from the very first year and everyone taking part would be paid the rate for the job. At the level of the minimum wage, that would cost £551 million a year more than we are spending on employment action. How will that be paid for? Where will the money come from?

It is not surprising that it is not only the shadow health spokesman who has been booted from the debate: it is the shadow Chief Secretary who was to reply to the debate and who would, no doubt, have been extremely embarrassed by the hon. Gentleman's indiscretion. The fact of the matter is that Beckett's law is in tatters.

I shall make this prediction: after we have won the next election, the Labour party will have another of its policy reviews. It will discover that it was wrong about the minimum wage, wrong about inheritance tax and wrong about the 20p rate of income tax—just as it has discovered that it was wrong about defence, about the trade unions, about public ownership and about taxation; and wrong about socialism itself.

The basis of the Labour party's appeal at this election is the simple proposition: "Aren't you lucky you didn't vote for us last tittle?" "Aren't you lucky", Labour says to the electorate, "that you didn't vote for a Labour Government in 1987? After all, if you had, we would have saddled you with all those wrong policies on defence, on the trade unions, on public ownership and on taxation." "Never", the Labour party says of itself, "has a party been so wrong so often on so many measures so recently". That is the clarion call with which the Labour party enters the fray for this election. It is a clarion call that will be rejected with contempt by the British people.

The Labour party has never believed in free enterprise. Labour Members came into politics to sweep it away. The Labour party has never believed in a market economy. Labour Members came into politics to destroy it. The Labour party has never believed in capitalism. It thought that it had a better system, called socialism. Now Labour Members sit there and believe in nothing.

We are the party that believes in free enterprise. We defended it when it was unfashionable; we have championed its cause through thick and thin. We shall be returned to Government to preside over a free enterprise economy that will bring ever greater prosperity to our people, ever greater resources for our public services and ever greater help for those in need.

I commend the Budget to the House and the Conservative party to the country. Both will be returned by substantial majorities.

Photo of Gordon Brown Gordon Brown Shadow Spokesperson (Trade and Industry) 5:11 pm, 12th March 1992

Is it not extraordinary that the Secretary of State for Employment, faced with the biggest rise in unemployment in western Europe over the past year, could speak for more than 45 minutes to the House without even mentioning the unemployment that his Government have caused?

Photo of Michael Howard Michael Howard Secretary of State for Employment

On a point of information, I spoke for less than 30 minutes. The hon. Gentleman cannot even get his basic arithmetic right.

Photo of Gordon Brown Gordon Brown Shadow Spokesperson (Trade and Industry)

The right hon. and learned Gentleman confirms that, as Secretary of State for Employment, he can make a 30-minute speech without mentioning any measures that the Government are prepared to take to bring down the appalling level of unemployment in this country. That is an absolute disgrace. The Secretary of State mentioned the Budget, and that was especially bad, because the framework for the Budget assumes that unemployment will continue to rise for many months.

Our argument is not just that people who are unemployed are hit by the Government's failure to deal with unemployment, but that thousands more are in fear of unemployment in every region, in every industry and in every sector, trade and profession. Thousands more people know that confidence will not return to the economy, investment will not substantially expand, and the housing market will not fully recover until employment and investment prospects improve. That is why we need an employment, industrial and regional policy for this country.

Three years ago, there was what was called a "Budget for jobs". The result is that, since then, nearly I million jobs have been lost. Last year, the Budget was entitled the "Budget for business". The result of that was that 50,000 businesses went under during the course of the year. Now we have a Budget which is blatantly a Budget for the Conservative Government. The result will be the same: they too will go under.

There is nothing in the Budget for the construction industry, no special incentives for manufacturing, and nothing targeted on increasing industrial investment. There are no special new measures for training, and, as the Secretary of State must be the first to know, there are no measures to tackle the rising problem of the 2·5 million people whom the Government have left unemployed.

The nearest that we came to a Budget for jobs was when the Secretary of State, to tide him over another embarrassing set of unemployment figures, announced at midday on 13 February: I have no doubt we will see a Budget for jobs". By the afternoon, a Treasury spokesman—no doubt acting on the instructions of the Chancellor of the Exchequer—had corrected the Secretary of State, saying: The Chancellor never said that". How right he was. This is no Budget for jobs. We would be more impressed by the Government's claim to be a party of the poor and the low-paid if they had not created so many of them.

A year ago, the Chancellor told us in his Budget speech that recovery was just around the corner. At least he is consistent—in this year's Budget speech he told us the same thing: that recovery was just around the corner.

The small print of the Budget statement shows that jobs will continue to be lost—the Chancellor had to admit that. He also had to admit, in the small print of the Red Book, that business investment would continue to fall. In our view, public services will continue to deteriorate and unemployment will continue to rise.

We are talking about a generation of young people—many qualified, and all eager to work—who have been successively disappointed. Many have been embittered and disillusioned by rejection after rejection, as unemployment continues its remorseless rise. We see the young couples who are forced to give up their homes and go with their young children into the misery and the unhealthy uncertainty of life in bed-and-breakfast accommodation—and there is the skilled man in his 50s who knows that, when his workplace closes, his working life, too, is over.

The Government cannot blame all that on the Trades Union Congress, the European Community, the American recession or—their latest pretext—world recession. They have no one to blame but themselves.

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

In giving his view of the future, the hon. Gentleman said that public services would continue to deteriorate. I am not sure what he meant by that. Presumably he meant that not enough money is going into public services. Will he tell us whether he would increase taxes, increase borrowing, or increase both?

Photo of Gordon Brown Gordon Brown Shadow Spokesperson (Trade and Industry)

If the Chancellor is in any doubt about the deterioration of public services in this country, let him visit our schools and hospitals, and let him travel down our roads and look at our railways. A report today by the King's Fund reveals the problems that the health service faces under the Conservative Government [HON. MEMBERS: "Answer".] I am happy to answer the Chancellor's question.

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

If the hon. Gentleman had been in the Chamber for Treasury questions today, he would have heard one of his hon. Friends complaining about borrowing and two of them complaining about the tax burden. How can he then say that not enough resources go into public services?

Photo of Gordon Brown Gordon Brown Shadow Spokesperson (Trade and Industry)

The Chancellor seems to have misunderstood the whole argument. We say that a tax cut at this time is wrong, because we should be investing in the economy, including the economic infrastructure. Our argument is that the Budget, which should have been a Budget to strengthen Britain, will do nothing to reduce unemployment and little to increase investment. It does not begin to add up to an economic recovery programme for the future of Britain. At its heart there is a complete void, because there is no purpose, no vision and no direction.

Let us remember what has happened in the past year. More than 500,000 more people are unemployed; there have been 50,000 more business closures; several hundred million pounds in investment has been lost; and, according to the census yesterday, there are even 190,000 more self-employed people out of work.

Last March, the Government told us that many of those redundancies, closures and cuts could not happen, because they predicted that there would be a recovery last June. The Chancellor should apologise to the House and to the people he has betrayed. Those are the business failures that the Government promised could not happen. In the summer, the Prime Minister said that a recovery would start "in weeks". He should apologise not only to us but to the people who have lost their jobs.

Those are the closures that the Government told us that we could not suffer. On I January, the Prime Minister said that the recovery had already started "as we speak". It is a disgrace that, when people have been cruelly misled in that way, there is not even a hint of remorse.

This is the Chancellor who said that unemployment "is a price worth paying". One of the Ministers with responsibility for social security said that unemployment was a "liberation" for thousands thrown out of work. The Chief Secretary said that training was a luxury that we cannot afford. The Prime Minister said that if it was not hurting it was not working. Let us be clear: this is the Government who are hurting but not working. They are a luxury that we cannot afford. If unemployment is a price that people are prepared to pay, they are prepared to pay for the unemployment of the Ministers on the Treasury Bench today.

If we look at what is happening in the country, we find that 22 people are chasing every job in the north of England, 28 in Yorkshire and 33 in the west midlands. In jobcentres in some constituencies, 100 people are chasing every vacancy on offer. There is a one in a hundred chance of people in many areas getting a job under this Government. The real national lottery is ever more thousands of disappointed men and women facing ever lengthening odds as they go after ever fewer jobs.

What has the Secretary of State for Employment done? Two years after the recession started and a year after he promised that action would be taken to create employment, how many people are on employment action schemes throughout the country? With unemployment running as high as 10,000 people in some constituencies, what do the Government offer? The Secretary of State for Employment plans to create 30,000 places under the employment action programme. Many of those places, I believe he will admit, have not yet been created. That amounts to 40 employment action programme places for a typical constituency, yet in some constituencies there are 10,000 people out of work. That is scarcely even tokenism, and is hardly even cosmetic. The Secretary of State has certainly not taken action commensurate with the scale of the problem, but after 9 April the Secretary of State may have a greater concern for the interests of the unemployed.

Our argument is clear: unless we tackle unemployment and the fear of unemployment, we cannot and we shall not have a swift economic recovery. As long as the fear of rising unemployment is there, people will hesitate about spending, about moving home and about investing their savings. As long as that fear is there, many of our shopping centres will remain quiet or empty, the housing market will be slow to recover and investment will continue to falter. It is not just the unskilled or the semi-skilled but the skilled and the white collar workers who are now anxious, with reason, about the economy. We cannot move the economy swiftly out of recession unless we diminish the fear of unemployment. We cannot diminish that fear unless we have a Government who are prepared to start to bring down unemployment.

Who influenced the shape of the Budget that the Chancellor put before us on Tuesday afternoon? Certainly it was not the unemployed. They were never consulted, and they will not be the beneficiaries of this Budget. Was it industry? Many sectors of industry were not consulted and do not feel that they will benefit from many of the Chancellor's proposals. Was it the regions? There is to be no action on regional policy. Who sketched and drafted this Budget? Was it the people at the Treasury or was it, more likely, the people at Saatchi and Saatchi? The Tory party's secret weapon is the double Saatchi. The Budget owes less to manufacturing industry than to the advertising industry.

I have been checking up on Saatchi and Saatchi and on what it has been saying not just on behalf of the Conservative party but on behalf of many other people. In the advertising industry, Saatchi and Saatchi has an unenviably notorious record for complaints made, for prosecutions initiated and for verdicts handed down by the Advertising Standards Authority.

I have here a letter from the head of the Advertising Standards Authority—not about the one or two prosecutions for misleading the public, or the half-dozen prosecutions for not telling the truth, but about the 71 prosecutions that were upheld against Saatchi and Saatchi: twice as many complaints as have been upheld against any other agent. Let me read out what the head of the Advertising Standards Authority said about the organisation upon which the Conservative party relies. She said that it was disappointing to find Saatchi producing quite so many complaints. It is too many complaints too often. It is not a very good record. They need to pay greater attention to detail, show firmer control of substantiation and take more copy advice when they are dealing with sensitive areas. What has been the substance of the complaints against Saatchi and Saatchi? It has been prosecuted for advertising products that are no longer available. That ideally qualifies Saatchi and Saatchi for talking about certain services in the national health service under this Government. It has been prosecuted for advertising old products that are described as new. Again that ideally qualifies Saatchi and Saatchi for presenting Majorism at the election. It has been prosecuted for advertising products that fall below the standards claimed on billboards, such as the claim about economic recovery. These are the prosecutions that have been brought against Saatchi and Saatchi in the last few years. It has been prosecuted for advertising considered inadmissible because of misleading, restrictive, dishonest or undisclosed terms of offer. We have yet, however, to see the Conservative party's manifesto.

The persistent offence which best qualifies Saatchi and Saatchi to represent the Chancellor of the Exchequer and the Government in their present plight is that of advertising products at give-away prices and advertising them only in the last few days of the period on offer.

Photo of Gordon Brown Gordon Brown Shadow Spokesperson (Trade and Industry)

I shall give way later.

What is the basis of this perfect, indeed enduring, relationship between Saatchi and Saatchi and the Conservative party? I have read the memoirs of Lord Young. One must go to him for his description of what happened during the last election when advertising was being prepared for the campaign. The Secretary of State for Employment may not remember this, but others will remember wobbly Thursday, or panic Thursday, when Maurice Saatchi wobbled. However, as Lord Young said, he steadied him by the lapels. Let me quote what Lord Young said to him. Then we shall see the truth behind the relationship between Saatchi and Saatchi and the Tory party, and who benefits. 'Now look, Maurice— Lord Young said to him, taking him by the lapels— 'how much are you worth? How much are your companies worth? Do you know what you will be worth this time next week if we lose the election? You will be broke, we will all he broke. I'll he broke.' That is the relationship between Saatchi and Saatchi and the Government.

Photo of Michael Howard Michael Howard Secretary of State for Employment

Can the hon. Gentleman confirm that the message that he wants to send to the country is that there is so little in the Budget that he can criticise that he is spending all his time talking about the Conservative party's advertising agents?

Photo of Gordon Brown Gordon Brown Shadow Spokesperson (Trade and Industry)

The Secretary of State for Employment has the audacity to rise on that point when he did not even mention unemployment in his speech.

Let us be absolutely clear about the scale of the problem that this country faces. In 1992, investment—which has already fallen—will fall again. Business investment, which has already fallen, will fall again. Construction and housing investment, which has fallen, will fall again. Having been bottom of the league in the European Community for investment in 1991—[Interruption.] Conservative Members do not like it, but they are going to hear it—this country will be bottom of the league again if current policies continue. Moreover, having been bottom of the league in the European Community for industrial production in 1991, we shall be bottom of the league again, if current policies continue. Having been bottom of the league for losses in manufacturing employment in 1991, according to the European Community we shall be bottom of the league again, not just in 1992 but in 1993.

Anybody who listens to what the trade associations throughout the country are saying knows of the problems that industry faces in holding on to people. Does the Secretary of State for Employment deny the accuracy of the forecast by the Engineering Employers Federation, that 70,000 people employed in the engineering industry alone are in danger of losing their jobs this year? Does he deny the forecast from the Retail federation that more than 10,000 jobs are at risk? Does he deny that more than 50,000 jobs in the construction industry are at risk? Is the CBI right to claim that 200,000 jobs in manufacturing alone are at risk and could be lost this year?

The failures that began under the Government in 1987 and 1988 were compounded in 1988, 1989 and 1990. Our argument is that the Prime Minister and the Chancellor have failed to correct those policies in the Budget. Having said that unemployment will rise, will the Chancellor tell us, under his forecast, for how many months it will rise?

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

The right hon. Gentleman chose to quote from what he called the Retail federation. Why does he not quote what the Retail Consortium really said about the Budget? The director general of the Retail Consortium said: The retail sector was looking for a Budget which would boost consumer confidence and revitalise small business while retaining sound financial good sense. We believe this Budget fits that bill. That is what was really said.

Photo of Gordon Brown Gordon Brown Shadow Spokesperson (Trade and Industry)

Does the Chancellor deny that the Retail federation and other organisations in this country are predicting job losses this year? Does he deny that the scale of the job losses predicted is of the order of 200,000 in manufacturing and 400,000 in total if we include retail jobs? When we know that those are the forecasts for job losses from industry, why did we have a Budget that took no action to deal with the problems that we face?

Photo of Michael Howard Michael Howard Secretary of State for Employment

Surely the hon. Gentleman knows that the only question that we should be addressing is which policies are best designed to create jobs. He knows that the national minimum wage would wantonly destroy countless jobs in the retail trade. Why does he not abandon that job-destroying policy?

Photo of Gordon Brown Gordon Brown Shadow Spokesperson (Trade and Industry)

It is interesting that the Secretary of State said nothing about unemployment when he spoke, and now—

Photo of Sir Nicholas Bonsor Sir Nicholas Bonsor , Upminster

On a point of order, Mr. Deputy Speaker. Hansard will clearly show that, when my right hon. and learned Friend the Secretary of State for Employment was speaking, he did mention unemployment and said specifically—

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

Order. That is not a point of order for me.

Photo of Gordon Brown Gordon Brown Shadow Spokesperson (Trade and Industry)

The key question in the debate is whether there will be a substantial economic recovery as a result of the measures in the Budget. The Chancellor admitted in his Budget statement that unemployment will rise. The Red Book makes it clear that investment will fall in 1992. Does the Chancellor agree with the forecasts from the trade associations including the CBI, the Engineering Employers Federation and others that 200,000 manufacturing jobs will be at risk this year if current policies continue, and that 400,000 jobs are at risk throughout the economy? The Chancellor refuses not only to answer the question but to take any measures to act directly on the unemployment that the Government have created.

The truth is that the Government have been wrong this year and throughout the five years during which the Chancellor has been at the Treasury, when the Secretary of State for Trade and Industry—he has not appeared today —was at the Treasury and when the Prime Minister, with only a few months exception, was a Minister at the Treasury making economic policy.

What is their defence for the failures of the past few years? Were they not consulted when the wrong decisions were made? Were they not involved in making them? Did they advise differently? What is their defence for the mistakes that have cost thousands of people their jobs? What is the Prime Minister's alibi? We know that the Secretary of State for Employment has an alibi. He was not in the Treasury. He was involved in another crime at the time—the poll tax. We know that the Secretary of State for the Environment was not in the Treasury. He was not even at Westminster at the time. He was touring the country trying to win the leadership of the Conservative party.

There is no doubt who was in the Treasury during those years. It is not just the Chancellor but the Prime Minister who will have to answer to the electorate for the mistakes that have been made. The Prime Minister was wrong in 1988 when he said that he would have a balanced budget —he has failed to deliver it. He was wrong when he predicted that the trade deficit would fall substantially in 1988 and 1989 and it did not. He has been wrong ever since. He was wrong when he told us that there would be no recession, when he told us that there would be an early recovery and when he told us that the recovery had arrived. He had to admit in the House only a few days ago that we were still in the midst of the recession.

The failures that the Government refuse to address are the failures not just of the past three, four or five years but of the past 13 years. Let us be absolutely clear about the extent of the Government's failure. Despite all the talk, all the boasts and all the rhetoric from Ministers, and despite all the statistics that Saatchi and Saatchi produce and put on billboards and in leaflets for them, no other country in the European Community has such a poor record of manufacturing investment since 1979. Our record is worse than that of Greece, Spain and Portugal. The real value of manufacturing investment under a Conservative Government, even with the unparalleled advantage of North sea oil, has fallen.

What of manufacturing growth? From being second bottom in manufacturing growth since 1979, we are now incontestably bottom of the league. In Japan, manufacturing has managed to grow by more than 60 per cent. outside the EC. In Germany, manufacturing has managed to grow by nearly 30 per cent. In this country, the growth rate for manufacturing has been one tenth that of Japan, and substantially below that of Germany.

That is why we need a policy that addresses the problems of under-investment. That is why we need a policy for the regions. It is absurd that we have a Minister responsible for regional policy who says that regional policy is a "phoney activity" of Government. The Government will pay the price for that when it is told to the electorate during the campaign. That is why we need a Government who are prepared to take seriously the problems of investment in the country's infrastructure.

I invited the Chancellor to look at our hospitals and schools. There are 7 million children being taught in schools where, according to independent reports, repairs are long overdue. There are thousands of pupils in schools with only outside toilets. Classrooms are still accommodating and teachers still have to teach more than 40 children at a time. The Secretary of State for Education and Science even admits that standards are not as good as they used to be, and that we lag behind our competitors abroad in the number of school leavers participating in further education.

The Secretary of State for Education and Science is prepared to tear up the pledge made 20 years ago by the right hon. Member for Finchley (Mrs. Thatcher) that there would be nursery education for all. In Britain in 1992, parent-teacher associations are reduced to having to write to parents asking them to make donations and begging for money for equipment and even for money to employ teachers. All that is a scandal that the Conservatives cannot defend. That is not educational autonomy. The pay-as-you-learn education policy is educational neglect. There was nothing in the Budget for education or training. There was nothing for the unemployed and nothing for the health service.

More than 1 million people are on waiting lists for the national health service throughout the United Kingdom. In some cases, people still have to wait two years for operations that they know they could have within days in the private sector. Two of the country's leading children's hospitals have lost faith in Government funding and have had to launch huge appeals for millions of pounds—not for extras, but for essential development. Disgracefully, in the Budget the Government have approved the transfer of £80 million from the health service to private medicine. A terminally ill cancer patient who needs radiotherapy for pain relief has had to wait four months—too long—to get it. I say—[Interruption.] Conservative Members will listen to what is happening to the national health service. The reason they need to be told is that they do not use it.

Photo of Gordon Brown Gordon Brown Shadow Spokesperson (Trade and Industry)

I am not giving way again. I have given way three or four times to those on the Treasury Bench.

Up and down the country, the principles of the NHS are being eroded by the Government as surely as hospitals are crumbling, and the Government must shoulder the blame. It is interesting that, when we mention the words "unemployment", "education" and "health", the Government cannot react in any other way than to try to shout speakers down. That is what happens.

This country does not want a Britain in which one can be turned away from an opt-out hospital because no one is prepared to pay, but a Britain—

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

Order. I must level at Government Back Benchers the advice that I offered earlier. We conduct our affairs not by bawling across the Floor of the House, but by reasoned debate. I very much hope that hon. Members, particularly senior Ministers, will set a better example.

Photo of Gordon Brown Gordon Brown Shadow Spokesperson (Trade and Industry)

The Chancellor is getting anxious because, as we can see from the press, this will be one of his last public appearances before the election on 9 April. As we know, the Budget was under wraps for two months, but for the next three or four weeks it will be the Chancellor who will be under wraps.

Photo of Gordon Brown Gordon Brown Shadow Spokesperson (Trade and Industry)

I am not giving way again.

The country does not want a Britain in which parents have to raise funds for the basic essentials, but one in which every classroom has books for children to learn and no one has to pay to learn. We do not want a Britain in which literally millions are condemned to a life without either the training they need or the jobs they deserve. What we want is a Britain in which, no matter where one is or who one is, one will have a chance to learn and to develop skills with the highest quality training. We do not want a Britain in which, by Act of Parliament, the poor must literally beg and borrow from a state charity social fund. What we want is a Britain in which compassion, fairness and justice are the values of the Government as well as the values of the people.

The British people have rejected the values of the Government who brought us the poll tax, the social fund, cardboard cities and the commercialised NHS. On top of all that, the Government have brought us abject economic failure. The country will reject this last-ditch Budget from a beleagured Cabinet that is trapped by time, failure and, now, by the certainty of defeat. They are the men who, by their mismanagement, have put thousands out of their homes, tens of thousands out of their businesses and millions out of their jobs. Now is the time for the people of this country to put them out of office.

Several Hon. Members:

rose

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

Order. Earlier, Mr. Speaker advised that I should apply the 10-minute limit to the length of speeches between 7 o'clock and 9 o'clock. However, given reasonable restraint, we might be able to get by without it.

Photo of Mr William Clark Mr William Clark , Croydon South 5:43 pm, 12th March 1992

The hon. Member for Dunfermline, East (Mr. Brown) did not once mention the increase in public expenditure that was announced in the autumn statement or the increases in public expenditure, in real terms, on roads, health and so on since 1979. Many of us listened with bated breath when the hon. Gentleman called for more expenditure on this, more expenditure on that and more on the other, but not once did he say where he would find the money.

We have been promised that, next week, the right hon. and learned Member for Monklands, East (Mr. Smith) will unveil the plans of a Labour Government. I hope that they will be spelt out in clear terms because the Labour party's fudge on public expenditure is beyond belief. The only time that the hon. Member for Dunfermline, East roused Labour Members was when he attacked Saatchi and Saatchi. For the life of me, I do not understand what Saatchi and Saatchi has to do with this Budget.

You will appreciate, Mr. Deputy Speaker, that I have been in the House since 1959. With the exception of three or four years when my service was broken, I have taken part in practically every Budget debate. In 1979, I was elected chairman of the Conservative Back-Bench finance committee and, since then, I have taken part in every Budget debate. Towards the end of one's career, one looks at the transformation that has occurred. In 1979, under the previous Labour Government, the standard rate of income tax was 83 per cent. in the pound. If one happened to have investment income, the rate was 98 per cent. Now, however, the top rate is 40 per cent. I should have thought that one should continually remind people of that transformation which has been achieved since 1979, when the Conservative Government took office.

Not only have we increased public expenditure in real terms but, at the same time, we have reduced the taxation charges for the higher bands. In addition, the standard rate of income tax, once 33 per cent., is now 25 per cent. and it will go clown to 20 per cent. We have also done much to help businesses and manufacturing industry because the corporation tax, which stood at 52 per cent. in 1978–79 —a real crippler—is now down to 33 per cent.

The Government have also abolished many taxes and they have disappeared from the statute book. The composite rate and the investment surcharge have gone. However, I understand that if there were to be a Labour Government, that tax would come back because Labour intends to add national insurance contributions to investment income, which, in itself, is an investment surcharge under a different guise. We have abolished the differential between husband and wife in terms of taxation and that has proved a great boon to all families. The land development tax, the investment surcharge estate duty, dividend control and exchange control have all gone.

We must admit that the current recession is much deeper than was thought not only by the Conservative party but by many pundits in the City and throughout the world. However, there are some good signs and I should like to point out some of them. When one has an international economy such as our own, one cannot wave a magic wand to make everything all right. However, the economic signs are looking promising.

Wage rates have come down tremendously and are now moderate. The number of production days lost through strikes is lower than it has been for many years. Inflation, which was nearly 11 per cent., is now just about 4 per cent. and it will fall further. That has been a great boon to everyone whether on low pay or on a middle-range income. It is a bit much that Labour Members should criticise us about the inflation rate, but I do not hear them say much now that it is standing at 4 per cent. They do not like to be reminded that inflation rose to between 25 and 26 per cent. when they were supposed to be in charge of the economy. That inflation rate was a killer. Anyone with small savings had up to 26 per cent. of them eroded each year and that, too, was a crippler. The Labour party has a lot to answer for.

It is claimed that the production rate in manufacturing industry has not increased. However, the statistics show that that rate is now 15 per cent. higher in real terms than it was in 1980. Productivity and investment have increased by 50 per cent. and exports have increased by 60 per cent. Let us make an international comparison. Twenty-seven of the top 50 performing companies in the European Community are United Kingdom companies. That is not a bad record; it is one that should be mentioned.

The Opposition do not like privatisation, but it has several advantages. Industries such as steel, the National Freight Corporation and the other privatised industries have been turned into far more profitable organisations. In many cases—for example, steel—a loss-making industry has been turned into a profit-making industry. That is good for the economy and means that the Chancellor's receipts are that much greater.

It is wrong and regrettable that—for, I suppose, party political purposes—so many right hon. and hon. Opposition Members always talk down the British economy. They give the impression that nothing pleases them more than bad news and bad trade figures so that they can say that our economy is a shambles. We must remember that it is not only the United Kingdom that is in recession—we need only to consider Australia, West Germany, Italy, France and the United States which have all suffered. Therefore, one should not blame only the British Government for the world recession.

A foreigner to this country may ask why we have the highest rate of inward investment of any country in the European Community. The Japanese and the Americans would not invest here if they thought that their investments were at risk. They come here because they know that we are competitive and that they can have a profitable outfit.

Let us consider the increase in the number of the self-employed. The number of people in work today has been compared to the number in 1979. My right hon. and learned Friend the Secretary of State for Employment was right to say that it is regrettable that unemployment has increased—it will probably climb a little in the next few months—but it is plateauing out. There is no easy way to make unemployment fall. My right hon. and learned Friend's devastating demolition of the statutory minimum wage was so logical that I do not understand how any Opposition Member can continue to believe that it would do anything for the economy. It is not only my view but that of the Confederation of British Industry, the chambers of commerce and the trade federations that the minimum wage would jeopardise employment.

Photo of John Battle John Battle , Leeds West

Will the right hon. Gentleman reflect on the remarks made to me recently by the Korean ambassador about the investment by Samsung in the north-east? He expressed surprise that in real terms the wage rates in the north of England are now lower than those in Korea and that people in the north had less protection from trade unions than people in Korea. What does the right hon. Gentleman deduce from those remarks?

Photo of Mr William Clark Mr William Clark , Croydon South

I am not familiar with the economic circumstances of the Koreans. If the Korean gentleman believes that, he should talk to people from the United States and Japan who will tell him that our wage rates are very competitive and are not lower than those elsewhere. The hon. Gentleman makes accusations about the Koreans, but I should not have thought that one could possibly compare the Korean economy with that of this country.

The public sector borrowing requirement is really an overspend. People in the House and elsewhere often speak in initials but people outside the House do not know what we mean when we talk about the PSBR. We should spell it out in easy terms—it is an overspend. The Government receive money and spend a proportion of it. As they do not receive sufficient to cover their spending, there is overspending. It looks as though the overspend in the current year will be about £14 billion and it is projected that next year it will be £28 billion. That means that over the two years it will be £42 billion.

In considering any economy one must examine what has happened in previous years. If we look back one year to 1991 we find that we repaid £26 billion—so over three years my right hon. Friend the Chancellor has overspent about £16 billion. Over three years, £14 billion plus £28 billion equals £42 billion, less £26 billion which gives—

Photo of Mr Dale Campbell-Savours Mr Dale Campbell-Savours , Workington

The right hon. Gentleman rightly draws the attention of the House to this matter, but has he studied the cumulative figure? By 1996–97 it will be £110 billion. When the Minister of State was asked today by one of my hon. Friends about the relationship between that increased borrowing—and, in particular, next years's doubling of the borrowing—and interest rates, she said that there was no relationship. Does the right hon. Gentleman—he is the chairman of the Conservative Back-Bench finance committee—believe that there is no relationship between the doubling of the PSBR and interest rates?

Photo of Mr William Clark Mr William Clark , Croydon South

I shall come to that in a moment, but let me finish my analogy. The £28 billion and £14 billion equal £42 billion. We have repaid £26 billion, so there has been an overspend of £16 billion in three years, which is just over £5 billion a year. That is about 2·5 per cent. of gross domestic product, which is well within any guidelines on how much a Government can borrow.

Photo of Sir Nicholas Bonsor Sir Nicholas Bonsor , Upminster

It is extremely important to consider the overall national public sector debt which, as my right hon. Friend will recall, has fallen from 50·6 per cent. of GDP in 1979 to 28·5 per cent. today. That is a significant cut and, even taking account of the increases forecast in the Budget, it will not return to the same proportion of GDP as in 1979. I am sure that my right hon. Friend will agree that the figures must be viewed in the context of overall borrowing and not considered merely on an annual basis.

Photo of Mr William Clark Mr William Clark , Croydon South

I am grateful to my hon. Friend because he makes the point more succinctly than I could have done. I agree that if we consider the national debt as a proportion of GDP, it is way below that of our competitors. If we wish, we have a tremendous leeway of borrowing capacity.

The hon. Member for Workington (Mr. Campbell-Savours) spoke about 1996. That is too far ahead for us to judge what the effect will be. One must be fair—the extrapolation of what might happen in 1994, 1995, 1996 or 1997 is bound to have changed—

Photo of Mr William Clark Mr William Clark , Croydon South

It may be in the Red Book. Something has to be put in the Red Book, and that is what is thought today—it is all based on estimates. Anyone who knows anything about business will understand the analogy of cash flow. The cash flow of any company in any country changes every three to six months.

Photo of Jim Wallace Jim Wallace , Orkney and Shetland

The right hon. Gentleman speaks of the uncertainty of making predictions. At Prime Minister's questions today the Prime Minister in reply to my right hon. Friend the Member for Yeovil (Mr. Ashdown) seemed to say that as a result of the Budget there would be a balance over the period of the cycle. Does the right hon. Gentleman also reject that analysis?

Photo of Mr William Clark Mr William Clark , Croydon South

No, I do not. One cannot make definite predictions about what will happen four years hence. Just taking the past three years—

Photo of Mr Dale Campbell-Savours Mr Dale Campbell-Savours , Workington

Will the right hon. Gentleman give way?

Photo of Mr William Clark Mr William Clark , Croydon South

Of course it is interesting. I am delighted that the hon. Gentleman finds this interesting, but the debate should not be a dialogue between us. Perhaps afterwards we could have a cup of tea and go into the matter.

Photo of Mr Dale Campbell-Savours Mr Dale Campbell-Savours , Workington

Let me intervene once more, very briefly—

Photo of Mr William Clark Mr William Clark , Croydon South

No, no. I have given the hon. Gentleman a lot of licence, if I may put it that way, and I wish to turn to the taxation proposals.

We had a reduced rate band in the past and it has been reintroduced in the Budget. The first £2,000 of taxable income will be taxed at 20 per cent. rather than 25 per cent. I cannot for the life of me understand how anybody could oppose that. The pension exhausts all the personal allowances of a retired pensioner, whether single or married, who must pay 25 per cent. on any sum over it. My right hon. Friend the Chancellor proposes that an individual will pay only 20 per cent. tax on the first £2,000 over the personal allowance. I hope that I am right in saying that this is a step towards the goal set down by my right hon. Friend the Member for Blaby (Mr. Lawson). The Conservative party and the Conservative Government are committed to getting the standard rate of tax down to 20 per cent.

That compares with what we are promised by Labour politicians. We know that under a Labour Government the top rate of tax would be 50 per cent. and that the investment surcharge would be 9 per cent., making a total of 59 per cent. In addition, an investment surcharge of 9 per cent. would be levied on the investment income of those who do not happen to be in gainful employment or who are not necessarily enjoying a pension which has always been considered as earned income rather than investment income.

The car tax reduction will be a great boon to the car industry, one of our key industries. It is extraordinary how some people run down British industry given the amount of Japanese investment in our car industry that will come on stream in 18 months' to two years' time. When it does, the United Kingdom will again be a net exporter of motor cars. The action on the unified business rate is welcome. It will help small businesses in particular. In addition, the concession on inheritance tax is good for business.

I have always thought that the rule of thumb for economics is that in good times we start to repay our debts and in a bad year it is fair and right to borrow to give an impetus to the economy. In the long run, that will generate taxation back to the Treasury. As I said earlier, the Chancellor of the Exchequer stressed the amount of extra investment in the infrastructure, schools and the rest.

On 9 April the electorate will face the stark choice between a high taxation Government or a low taxation Government. At the moment we are on the road to prosperity. It would be a catastrophe to change course.

Photo of Jim Wallace Jim Wallace , Orkney and Shetland 6:04 pm, 12th March 1992

At times during the speech of the right hon. Member for Croydon, South (Sir W. Clark) we heard a somewhat typical reaction from Conservative Members. The right hon. Gentleman rightly pointed out what was good about the economy —for instance, that inflation was relatively low and set to decrease—but everything that was good was the result of the Government and all the failures were someone else's fault. He blamed the failures not least on the French, other foreigners and whoever else might be responsible for the recession. Those who are unemployed, those who face unemployment and those who have the fear of unemployment hanging over them know where the blame lies. The head of the Government was Chief Secretary to the Treasury and Chancellor of the Exchequer before he became Prime Minister. His fingerprints are well imprinted on the recession.

When I heard that the Secretary of State for Employment was to open today's debate, I thought that he would tell us how this is a Budget for jobs, which he predicted when the unemployment figures were last announced, but so far no one has been able to see how that is so. The hon. Member for Dunfermline, East (Mr. Brown) quoted the right hon. and learned Gentleman's statement following the release of the unemployment figures on 13 February and said that during the afternoon they had been somewhat glossed over by a Treasury official. I do not know whether the hon. Gentleman is aware of this, but on a programme for Central Television recorded later that evening, in which the Secretary of State and the hon. Member for Sedgefield (Mr. Blair) and I took part, the Secretary of State again said that we would have a Budget for jobs. None of us can work out what has happened to that Budget for jobs.

I accept that there has been a welcome boost for the car industry. That was very necessary, although I would not necessarily have adopted the measures in the Budget. More should perhaps have been done to promote environmental objectives at the same time. Nevertheless, the boost is welcome. There has also been a welcome boost for the small business sector, to which I shall return.

Clearly—no one has sought to deny this—the Budget will do nothing to stem the rise of unemployment which has been going on for almost two years. The figures this month will almost certainly show that unemployment in this recession has risen by more than 1 million people. That is 1 million individuals, with their families, all of whom feel the blight of unemployment in a very real way.

We have heard that the great centrepiece of the Budget is the reduction of the tax rate to 20 per cent. on the first £2,000 above personal allowances. But the unemployed do not have the earned income to benefit from that in any way. It has been argued that the tax cuts are intended to help the low paid. The Institute of Fiscal Studies, which the Secretary of State for Employment was pleased to pray in aid during his speech, has said that the measure is an inefficient way of targeting help on the low paid. It would be far more effective to use the same sum to increase personal allowances.

I do not know whether anyone has done the calculation, but for many people the additional income that will derive from the tax cut will mean that they will no longer qualify for as much family credit as they do now. Some people will be taken out of family credit and will lose benefits—such as free prescriptions. [Interruption.] If the Minister is about to say that that is not accurate, I shall be only too pleased to hear it.

Photo of John Maples John Maples The Economic Secretary to the Treasury

I am only too happy to give the hon. Gentleman the figure. The cost of the tax cut is about £1·8 billion, £20 million of which will be clawed back in lost benefits. That is 1 per cent. of the total, which is a very small amount.

Photo of Jim Wallace Jim Wallace , Orkney and Shetland

The Minister points out that the tax cut costs £1·8 billion, but the cut is not concentrated solely on the low paid. The highest paid will also enjoy it. It is not £1·8 billion being enjoyed by the low paid from which £20 million has been taken away. There will be an impact on the higher paid as well.

Photo of John Battle John Battle , Leeds West

This is a debate in which I take great interest. I put the point about the low paid to the Chief Secretary yesterday and in reply he gave me the figure that the Economic Secretary gave just now. If Parliament lasted longer, I should be tempted to table parliamentary questions to draw out the true figures. If £617 million is being spent on family credit, the percentage works out at 3 per cent., not 1 per cent. as the Government claim. If we take into account access to other benefits, the little gain that the low paid have left is wiped out.

Photo of Jim Wallace Jim Wallace , Orkney and Shetland

I hear what the hon. Gentleman says. I have no doubt that he has gone into the figures in greater detail than I have. There will be some among the low paid who will lose out through losing family credit and through losing further entitlements such as free school meals and free prescriptions.

As has been said, the impact of the Budget on the public sector borrowing requirement shocked the House. I heard the Chancellor mention the figure of £28 billion for 1992–93, which was far higher than I had expected. When I looked at the face of the right hon. Member for Finchley (Mrs. Thatcher), I realised that it was also considerably higher than she had expected.

As the Chancellor introduced one small measure here and another small measure there, and even after he had announced the 20 per cent. tax band, I kept waiting for the big idea which would explain that level of borrowing. The Chancellor then sat down and one was tempted to say, "Is that it? Where is the big idea?" The truth is that the borrowing requirement is so high because of the depth of the recession, because of the transferred payments that have to be made, such as unemployment benefit and social security benefit, and because of the loss of revenue. The extent to which the Chancellor will have to borrow emphasises the depth of the recession.

The right hon. Member for Croydon, South has said that he thinks that borrowing is quite acceptable if it gives the economy an impetus, and I agree with that as a principle, but I believe that the real question in the debate is whether the Chancellor's proposals are sufficient to give an impetus and whether they have been targeted in the right direction. We believe that to borrow principally to finance consumption, which is what one does through tax cuts, is not nearly so effective an impetus as borrowing to embark on a programme of investment. When the right hon. Member for Finchley was Prime Minister, she often used to give the House little homilies on prudent housekeeping and the corner shop business. We were always told how the books had to balance. I am sure that the corner shop business man or woman accepts that it is prudent to borrow money if one uses it to extend the range of goods, to put in new shelving, to extend the premises, to make the premises more attractive or to employ another person. The same corner shop business man or woman would not consider it prudent to borrow money and then to hand it out to customers who might spend some of it in the shop down the road, which is what will happen to some extent with the tax cuts.

We are not talking about very much money. As my hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) pointed out yesterday, we are talking about the equivalent of buying a daily newspaper every day for a year. Some of the money will be spent on imports, and some will be spent on repaying debt. We are nationalising private debt, which will not give the impetus for which the right hon. Member for Croydon, South looked.

Photo of Mr William Clark Mr William Clark , Croydon South

We must be logical. The hon. Gentleman has agreed that part of the borrowing requirement is caused by welfare benefits and transferred payments. Surely all those payments go to consumption.

Photo of Jim Wallace Jim Wallace , Orkney and Shetland

Indeed they do. However, I am sure that the right hon. Gentleman is not saying that the resulting borrowing should be encouraged. It would be far better —hon. Members of all parties would agree—if the borrowing was not necessary. If we had a lower level of unemployment, it would not be necessary to make so many unemployment payments. If we had lower levels of unemployment and higher levels of employment, the greater buoyancy of the economy would generate revenue.

Before the Budget, we suggested a package to try to turn the economy round and to create jobs. Our estimate was that in the first year we could create up to 400,000 jobs, with perhaps another 200,000 the following year. As the hon. Member for Dunfermline, East mentioned, we could carry out the much needed repairs to schools and college buildings.

Everyone tries to make the issue of housing more complicated than it is. We have homelessness, yet capital receipts from the sale of council houses have been frozen and local authorities are not allowed to invest in housing. The recent report by the Select Committee on the Treasury and Civil Service in response to the autumn statement says that there is a case for using local authority receipts to try to give a boost at appropriate points in the cycle.

Photo of Jim Wallace Jim Wallace , Orkney and Shetland

I have given way a fair amount and we are trying to keep our speeches brief. I may give way later.

Rail investment, energy conservation programmes and training, both in quality and quantity, are worth doing in their own right and are especially worth doing when there is a deep recession. They are temporary because after the house is built or after the school is repaired, the borrowing does not recur, whereas borrowing for tax cuts has to continue unless the tax cut is only a temporary phenomenon.

Many local authorities have been prevented from undertaking school repairs because of poll tax capping. British Rail has drawn up projects which it could implement relatively speedily. Such projects would have a more immediate and noticeable impact in trying to turn the economy round than will the tax cuts proposed in the Budget.

We should give particular help to the construction industry. So long as unemployment is set to rise and so long as the fear of being unemployed hangs over families and communities—and with it the fear of losing their homes—where will the confidence come from to boost consumer demand?

I try to be fair and to give credit where credit is due. The Government's targeting of help towards the small business sector and the changes in the uniform business rate are welcome moves. I heard what the Chancellor said about why he did not go down the road of corporation tax allowances, and I believe that his judgment was probably right. When I heard the Chancellor list some of the measures that he proposed for the small business sector, it was like hearing one's own words coming back.

For a long time, I have tried to point out that for a business to lose its transitional relief if it sought to move premises was helping to freeze the property market and meant that smaller businesses which wanted to expand were being contained, whereas larger businesses in larger premises which wanted to contract in the recession were being hampered. The proposal on the UBR was a sensible move which, as is often the case, came late. The measures designed to keep down the rate of UBR are welcome, although I would have preferred the Government to take the simple step of freezing this year's increase and, as we propose, to give equivalent help to Scotland. That would have been of greater help for the small business sector.

I also welcome the steps towards tackling the problem, about which many small businesses complain, of the late payment of debt. It is not solely a question of large company customers because it can happen at all levels. The real problem is a customer on whom a business is dependent, which means that the business does not like to push its luck too much. The Government have suggested that businesses will have to publish in their accounts how late they pay. I make the constructive suggestion that it might be better if companies had to make a statement of overdue debts in their accounts. If we were to introduce statutory interest, companies would have to list those debts as well. Last week the hon. Member for Newark (Mr. Alexander) introduced a Bill to allow for interest on debts after late payment by 28 days. He was given leave to introduce the Bill, but clearly it will not reach the statute book on this occasion. The measure has considerable support in all parts of the House and I hope that it will be revived in the next Parliament.

The Secretary of State did not refer to unemployment this afternoon, except in the context of trying to attack the minimum wage. When the unemployment figures are published each month, he tries to put a statistical gloss on them. He says, for example, that perhaps it is the second lowest month's figures in relation to trend and rate of increase. I thought that he might have said last month that it was the lowest rate of increase in a month when England had won two successive test matches against New Zealand since 1979. The right hon. Gentleman has run out of excuses, to the point where he cannot even address the subject.

The Labour party's approach to unemployment is disappointing at times, in terms of the number of press releases in which unemployment seems to matter only in the context of how much it has increased in a constituency compared with the sitting Conservative Member's majority. That does not do much for the unemployed, who are looking for a message of hope.

The package that we put forward would not bring about employment as we knew it in the 1950s and 1960s, but it would turn the economy around and produce that ray of hope for which the unemployed are looking, and which the country as a whole thinks is right and proper to get the country moving again. On 9 April the British people will have an opportunity to vote for a party of hope with a message of hope.

Photo of Mr Ian Lloyd Mr Ian Lloyd , Havant 6:20 pm, 12th March 1992

It is a relief to follow the hon. Member for Orkney and Shetland (Mr. Wallace), and I am grateful to have been called to speak now, rather than having to follow the hon. Member for Dunfermline, East (Mr. Brown), who I see is about to leave the Chamber.

I could not help thinking that, if Tchaikovsky had written the 1812 overture when the hon. Member for Dunfermline, East was around, he would not have needed an orchestra. He would simply have scored it for the hon. Gentleman. If Wagner had been scoring Gotterdammerung, he would have done so similarly, solely for the hon. Gentleman, but with 12-inch howitzers at the end of every bar. I was reminded during his speech of the famous comment that the charge of the Light Brigade at Balaclava was magnificent but was not war. What the hon. Member for Dunfermline, East said was not magnificent, and it bore little relationship to the major problems facing all the major industrial countries of the western world, the subject which I shall discuss.

As in your case, Mr. Deputy Speaker, this is my 28th Budget debate. Unlike you, I have always participated from the less elevated position of the Bench below the Gangway. I expect that we both share similar regrets and have listened to a great flood of rhetoric and argument. I have always been much obliged to you, Mr. Speaker, and to your colleagues in the Chair, and to all those who have tolerated my perhaps somewhat eccentric views on economics, science and southern Africa, to say nothing of industry. That tolerance has also been extended by my constituents, most of whom, I am glad to say, have taken a broad view of the alignment between the national interest and their own.

When we arrive here, many of us step on the great glacier of history and think that, by our personal efforts, we can shift it perceptibly. I suggest that we should not be here if we do not hold that view when we arrive. We have learnt nothing if we still hold that view when we leave. On arrival, most of us step firmly on to the ice, find somewhere where we can lean on solid rock, and heave. From time to time, great chunks of the glacier crash into the sea miles away and the more hopeful among us attribute the noise and rumble to our personal efforts.

Some of us band together in government, a process which reinforces the perception of power. But if we are frank with ourselves, we realise that the forces operating on the glaciers of human history are far more powerful than any which we might bring to bear, personally or even collectively, in this place. It has always been thus.

In August 1914, a great Foreign Secretary, Sir Edward Grey, stood not at that Dispatch Box—it did not exist at that time—but at its predecessor and made a speech that was crucial to political support in Great Britain for the first world war. The distinguished historian, the late Barbara Tuchman, described his task as reconciling the past, persuading the present and speaking to posterity. The Chancellor faced an equally daunting challenge in recent days. He had to reconcile economic realities with political perceptions on both sides of the House, expose the prejudices which exist in all parts of the House, convince the City and speak to the posterity which will judge Britain's economic performance in the new era of a united Europe. Those have been formidable tasks, and he has made a pretty good fist of them.

The arguments are not about objectives but about methods. They have been going on since, in my intellectual and political youth, I read Harold Macmillan's "Middle Way" before the second world war and Keynes's "General Theory of Employment, Interest and Money" shortly afterwards. Since then, the debate has filled a few thousand books, a few million articles and thousands of tons of newspaper commentary. It will continue for some time yet, but the argument will be advanced only by better definition and information. The paradigms must change, and the one general criticism I offer—it will be my last —is that we tend to ignore significant, objective and devastating analyses which challenge our definitions.

I have on the Bench next to me three such reports from the OECD which it is obvious most Opposition Members have not read. Good definitions scar our political prejudices more severely than any other factor. That is why we avoid them. But in doing so, we allow our debates to be dominated by obsolete paradigms and criteria. I therefore give a warm welcome to the reorganisation of the budgetary procedure announced by the Chancellor, and the White Paper is significant and long overdue. It is also a solemn and significant acceptance of the fact that this House neither controls public expenditure nor debates it adequately. Public recognition of that conclusion is the essential basis of future reform, and later I shall give an example of that.

The electoral processes and forces in a democracy persuade most of us to offer £2-worth of entitlements where there is normally only £1·99-worth, or less, of provision. It is the modern version of Micawberism on a large scale. In my judgment, the most significant figures produced by the Chancellor on Tuesday were contained in two tables of the red document, the Budget report. The first appear in table 2A.1, which reveal that, over three decades, all Governments, irrespective of political philosophy, have had the greatest difficulty containing public expenditure and the tax burden associated with it.

Up and down it goes like the proverbial yo-yo, never less than 37 per cent. of gross domestic product, as in 1963–64, nor more than 49·25 per cent., as in 1975–76. Again on an upward curve, it is scheduled to fall, hopefully, in 1996. It is an issue on which most of us and most of our constituents are somewhat schizophrenic. We resent the burdens, but we claim the benefits. We should be more concerned about—we do not discuss it with any relish or with much competence—the wealth-creating effectiveness of the expenditure in either sector.

The second set of figures appears in table 1·2. The magnitudes are much too large for public comprehension. They are galactic figures, for most people the economic equivalent of light years or black holes, depending on one's point of view. I will try to summarise them. In 1991–92, our best estimate is that we shall spend £87·2 billion on social security and health combined. That amounts to £1,516 per head of population of 57 million in this country, or £3,910 per head of the employed population.

Significantly, that expenditure is now so large that the whole of the taxation derived from income tax and corporation tax—some £76 billion or £1,312 per head or £3,421 per employed person in this country—is not enough to pay for it. Only if social security receipts are added does the total rise to £113 billion—a colossal £1,963 per head, or £5,000 per employed person. The significance of that is that the whole of the remaining revenue from Customs and Excise is not enough to cover the other items of public sector expenditure, including defence and education. In relation to those massive total receipts from privatisation, borrowing and other sources are minuscule.

For what are doubtless regarded as sound political reasons, we concentrate our fire not on basic determinants but on residuals. That must change if the House is to retain credibility as a representative or controlling institution. I have argued before and do so again for the last time that we must look at the boundaries between the great spending empires and ask whether, how soon and in what direction they must change. Most of our supervisory instruments and procedures are directed not at the strategic or structural elements of public expenditure and revenue, but at the nit-picking level of waste and inefficiency within Departments. That is not enough.

I trust that the House will understand if I discuss science for the last time. Our national endeavour in basic science is the critical component of long-term success—more so today than ever before. Its development, understanding and transfer into industrial performance is a function of many things, not least academic excellence. But only the most assiduous among us—we all have other things to do—are prepared to wade through the vast, comprehensive research and development analysis now published each year so that we can begin to form a judgment about that.

The sum spent by the Government on the public sector is large—some £6 billion—and by the nation as a whole even larger—some £11 billion. Its adequacy is debatable, but the fact that it is almost impossible for the House, given the present emphasis on other matters, to make significant judgments about what the nation is doing in that area is not debatable.

Responsibility in the public sector is spread between dozens of Departments and institutions. The most important Ministers—Education, Trade and Industry and Defence—have other major concerns, and brook no interference in their scientific domains. No one except the Prime Minister can take an overall view, and no one speaks to him on behalf of the science community as a whole from within the political establishment, either in the House or in the Cabinet.

The miracle is that so much good science is still undertaken and applied in the United Kingdom, but "muddling through" will not always produce the best results. There are disturbing signs that, because of that, the overall performance of British science is declining compared to that of other countries, which see the problem in a different light.

The most depressing document that I have come across recently is an OECD report which classifies research and development intensities in the 1980s and compares various groups of countries. The first group is technological leaders which includes six countries—Germany, Japan, Sweden, Switzerland, the United States and South Korea. The second group is the other hi-tech countries, and the United Kingdom comes at the bottom of the table. I found that immensely disturbing, and far more attention must be paid to it. We are led by Taiwan, Norway, the Netherlands, France, Finland and Belgium in the second group of countries.

President Bush has referred in disparaging terms to the "vision thing". Political realists doubtless advise him and others that, where there is no vision, the people perish, but that where there is no defence, law and order, or where the vision is distorted by political distorting mirrors, there is little opportunity for calm reflection on problems or events that sustain both academic and scientific excellence. That may be so. Judgment, as the poet Robert Bridges reminded us a long time ago, lies in the "masterful administration of the unforeseen", and the political leader will always be assailed by the unforeseen, whatever his scientific advisers predict.

However, in this age of exponential change, if scientific excellence is not the whole vision, it is undoubtedly the coal face of our civilisation and the most vital component of the spectrum. The Government must pay more attention to that question. They must ensure that they keep up with the performance of our principal competitors. We must give the structure and direction of our scientific machinery far more attention in this place.

If I have one criticism of the Budget, it is that, within the substantial increase in public expenditure that it envisages, there seems to be no specific mention of the science budget. Science represents the seedcorn of the future, and it should come first. That is why I hope that, when the House returns—whichever party is in power—it will endorse the recommendations of the new Information Committee, which has recommended a significant change in the relationship between Parliament and the organisation set up by the Parliamentary and Scientific Committee called the Parliamentary Office of Science and Technology.

It would be churlish of me not to acknowledge the tremendous support that I have received from hon. Members and others in that endeavour, but the staff must now pass to others, for this place will not survive as a valid democratic institution, as it must in this scientific age, unless it is adequately informed about the immense potential and consequences of science at the end of the 20th and the beginning of the 21st centuries. As a tribe much maligned by Swift, we politicians should be kinder and more generous to those who, today more than ever before, provide through modern science an unlimited and exciting vision of the standards of health and welfare, output dissociated from drudgery, and leisure and security unimagined by our forebears, and certainly unimagined in the lifetime of many living today.

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield 6:37 pm, 12th March 1992

I am grateful for the opportunity to sing my swansong this evening. I shall leave this place when Parliament is dissolved and there is no doubt that I shall miss it. I have thoroughly enjoyed every moment I have spent here, but one can only enjoy those moments—[Interruption.] I am already bringing tears to the eyes of a Conservative Member. One can only enjoy one's stay in this place if one is not left completely alone but gets a fair amount of assistance.

I will start with the Chair. The Chair has been very good to me, and there is an important reason for that. I spent 10 years or more in the Whips Office. Whips are more or less a go-between between the Chair and hon. Members because the Speaker or Deputy Speaker cannot leave the Chair if they want something done.

We cannot manage in this place without the Serjeant at Arms Department, which does a wonderful job on our behalf. One particular officer in the Serjeant at Arms office —Michael Cummins—has helped me in many ways ever since I have been here. He and the rest of his team have done a wonderful job, and I am grateful for his help. When we discuss Bills in Committee we could not manage without the wonderful doorkeepers, under the leadership of Mr. Roy Usher. I recognise immediately that they do a first-class job, and I feel that I must make particular reference to them.

Police and security staff have been mentioned; we cannot manage without them, particularly with the things that are happening nowadays. They do a good job on our behalf.

Mr. Speaker's staff do a first-class job. He would not be able to do his job properly unless they were doing theirs, and I am grateful to them.

I want to recognise the place above you, Mr. Deputy Speaker. We could not manage without the Hansard writers, who do a first-class job. Behind them sit representatives from the media, who can sometimes be kind and sometimes be awful. A little chappie who works for The Guardian does a good job on my behalf and has been kind to me. I shall not mention one other reporter, who writes for The Times, as he has been a naughty boy.

Photo of Mr Michael Alison Mr Michael Alison , Selby

I hope that in his list of commendations the hon. Gentleman will not forget the admirable official who adjusts the volume control. It is normally so difficult to hear the hon. Gentleman, but thanks to the guy who turns up the sound, we can always hear the hon. Gentleman when he speaks in his usual soft voice.

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield

I do not need any back-up from my hon. Friend the Member for Ogmore (Mr. Powell). It is also said that patients in bed at St. Thomas's hospital can switch off the television if they want to hear a speech in the Commons provided by my good self.

I want to travel a different road from that travelled by the hon. Member for Havant (Sir I. Lloyd). I do not want to talk about science, so I shall leave that subject and make my speech in my own way, but for the moment I give way to my hon. Friend the Member for Ogmore

Photo of Mr Raymond Powell Mr Raymond Powell , Ogmore

We normally look at the Annunciator to know who is speaking in the Chamber. Earlier, when we were gathered in the Tea Room we started listening to a strong voice from the Chamber. It was only then that we realised that the voice was that of my hon. Friend the Member for Ashfield (Mr. Haynes). As we do not like to miss any of his speeches—I am sure that the House appreciates all his contributions and excellent speeches —we all dashed in. That shows clearly the volume of his voice and the excellent content of his speeches.

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield

You, Mr. Deputy Speaker, know as well as I do what I have to put up with sometimes. In fact, it happens nearly all the time.

I want to concentrate on the Budget. I am terribly disappointed with this Tory Government's Budget, which is not going to get us out of the mess that we are in.

Photo of Mr Donald Dixon Mr Donald Dixon , Jarrow

They put us in it.

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield

We are all in it. They make the decisions and carry out the policy, but we have to live with it until we can get rid of them. I have no doubt that we shall do that on 9 April, when there will be a Labour Government and such Conservative Members as manage to get back in will be sitting on the Opposition Benches.

When I retire from this place, I shall be able to sit in my little old armchair and watch all the activities going on here. I shall keep my eye on things, and no doubt I shall see my hon. Friends the Members for Jarrow (Mr. Dixon) and for Ogmore sitting on the Government Benches.

Photo of Mr Donald Dixon Mr Donald Dixon , Jarrow

If we get re-elected.

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield

My two hon. Friends will definitely get re-elected. With their majorities, they cannot but get back here, and the same applies to my hon. Friend the Member for Pontypridd (Dr. Howells). I know Pontypridd because I knew the previous Member. With his nice majority, my hon. Friend the Member for Pontypridd is certain to get back in.

I thought that the Secretary of State for Employment had a nerve to stand at the Dispatch Box and make a Budget speech with no reference to unemployment and what the Government intend to do about that problem. Our constituents are up to their necks in unemployment, and they tell us in no uncertain terms how they are struggling to live.

The Chancellor of the Exchequer was sitting on the Treasury Bench earlier, but he is not there now. I bet he is having a nice rich meal. Some of my constituents back home in Ashfield will have to be satisfied with bread and jam, or bread and cheese. I have been through those days. I am 66, and I know what goes on. I had to live through such days under a previous Tory Government many years ago, and I know what rough living is. I know how to go without.

The hon. Member for Birmingham, Northfield (Mr. King), who has a big grin on his face, will not be coming back. He need not have a grin on his face—he is only a young lad and has not yet experienced poverty. He has no idea about poverty, and nor have the Treasury Ministers. They have no more idea about it than flying to the moon.

When my hon. Friend the Member for Dunfermline, East (Mr. Brown) talked about the unemployed, the Chancellor sat on the Treasury Bench with a big grin on his face, which I thought was disgusting. I remember when the Chancellor had a black eye and he put a 141b steak on it. I ask you, Mr. Deputy Speaker—a 141b steak on a black eye? Some of my constituents can't afford fish and chips, never mind a 141b steak. The way this lot carry on shows that the sooner we get rid of this shower—

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield

No, sit down.

The sooner we get rid of that shower, the better off we shall be. That was shown by the Budget, which contained nothing about halting the pit closures which are ruining the economy of Nottinghamshire and my constituency. There were 10 pits in my constituency when I came here. That number is down to three due to the Government's policies. They never mentioned what amount of money is available to keep the pits open. Oh no, instead they organised a survey with a view to Rothschild drawing up a report on closing the pits that are left and leaving the nation with only 12 pits. How is the economy to survive on that sort of decision?

When we consider borrowing money it is no wonder that the shares are falling like nobody's business in the City. I am laughing my flipping socks off at the Government's wrong decision. There is no doubt that the City is realising the Government's bad mistake on borrowing. I have heard some Tories say that borrowing is all right, can be spread over time and will all come right in the end. One thing that they have not mentioned but have forgotten is that the money has to be paid back from somewhere. If the economy fails, as it has done under the Tory Government, how the hell will that money be paid back? The problem will get worse and worse.

I have two wonderful grandchildren. What do they have to look forward to under this Administration if things go on like this? We have got to get rid of the Tory Government on 9 April in the interests of the nation and the people who follow behind us. The hon. Member for Havant and I are two elderly gentlemen who are bowing out. We do not want to spoil the economy so much that living standards will have fallen by the time our young people have grown up.

The Government brag about how they have helped pensioners. They do not realise—or perhaps they do, but they are keeping it to themselves—that the new income tax band of 20 per cent. filters all the way through to the rich bods at the top who have been raking off for years under this Administration.

There is another thing about this Secretary of State for Employment. He was partly responsible for the poll tax, and look at the misery that that has brought to lower paid workers and struggling families. And what else did he do? He privatised water and then allowed the directors of the new companies to bump up their salaries as high as the clouds at the expense of ordinary people who have to pay their massive water bills. The Government use the excuse that they will make the water authorities more efficient in the private sector, but that will cost the ordinary folk whom we represent a great deal. Tories represent them too, but they could not flipping care less. Ordinary people will suffer more and more under the Government's policies.

We need to get Labour into office to change direction. People in this country need the kind of help that we can give them. The Government have had billions of pounds of oil money and they have squandered every penny of it. They ought to be ashamed of themselves. If they had spent it properly we would not be in this mess.

The chairman of the education authority back home is a wonderful man called Fred Riddell. He does a marvellous job for Nottinghamshire's education, but what has he been told by the Secretary of State for the Environment, the right hon. Member for Henley (Mr. Heseltine)? If he spends too much, he will be capped. But he needs to spend the money to provide improved education facilities and accommodation for the kids of Nottinghamshire. The Government have ruined adult education. I sat on the relevant Bill and I got sick to death of listening to the Minister reeling off what the Government were going to do. We had to sit and listen to the Government destroying adult education. We heard nothing about education from the Dispatch Box today. Opposition Members have argued that people need help —that their buildings are falling down and that they will keep falling down so long as this lot are in office. To change things we need more money, but the Government are not providing it. They are just borrowing money in the interests of the people they represent.

All this will go on unless the people of this nation have some sense and realise where to put their crosses—in the right place, next to the Labour candidate, throughout the land.

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield

The hon. Gentleman is killing my flow; I have really got going now.

Photo of John Maples John Maples The Economic Secretary to the Treasury

I will give the hon. Gentleman's voice a rest just for a moment. Will he explain why, if Labour government is so good, his constituency was won by the Conservatives in a 1977 by-election?

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield

The Minister is not getting away with that one—it was a fluke.

Photo of John Home Robertson John Home Robertson , East Lothian

Where is the winner now?

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield

He sits up at the back on the Conservative Benches. He is with Price Waterhouse. We all know about the Bank of Credit and Commerce International. We all know about Price Waterhouse. We hear reports that those organisations are crooked, and the Conservative Member in question has got his flipping nose in them. He is known as the hon. Member for Beaconsfield (Mr. Smith), and he won by 263 votes—

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield

It was a fluke, but I can tell the Minister this—I took the seat back, and it has been Labour ever since.

I am going now—I have said my piece. I look forward to the election. I shall play my part back in Nottinghamshire. We shall win there; we shall get them out in the city of Nottingham. Conservative Members who sit for that area should never have been there in the first place. We shall get them out and replace them with Labour candidates. We shall get a decent Government—and we have not had one of those for a long time.

The Government have repeated history. I recall the last time the Conservatives went out after 13 years of terrible rule. History is repeating itself—the Conservatives are in their thirteenth year. You and I, Mr. Deputy Speaker, are going out, but so are they—and we shall have a Labour Government after the election.

Photo of Mr Kenneth Hind Mr Kenneth Hind , West Lancashire 6:55 pm, 12th March 1992

It is always a great pleasure to follow the hon. Member for Ashfield (Mr. Haynes), and it has been a pleasure to serve in the House of Commons with him. He always has amusing things to say and he says them positively—and we never have any difficulty hearing them.

Much of what the hon. Gentleman said was all heart—

Photo of Mr Kenneth Hind Mr Kenneth Hind , West Lancashire

No, all heart, but he did not deal with certain problems. It is easy to churn out rhetoric and say that we want to spend money on this, that and the other, but in the end we have to ask how that money will be raised and how the prosperity that creates it can be generated. If we take it out of industry and out of people's pockets, we reduce their standards of living and the amount of investment in the country, thereby reducing the number of jobs available for our people.

If, as the hon. Member for Ashfield claims, the economy is in a dreadful mess, he and his colleagues should be asking themselves how on earth the increased taxation that they propose will drag our economy out of the recession. The answer is that it will not. It will deepen the recession and make matters worse. It will not help to improve the standards of living of the British people.

Today's theme is employment. It was my privilege to serve as a Parliamentary Private Secretary in the Department of Employment after the last general election, when the Government increased the number of jobs in the country by more than I million and reduced unemployment by 1·4 million. We did it then and we can do it again.

The British people can expect as much from us in the years to come, provided that they recognise that there must be a degree of prudence in our economic planning and that there are limitations, because of the exchange rate mechanism, on what can be done. No longer can we lower interest rates to generate economic activity or to protect the parity of the pound against the deutschmark and other currencies in the ERM. The public must realise those limitations.

We are left with the public sector borrowing requirement. I have listened to what the hon. Member for Dunfermline, East (Mr. Brown) and his colleagues have said about that. They ought to remember that the PSBR run by a Labour Chancellor in 1978 was 9·5 per cent. of GDP. We at least will not forget that, and we will remind the public during the campaign that it was a Labour Government who borrowed to provide tax relief in the 1978 Budget—except that on that occasion they reduced taxes from 35p to 33p in the pound in the year before an election.

Now Labour is turning around and saying, "It doesn't matter what we did in the past. You've got to forget all about that. That was in a past era and we've changed our habits. We're not going to do it again." I do not accept that. A leopard never changes his spots. The public will be able to tell from history that the Labour party will pursue the same policies if it ever gets into office again.

Over the past few months, we have been able to analyse the Labour party's proposals. We know that they amount to a £37 billion increase in public expenditure. That is the same problem that Labour had after 1974, when it had promised the public that it would spend, spend, spend. The fact that the country could not afford it then and cannot afford it now has nothing to do with the Labour party's policies. If that spending were to start again, the country could only look forward to more borrowing, above the level proposed in the Budget, and major increases in taxation.

The Labour party will increase taxes not just in the higher rates but in the basic rate. A Labour Government would raise £12 billion from taxation—that is in the party's plans. However, between £12 billion and £37 billion there is a £25 billion gap, and that can be paid for only by increasing the standard rate of tax, which will amount to a return to a 35p in the pound rate of tax. That is what the public can expect from Labour—imprudence in borrowing, higher tax rates and inevitably higher inflation and prices.

Photo of Frank Cook Frank Cook , Stockton North

The hon. Gentleman is comparing the PSBR of 1978 under a Labour Government and Labour's proposals for the coming year. Would he care to include in his comparison the advantage enjoyed by the Tory Government, who have scooped £150 billion from selling the family silver and harvesting the crop of North sea gas and oil? Will he make some sensible and clinical comparisons between the one and the other and not use distorted methods?

Photo of Mr Kenneth Hind Mr Kenneth Hind , West Lancashire

The hon. Gentleman can be satisfied that I can. The 1980s saw record levels of investment, right up to 1990, a fall in unemployment of 1·4 million, an increase in participation in companies through the increase from 2 million shareholders in 1979 to 12 million today. The public have a greater say and participation in industry than ever before. There was a record increase in jobs, by 1 million. Britain had more jobs as a proportion of the population than any other country in Europe and the G7. This is where the money worked its way through, and it has resulted in a higher standard of living. The public are better off than they have ever been, and that is where the oil revenues went—to benefit the British people. The Conservative Government need have no shame about the way that they used that money.

It has been suggested by the Opposition parties that the 20 per cent. band set out in the Budget is a bribe and that it is not enough and does not achieve what it set out to do. Both cannot be right. It is not a great deal of money in itself. My right hon. Friend the Chancellor has injected 0·33 per cent. of GDP back into the economy. It is part of the picture, part of the strategy to kick-start the economy and move it forward. For the seventh month running, there have been improvements in retail sales in the high streets. Organisations such as the House of Fraser are saying that they are astonished by the increase in sales. The CBI has said that retail sales are improving.

The Budget makes a contribution to moving the country out of the recession. Inevitably, that move must be demand led, which means putting money into the pockets of people. If one takes the money out of their pockets, one deepens the recession. Putting money into pockets helps to pull the country out of recession. The country will face a clear choice when the parties go to the hustings over the next four weeks. The public must realise—I am sure that they will do so quickly—that increasing taxation will not stop the recession. However, decreasing taxation at a time when it is prudent to do so, in limited measure, will help and will result in Britain turning the corner and getting back on the right track towards prosperity.

We have seen the Labour party's confusion over the 20 per cent. band. I am delighted with the Budget for this reason. It is a Budget for the needy, not the greedy. It will benefit the lowest-paid workers, and it will benefit 5 million pensioners by making additions to income support. They will see that and realise that things will improve for them.

Pensioners will realise that the lower rate of tax, with the 20 per cent. band under a Conservative Government, will improve their standard of living. The alternative to that is the investment income surcharge to be imposed by a Labour Government which would add 9 per cent. to the tax on savings, taking it to 34p in the pound. That would drag away years of savings. That is what pensioners are up against and do not let us forget that more than 50 per cent. of pensioners have savings, occupational pensions and investments, all of which count. They will turn their backs on the Labour party because they will realise that the Labour party will put its hands into the pensioners' pockets rather than putting money into their hands.

Photo of John Battle John Battle , Leeds West

Will the hon. Gentleman give way?

Mr. Hind: I am sure that the hon. Gentleman will have an opportunity to make his own speech.

I welcome the proposals for small businesses, such as the changes in VAT. The most important is the improvement in the uniform business rate. That will be welcomed by small businesses throughout the country. They will be frightened to death at the thought of the UBR being taken over by profligate Labour councils which would use it to draw cash into their communities. Businesses would be used as money milch cows to the detriment of employment, investment and the prosperity of their communities.

Photo of John Battle John Battle , Leeds West

Will the hon. Gentleman give way?

Photo of Mr Kenneth Hind Mr Kenneth Hind , West Lancashire

I have already said that I will not give way.

Small businesses will welcome the changes in inheritance tax concessions which will allow owners to pass on to their children more of what they have worked for. These are not wealthy people, the rich about whom the Labour party talks. Labour thinks that somebody on £20,000 a year is rich, but it is misguided. It will find that police sergeants, staff nurses and many others doing essential jobs that are not particularly highly paid will fall into its so-called rich category.

Our economy is highly dependent upon cars and the cut of 5 per cent. in car tax—50 per cent. of it—will help to generate economic activity. If there is one factor that will bring my hon. Friend the Member for Birmingham, Northfield (Mr. King) back to the House of Commons, it is the realisation among midlands workers that the Government are behind the car industry. They will be helping to export cars. They will not be turning their backs on the workers. That is what it is all about.

People throughout the country—in Sunderland and Derbyshire and those on Merseyside who work for Vauxhall and Ford—will realise that they are being given exactly the sort of help that they need. They will understand that Government policies will help to end the recession and push the country forward. The Budget will not inject an especially large amount of money into the economy—we are talking about £2·2 billion in the context of gross domestic product—but it will help to move the economy forward. There is a balance: the Budget is prudent and it is targeted at areas where it will produce the maximum results for the benefit of the people and for the economy.

Photo of Mr Kenneth Hind Mr Kenneth Hind , West Lancashire

The hon. Gentleman says from a sedentary position that I am talking nonsense. Labour Members speak nonsense when they make promises about training, the health service and all the money that they will spend. We are never given figures. We do not know how much a Labour Government would spend. We never hear from the Labour party how it would raise the money; we hear only rhetoric. We can all trot out rhetoric but the Labour party cannot back it with hard facts. The difference between the Conservative party and the Labour party is that Conservatives do what we say. We do not make promises, only to lead the public up the garden path. No doubt, we shall have four weeks of promises from the Labour party at the hustings, but we, the Conservative party, will deliver what we promise.

Photo of Mr Peter Thurnham Mr Peter Thurnham , Bolton North East

Does my hon. Friend agree that the lower band of income tax will put an extra £250 million into the pockets of the people of the north-west? It is entirely wrong for Labour Members to think that they should take that money out of the pockets of those people because they know better how to spend it.

Photo of Mr Kenneth Hind Mr Kenneth Hind , West Lancashire

That is right. As my hon. Friend said, the money will go into the pockets of the people of the north-west, who will spend it on goods and services. The consequences of that will work their way through into the economy. Jobs will be protected in the north-west as a result. Job opportunities in the region will increase and there will be a gradual move towards prosperity.

There will be slow recovery but it will come and we shall see it by the end of the year. We can do it and we can deal with it. I am sure that the public will realise that, if they vote for a Labour Government, they will have to pay more tax, which will increase interest rates, inflation and unemployment. That will postpone the recovery. That will deepen the recession, not help to end it. The Budget is one step forward towards recovery and I welcome and support it.

Photo of Mrs Maria Fyfe Mrs Maria Fyfe , Glasgow Maryhill 7:12 pm, 12th March 1992

The hon. Member for Lancashire, West (Mr. Hind) was correct when he said that recovery is slow. I would say that it is imperceptible. There are many people, especially my constituents, who fail to find any evidence of it. They have suffered massive unemployment for many years.

When I opened my mail last week I took out The House Magazine from its cover. At first, I thought that I had come across a satirical magazine. On the front cover was a picture of St. Margaret's church, and beneath it was the caption, "Reviving the economy". It seems that the Conservatives have turned to divine intervention in the absence of policies. I am sure that their predecessors would agree with the proposition that faith without converts will not save the Government.

I found it incredible that the Secretary of State for Employment could make a lengthy speech without saying one word about unemployment levels. On Tuesday, the Chancellor of the Exchequer said casually—it seemed to be a throw-away remark—that unemployment would continue to rise until he finally managed to bring about economic recovery. How can anyone say that and claim that he has concern for the low paid, the unemployed and those living in poverty? That must be nonsensical.

In the past few days we have heard Conservatives expressing their concern for the low paid and we have seen their breast beating, but we remember their policies over recent years, which have shown clearly how little they care for the low paid. There are tens of thousands of low-paid employees who do not have the protection of wages councils, and thousands of others who come under wages councils but find that the councils can do only very little under the current arrangements. When the Secretary of State was pressed on this issue today by my hon. Friend the Member for Sedgefield (Mr. Blair), he said that the Tory party's policy on wages councils was under review. He said nothing at all about protection.

Photo of John Battle John Battle , Leeds West

He said that the policy was under review, but in the document entitled "People, Jobs and Opportunity" he states that the councils should be phased out.

Photo of Mrs Maria Fyfe Mrs Maria Fyfe , Glasgow Maryhill

My hon. Friend is correct. The Government's intention is to phase out wages councils. The right hon. and learned Gentleman has made that intention clear over and over again when my hon. Friends and I have debated employment Bills. The Government's position is clear—so much for their concern for the low paid, if that is their attitude to wages councils.

The Secretary of State claimed that family credit is a great scheme for those on low pay. It is a scheme that uses taxpayers' money to subsidise low-paying employers. If employers were required to pay decent rates, there would be no need to use taxpayers' money to provide a subsidy.

The Government are hoping that we have already forgotten the poll tax. If ever a policy was designed riot to take account of the needs of the low paid and the impoverished, it was the poll tax. Everybody had to pay the same if weekly family income exceeded a low threshold. A person whose income barely crossed the threshold had to pay the same as the richest in the land. That policy was supported by those who have claimed today that they care about the poor. We see them beating their breasts and expressing concern for the poor, but they supported the poll tax and forced it through Parliament.

There was not a word in the Budget statement about improving unemployment benefit. As a result of small increases in the price of beer and cigarettes, for example, the unemployed will be even worse off. Nothing was said about housing benefit. We know that the Government want gradually to reduce the value of the benefit. They have not said anything today about improving it and making it more valuable to those who receive it. We have heard nothing about child benefit, either.

The Government's approach shows that their so-called concern for the low paid and the poor is entirely insincere.

It amounts to nothing more than a death-bed conversion. If they are concerned about the poor, it is only because we are on the eve of an election.

The Federation of Small Businesses in Scotland has written to me drawing attention to two areas in which the Government, in the context of the Budget, have been negligent. There will obviously be consequences for small businesses in Scotland and for those who work in them. We know that the uniform business rate will be reduced slightly. The Chancellor of the Exchequer said that Scottish business rates would be similarly reduced. In Scotland, small businesses pay a higher level of business rates than their equivalents in England. That deters the provision of work in Scotland. The problem is not so great in England and Wales.

Businesses throughout the United Kingdom should pay their fair share towards the cost of running their local authorities, but the anomaly between what Scottish businesses pay and what their counterparts in England and Wales pay is a problem for Scottish businesses trying to overcome unemployment and to create work in our localities.

Likewise, it is not entirely clear what is planned to help the whisky industry in Scotland. The Chancellor spoke of protecting our spirits industry, but I should welcome some clarification of what precisely he meant by that in terms of protecting our important whisky industry.

For months, the Secretary of State has attacked the minimum wage in a wearily repetitive way, as though we were incapable of taking in his points, just as he is incapable of taking in our answers to those points. Does the right hon. and learned Gentleman care about how many jobs are being destroyed simply because people are unable to buy goods in the shops because they are too poor, because they are scraping a living and have no money to spare? Lack of money for households in which earnings are less than £3·40 per hour, and sometimes not even half that figure, means that there is no demand for goods that people could otherwise be employed to make.

The Secretary of State quoted some hotel keeper as saying that if the minimum wage were imposed he would be forced to pay off staff. I should have liked to know what that hotel keeper pays his staff—in many hotels the pay is scandalous—but perhaps it would have been too uncomfortable for the right hon. and learned Gentleman to tell us that. Is that hotel keeper really employing more people than he needs? If so, he would be unique among employers generally, who obviously have no reason to employ more people than they require to carry out the work which needs to be done.

Debates such as this always remind me of the days of Lord Shaftesbury. Let us imagine in our mind's eye what this House would have been like when Lord Shaftesbury was bringing forward reforms to prevent small children working in factories. At that time, people said that he could not possibly do that, that it would bring the country to ruin, wreck the economy, prevent us from competing with our competitors and create unemployment. All those arguments were heard then, and we are hearing them now in relation to the minimum wage.

Photo of Edward O'Hara Edward O'Hara , Knowsley South

Does my hon. Friend agree that the workers about whom she is talking who are supposed to benefit so much from the 20p rate of income tax will, because of the low level of their earnings, benefit by the princely sum of 20p per week?

Photo of Mrs Maria Fyfe Mrs Maria Fyfe , Glasgow Maryhill

My hon. Friend is right. As has been pointed out, that is the price of a box of matches. Big deal. Perhaps that box of matches could usefully be used to set fire to Tory propaganda. That is the only good that will come from that measure.

People listening to tonight's debate, even if they know nothing about economics, even if they had just arrived from Mars and knew nothing about what was going on here, need only contrast the performances of the two Front Bench spokesmen. My hon. Friend the Member for Dunfermline, East (Mr. Brown) spoke with the deep sincerity that comes from genuine concern about unemployment and the low paid—a concern which is well respected and recognised throughout the United Kingdom. My hon. Friend will be one of the major figures in the Labour party's Front Bench team when we form the next Government.

Contrast my hon. Friend with the Secretary of State for Employment oozing insincerity from every pore. The right hon. and learned Gentleman strikes me as a man for whom the word synthetic would be a compliment because at least some synthetic things can be capable of useful service. I was reminded of the saying, The louder he talked of his honour, the faster we counted our spoons". The Secretary of State and the Chancellor continually spoke of their concern for the low paid and the more that they did so, the more we counted the tens of thousands on low pay who are not protected by wages inspectorates and who have had their trade union rights abolished, and the more we counted the millions unemployed in our constituencies. But the counting that I am thinking of now will come on 9 April, when the votes counted will show Conservative Members the consequences of their cold and heartless policies. They will then start learning something about what it is like not to have a job any more.

Photo of Miss Emma Nicholson Miss Emma Nicholson , Torridge and West Devon 7:24 pm, 12th March 1992

I am delighted, Mr. Deputy Speaker, to have the opportunity to say a last few words in this Parliament while you are in the Chair. This afternoon the House has had an opportunity to pay tribute to some remarkable people who look after our well-being in the Chamber and to have a moment or two to thank you personally means much to me, not least because you are a south-west Member of Parliament and, as such, must be among the greatest and best.

My prime memory of you, Mr. Deputy Speaker, is of the day when I found that I needed a cow in London. That was a difficult thing to achieve because I was told by the authorities in London that a cow was a wild beast. So far we have strayed from our agricultural background in this great city of ours that a cow is deemed to be a wild beast. The result is that one is not allowed to bring a cow into London; at least, if one is, one cannot offload her on to the pavement, because the pavement is not for wild beasts, nor can one offload her on to the road, because the road is not for wild beasts either.

So well served are we by the police in the House of Commons that, ever inventive, they carved out a small space with barriers off the pavement which they deemed not to be the road. It was an enclosed space just outside St. Stephen's entrance. That was deemed to be neither road nor pavement, so we could unload the cow.

How on earth do you, Mr. Deputy Speaker, come into this caper? I have to tell the House that the cow was yours. I had cheated. I had wanted a cow from Torridge in west Devon but, alas, it was deemed that the cows there were too delicate beasts to travel up to the evil city of London. None the less, Mr. Deputy Speaker, you unwittingly and unknowingly were able to provide a cow. I was feeling a little guilty. I had pinched a cow from your constituency. The cow's minder from the NFU had driven up with her at 5 o'clock that morning and had had eggs and bacon with me at 7.30 am. There the cow was, standing on what was neither the road nor the pavement, this famous wild beast, just outside St. Stephen's entrance.

By pure chance—it was quite a neat thing—along came the then Minister for Health and, again by pure chance, our good friends from the BBC and ITN were there too. That was the most peculiar concatenation of happy circumstances that any cow could wish for who was producing unpasteurised green top milk and who wished the sale of it to continue. There I was, guilt ridden, while the Minister for Health was just about to quaff his first ever draught of health-giving, bacteria-ridden, beautiful creamy green top milk which is absolutely wonderful, and along you came, Mr. Deputy Speaker.

You did not say, "Goodness me, what are you doing with my cow?" You said, "How wonderful to see you, Mary" addressing the farmer, and you and she sat chatting. In the end we managed the impossible and, together, we managed to persuade the Minister to take his pint of green top milk into the Cabinet meeting five minutes later where it was decided to continue the sale of first-class green top west country milk.

That episode, Mr. Deputy Speaker, personified your urbanity, charm, delightfulness and inventiveness. Your humour, wit, courtesy and kindness to us all are legendary. I am grateful to you for all that you have done for me as a Back Bencher and for so many others during your lengthy term of office.

I do not intend to talk about animals throughout my Budget speech. I could not help but listen to the hon. Member for Ashfield (Mr. Haynes). I am sorry that he is temporarily not with us; I am sure that he will be back in a moment. I wonder whether he quite knew what he was talking about. [Interruption.] Here he is. Wonderful. How glad I am that the hon. Gentleman is back in his accustomed place, or one of his accustomed places; he bobs around the Chamber quite splendidly these days. I want to comment on part of what he said. I wonder whether he knew what he really meant when he said so charmingly, in his usual dulcet tones, that his last speech, which he had just delivered, was his swan song.

I was a little fearful, as the hon. Gentleman revved himself up in his usual wonderful way, that his speech might turn out to be more like the song of a corn-crake, or perhaps an advertisement for throat pastilles, but he managed to get through his speech and sit down.

Photo of Miss Emma Nicholson Miss Emma Nicholson , Torridge and West Devon

This seems to be a splendid duet.

My hon. Friend the Member for Havant (Sir I. Lloyd), who spoke before the hon. Member for Ashfield, said during his magnificent and masterly speech about science and technology that he had been listening to Gotterdammerung—but that means the twilight of the gods, and the past two days have been no twilight of the gods. The Labour party's opposition to the Budget has not been Gotterdammerung at all. As a matter of fact, it has reminded me more forcefully of an organ piece that I recently played at a funeral—"Pavane for a Dead Doll" by Tchaikovsky. That is the level of banality that has characterised the Opposition's objections to my right hon. Friend the Chancellor's excellent Budget.

It will be a lot of fun for the rest of us to see the Labour party wriggling, wheeling and dealing in an attempt to justify to its electorate the fact that Labour Members are voting against a reduction in income tax to 20p in the pound for those who earn the least.

In his musical fervour, the hon. Member for Ashfield may not have realised that a swan song is what a swan sings when it is dying. No doubt he will recall that wonderful piece by Orlando Gibbons—"The Dying Swan". That is what a swan song is, and we may have been witnessing the dying throes of the Labour party.

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield

I am grateful to the lovely lass for giving way. I watch ballet too, and I have seen "The Dying Swan". I am not dying—I shall go on and on and on—but I was making my last speech in this place. I shall be making plenty more speeches outside during the election campaign.

Photo of Miss Emma Nicholson Miss Emma Nicholson , Torridge and West Devon

That explicit tenor statement did not hide the fact that we are witnessing the dying throes of the Labour party, as Labour Members attempt to vote against a 20p income tax band for the lowest paid—I make that point most seriously. I urge my right hon. Friend the Chancellor who has introduced that magnificent measure to go up the scale as soon as possible and raise the 20p band higher and higher. That is a true Conservative choice—allowing people who earn money to keep as much of it as possible.

The hon. Member for Ashfield has darted away from the Chamber again, like a gadfly, but during his speech he mentioned his favourite newspaper. He said that The Guardian had done him sterling service. Has that service really been so sterling? Perhaps the hon. Member did not bother to read the headline yesterday. Yesterday The Guardian said that the Budget was good for small businesses and the poor. That may have escaped the hon. Gentleman's notice as he was talking about poverty and rich living.

I wonder whether the modern Labour party, for all its protestations, can really claim to understand the problems of poverty when it charges £500 a head for a "rich living" dinner. The hon. Gentleman told us that his constituents could not afford fish and chips. It is clear how outdated he is, because the present price of salmon makes it one of the cheapest protein dishes in the United Kingdom—bettered only by chicken. We have never had such low-cost protein before, and we shall never have it again if the Labour party gets into power—it will be £500 a head for dinner if Labour win. Labour's fund-raising efforts are quite unlike those of the Conservative party, which at a recent winter ball charged only £75 a head—we considered that to be really rich living. Perhaps the hon. Member for Ashfield—who has darted out again—is suffering from a surfeit of lampreys. Perhaps that is how the modern Labour party will writhe to death.

The Labour party will certainly not do very well in its attempts to impress the electorate with its claims that our education policy is all wrong. The hon. Member for Ashfield wanted more money for his chief education officer to spend on running education. I shouted out—perhaps inelegantly— "Jobs for the boys". The fact that I am right is demonstrated by the fact that schools are opting out and walking out of local education authority control in many Labour-controlled areas—[Interruption.] I am making a very important, accurate, factual point.

The great difference between the Labour party and the Conservative party emerges when Labour Members talk about the minimum wage. I was in business myself nearly all my life before I entered the House. When Labour Members use the word "differentials", I realise that the modern Labour party does not understand what a differential is—perhaps that is because there are no differentials in the House of Commons. There is a minimum wage flat rate for everything we do.

Modern Labour Members, who do not come out of industry or business, honestly do not understand what the erosion of differentials means to the lower-paid. Every low-paid person would run away from the idea of the erosion of differentials, because it diminishes people in terms of their skills and aptitudes and the way in which society regards them. Furthermore, it reduces their actual pay. That is why the minimum wage would be no good to anyone—unless differentials were preserved, in which case it would merely encourage the inflationary spiral. That is why, as one of my hon. Friends said earlier, inflation reached such intolerable heights last time the Labour party was in government. As my right hon. Friend the Chancellor said earlier this week, his goal has been to have a generation of people who have not been brought up to see inflation as the order of the day, as it was under the Labour Government.

Photo of Miss Emma Nicholson Miss Emma Nicholson , Torridge and West Devon

I have commented large and long on the problems which arose from the speech by the hon. Member for Ashfield, but I now wish to deal with something much more upsetting to me personally and to many people outside this place. The hon. Member for Dunfermline, East (Mr. Brown) acted in an unmanly way —I hesitate to use the word "cowardly", because that may be an unparliamentary term. However, the hon. Gentleman was certainly cowardly—if I am allowed to use that word in the House—because he failed to give way when he was ripping apart what he saw as the terrible Tory tactics on advertising. He would not give way either then or when he was talking about the health service, yet the important thing—

Photo of Miss Emma Nicholson Miss Emma Nicholson , Torridge and West Devon

I am sorry; the hon. Lady has just spoken and I shall not allow her to butt in now. I had not spoken before the hon. Member for Dunfermline, East, as everyone knows, and I tried twice, courteously, to intervene, but he would not let me.

Why did I wish to intervene? It was because I found it truly unspeakable, in the real sense of that word, that he should talk about advertising and attempt to destroy a perfectly honourable advertising company which has served the country well—Saatchi and Saatchi—and attempt to destroy our record on the NHS in a week in which the Labour party has destroyed the lives of a family by claiming in an advertisement that the death of their daughter was due to underfunding and understaffing at Great Ormond Street hospital. I find that despicable. I am appalled and horrified. I ask all Labour party members to spurn their party's advertising campaign. It is despicable. The hon. Member for Dunfermline, East, who must have known what I wanted to refer to, was too cowardly to give way and allow me to make that point.

Photo of John Battle John Battle , Leeds West

Will the hon. Lady allow me to intervene?

Photo of Miss Emma Nicholson Miss Emma Nicholson , Torridge and West Devon

I shall give way with pleasure if the hon. Gentleman will say that he does not support that filthy advertisement.

Photo of John Battle John Battle , Leeds West

I remind the hon. Lady that my hon. Friend the Member for Dunfermline, East (Mr. Brown) simply read out what the Advertising Standards Authority had said about the advertising company in question. Does she dispute or challenge the authenticity of the ASA's statement?

Photo of Miss Emma Nicholson Miss Emma Nicholson , Torridge and West Devon

The hon. Gentleman has not bothered to pick up the point. Obviously it hurts him too much. The hon. Gentleman is an honourable man. Perhaps he does not support that foul advertisement. I did not comment on what the Advertising Standards Authority had said. I am more than willing to bow to its authority; this matter is its particular concern. I was commenting on the failure of the hon. Member for Dunfermline, East to let me ask him whether he supports that form of advertising, because he purported to criticise our advertising by means of one particular advertising company. It is a squalid and despicable advertisement. I am ashamed for him for not saying that he does not support it.

When the hon. Member for Dunfermline, East referred to advertising he was not talking about the Budget. I support the excellent Budget that my right hon. Friend the Chancellor of the Exchequer presented. I support also the excellent points that my right hon. and learned Friend the Secretary of State for Employment made this afternoon. I am glad to note that Computer Weekly agrees that the Budget offers a boost to software. As David Bicknell writes: Chancellor Norman Lamont has ironed out discrepancies in capital allowances on software. My right hon. Friend has allowed suppliers and users to obtain tax relief on all software, as he stated yesterday. This is a boost for business. Do the Opposition not realise that software is the information marketplace upon which the single market depends? This is a major initiative, but they have chosen not to recognise it, or they have failed to understand what is included in the Budget. It is an excellent move. It will encourage suppliers to download electronically transmitted software, which is the preferred method of supply. It is a first-class initiative which I heartily commend.

This is a prudent Budget, which I heartily support. I suspect that the Labour party has talked about everything other than the Budget this afternoon because it has no alternative to put forward. The hon. Member for Dunfermline, East spent an enormous amount of time on saying that he believed that the national health service was deteriorating and that the principles of the national health service were being eroded by the Government. His sense of history is hugely at fault. It is a great shame that my hon. Friend the Member for Cambridge (Sir R. Rhodes James), one of Britain's leading historians, is not here. He would be able to put the Labour party right on that.

The principles of the national health service are to offer assistance to the poorest in health, free at the point of delivery, so that they can become healthier and be less of a burden on the NHS. The Conservative Government have increased expenditure on the NHS by 50 per cent. in real terms. What sticks in the Labour party's gullet is that we are achieving real reforms that have cut waiting lists and led to many more operations and to the greater range of operations that science, doctors and the medical profession in general can now offer to patients.

I have personal experience of a flagship NHS trust hospital. I have continuing personal family experience of Guy's hospital in Lewisham. I commend most highly the plastic surgery team, the children's ward, the Rothschild ward, the nurses, the doctors, the support services, the administrators and the chairman, Sir Philip Harris. They are carrying out a first-class job. I shall continue to have family experience of that hospital for many years to come. The truth is that the Labour party does not understand what the principles of the national health service were, are, or will be. It has no alternative to offer. Therefore, it falls into the usual Labour party trap of whining, moaning and whingeing about excellent policies that, in all honesty, it ought to have difficulty in not supporting.

We are offering a lot of extra money to pensioners. The Labour party moans about that. We are offering help to family businesses and small farms. That is a first-class measure. The help that we shall give to family businesses and small farms relates to inheritance tax. Again that goes against the grain. The Labour party wants everything to go back to the centre, to the state. However, our proposals go with the grain, since the nation wishes us to conduct its affairs on its behalf in that way. The help to be given over the uniform business rate will be widely welcomed in my constituency. Many people in my constituency will also welcome the help that is to be given to small businesses in terms of the disclosure of the time of payment in the company accounts of big companies, as well as the introduction of best practice by the Government when it comes to payments to small businesses after they have secured Government contracts.

This is a prudent, thoughtful, intelligent and caring Budget. It epitomises the Conservative party's philosophy. As I prepare to return to my constituency to fight the election—where, I am delighted to say, we shall continue to enjoy our cider without any unwarranted intervention by the French—I can say that we shall win the election on this Budget. The society that the Conservative party's values represent is the larger part by far of society in modern Britain.

Photo of Mr Derek Fatchett Mr Derek Fatchett , Leeds Central 7:46 pm, 12th March 1992

My right hon. Friend the Member for Morley and Leeds, South (Mr. Rees) graced yesterday's Budget debate with what will be his final speech in the House of Commons. He spoke movingly of his experiences in the past 30 years as a Member of Parliament for Leeds. I have the privilege of representing part of my right hon. Friend's former constituency of South Leeds. I wish to put on record not just my thanks to my right hon. Friend but the thanks of my hon. Friend the Member for Leeds, West (Mr. Battle) as well as the thanks of literally thousands of people in Leeds who will always regard my right hon. Friend as a citizen of our city and as one of whom they can be totally proud for having given great service to the city.

As I listened to my right hon. Friend's speech I compared its grace, style and wisdom with what, sadly, was the cheapjack speech of the Chief Secretary to the Treasury. The latter was a knockabout speech,. As someone on these Benches rightly pointed out, it was a speech appropriate for a Chelsea supporter but not for a Government Minister. The same sort of speech was made this afternoon by the Secretary of State for Employment. It is indeed sad that at the fag-end of this Parliament the Government and their Ministers should behave in that way. They could certainly learn a lesson in decorum and behaviour from my right hon. Friend the Member for Morley and Leeds, South.

My right hon. Friend made one very important point. He referred to the fact that Leeds had grown on account of its manufacturing industry. He talked about the wealth that had been created by our engineering, textile and clothing industries. He made the point that we have a Government who seem, at best, indifferent to manufacturing and, at the very worst, anti-manufacturing. It seems almost as though the Government do not believe that we need to produce goods in order to pay our way in the world. When the Government's attitude to manufacturing comes to the fore, I am always reminded of the comment of a leading industrialist in manufacturing industry who said, "We cannot live in a service economy; we cannot live by taking in each other's washing; we cannot live on a service basis; we need a manufacturing base."

In Leeds we are asking not to go back or for a return to the old industries but for support, help and hope for existing industries and future developments. Over the past 18 months we have experienced the longest recession of the past 60 years. My constituency is now faced with over 20 per cent. unemployment. There is a loss of hope and ambition. Leeds is an affluent city, but the pockets of poverty are deep and desperate. Ministers talk about generalities of statistics. They should see the pockets of poverty and hopelessness and consider them alongside those generalities. Even on the Government's official statistics, sufficient people are unemployed in Leeds to fill Elland road football ground. If the hon. Member for Boothferry (Mr. Davis) thinks that that is funny, he should visit Leeds. Each day those unemployed people get up and know that there is no hope and nothing that they can put their hands to. That is why we make the plea for improved manufacturing industry. We do that not in the cheapjack way of the Conservative party but because we believe in producing wealth and real jobs. That is why we want the new industries to develop and why we want to preserve our existing industries.

Photo of Francis Maude Francis Maude The Financial Secretary to the Treasury

The hon. Gentleman is keen to support manufacturing industry and to encourage the development of manufacturing industry in Britain. Will he take this opportunity to dissociate himself from the motion passed by the Trades Union Congress last year which described investment from overseas as being alien and made some thoroughly disgraceful and offensive remarks about such investment? Labour party Front-Bench spokesmen have not yet dissociated themselves from that motion. Does the Labour party support that disgraceful attitude?

Photo of Mr Derek Fatchett Mr Derek Fatchett , Leeds Central

The hon. Gentleman should know that the TUC is not the Labour party.

Photo of Ian Taylor Ian Taylor , Esher

The Labour party is the TUC.

Photo of Mr Derek Fatchett Mr Derek Fatchett , Leeds Central

The hon. Member for Esher (Mr. Taylor) shows a lack of understanding and ignorance worthy of a member of the Government, but it does not do him justice. The Labour party's position on such issues is clear.

Photo of Mr Derek Fatchett Mr Derek Fatchett , Leeds Central

I will give way later. I want to develop my point further.

Manufacturing industry in Leeds has suffered under the Government's policies. A survey published last year by the Leeds chamber of commerce showed that 91 per cent. of its firms referred to high interest rates and the Government's high interest rates policy as the main factor affecting their performance. That is a telling criticism of the Government. In a city that is trying to improve its economic and manufacturing base, firms feel that the real constraint on increased performance has been the Government's high interest rates. That was not a comment from the TUC. Unlike the Government, Leeds chamber of commerce understands the importance of manufacturing.

Yesterday my right hon. Friend the Member for Morley and Leeds, South made some telling points about manufacturing. I echo those comments. We need a Government who invest in and help manufacturing. My right hon. Friend the Member for Morley and Leeds, South also said that many of our constituents feel that there is no hope for them. They have no ambition. That is why training is important. It provides the skills for the future. It provides people with passports, hope and ambition.

In today's Yorkshire Post is a letter from a 19-year-old. That young person wrote to Dr. Jenny Cozens on the reader's problem page. Dr. Cozens is a clinical psychologist at the university of Leeds. It is a typical letter from a young person. It says: I am 19 and I haven't had a job for over a year and I think I've lost my confidence. I realise I've got to keep trying and that it's my fault if things don't go right, but I've become so unhappy lately that sometimes I think things are too much for me. I still write for jobs, but not as much as I did and then I feel I'm not trying hard enough. I got mugged recently and that seemed like the last straw. I used to sing a lot, but now my voice sounds awful a friend said that it might be the blow to my head. The response from Dr. Jenny Cozens is very important. She said, "Stop blaming yourself". Under this Government, it is always supposed to be somebody else's fault—very often that typical young person's fault. I enjoyed the final comment from Dr. Cozens. Talking about job losses and the difficulty of readjustment, she said: Even Prime Ministers like Mrs. Thatcher get upset when it happens to them. It is a funny old world for Prime Ministers, but it is not such a funny old world for that 19-year-old. That is the cost of unemployment and it is about time Ministers understood that.

The Government's training and enterprise councils say that the employment training programme is important arid that it is a pathway to jobs and hope for the future. The Leeds training and enterprise council has suggested that we need 2,200 jobs on employment training. The Government have offered 1,800—a cut of more than 20 per cent. At a time of rising unemployment—it has increased by more than 40 per cent. in the past 12 months—this Government, alone in western Europe, have cut back on their training budget. That is criminal. It is criminal in terms of investment for the future, for the young 19-year-old and for my constituents who have been waiting for a future.

This is a Budget in which the Government have tried to deceive. It is very much like last year's Budget. The Government cry crocodile tears about those on low incomes. I can tell the Financial Secretary that when the poll tax was introduced—every Conservative Member sitting on those Benches now voted for it—more than 70 per cent. of my constituents were losers. The Tories in Leeds voted for the poll tax regularly. We did not hear then about concern for those on low incomes. The hardship and injustice of the poll tax in my constituency has to be seen to be believed. Conservative Members should see the elderly constituents who come to my surgeries because they cannot pay their poll tax bills. They are in fear. For the first time in their lives, elderly ladies are in debt and running against the law. They are not law breakers. They want to pay their poll tax, but they simply cannot afford to pay it. They lose sleep over it. I do not want to hear from the Government about their concern for those on low incomes. After the introduction of the poll tax every Conservative Member is guilty of inflicting a great deal of hardship on my constituents.

The Government have missed political, social and economic opportunities in the Budget. It should have been a Budget for investment in our future. It should have been a Budget for investment in skills and education. It should have been a Budget that would have given us the work force for the 21st century. What have we got? We have an education system in which one in four children in primary schools is taught in classes with more than 31 pupils. Conservative Members who buy private education for their children would not be satisfied with a class of 31. In many schools there is a shortage of books, teachers and scientific equipment. Many of our science and technology classes are taught with yoghurt pot Blue Peter technology. The youngsters do not have the resources to enable them to carry out real learning and real work.

That is the reality. We have crumbling schools with a backlog of repairs worth £4,000 million. The Budget simply does not address those problems. It is criminal for the Government to put their own skins before the skills and knowledge of our children and the future of this country. The Government will be damned for that on 9 April and for a long time after. In their 13 years in office, the Government have shown they they are cheap fixers who are not concerned about Britain or its future. Labour Members are concerned about Britain's future—that is why we shall win on 9 April.

8 pm

Photo of Mr Roger King Mr Roger King , Birmingham, Northfield

While listening to the hon. Member for Leeds, Central (Mr. Fatchett), I reflected upon the fact that we all share the challenge of providing employment for our constituencies. We all try to create a system that will provide jobs, wealth and health to our communities.

My community is the centre of a substantial portion of our car manufacturing industry, with Rover's Longbridge plant dominating the local economy. We like to think, justifiably, that after the death throes of socialism 12 years ago, when Red Robbo was finally sent packing, we have produced at that factory some of the finest products, to the highest standards of productivity and quality.

We are justifiably proud of the Metro car, which ranks as probably the best small car that one can currently buy. Among the various car magazines that are on offer, What Car? named it as its small car of the year for 1990. The Rover 200 and 400 series continue to break new records in productivity, quality and market acceptance. We are proud of the fact that we make cars that are saleable and that are wanted by the public, because that brings jobs to the community and to our young people.

I watched Labour party members cavort about Birmingham in early January with their "Buy British" campaign. They visited the factory in my constituency and spoke to the workers on the shop floor. The Labour party said it was not in the business of helping that factory and it said that it was not going to abolish the special car tax. No future Labour Government would give any help to the car industry. It would not revise all the company car taxation problems that have built up over the years. No —to the Labour party, the company car is a bad thing which must be destroyed. We all have to travel by public transport, courtesy of the transport unions.

After the Labour party visit to the factory, some of us did some investigating, but we did not have to do much, because the newspapers did it for us. At the same time as the Labour party was advocating its "Buy British" policy, we discovered that the deputy leader of Her Majesty's Opposition, the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), drives a Citroen. I have no objection to that. They are outstandingly good cars. I have no objection to anybody buying a car from whatever country in the world—the world is full of wonderful products—but I maintain that our local products are as good as any others. If people think differently, they are entitled to buy other goods.

Where I part company from the Labour party is that anyone who insists that we should buy British should emulate that policy. It was with great shock that I saw the other weekend, in the News of the World, a report that the Leader of the Opposition no less had slunk away quietly last May to buy a Fiat car. He said, "No news, please. Don't you dare tell the rest of the world." The salesman said "Mr. Kinnock, we have not got a red car for you, but we have got a blue one." The Leader of the Opposition refused to sit in that. He ordered a red car instead.

I repeat that I have no objection to people buying what they like, but when the hon. Member for Leeds, Central talks about the morality of providing jobs for young people, he should ask the Leader of the Opposition why he supports the working people of Turin and denies the people of Birmingham the opportunity to supply his needs. That is the question that the hon. Gentleman should consider. I hope that he does so because, on 9 April, my constituents will want to know why they were betrayed by the Leader of the Opposition.

I have written to the Leader of the Opposition to ask why he chose to buy a foreign car and what was wrong with our home products. Was it discount? I could have arranged a good discount and helped him out. Was the colour a problem? Do we not do a bright enough red? We could have had a car sprayed especially for him; I am certain of that. I have had no answer, and my constituents do not know why the Leader of the Opposition, who hopes to be the future Prime Minister—of course, that will not happen—bought an Italian car and denied the working people in my constituency the opportunity to provide that product for him.

Photo of Edward O'Hara Edward O'Hara , Knowsley South

Is the hon. Gentleman prepared to pursue the logic of his argument? Will he state his opposition to the freedom from exchange controls which allows capital from this country to be invested in millions of jobs abroad —in any country but this?

Photo of Mr Roger King Mr Roger King , Birmingham, Northfield

That has come as a bolt out of the blue. The hon. Gentleman is advocating capital control, a siege economy and the raising of tariff barriers. That would deny the Japanese the opportunity to bring businesses to this country, because we could not export businesses and opportunities there. We are a trading nation and, if we put up such barriers, no wonder that Liverpool is happy to be in its current state, given that kind of advice. One will never get the foreign investment wanted in Liverpool if one denies the opportunities to two-way trade.

Photo of Mr Roger King Mr Roger King , Birmingham, Northfield

No, I will not. I have saved the hon. Gentleman from certain defeat by not allowing him to intervene again.

Photo of Edward O'Hara Edward O'Hara , Knowsley South

That is the logic of the hon. Gentleman's argument, not mine.

Photo of Mr Roger King Mr Roger King , Birmingham, Northfield

I am sorry if the truth causes some conflict of opinion.

We heard the hon. Member for Dunfermline, East (Mr. Brown) give a tour de force or something or other. He certainly did not give any suggestions about what the Opposition would do in the unlikely event of them winning the majority at the election. He made lots of comments about the Government and about the possible level to which unemployment might rise, but he gave no suggestion about how to create jobs. The hon. Gentleman's speech contained plenty of criticism of the Government's decision to reduce taxes to give working people on lower incomes more disposable income. What was central to the hon. Gentleman's speech was his belief that, somehow or other, it was immoral to make those reductions, and that there were plenty of other things on which the money could be spent.

The sum involved is £1·8 billion, and the hon. Gentleman suggested that that money should be spent on hospitals, schools, manufacturing investment and the railways. One would not get very much for £1·8 billion if one threw all those spending commitments in, but that was just for starters. Presumably the Opposition have an endless list of expenditure promises which are supposed to be met from that relatively small sum, in terms of Exchequer levels, of £1·8 billion. The Opposition ignore the fact that they have to find the extra money for all those commitments—which have been made on top of the commitments already given by the Government.

We will provide new hospitals, new opportunities in our schools and systems for industry whereby it can invest using its own money. My right hon. Friend the Chancellor and his colleagues on the Treasury team launched an important initiative by containing the level of the uniform business rate. That decision will put a significant amount of money in the pockets of the manufacturing and retailing sectors, which undoubtedly will be used for investment.

Photo of John Battle John Battle , Leeds West

The Government invented the uniform business rate.

Photo of Mr Roger King Mr Roger King , Birmingham, Northfield

Indeed, and the uniform business rate has been uniformly welcomed in the manufacturing sector. Some of the reductions in the business rate have a transitional element, but they will filter through quickly to much of the manufacturing sector in the west midlands, which is delighted and grateful.

The Government have certainly helped industry by their decision in the Budget to reduce the special car tax by 50 per cent. In the January visit to which I referred earlier, the shadow Chancellor of the Exchequer went to the Rover plant at Longbridge, and was asked on the shop floor about the special car tax. He said that Labour had no plans to abolish it. I pressed the right hon. and learned Gentleman about that yesterday. I must say, he is fleet of foot and agile of mind. He said that what he had said was that Labour would not abolish the special car tax but that that did not imply that it would not reduce it.

I do not want to use the expression "weasel words", but in that context we must examine closely what the right hon. and learned Gentleman said in January. When asked whether he would abolish the special car tax and after he had replied that Labour had no plans to abolish it, he did not add that Labour would reduce it. Therefore, we deduce that, because the Government have done something that has been warmly welcomed by the country's largest manufacturing sector, the Labour party would not reverse it. That means that it will have to find another £700 million for its expenditure programme if it is to keep that element of tax reduction.

The changes that the Government have introduced in company car taxation have also been warmly welcomed. The Chancellor has answered many of the criticisms that I and others made for more years than I care to remember. For example, the scale charge reform based on price—as opposed to the arbitrary cut-off point of engine cubic capacity—seems to be a commitment and must be a more sensible and economically viable way of working out the benefit charges for business car use.

At long last, the Government have considered fuel scale charges in relation to diesel. Diesel is a more environmentally responsible fuel and is acknowledged to emit less carbon dioxide and far fewer noxious gases. The Government have considered diesel in a far more favourable light. If most of Britain's company cars were exchanged for diesel cars, we could fulfil the Government's commitment to maintain carbon dioxide levels in 2000 at last year's levels. That is a tall order, but the encouragement given in the Budget is a clear sign that industry can and should examine closely the idea of providing company car users with diesel vehicles.

I was delighted to learn that, from 1 August, value added tax will be recoverable on certain elements of business car purchase for car hire firms—not black cabs because they can get back their VAT, but for the new and burgeoning growth sector of community life. The private hire taxi firms will now have the opportunity to recover VAT on new car purchases. That represents a sizeable saving on their investment in vehicles, because they will be able to recover the 17·5 per cent. in addition to benefiting from the 5 per cent. cut in special car tax which is available to everyone as of midnight on Tuesday. The cars of private hire companies which ply their trade in the streets of our cities are generally fairly dilapidated. The saving will provide those companies and their drivers with the opportunity to buy new, environmentally acceptable cars. I look forward to that.

It is also a step forward that VAT can be recovered by car hire firms, the self-drive organisations. That will be a tremendous fillip to the car industry and to driving schools. No one could understand why a driving school that must have a car in which to teach someone to drive could not get back VAT on the car that it employed in its everyday work.

The capital allowance limit has been increased from £8,000 to £12,000. That is long overdue; it has been campaigned for for a long time. At long last the Government have seen fit to introduce the change, which has been well received.

What will be the end results in our economy of all those changes? I am convinced that our car industry is the element of our manufacturing base which will power the economy forward. The indicators are extremely encouraging. We have had massive inward investment from the Japanese and from the French—Peugeot at Ryton in Coventry—and from multinationals such as Ford and General Motors, which are building new factories, new plant and new equipment to produce new models and engines in this country.

We are beginning to see the fruits of that after the debacle of the 1970s, when hardly any factories operated on a 24-hour basis without a stoppage. We now have almost wholly strike-free conditions in the motor industry, in the component and car plants. That has been translated into a superb export performance in the past 13 months. Exports have increased by 50 per cent. so the deficit in motor vehicles, which was around £6 billion, has been closed dramatically to no more than £1·5 billion. In turn, that will become a surplus as Toyota's production gets under way later this year, as Nissan starts to produce a new small car for sale throughout Europe and as Honda's production gets under way in Swindon.

The indicators are very encouraging. Within a few years, our car and component exports will be in surplus. I cannot envisage a time when we shall move into deficit, because of the tremendous investment that has taken place, and this is only the beginning.

The Japanese, with their British management and British partners, will realise the quality of the product that we can make in this country. The Nissan Primera made in Sunderland is exported to Japan because it is of a higher quality than those which the Japanese are making.

The Japanese will realise the excellence of the highly trained British working people. Training to achieve the right results on our shop floors is exceptionally good, because British industry on its own spends well over £20 billion on training schemes, without Government interference. As people realise the quality of the products that can be made in this country, they will not only maintain production here but seek to double and treble it, so that the United Kingdom will become the supplier of cars to the rest of the European Community and eastern Europe.

That is the opportunity before us, and it is an opportunity that this Government alone will grasp. The Opposition do not like Japanese investment: they have said as much, and have continued to criticise it. Can anyone seriously believe that, under a Labour Government, we would continue to get the same level of Japanese investment? The Japanese would no doubt be driven out by import tariffs, by the lack of movement of capital which has just been advocated by the Opposition, and by penal rates of taxation.

The United Kingdom's success has been caused by the Government creating the right framework—the right personal tax policies and the incentive to put in a decent week's work for a decent week's salary which enables people to buy the home that they hitherto rented from the local authority and gives them a stake in society through privatisation measures. These incentives have filtered through society, so that our manufacturing units, especially in the car industry, are the most efficient and effective we have.

However, we have to go much further merely to stand still in comparison with the competition. The Germans and French are trying to compete with us, and the Japanese continue to forge ahead with more examples of higher and higher productivity, so we must be very efficient. To load our factories with extra taxes, to abolish the uniform business rate and then to allow authorities to get what they can from businesses within their communities to bankroll their expansionist programmes, would act as a major brake on the investment that we need and are getting as a result of the Government's policies.

Yesterday, 24 hours after the Budget, The Birmingham Post, which is probably the most influential regional newspaper and the second city's major morning paper, had as its headline "Car firms celebrate £80m sales bonanza" thanks to my right hon. Friend's decision to reduce car tax. That is the way forward. We should cut taxes and provide incentives to invest in business. We should allow people a little more take-home pay as evidence that Britain is a great place in which to work and earn money, and in which to live. It will continue to be a better place under a Conservative Government after 9 April.

Photo of John Battle John Battle , Leeds West 8:19 pm, 12th March 1992

I suspect that the Budget may be remembered for the contrast between the period of Budget purdah and the reception that it has justifiably been receiving.

At the beginning, the air was heavy with expectation. There was a fanfare of flyers about what the Government would offer to the people. I should like to compare it to a firework—brightly coloured paper, lighting the touch paper and the rocket going up. What do we get? After Government press releases and one morning's headlines, within days we find the remainder, rather like the remains the day after fireworks: we are left with a burnt stick in a bottle. That is what the Budget will prove to be as the people of Britain start to examine it in detail. There has been something of a contrast between its muted reception and the hype it was given before it was presented.

The Budget will be noted for its silence and absences: the absence of measures to tackle the economic crises and the needs of our people; and the silences about the decline in manufacturing industry, about mass unemployment which is experienced by 3 million people and about the shift of 10 million people into low-paid jobs in the past 13 years. Even Tory Members have mentioned the silence on science, the silence on the seedcorn for the future.

The Budget will not be praised for tackling unemployment. Nor will it be praised for finding real pathways out of poverty. There was a time in the past 13 long years when the Conservative party proclaimed that the decline in manufacturing was good. I recall the attitude of Lord Young when he was Secretary of State for Employment. He advised people that his strategy to reduce unemployment was to encourage people to eat out more. He suggested that, if only more people would eat out, unemployment would sink. It was as if the service sector only, the McDonalds and Burger King economy, would be Britain's future. We all know, as it is practical common sense, that a land of rent-out car parks and fast-food outlets is not a sustainable means of running an economy.

I say that as a Member who represents a city with a proud manufacturing base and history. Leeds was based on the traditional manufacturing industries of engineering, textiles and printing. What has happened in the past 13 years? The decline in manufacturing in Leeds is absolutely typical of the decline in manufacturing in the country as a whole. Between 1981 and 1987, the number of full-time jobs fell by 8,600, and the total number in manufacturing fell by 13,900.

What was happening? Yes, there was a shift from manufacturing to the service sector, but there was also a shift from full-time to part-time work. When Tory Members tell us of all the new jobs that they have created, they should also tell the House and the country that many, if not the majority, of those jobs are part-time. They should also tell us that they are not jobs for men, because there has been a shift towards jobs for women. They should also tell us that there has been a shift from well-paid to low-paid work. There has been a shift to a part-time, low-wage economy.

In my area, redundancies in manufacturing have risen dramatically—to 1,229 in 1989 and to 1,708 in 1990. That is an annual rate of increase of 30 per cent. What comments do we hear about the outlook under this Government? Textiles face tougher times because of high interest rates depressing demand. The outlook for engineering has been described as decidedly patchy because of the present regime of higher interest rates leading to cuts in orders. Where is the strategy for manufacturing investment? The CBI projects that, between 1989 and 1992, manufacturing investment under this Government will fall by 25 per cent. That is the reality. Manufacturing in Britain dropped by 33 per cent. between 1979 and June 1991. It is continuing to fall by 6 per cent. a year.

When the Chancellor of the Exchequer implies in the Budget that a further 200,000 jobs will go in manufacturing, we should work out the impact on regions traditionally dependent on manufacturing as the source of wealth creation, such as Yorkshire. In practice, at 1989 prices there will be a loss of £329 million of manufacturing investment in Yorkshire between 1989 and 1992. The reality for millions of people whose families have relied on manufacturing industry will be insecurity and fear for the future.

Millions already feel that they are a single wage packet away from the dole queue. Unemployment is 150 per cent. higher than when the Government came to power in 1979. It is continuing to rise, yet the Government throw up their hands and declare that that is a price worth paying to get inflation down. There are now 1,426,000 more unemployed people, on the Government's own figures, than when Labour left office in May 1979. Under this Government, unemployment has never been lower than it was under Labour. During the past 13 years, the Conservative party has proved itself to be the party of high unemployment. As we all know, unemployment is a personal disaster and a social evil that the Government simply try to brush under the carpet.

Every year, the unemployed have been rubbed out, as if by Noddy's magic rubber in Enid Blyton books, by 30 changes to the unemployment benefit figures, just as the poor have been subjected to statistical elimination under this Government. When we look at the figures in practice, who are the unemployed? They are the generation of 16 to 25-year-olds. A generation of our young people is being written off by the Government.

In my constituency, unemployment rose by 51 per cent. between December 1990 and December 1991. In reality, it is now standing at 15 per cent., yet the number of jobs advertised locally has fallen in the past two years: by 60 per cent. in 1990–91 and by 44 per cent. in 1991–92. There has been a 50 per cent. drop in textile vacancies.

In December, I looked in the jobcentre to see what was on offer. These were the vacancies: one managerial and professional job, seven clerical jobs, one secretarial job, 11 non-manual jobs, one fitter/machinist job, one catering and domestic job, seven road-sweeping jobs, three processing jobs, one assembly-packing job and one transport-operating job. I read out the list to show that, significantly, there was not one single skilled manufacturing job. That is the reality in our constituencies.

It is all very well for Ministers to go round the country and make stupid remarks about people who are made redundant being "liberated" from work. Fine—but the problem is that those without work get very little income. It is surprising that the very Minister who declares that those people are liberating themselves from work is a Minister responsible for social security, who does not even guarantee them a decent income to live on when they are out of work.

The Chancellor of the Exchequer claimed that this was a Budget for the low-paid—a noise echoed by Tory Members. The Chancellor said that he had given proportionately greater benefit to those on low incomes."—[Official Report, 10 March 1992; Vol. 205, c. 760.] Yet the unemployed gain absolutely nothing. They do not get a penny from a tax reduction, because they are not paying any tax because they are not working. How will they gain from the Budget?

When the Conservative Government's Budget details are put under close scrutiny and analysis, they reveal, as usual, that, despite all the instant claims, it is not the poor or the poorest, but the rich, and the richest, who gain. Members of Parliament get more from the tax cuts through the 20 per cent. reduction than do the unemployed. The 10 million workers—46 per cent. of the work force—who now earn below the Council of Europe's decency threshold for wages will get little. The tax changes do not help the low-paid in any great measure, because those caught in the poverty trap of taxes and means-tested benefit will gain even less.

I give the example of family credit. In my constituency, with high unemployment, 1,124 families claim family credit. My area is a low-wage area, and Yorkshire generally is one of the lowest-wage areas in Great Britain, second only to Northern Ireland. Those people will lose 70p for every pound they may gain under the Budget. Many families are too poor to pay tax, and will not benefit at all.

An answer to a parliamentary question on 5 March shows that, because of the Government's decision to change the definition of full-time work from 24 hours to 16 hours for family credit, 15,000 families will have their family credit topped up by income support. They have now been pushed towards having to apply for two means-tested benefits. That is the reality for the poor under this Government.

Conservative Members may tell us that the change will affect few people. Let them do their homework and let them see how the tax benefits disintegrate under the pressure of the social security system. Even if people earn enough to pay tax, and even if they benefit fully from the 20 per cent. band, many will gain only £1·64 a week. The problem is that bringing in the lower rate band as a means of making tax fairer and more progressive is, in this Budget, at the expense of the failure to maintain the value of the personal allowances for married couples. In practice, its effect is limited and many families on low pay will be drawn into paying tax as a result of the Budget. The Government hope that people will not realise that point until they get their wage packets some time at the end of May when the election is over. People will have to take advice to find out why they have been short-changed.

There was an article in The Independent yesterday by Holly Sutherland, a research fellow on social policy at the London School of Economics. The article was entitled "Poor without work stand to gain least". She pointed out: the top 50 per cent. of families will on average be better off by some 0·95 per cent. of their incomes. The bottom half will be better off by only 0·55 per cent. of their incomes. They gain less absolutely—as would be expected—but they also gain less proportionately". That wholly contradicts what the Chancellor told the House in his Budget statement. The Chancellor claims that he is unable to reach those on the lowest incomes through the tax system. The reason is clearly that people's incomes are too low for them to pay tax in the first place.

Conservative Members refer to pensioners. It would have been a far better and more progressive method of increasing the incomes of poorer pensioners to have raised the rate of the non-means-tested state national insurance pension. That is the key. People should not be pushed further into means-testing or into losing their access to housing benefits or assistance with the poll tax.

This is not a Budget for the low-paid, for the poorer pensioners or for those in work in the lower income brackets. It is not a Budget to tackle the decline in manufacturing investment. I hope that the fact that the election has been declared means that the Budget will be firmly behind us and that new opportunities will open up.

I look forward to a Budget that puts investment in manufacturing as a priority, which would reinvigorate the base of manufacturing industry in Britain, and which provides real work opportunities. I look forward to a Budget that tackles unemployment as a priority with a Government who are committed to active intervention in the labour market, and who invest in the infrastructure and who invest sensitively in the regions. I look forward to a Budget which will provide real value for one's work and which provides a real means of taking the low-paid in work out of poverty.

We heard nothing in the Budget statement about increasing child benefit which still has not caught up after the freeze that was imposed by the Government some years ago. That is an announcement in the Conservative manifesto to which I look forward. I look for a Budget that will establish a skills fund to boost the skills of those in work. I look forward to a Budget that introduces a statutory minimum wage to ensure that people do not degenerate further into a European cheap-labour economy, which some Conservative Members seem to want to inflict on us.

This is a burnt-out Government. They are a spent force, whose time is up. The Government are well past their sell-by date. It is time for a Labour Government, with a vision of social justice and with new hope for the future of the people of our country.

Photo of Alistair Burt Alistair Burt , Bury North 8:35 pm, 12th March 1992

It is a pleasure and a privilege to speak at the end of a Parliament. It is also a pleasure and a privilege to follow the hon. Member for Leeds, West (Mr. Battle), who speaks with knowledge and passion on these matters. The hon. Gentleman and I share one of my most pleasant memories of this Parliament. Some two years ago we both went on a visit to the United Nations. I enjoyed his company then, and I enjoyed his speech today even though I do not always agree with the way he wishes to achieve his ends. He knows enough about me to know that I share some of the aims of which he speaks, although we differ in our methods in terms of how to get there. I do not detract from the knowledge and passion with which he put his case.

The interesting point about the Budget is that it has themes which link this old Parliament with a new Parliament in which I confidently expect that there will be a Conservative Government. I welcome the Budget, the themes of which underline some of those which separate the Government and the Opposition.

The right hon. and learned Member for Monklands, East (Mr. Smith) has the reputation of being bold and clever. I was rather disappointed that he chose not to deliver his budget at the same time, or immediately after, the Budget presented by my right hon. Friend the Chancellor. I see no reason why he should not have done so. He knew as much about the economy as my right hon. Friend did and he knew enough about the economy to prepare his budget for next week, yet he chose not to make his statement at the same time. That does not show a great deal of bravery and it enables him to pick and choose among the items introduced by my right hon. Friend, to mull over the Sunday papers and to cobble something together. It would have been braver to produce something the day before, or at the same time, but he has not done so. The other reason why the right hon. and learned Member for Monklands, East did not present his budget statement at the same time as my right hon. Friend's was that he was wrong-footed. He was afraid that if his budget had been ready immediately after my right hon. Friend the Chancellor sat down, he would have been exposed as being wrong-footed—as, indeed, he would have been.

The themes which make a difference between the Government and the Opposition, and which are captured in the Budget, are these: freedom, choice and responsibility are watchwords of the Conservative party and are important in a Budget context, although they are sometimes derided by the Opposition. Freedom to choose is important because choice brings responsibility and responsibility builds a decent society. One does not build a just or proper society by taking responsibility away from people.

One of the mistakes that we made over the past few years, until perhaps 18 months ago, was not to emphasise sufficiently how the building of individual responsibility contributes to society. That is why we have always fallen prey to the argument that individual choice and responsibility are about selfish gain rather than gain to the community. It is easy to argue that social responsibility builds through individual responsibility. I hope that that theme will be developed by the next Conservative Government.

Because freedom to choose is important, our attitude to taxation is different. Labour says, "It all belongs to the state—we will let you have back what we think you deserve." We say, "What you earn is yours—we will ask for what we need for society." There is a world of difference between the two, and the £250 million that is coming into the pockets of people in the north-west through the tax changes announced by the Chancellor is important because I trust those people to use the money sensibly. They will use it to look after their homes and families, to make a proper choice of purchases and to contribute to society. We must trust people, and in our tax policy, as in many of our other policies, we do just that.

As well as being important from the point of view of freedom, a low-tax-low-inflation economy works. I fail to appreciate how the hon. Member for Leeds, West can argue that more taxation would help us get out of recession. He and his hon. Friends would have a stronger economic case if they could point to much in their economic background in the way of success. We know what happens when their economics run the country and things go wrong.

We in Bury still cherish a circular presented to the local authority in 1976 by the then Labour Government when they announced savage cuts because of the mess the economy was in, prior to its being rescued by the IMF. We recall how unemployment increased under the Labour Government. The hon. Member for Leeds, West speaks with passion about the unemployed, but he fails to appreciate that every Labour Government have left office with unemployment higher than when they began. The failure of the last Labour Government properly to look after the economy cost my constituents dear in terms of the national health service. It was the only time in the history of the NHS that expenditure on health care in my constituency fell. That happened between 1974 and 1979.

Today and previously, we have remarked with distaste certain cases being used in advertising by Labour Members in an effort to make charges against the Government in relation to the NHS. How would they feel if I asked my constituents to calculate how many people were killed in my constituency because spending on health care fell under the last Labour Government? Why should we not challenge them with similar cases? We do not do it because we do not believe in operating in that way. It is immoral for Labour politicians to claim that their running of the economy would provide more cash and resources for the NHS. They did not do it when they were last in office and they would not do it in the future. The bottom line is that, if the economy is bankrupt, the Government cannot deliver, whatever promises they make. Such promises were made to the people of Bury by the last Labour Government. They promised, but they did not deliver.

That is why low taxation and a low-interest economy is right, not only for freedom of choice but because it works better. People do not trust the Labour party to run the economy properly. I assure Opposition Members that the electorate have longer memories than they think, and that fact will be decisive on polling day.

Bury will enjoy other benefits as a result of the Budget. I welcome the changes for industry and business—for example, in the uniform business rate. Heavy industry has enjoyed a drop in local taxation. Businesses that have witnessed increases, as a result of changes in the rates, will be assisted by the measures announced in the Budget in the sense that the rises that they have suffered will be easier to cope with. The Labour party cannot disclaim responsibility in relation to the UBR because at the heart of it was the revaluation policy that it supported.

An important aspect of the Budget is the bringing together of spending and the raising of revenue, and I welcome the change that my right hon. Friend the Chancellor is making in that respect. The Budget is only one part of the equation. The other part is the autumn statement, which details the spending policy of the Government. Many comments about the Budget, made by hon. Members who should know better and by people outside Parliament, fail to differentiate between the autumn statement—the spending part of the equation—and the Budget.

We saw in the last autumn statement the aspects on which the Government were spending. That included the NHS, education and extra resources for capital investment in transport. The money that was asked for has been put into those items and I am proud of the Government's record. But there must be a balance, and in future that balance will be seen because the two parts of the equation will appear together. That makes good sense.

It will be important for the next Conservative Government to address some of the social challenges that we face. There is no point in building an economy for its own sake. It must be built to be used, and the nation faces some of the social problems to which the hon. Member for Leeds, West referred. We have pockets of poverty and unemployment. Those problems cannot be dealt with in the way that the hon. Gentleman suggested because high taxation, with inevitable high inflation, would create the problems that had to be faced by the last Labour Government, when the economy collapsed and they could not deliver what they had promised to provide.

If we in the Conservative party build the economy that we want, we must have the courage to opt for a form of social conservatism which will deliver the conditions that our people need. I firmly believe that a Conservative Government can deliver social justice. Such justice cannot be built on a weak economy. A Labour Government would mean a weak economy. Only the Conservatives can deliver what they promise to deliver. I am confident that we shall be delivering what the nation needs from these Benches from 27 April onwards.

Photo of Edward O'Hara Edward O'Hara , Knowsley South 8:46 pm, 12th March 1992

The Chancellor has received praise from a number of predictable quarters, including sections of the press and, of course, Conservative Members. Clearly, they were bound to heap praise on the right hon. Gentleman.

I wish at the outset to correct the wilful perversion of what 1 said by the hon. Member for Birmingham, Northfield (Mr. King). I asked him to pursue his logic in criticising me for speaking of the investment in purchasing power resulting from the sale in this country of the products of foreign workers. I asked him to explain what difference there was between that and this country investing capital in the countries of origin of those workers. I was not advocating controls on capital exchange. I am left wondering, after such wilful misunderstanding—I put it no higher than that—of the views of my hon. Friends and I, how Conservative Members can heap praise on the Budget proposals.

After much trying, I have discovered an accolade that can be given to the Chancellor—for barefaced cheek, or, as we say in the part of the world from which I come, for brass. My hon. Friend the Member for Leeds, West (Mr. Battle) will appreciate what I mean. We also say in my area that where there is muck there is brass. It came to me in a blinding flash that this is a Budget of muck and brass.

We shall be asked later to support a series of instruments relating to the payment of VAT, penalties for misdeclaration and surcharges for default of payment. I marvel, as I watch the Chancellor clearing up the muck left by his predecessor, at the way in which he is claiming credit for it. For example, the right hon. Gentleman tries to claim credit for alterations to the uniform business rate. The Government claim credit for the mitigation of the worst effects of their actions. The uniform business rate is the ugly sister of the poll tax. The Government were responsible for driving many businesses to the wall because of the uniform business rate. They drove businesses over the edge in the teeth of the current recession and now claim credit for rescuing the victims that they had left buried up to the neck for two years in the face of the incoming tide. The uniform business rate is the muck and brass of this Budget, adding just one small extra cost to the £14·5 billion final account of the poll tax.

I doff my cap to two small fiscal changes that I came across in the small print of the Budget: the abolition of the requirement for small social clubs to pay bingo duty and the 50 per cent easing of car tax. My postbag will be much lighter, because the priest of my local parish church will no longer complain to me about the burden of bingo duty on his parish social club and the manager of Halewood labour club will no longer lament about the burden that he has suffered from the imposition of bingo duty. People were dancing in the streets of Halewood last night. I was there and I was not sure whether people were rejoicing because of the easing of bingo duty or the 50 per cent. easing of car tax, because Ford of Halewood is an important car manufacturing plant. I suspect, however, that it was part of a splendid celebration of the 25 years of life and work in St. Mary's church there, which I was delighted to attend. Halewood had several reasons to rejoice last night.

If that 50 per cent. easing of the car tax is fine today, why was it not fine 18 months ago, when it was clear that the car industry was approaching a disastrous decline, in the face of which the Government have at last had to act? The same question must be asked about other measures in the Budget—if they are so good for the economy now, why were they not taken earlier?

I have been in the House for about 18 months. I referred in my maiden speech to the fact that the recession was the "R" word that Conservative Members dare not mention. At first, the Prime Minister and the Chancellor denied that there was a recession. They then deliberately understated the depth of the recession, before rashly and prematurely predicting its end. Most recently, they blamed it all on "those foreigners". It was a remarkable repertoire of evasion, deceit and hiding from the truth. Throughout those 18 months, the Government did nothing to resolve the problems. We have now gone beyond recession and have the "S" word—slump.

My constituents in Knowsley, South have suffered. The unemployment statistics for my constituency show that, in the past 12 months alone, unemployment has risen by 25 per cent. I checked the figures yesterday and discovered that there were 101 vacancies in the jobcentres there.

Photo of Mr Tom Pendry Mr Tom Pendry , Stalybridge and Hyde

Before my hon. Friend gets away from the dancing in the streets of Halewood—he is one of the most perspicacious Members in the House—will he say whether that dancing took place because a general election is approaching and people knew that a Labour Government would soon be elected?

Photo of Edward O'Hara Edward O'Hara , Knowsley South

Indeed. Not only that, but the sun came out in response to the news that at last we were going to have a general election. I planted a tree and my constituents cheered and wished me well in the coming election.

Photo of John Battle John Battle , Leeds West

Spring time for Labour.

Photo of Edward O'Hara Edward O'Hara , Knowsley South

I thank my hon. Friend the Member for Stalybridge and Hyde (Mr. Pendry) for allowing me to make that extra point.

I was quoting unemployment figures for Knowsley, South and mentioned the figure of 101 job vacancies, which is pathetic when one realises that 65 jobless people chase every vacancy. Taking the figure 30 modifications ago, 99 people without jobs in Knowsley, South chase every vacancy in our jobcentres.

If the Budget is such a good measure to cure the recession now, why could not the Government have introduced such measures when the estimated public spending borrowing requirement was only £8 billion rather than £28 billion? A cartoon published by Credit Lyonnais, which hon. Members may have seen in the press, showed the Chancellor and the Prime Minister as Batman and Robin in a helicopter, showering £5 notes on the ground and shouting, "Holy £28 billion, and it is not even reaching the streets yet!" That is what the Government are about.

The Budget is not about tackling the recession but is a desperate scramble to rally wavering Tory voters in the marginal constituencies, cunningly targeted on small business men who feel comprehensively cheated and let down by the Government's mismanagement in the past. It provided too little, too late for those tens of thousands of people who had already been made bankrupt and whose businesses had failed. It was cunningly targeted on those in danger of having their houses repossessed, but it gave too little too late for those hundreds of thousands who have already lost the roof over their heads. It was cunningly worked to deceive those pensioners who have been callously robbed by the Government for 13 years. It gave them, as a sop, entitlements that were theirs by right in a blatant attempt to steal the Labour party's clothes. I heard Conservative Members refer to shooting Labour's fox. The fox analogy is appropriate: it is a foxy Budget, if cunning is the defining characteristic of a fox.

The Labour party is proud of its long-held commitment. It does not use advantageous ploys, like those of the Government, when addressing the problems of pensioners' poverty. As for the proposed 20p rate of income tax, I marvel at the Government's remarkable conversion to the principle of regression after 13 years of punitive and progressive taxation. It was a glance—one might say a wink—towards the principle of regression as the last minute of the last hour of the last day of the Government approaches.

The cunning, cynicism and blatancy of the Budget takes one's breath away. It is the Budget of deferred accounts and post-dated cheques. Those who will pay the post-dated cheques are the recipients of the phantom benefits put on offer. The Budget tinkers with the margins of recession. It says nothing about the thousands of unemployed residents of Knowsley, South who are doomed to live on income support. It says nothing about investment in training. In my district, as elsewhere in the country, the training budget has been cut. We have the farce of trainers being added to the queue of jobless.

The Budget contains nothing on the construction industry, transport infrastructure or charting our way out of recession. There is no strategy: it is a Budget for the moment—the ad hoc Budget—and the moment is that of the imminent election. The Budget contains no strategy, just tactics—ducking and weaving. "Si monumentum requiris" said Wren, "circumspice"—if one wants monuments, one should look around. Monuments to the Government's incompetence lie all around us in the ruins of recession. The electorate will not be deceived by the exercise in chicanery that constitutes the Budget statement and will treat it with the contempt that it deserves.

The chairman of the Conservative party, the right hon. Member for Bath (Mr. Patten), launched his double whammy last week, and it fell flat. The Labour party would need an octopus in boxing gloves if it were to present in a poster the octuple whammy that is Conservative party policy. That policy encompasses high taxes, high interest rates—which have only been brought down to 10 per cent. from 15 per cent. to which they had been increased—the poll tax, unemployment, repossessions, cardboard cities, business failures and multiple debt. I have covered the boxing gloves on every leg of an octopus and have enough left to put a kangaroo in the ring with it. We also have crumbling schools and the crisis in the national health service and on the railways and roads. The Conservative party is not the party to talk about whammies.

I now turn to the obscenity referred to by the hon. Member for Bury, North (Mr. Burt): the Government's sudden conversion to social welfare after 13 years of not only destroying the economy but—in the last minute of the last hour of the last day, in a blinding flash of inspiration —discovering that social welfare for the people ground down in Knowsley, South is as important as private wealth creation. Never was nemesis better deserved, and never was it more certain to be delivered than on 9 April.

Photo of Ian Taylor Ian Taylor , Esher 9:03 pm, 12th March 1992

Having listened to the speech of the hon. Member for Knowsley, South (Mr. O'Hara), I think that, even were the sun to shine on Halewood, he would see only the gloom. That is not at all how I view the implications of the Budget. In the short time allowed me, I do not have scope to go into the detail on those Budget items that my constituents and I welcome. The Chancellor correctly targeted such prudent tax cuts as he could make on those most in need. I enthusiastically welcome the new 20p rate because it will most benefit those who are beginning to earn and to be taxed at the bottom of the scale, and those working part time whose income is most disproportionately affected by a lower tax on lower earned income. I welcome all those measures; the alternatives which might have been available to my right hon. Friend in other circumstances are to be discounted—he did what was right at this stage.

I strongly welcome the help for pensioners on income support. Businesses in my constituency will benefit from the changes in the uniform business rate—I have received many representations about it, but not because it is wrong as a system. Hon. Members from the north of England should bear in mind that constituencies in the north, not those in the south, have tended to benefit. The burden of the UBR often affected people who wanted to sell their property, because the transitional relief could not be passed on with the property. That meant that sales were difficult, or if a company had ceased business it was difficult for another to occupy its premises.

I shall concentrate on the broader Budget judgment, as my hon. Friends have eloquently analysed the taxation aspects of the Budget. I wish to mention some of the weak-willed people in the City who have allowed their worries to overtake their judgment. I readily admit that I am an adviser to two City institutions, which is not to say that they always accept my advice. Often they appear not to.

In a difficult situation my right hon. Friend the Chancellor has created an extremely responsible framework for the Budget. He made a clear commitment to maintaining our position in the exchange rate mechanism and a further commitment to joining the narrow band at the DM2·95 level. There could be no clearer signal that a Conservative Government mean to maintain a stable exchange rate and will continue to reinforce sound monetary policies. My right hon. Friend's statement on MO clearly underlined that. We need have no worries that a Conservative Government will allow the currency to decline, thereby creating further inflationary pressures, so the City should take careful note of the Budget commitments.

Certainly the public sector borrowing requirement is much higher than any Government would wish, but as a percentage of GDP it is a great deal less than it was under the last Labour Government—and much less than it would be under a Labour Government if the country unfortunately got one after 9 April. Labour is committed to forgoing privatisation proceeds, which will instantly add a further £8 billion to forecasts of the public sector borrowing requirement for next year.

The key point about the PSBR under a Conservative Government is that the rise which has occurred since the autumn statement forecast is due to a decline in revenues from taxation. That is both important and positive. It has not been due to a giveaway in the form of tax cuts; the proportion due to tax reductions in the Budget was small —less than £2 billion net. The rise has not been due to additional public expenditure either. We still work in this strange system—I am delighted that my right hon. Friend the Chancellor is to reform it—in which we announce our public expenditure plans separately from our revenue-raising plans. The public expenditure plans, including a large increase in spending on key social services, were announced last autumn, since when the recession has led to a decline in tax revenues, which in turn has led to an increased PSBR.

I said that this was a positive point, because when the economy begins to pick up again the buoyancy of tax revenues will also pick up speedily. That will lead to exactly what the Chancellor predicted—a rapid fall in the PSBR. The City should therefore take good heart from the fact that my right hon. Friend the Chancellor has set up a reasonable framework in the Budget. Because the PSBR, even at this level, will be fully funded, that will lead to a rapid recovery in Government revenues when the growth in the economy that all the independent forecasters believe is upon us starts.

My right hon. Friend the Chancellor set out another factor in his speech which is not widely talked about but is critical to understand because it gives the lie to the Opposition's claims that we are borrowing to bribe. We are not. We are borrowing at this stage of the recession, with a commitment to balance the budget over the cycle, and at the same time we are financing £30 billion of public sector asset creation.

This is a sound and prudent Budget which will take us out of the recession. It shows that only a Conservative Government is capable of running the economy successfully. I am sure that the electorate will understand that on 9 April.

Photo of Tony Blair Tony Blair , Sedgefield 9:10 pm, 12th March 1992

The test that the country applied to the Budget was whether it would bring economic recovery to Britain—and the answer is no. The test that the Tory party applied to the Budget is whether it would bring political recovery to the Tory party—and the answer is again no. It has failed both the high test of public interest and the low test of party advantage. It has failed because it does nothing to promote investment in industry, nothing to rectify the appalling damage done to training by cuts in Government spending, nothing to increase economic confidence, nothing to assist the construction industry and nothing to reduce unemployment or even to stop it rising.

Almost before the cheering of Conservative Members —at least of those who were not still sitting in a state of shock from hearing the borrowing requirement—in support of their Chancellor had ceased, the Budget as a work of political art began to unravel. In the City, as Morgan Grenfell said: It will have a tiny effect on the economy as a whole. As Mr. Lyons of DKB International, said: This was not a Budget for recovery. As Mr. Gardner, managing director of ICL UK, said: As the managing director of a large company it did little for me. There were no real measures to break the capital expenditure block; nothing to encourage large companies to spend more money. It is not hard to fathom the reason for the scepticism and downright hostility of large parts of industry and taxpayers alike. The vast majority of people know that, when our health service is in crisis, our school buildings are crumbling, our crime levels are rising and our transport system has become Europe's sick joke, borrowing to finance tax cuts rather than to spend on good services is not a sensible use of money. Many in industry who see the daily ravages of a recession that they were promised would never happen, but is now the longest for decades, know that, unless the Budget deals with the fundamental problems of the British economy, it fails. Above all, unless and until we halt the rising tide of business failures and unemployment and begin to turn that tide, we cannot get economic confidence moving and we therefore cannot get economic recovery.

Photo of Mr Ian Bruce Mr Ian Bruce , South Dorset

The right hon. and learned Member for Monklands, East (Mr. Smith) yesterday asked me to read the newspaper reports about minimum wages. I have taken his advice, and I read from the Employment Gazette that the average hourly wage a year ago was £7·57. If one simply applies 6 per cent. to that, the average wage in Britain this year will be £8. As the shadow Secretary of State for Employment, will the hon. Gentleman be advising the right hon. and learned Gentleman that the pledge of £3·40 is out of date and the Labour party should be pledging a £4 minimum wage?

Photo of Tony Blair Tony Blair , Sedgefield

The hon. Gentleman must tell us why the Conservative party, as the Secretary of State for Employment said today, is still pledged to abolish wages council protection for some of the lowest-paid in our society.

Photo of Michael Howard Michael Howard Secretary of State for Employment

The hon. Gentleman must not misrepresent what I said, which I shall repeat. I have said it endlessly before and I shall repeat it again. Our position is that we shall keep wages councils under review, but we see no permanent place for them in the system. That is what I said before and that is what I say again. The hon. Gentleman must not misrepresent me.

Photo of Tony Blair Tony Blair , Sedgefield

That was an extraordinary intervention. I assume from that that the right hon. and learned Gentleman is pledged to remove the wages councils. Is he? Let me give him the opportunity to make his position clear. Let him give us an undertaking that, if re-elected, the Conservatives will not abolish the councils.

Photo of Michael Howard Michael Howard Secretary of State for Employment

We read from Mr. Hammond's book this afternoon about the hon. Gentleman's failure to understand the minimum wage. The hon. Gentleman fails to understand the meaning of the simple English word "review". It means that we are not committed to keeping wages councils and we are not committed to abolishing wages councils. We shall keep their future under review. Does the hon. Gentleman understand the meaning of that simple English word?

Photo of Tony Blair Tony Blair , Sedgefield

I thought that I had asked a simple question. Can the right hon. and learned Gentleman not give us such an undertaking? He cannot, because the Conservatives will abolish the councils if they are returned.

Since the recession began, unemployment has risen by 70,000 in the east midlands, 80,000 in the north-west, 400,000 in the south-east and 100,000 in the south-west. Employment has fallen by over 500,000 in the south, 170,000 in the west midlands, 80,000 in Humberside and 73,000 in the north-west. The vacancy levels become worse month by month. The tightening labour market means that there are 23 people chasing every vacancy in the south-east. Over 40 are chasing every jobcentre vacancy in London and 33 are chasing every such vacancy in the west midlands.

Many of the unemployed fear that they will never work again. Men in their 40s who are made redundant are told that they are too old even to be considered for a job. Women who have raised a family and look forward to returning to work are now unable to obtain qualifications or work. Many young people have neither work nor training. They are denied even the basic right to benefit. They are shunted from dole queue to training queue to benefit queue. It is not these people who have let down the Government: it is the Government who have let down these people.

The most significant part of the Chancellor of the Exchequer's statement was that unemployment will continue rising for many months to come. Surely we are entitled to ask in a Budget debate before an election, "How many months and how many people?" Will the number of unemployed increase by 200,000, 300,000 or 500,000? Until when will unemployment rise? Will it be until the middle of the year, the autumn or the end of the year? While there remain hundreds of thousands in fear of losing their jobs, unemployment will blight their prospects and the prospects of the entire economy.

The impact of such a devastating situation in the labour market is not confined to the personal tragedy of those who are made redundant or unemployed: it is felt throughout the economy. The housing market is not merely stagnant: it is declining. The February edition of Greenwell tells us that there was a 12 per cent. fall in construction activity up to the end of 1991. It is forecast that new construction will fall by 10 per cent. this year. No wonder that the January edition of Building, the chief magazine of the building industry, stated: It is not the job of this magazine to tell its readers how to vote, but imagine if construction companies had the franchise —and had to exercise it in the best interests of their shareholders. Their vote would be cast for Labour. That is what is being said within the construction industry.

Why is the housing market failing? The answer is that, while householders, especially in the south, are worried about their jobs, they will not sell and they will not buy. Even those who are not at risk find the market too cold and stay out.

Take consumer spending. A report soon to be published by PA Consultants on the problems of consumer spending says: Three factors are responsible for undermining the prospect of consumer-led recovery: rising unemployment, fear of unemployment for those still in work and falling house prices. The message is clear. If there is no stop to rising unemployment, there is no start to economic confidence. If there is no beginning to economic confidence, there is no end to the recession. That is why unemployment today is a problem not just for the unemployed but for the whole country. That is why, when we propose measures to tackle unemployment or to halt the rise in business bankruptcies, we do so not just out of compassion for the unemployed, not just out of sympathy for those who have sweated and toiled to build up businesses and now see them collapsing, but because helping the unemployed is helping all of us. That is the message of the Budget.

But the crime is not simply one of omission. It is not just that the Government have refused to increase help for the unemployed in the recession: they have cut it drastically. Since 1988, the Department of Employment's budget has been cut by more than £1·5 billion. Last year, as unemployment soared, the special measures for the unemployed were cut again. So outstanding has the Secretary of State been at the helm of the Department of Employment, so enthusiastic has he been in its cause, that now apparently, according to the most recent newspaper reports, the Tories want, if re-elected, to abolish the Department of Employment. Is not that typical of the Tories? Instead of abolishing unemployment, they abolish the Department responsible for helping the unemployed.

The Government's response, announced last June as an emergency measure, was employment action. I believe that there are barely 20,000 people on that scheme—less than half last month's rise in unemployment. Why is the Government's response to unemployment so pathetic? As the chairman of the Conservative party, in one of his rare moments of frankness, said: The question is how much unemployment affects people's voting intentions and I don't think that there is very much evidence that it has all that much impact. The reason why there were no measures in the Budget to help the unemployed is that the Conservative party does not care about the unemployment.

Consider the absurdity of not acting on unemployment. There are now 150,000 homeless people in Britain, possibly as many as 2 million in substandard homes, and thousands of families in bed-and-breakfast accommodation costing hundreds of millions of pounds. Only today, the King's Fund report into health care in London showed that buildings were so dilapidated that some were fit only for demolition.

Spending on school buildings in Britain is less than half that of the OECD average. There is a backlog of billions of pounds-worth of repairs. Our pensioners often live in cold and badly insulated accommodation, forced to pay high heating bills because they cannot afford the capital cost of insulation. Thousands of environmental improvements are needed in our local communities. Councils want to carry out the work, but cannot find the resources to do so When we know that unemployment is damaging our economy, when we know that the unemployed are anxious, if not desperate, to work, and when we have a collapsing infrastructure in need of urgent repair, what sense does it make to cut help to the unemployed rather than marry the unused human resources with the unmet needs of our community?

For the past three years, however, the Government have not merely been cutting help to the unemployed: they have betrayed our future in the cuts in training and skills. They have instigated a savage programme of cutting investment in training and skills. For months, the Secretary of State has denied that that is so. For months, he has told us in debates in the House that no such cuts have taken place. But on Tuesday, the same day as the Budget, the Government published their up-to-date estimate of the labour force.

Not only did it show the catastrophic drop in employment, not only did it show that, on international definitions of unemployment, there are nearer 3 million than 2.5 million unemployed: it showed that, during the past three years, 112,000 places have been cut from Government training programmes for young people and the unemployed. As some of my hon. Friends have already said, all over Britain programmes have collapsed, trainees are being turned away, and training providers are being closed. What other party anywhere in Europe but the British Conservative party would be so cruel and short-sighted as to cut investment in training just when it is most needed?

What would we say about a private sector company which borrowed money to pay higher wages and then cut investment in training? We would say that it was feckless, irrational and bound to fail—and that is what we say about the Government. Now, in the depths of the recession, we should be increasing investment in training and skills so that, when recovery comes, it is British firms which benefit, British order books which are full, and Britain which is prosperous.

I shall ask the Secretary of State a specific question. On 6 December 1989, the then Secretary of State for Employment made a speech in which he set out what he called a framework of national objectives, within a time frame that he described as essential for the upgrading of skills. The Government set themselves a specific target for the upgrading of skills. By the end of 1995, all employers, of whatever size, were to be given the kitemark seal of approval as investors in people—the sign of training excellence.

It is now March 1992. How many employers have received the kitemark? There are about 100,000 major employers, so, although the target was for employers of all sizes, will the Secretary of State tell us how many of the 100,000 major employers have so far received the kitemark? I shall tell the House the answer, as the right hon. and learned Gentleman is being coy. In the whole country, 38 employers have received the kitemark. Is that right or is that wrong? It is right. That is why, under present Tory policies, this country is so ill prepared.

The Tories cannot understand that modern economy requires an active partnership between Government and industry to make it successful. All through the 1980s, they have ignored the importance of industrial policy, and of building a strong industrial base. Even now, in the depths of the recession, what do they do to stimulate the economy? Again they attempt to cut taxes in order to boost consumption, while at the same time cutting investment in training—and this time they borrow to fund the tax cuts.

That is the worst of Thatcherism without even Thatcherism's compensation of fiscal rectitude. One might almost say that it is Margaret without Prudence. That is the difference between the present leader of the Conservative party and his predecessor. For the right hon. Member for Finchley (Mrs. Thatcher), the task was to manage her political party in the interests of her political philosophy. For the present Prime Minister, the management of his party is his political philosophy.

The problem for the Conservatives is that they have lost Thatcherism but they have not yet found Majorism. Let me spare them the trouble of looking for it: it does not exist. That is why they have spent the past 18 months attacking Labour rather than advancing their own ideas. They do not dare to defend the philosophy of the first 11 years of their Government, and they have not had the wit to put anything in its place.

The Conservatives cannot escape their record, because we shall not allow them to escape it. The country will be reminded of the 13 years in which the Tories have given us two recessions in a decade, ending with the fastest rising unemployment, the lowest output .and the sharpest fall in investment in Europe. And they have the nerve to call that an economic miracle. We shall remind people of the 13 years in which the Government sold our public services, spent the proceeds but still inflicted higher charges on our consumers. We shall remind the public of the 13 years in which the Government have received—alone out of all previous Governments and of all present competitors—the God-given bonus of North sea oil: £100 billion flowing into the Exchequer but squandered on a boom that is now a bust. That is the record of 13 years of Conservative government.

The Government talk of being the taxpayers' friend. Let me remind them that it was not the Labour party that doubled value added tax but the Tory party; that it was not the Labour party but the Tory party that introduced the most hated and least competent tax of modern times —the poll tax that has cost every family in Britain £1,000, not to pay it but just to get rid of it.

The questions that the country now asks are these: when the Tory party has got things so wrong, why should the public now trust it to get things right? Why should we trust those who created unemployment now to reduce it? Why should we trust those who scorned the manufacturing base of this country now to build it? Why should we trust those who cut training now to increase it? Why should we trust Tory party politicians—who, even as the mistakes were being made, congratulated themselves on an economic miracle—now to rectify those mistakes rather than repeat them?

That is why it is time for change, time to turn back the rising tide of unemployment and put our people back to work. It is time to make investment in the education of our children and our work force, so that this country can succeed. It is time to reinstate the national health service as a great public service of which we can be proud. It is time to give our young people hope and to give our elderly the comfort in old age that they deserve. It is time to build Britain as a land of opportunity for all our people, not just for a privileged few. It is also time to recognise that we are not just individuals, stranded in helpless isolation, but members of a community. It is time, in other words, for change—time to turn this Government out, and time for Labour.

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames 9:32 pm, 12th March 1992

This has at times been a heated debate, which I suppose is hardly surprising on the eve of an election, but it is at least worth recalling that there is one measure in the Budget which commands the support and respect of Members in all parts of the House. I refer to the decision to bring expenditure and taxation together in future Budgets. I believe that that measure has the support of the Labour party. It is a far-reaching reform which will provide us with a much more rational system and much better control of public spending. Above all, it will lessen much of the pressure for tax reliefs, which have given us such a complex and unnecessarily complicated tax system. I was pleased that a number of right hon. and hon. Members felt able to support that measure.

The hon. Member for Sedgefield (Mr. Blair) managed to drag up a few quotations from business men and implied that this Budget had not been well received by the business community. I do not know what newspapers the hon. Gentleman has been reading. Obviously, he does not regard the Confederation of British Industry as a representative organisation in any way. The director-general of the CBI said: This is a prudent and positive Budget—reflecting the prime importance of keeping inflation under control. That was the verdict of the CBI and also of the Association of British Chambers of Commerce and of the Institute of Directors. The Budget has been well received by manufacturing industry.

It was a Budget for sustained recovery and prosperity. It will enable the people of this country to do as well in the 1990s as they did in the 1980s. Above all, it was a Budget to deliver real help to business. Within the scope available to me, I was able to cut car tax by half. I know that that was welcomed by my hon. Friends and some Opposition Members. It was also warmly welcomed in the car industry. Many dealers and manufacturers have already said that the halving of car tax is having a good impact on business. That measure seems to have been warmly welcomed. The Society of Motor Manufacturers and Traders said: The Chancellor has appreciated the importance of boosting the domestic car market. We believe about 70,000 extra sales should result. That was the verdict of the SMMT which, unlike the hon. Member for Sedgefield, regards the Budget as good for business and for the motor industry in particular.

The chief economic adviser of the Retail Motor Industry Confederation said: This is the stimulus the industry needed. I was also able to give immediate help to industry and businesses, big and small, by ensuring that no businesses will see a real increase in business rates this year. That will help some 600,000 business premises in this country. All my hon. Friends know that that measure has been welcomed by small business men and women up and down the country. It is exactly what business was looking for. The Association of British Chambers of Commerce said: Relieving the burden on business of UBR increases will be of enormous help to … businesses, particularly in the South.

Mr. Robert Hughes:

The Chancellor has made great play about how business is happy about the changes to the UBR. Will he tell the House who introduced it in the first place?

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

We are keeping the UBR. We believe that it will be much better for business in the long run. It is warmly welcomed by business and by the CBI and the Institute of Directors. They know that it stops irresponsible Labour local authorities from bankrupting businesses by extravagant spending.

I was also able to make other detailed changes which will be of particular help to small businesses. I was able to alleviate the VAT penalty regime—something that small business organisations have been asking for for years. At modest cost, I was able to take the radical measure of exempting small businesses entirely from inheritance tax. That means that in future businesses will not have to be broken up on death. That was welcomed by the Union of Independent Companies, which said: The greatest thing in the Budget is the encouragement to the owners of independent businesses that they can keep their companies intact. The Labour party talks about all its plans for business. There is no enthusiasm in the business community for the Labour party. The hon. Member for Sedgefield tried to pretend that business has not supported the Budget. It has supported the Budget, and the statements from business are clear. Business men appreciate low inflation and the fall in interest rates. They know that the fall in interest rates in the past year will eventually feed through into increased consumer demand, which the hon. Member for Sedgefield mentioned. Like his hon. Friend the Member for Dunfermline, East (Mr. Brown), the hon. Member for Sedgefield has obviously not read what was said by the director general of the Retail Consortium, who said: The retail sector was looking for a Budget which would boost consumer confidence and revitalise small business while retaining sound financial good sense. We believe this Budget fits the bill. The chairman of Dixons—I hesitate to quote this—said: It was an intelligent and sensible Budget … a confidence building Budget.

Photo of Mr William McKelvey Mr William McKelvey , Kilmarnock and Loudoun

Is the Chancellor aware of what the Scotch Whisky Association said about the incredible 28p increase on the price of a bottle of whisky? Although I understand that the Chancellor has said from the Dispatch Box that he would fight extremely hard to harmonise the prices of spirits in Europe, he knows perfectly well that he may not be there to do that—the strong chance is that he will not. He has lumbered my hon. Friends on the Labour Front Bench with the prospect of going to Europe to argue for the harmonisation of whisky prices with one hand tied behind their backs. It was certainly stupid of the Chancellor to put 28p on the price of a bottle of whisky because that widens discrimination against spirits.

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

As the hon. Gentleman said, I have made clear my absolute determination to fight for the Scotch Whisky Association in Europe and made clear our position. That is a very good reason why the Scotch Whisky Association will back and support the Government.

The economy is poised for recovery. That is not just my view. Take the view of the chairman of Williams Holdings, one of the largest industrial groups in this country, who said: I think we are coming out of the recession … the election will signal the end of the recession. Take the words of the chairman of the Confederation of British Industry's distributive trades panel, which today published some very good figures showing the seventh successive month, according to the distributive sales survey, in which retail sales have increased. The chairman said: There has clearly been an underlying increase in retail trade since last summer, making the seventh successive increase recorded by the survey. The Government know and have done what is required to build a strong economy. Low inflation was not mentioned by the hon. Member for Sedgefield, by the shadow Chancellor or by the hon. Member for Dunfermline, East. It was not mentioned by the Leader of the Opposition when he spoke in the Budget debate or when he made his party conference speech.

Low inflation underpins everything. Only low inflation can enable business to compete, can enable savers to put money away with confidence, and finance investment. There can be no prosperity and no sustainable recovery without low inflation. Low inflation is what the Government have delivered. Inflation is now below the European Community average. We have also had some excellent figures for producer output inflation—an extremely important measure of competitiveness and a very good indicator of future inflation. We confidently expect that inflation will continue to fall throughout this year, and producer price inflation is expected to decline to 1½ per cent. by mid-1993. That will be the lowest level achieved for decades, as a result of the policies pursued by the Government.

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

I shall give way in a minute.

Low inflation provides the crucial building block for the growth that Britain can enjoy in the 1990s. The facts are that we have low inflation and our unit labour costs are expected to grow at a lower and slower rate in 1992 than those of any other of our large competitors.

Photo of John McFall John McFall , Dumbarton

Following the question of my hon. Friend the Member for Kilmarnock and Loudoun (Mr. McKelvey), the Scotch Whisky Association does not support the Government. I have a press release in my hands which states that the association reacts with "anger and dismay" to what the Government have done. The increase of 28p on the price of a bottle favours the institutionalised discrimination against Scotch whisky which has happened in Europe. The Chancellor has been lucky to meet representatives of the Scotch Whisky Association.

If the Chancellor is unfamiliar with Scotland's most famous product, I will give him a bottle of the best malt whisky from my constituency—Speakers Choice whisky. That will at least give him some consolation on the morning of 10 April.

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

There is certainly one thing wrong with what the hon. Gentleman said—the best malt whisky comes from Orkney and nowhere else. The hon. Gentleman appears to be saying that it is wrong to index the duty on alcoholic drinks. If that is Labour party policy, it is extremely interesting to know.

Photo of Mr Bill Walker Mr Bill Walker , North Tayside

I would not wish the House or the country to be misled. When the Government came to office in 1979, the Scotch whisky industry was in the doldrums. It had massive stocks and was running up losses. It was in difficulty and was laying people off. Today, the Scotch whisky industry is in much better shape and, although there may be differences about some aspects of taxation, there is no question but that the Scotch whisky industry wants a Conservative Government, just like the rest of the people.

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

My hon. Friend is absolutely right, but he might have added that the Scotch Whisky Association has done very well in the past decade in the sense that the duty on Scotch whisky has not been indexed.

I want to deal with one point in particular that was raised by the hon. Members for Sedgefield and for Dunfermline, East and by the right hon. and learned Member for Monklands, East (Mr. Smith). They said that they felt that it was wrong to borrow to finance tax cuts, as they put it. They seem to have completely forgotten that that was exactly what their right hon. Friend the Member for Leeds, East (Mr. Healey) did in 1978. In 1978 he cut taxes and increased the PSBR to a level well above that which it will reach next year in today's money. Furthermore, he not only introduced a reduced rate band but cut 1p off income tax at the same time—yet the Opposition are anxious to call us irresponsible. The hon. Member for Dunfermline, East said that it would be all right if the PSBR were used for investment. He seems to have ignored one simple fact: public sector investment in the coming year will total about £30 billion—more than the PSBR itself.

It is right to cut taxes because our tax cuts are sustainable. They will last and they can be afforded. This country is now in a strong financial position. We have one of the lowest ratios of debt-to-GDP of any industrialised country in the world. We have the lowest ratio of debt-to-GDP of any country in the European Community other than Luxembourg. We are the only G7 country to have reduced its debt-to-GDP ratio in the past decade. We are going to maintain our position as a country with a low debt-to-GDP ratio, and that is not endangered by what we are proposing in the Budget.

What has been remarkable has been the way in which the Opposition have been so coy about their own policies. They told us that they were going to present an alternative Budget. One might have thought that the moment to present an alternative Budget was during the Budget debate in the House—but no, they do not want to do that. Even before the election was called, the right hon. and learned Gentleman had made it clear that he was not going to announce his alternative Budget until next week, after the Budget debate had finished. The Opposition are always afraid to have an argument. They told us that they were going to spell out their spending plans on a costed basis, but they also dropped that. Why could the right hon. and learned Gentleman not come to the debate on the Budget to present his alternative Budget? We shall be waiting with interest—

Photo of Mr John Smith Mr John Smith , Monklands East

As the right hon. Gentleman is interested in public debate, will he engage in a face-to-face debate with me on television?

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

Yes, absolutely, I will—delighted.

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

Any time. As the right hon. and learned Gentleman knows, he is always inviting me up to debates with him run by his daughter at Glasgow university. I have debated with him many times and I shall look forward to doing so during the general election.

Photo of Mr John Smith Mr John Smith , Monklands East

I am grateful to the Chancellor for accepting that public invitation. Why is he willing to do so while the Prime Minister is frightened?

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

I hope that when the right hon. and learned Gentleman presents his alternative Budget he will tell us how many of the spending pledges that his spokesmen are promising up and down the country—bribes to every interest group—will be included in it and how many have been dropped.

Again and again, we have heard Labour Members repeating Labour's pledges. The hon. Member for Sedgefield was at it again today, and so was the hon. Member for Dunfermline, East. They seem to have forgotten that the right hon. and learned Gentleman has said that the Labour party has made only two spending pledges. The hon. Member for Dunfermline, East was going on about the underfunding of education and health. He was not prepared to say whether, if there was underfunding, he would increase taxes or borrowing. What is the mixture of the two?

The right hon. Member for Manchester, Gorton (Mr. Kaufman) said of a Labour Government: Over our first Parliament we will increase Britain's aid budget to the United Nation's target of 0·7 per cent. of GNP. That alone would cost £2½ billion—two thirds as much again as the net effect of all the proposals that I announced in the Budget on Tuesday. Let us have an answer from the Labour party: is that still Labour party policy or not? Will that be included in the alternative Budget?

The hon. Member for Livingston (Mr.Cook) has spoken of "pouring" money into the health service. He said of a Labour Government: in the first year we shall start to tackle underfunding and shall continue to do so year on year."—[Official Report, 21 October 1991; Vol. 196, c. 673.] I hope that those spending pledges will be included in the alternative Budget.

The Budget is good for the economy and good for the country. It will serve the nation well in one other important respect: it crystallizes the great divide between this side of the House and the Benches opposite. It is the choice between higher taxation and lower taxation. The Labour party has always believed in high taxation. In office, Labour has always increased taxation, and Labour has always voted against our tax cuts from whatever level we were reducing them.

Labour Members have learnt to mouth the language of free markets, but they have not yet learnt the value of lower taxes, or the importance of incentives and the expansion of choice. For them, a tax cut is a give-away. It is revealing, is it not, how they do not seem to realise that money belongs to the people who have earned it? That is why they use the word "give-away".

It is right that the country should have the opportunity to judge the shallowness of the Labour party's conversion from policies which always in the past led them to penal taxation and financial crisis. The right hon. Member for Islwyn (Mr. Kinnock) did not do much for his credibility with his response to the Budget speech. He had written as speech for another Budget—for a Budget of the kind of fiscal irresponsibility that we normally get from Labour Governments. In his rambling speech the right hon. Gentleman could not make any response to the 20p band. He did not seem to know his own policies.

The Leader of the Opposition judged himself well in the famous interview that he gave Mr. Naughtie on the "World at One". The transcript of the interview says: Opposition Leader asked what would you do? Opposition Leader says: 'To cut a long story short we don't know'. The right hon. Gentleman did not know what to say in response to the 20p income tax band. He had had seven days in which to think about it, and he has had seven years in which to frame his policies and to develop a tax policy. We know what had to happen. The right hon. and learned Member for Monklands, East had to go on television seven hours later and tell the country what the Labour party's policy actually was.

Now we know. We know what conviction lay behind the solemn pledge by the Leader of the Opposition on 16 May 1990. He said: We have no design, no intention, for raising the taxation of the huge majority of ordinary people working for their living. Yet, at the first moment, the Opposition are determined to oppose the tax reductions proposed by the Government.

Opposition Members have attempted to give us lectures on borrowing. They seem to forget that in Labour's previous five years in office borrowing averaged 6½ per cent. of gross domestic product a year. That is £40 billion each year. When the right hon. Member for Leeds, East was Chancellor of the Exchequer, borrowing reached its peak at 9 per cent. of GDP—almost £60 billion in today's money. The process stopped only when our financial affairs could be handed over to the International Monetary Fund.

The Leader of the Opposition now seeks to present himself as a man who thinks that he can manage a market economy and manage capitalism better than the Conservative party can. That seems a little strange for a man who, only a few years ago, did not believe in markets or in the capitalist system. Just three years before he became Leader of the Opposition, he said about our free enterprise system—[Interruption.] Opposition Members do not like this. The Leader of the Opposition said: The answer to the weakness, injustice and rottenness of capitalism is not more of the same. That is like trying to clean a wound with handfuls of filth. The Leader of the Opposition has changed his mind on the European Community, on nuclear defence and on nationalisation. He does not know which way he is facing. He does not know what he believes in any longer. He tells us that the Government are borrowing too much money, yet a few years ago he urged the Government to borrow more money.

The right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), a lifelong borrower, dismissed the public sector borrowing requirement as "a meaningless totem". It is astonishing that the Labour party does not even know what its own policy is. A few weeks ago, it published a pocket policy guide. What is one of the key policies advocated in it? It is a lower rate of income tax—a reduced rate band. We know that the Leader of the Opposition does not write his own party's policy. From his answer in the Budget debate, it seems that he does not read it either because he does not know what his party's policy is.

The key point is that the Labour party has shown that it does not believe in fighting inflation. Every tough and difficult policy decision that we have made to get inflation down has been opposed by the Labour party. Every time we have cut taxes, the move has been opposed by the Labour party. When we cut the basic rate of tax from 30p to 29p, the Labour party voted against it. When we cut it from 29p to 27p, the Labour party opposed it. They have opposed every reduction that we have made.

This country has been faced with a clear choice. We have delivered a Budget that is good for recovery and good for the British people because it cuts taxes. The people have a clear choice, and in four weeks' time we shall know that the policies put forward by the Labour party have been rejected.

Question put:

The House divided: Ayes 351, Noes 208.

Division No. 108][9. 59 pm
AYES
Adley, RobertCartwright, John
Alexander, RichardCash, William
Alison, Rt Hon MichaelChalker, Rt Hon Mrs Lynda
Allason, RupertChannon, Rt Hon Paul
Amery, Rt Hon JulianChapman, Sydney
Amess, DavidChope, Christopher
Amos, AlanChurchill, Mr
Arbuthnot, JamesClark, Rt Hon Alan (Plymouth)
Arnold, Jacques (Gravesham)Clark, Dr Michael (Rochford)
Ashby, DavidClark, Rt Hon Sir William
Aspinwall, JackClarke, Rt Hon K. (Rushcliffe)
Atkins, RobertColvin, Michael
Atkinson, DavidConway, Derek
Baker, Rt Hon K. (Mole Valley)Coombs, Anthony (Wyre F'rest)
Baker, Nicholas (Dorset N)Coombs, Simon (Swindon)
Banks, Robert (Harrogate)Cope, Rt Hon Sir John
Barnes, Mrs Rosie (Greenwich)Cormack, Patrick
Batiste, SpencerCouchman, James
Beaumont-Dark, AnthonyCran, James
Bellingham, HenryCurrie, Mrs Edwina
Bendall, VivianCurry, David
Bennett, Nicholas (Pembroke)Davies, Q. (Stamf'd & Spald'g)
Benyon, W.Davis, David (Boothferry)
Bevan, David GilroyDay, Stephen
Biffen, Rt Hon JohnDevlin, Tim
Blaker, Rt Hon Sir PeterDickens, Geoffrey
Body, Sir RichardDicks, Terry
Bonsor, Sir NicholasDorrell, Stephen
Boscawen, Hon RobertDouglas-Hamilton, Lord James
Boswell, TimDover, Den
Bottomley, PeterDunn, Bob
Bottomley, Mrs VirginiaDurant, Sir Anthony
Bowden, A. (Brighton K'pto'n)Dykes, Hugh
Bowden, Gerald (Dulwich)Eggar, Tim
Bowis, JohnEmery, Sir Peter
Boyson, Rt Hon Dr Sir RhodesEvans, David (Welwyn Hatf'd)
Braine, Rt Hon Sir BernardEvennett, David
Brandon-Bravo, MartinFairbairn, Sir Nicholas
Brazier, JulianFallon, Michael
Bright, GrahamFarr, Sir John
Brooke, Rt Hon PeterFenner, Dame Peggy
Brown, Michael (Brigg & Cl't's)Field, Barry (Isle of Wight)
Bruce, Ian (Dorset South)Finsberg, Sir Geoffrey
Buck, Sir AntonyFishburn, John Dudley
Budgen, NicholasFookes, Dame Janet
Burns, SimonForman, Nigel
Burt, AlistairForsyth, Michael (Stirling)
Butler, ChrisForth, Eric
Butterfill, JohnFowler, Rt Hon Sir Norman
Carlisle, John, (Luton N)Fox, Sir Marcus
Carlisle, Kenneth (Lincoln)Franks, Cecil
Carrington, MatthewFreeman, Roger
Carttiss, MichaelFrench, Douglas
Fry, PeterLester, Jim (Broxtowe)
Gale, RogerLloyd, Sir Ian (Havant)
Gardiner, Sir GeorgeLloyd, Peter (Fareham)
Garel-Jones, Rt Hon TristanLord, Michael
Gill, ChristopherLuce, Rt Hon Sir Richard
Gilmour, Rt Hon Sir IanLyell, Rt Hon Sir Nicholas
Glyn, Dr Sir AlanMcCrea, Rev William
Goodhart, Sir PhilipMcCrindle, Sir Robert
Goodlad, Rt Hon AlastairMacfarlane, Sir Neil
Goodson-Wickes, Dr CharlesMacGregor, Rt Hon John
Gorman, Mrs TeresaMacKay, Andrew (E Berkshire)
Gorst, JohnMaclean, David
Grant, Sir Anthony (CambsSW)McLoughlin, Patrick
Greenway, Harry (Ealing N)McNair-Wilson, Sir Michael
Greenway, John (Ryedale)McNair-Wilson, Sir Patrick
Gregory, ConalMadel, David
Griffiths, Sir Eldon (Bury St E')Major, Rt Hon John
Griffiths, Peter (Portsmouth N)Malins, Humfrey
Ground, PatrickMans, Keith
Gummer, Rt Hon John SelwynMaples, John
Hague, WilliamMarland, Paul
Hamilton, Rt Hon ArchieMarlow, Tony
Hamilton, Neil (Tatton)Marshall, John (Hendon S)
Hampson, Dr KeithMarshall, Sir Michael (Arundel)
Hanley, JeremyMartin, David (Portsmouth S)
Hannam, Sir JohnMates, Michael
Hargreaves, A. (B'ham H'll Gr')Maude, Hon Francis
Hargreaves, Ken (Hyndburn)Mawhinney, Dr Brian
Harris, DavidMaxwell-Hyslop, Sir Robin
Haselhurst, AlanMayhew, Rt Hon Sir Patrick
Hawkins, ChristopherMellor, Rt Hon David
Hayes, JerryMeyer, Sir Anthony
Hayhoe, Rt Hon Sir BarneyMiller, Sir Hal
Hayward, RobertMills, Iain
Heath, Rt Hon EdwardMitchell, Andrew (Gedling)
Heathcoat-Amory, DavidMitchell, Sir David
Heseltine, Rt Hon MichaelMoate, Roger
Hicks, Mrs Maureen (Wolv' NE)Molyneaux, Rt Hon James
Hicks, Robert (Cornwall SE)Monro, Sir Hector
Higgins, Rt Hon Terence L.Montgomery, Sir Fergus
Hill, JamesMorris, M (N'hampton S)
Hind, KennethMorrison, Sir Charles
Hordern, Sir PeterMorrison, Rt Hon Sir Peter
Howard, Rt Hon MichaelMoss, Malcolm
Howarth, Alan (Strat'd-on-A)Neale, Sir Gerrard
Howarth, G. (Cannock & B'wd)Nelson, Anthony
Howe, Rt Hon Sir GeoffreyNeubert, Sir Michael
Howell, Rt Hon David (G'dford)Newton, Rt Hon Tony
Howell, Ralph (North Norfolk)Nicholls, Patrick
Hughes, Robert G. (Harrow W)Nicholson, David (Taunton)
Hunt, Rt Hon DavidNicholson, Emma (Devon West)
Hunt, Sir John (Ravensbourne)Norris, Steve
Hunter, AndrewOnslow, Rt Hon Cranley
Hurd, Rt Hon DouglasOppenheim, Phillip
Irvine, MichaelOwen, Rt Hon Dr David
Irving, Sir CharlesPage, Richard
Jack, MichaelPaice, James
Jackson, RobertParkinson, Rt Hon Cecil
Janman, TimPatnick, Irvine
Jessel, TobyPatten, Rt Hon Chris (Bath)
Johnson Smith, Sir GeoffreyPatten, Rt Hon John
Jones, Gwilym (Cardiff N)Pattie, Rt Hon Sir Geoffrey
Jones, Robert B (Herts W)Pawsey, James
Jopling, Rt Hon MichaelPeacock, Mrs Elizabeth
Kellett-Bowman, Dame ElainePorter, Barry (Wirral S)
Key, RobertPorter, David (Waveney)
Kilfedder, JamesPortillo, Michael
King, Roger (B'ham N'thfield)Powell, William (Corby)
King, Rt Hon Tom (Bridgwater)Price, Sir David
Kirkhope, TimothyRaffan, Keith
Knight, Greg (Derby North)Raison, Rt Hon Sir Timothy
Knight, Dame Jill (Edgbaston)Rathbone, Tim
Knowles, MichaelRedwood, John
Knox, DavidRenton, Rt Hon Tim
Lamont, Rt Hon NormanRhodes James, Sir Robert
Lang, Rt Hon IanRiddick, Graham
Lawrence, IvanRidley, Rt Hon Nicholas
Lee, John (Pendle)Ridsdale, Sir Julian
Leigh, Edward (Gainsbor'gh)Rifkind, Rt Hon Malcolm
Lennox-Boyd, Hon MarkRoberts, Rt Hon Sir Wyn
Roe, Mrs MarionThatcher, Rt Hon Margaret
Rossi, Sir HughThompson, Sir D. (Calder Vly)
Rost, PeterThompson, Patrick (Norwich N)
Rowe, AndrewThorne, Neil
Rumbold, Rt Hon Mrs AngelaThornton, Malcolm
Ryder, Rt Hon RichardThurnham, Peter
Sackville, Hon TomTownend, John (Bridlington)
Sainsbury, Rt Hon TimTownsend, Cyril D. (B'heath)
Sayeed, JonathanTracey, Richard
Scott, Rt Hon NicholasTredinnick, David
Shaw, David (Dover)Trippier, David
Shaw, Sir Giles (Pudsey)Trotter, Neville
Shaw, Sir Michael (Scarb')Twinn, Dr Ian
Shelton, Sir WilliamVaughan, Sir Gerard
Shephard, Mrs G. (Norfolk SW)Viggers, Peter
Shepherd, Colin (Hereford)Waldegrave, Rt Hon William
Shepherd, Richard (Aldridge)Walden, George
Shersby, MichaelWalker, Bill (T'side North)
Sims, RogerWalker, Rt Hon P. (W'cester)
Skeet, Sir TrevorWaller, Gary
Smith, Sir Dudley (Warwick)Walters, Sir Dennis
Smith, Tim (Beaconsfield)Ward, John
Soames, Hon NicholasWardle, Charles (Bexhill)
Speed, KeithWarren, Kenneth
Speller, TonyWatts, John
Spicer, Sir Jim (Dorset W)Wells, Bowen
Spicer, Michael (S Worcs)Wheeler, Sir John
Squire, RobinWhitney, Ray
Stanbrook, IvorWiddecombe, Ann
Stanley, Rt Hon Sir JohnWiggin, Jerry
Steen, AnthonyWilkinson, John
Stern, MichaelWilshire, David
Stevens, LewisWinterton, Mrs Ann
Stewart, Allan (Eastwood)Winterton, Nicholas
Stewart, Andy (Sherwood)Wolfson, Mark
Stewart, Rt Hon Sir IanWood, Timothy
Stokes, Sir JohnWoodcock, Dr. Mike
Sumberg, DavidYeo, Tim
Summerson, HugoYoung, Sir George (Acton)
Tapsell, Sir PeterYounger, Rt Hon George
Taylor, Ian (Esher)
Taylor, Rt Hon J. D. (S'ford)Tellers for the Ayes:
Taylor, Sir TeddyMr. David Lightbown and
Tebbit, Rt Hon NormanMr. John M. Taylor.
Temple-Morris, Peter
NOES
Adams, Mrs Irene (Paisley, N.Campbell-Savours, D. N.
Allen, GrahamCanavan, Dennis
Anderson, DonaldCarlile, Alex (Mont'g)
Archer, Rt Hon PeterCarr, Michael
Armstrong, HilaryClark, Dr David (S Shields)
Ashdown, Rt Hon PaddyClelland, David
Ashley, Rt Hon JackClwyd, Mrs Ann
Banks, Tony (Newham NW)Cohen, Harry
Barnes, Harry (Derbyshire NE)Cook, Frank (Stockton N)
Barron, KevinCook, Robin (Livingston)
Battle, JohnCorbett, Robin
Beckett, MargaretCorbyn, Jeremy
Beith, A. J.Cousins, Jim
Bell, StuartCox, Tom
Bellotti, DavidCrowther, Stan
Benn, Rt Hon TonyCryer, Bob
Bennett, A. F. (D'nt'n & R'dish)Cummings, John
Benton, JosephCunliffe, Lawrence
Bermingham, GeraldCunningham, Dr John
Bidwell, SydneyDarling, Alistair
Blair, TonyDavies, Rt Hon Denzil (Llanelli)
Blunkett, DavidDavis, Terry (B'ham Hodge H'l)
Boateng, PaulDixon, Don
Boyes, RolandDobson, Frank
Bradley, KeithDoran, Frank
Bray, Dr JeremyDuffy, Sir A. E. P.
Brown, Gordon (D'mline E)Dunnachie, Jimmy
Brown, Nicholas (Newcastle E)Dunwoody, Hon Mrs Gwyneth
Bruce, Malcolm (Gordon)Eastham, Ken
Caborn, RichardEdwards, Huw
Callaghan, JimEnright, Derek
Campbell, Menzies (Fife NE)Evans, John (St Helens N)
Campbell, Ron (Blyth Valley)Fatchett, Derek
Faulds, AndrewMartlew, Eric
Fearn, RonaldMeacher, Michael
Field, Frank (Birkenhead)Meale, Alan
Fisher, MarkMichael, Alun
Flannery, MartinMichie, Bill (Sheffield Heeley)
Flynn, PaulMitchell, Austin (G't Grimsby)
Foot, Rt Hon MichaelMoonie, Dr Lewis
Foster, DerekMorgan, Rhodri
Fraser, JohnMorley, Elliot
Fyfe, MariaMorris, Rt Hon A. (W'shawe)
Garrett, John (Norwich South)Morris, Rt Hon J. (Aberavon)
George, BruceMowlam, Marjorie
Gilbert, Rt Hon Dr JohnMullin, Chris
Godman, Dr Norman A.Murphy, Paul
Golding, Mrs LlinOakes, Rt Hon Gordon
Gordon, MildredO'Brien, William
Gould, BryanO'Hara, Edward
Graham, ThomasO'Neill, Martin
Grant, Bernie (Tottenham)Orme, Rt Hon Stanley
Griffiths, Win (Bridgend)Parry, Robert
Grocott, BrucePatchett, Terry
Hain, PeterPendry, Tom
Hardy, PeterPowell, Ray (Ogmore)
Harman, Ms HarrietPrescott, John
Hattersley, Rt Hon RoyPrimarolo, Dawn
Heal, Mrs SylviaQuin, Ms Joyce
Healey, Rt Hon DenisRadice, Giles
Henderson, DougRedmond, Martin
Hinchliffe, DavidRees, Rt Hon Merlyn
Hoey, Kate (Vauxhall)Reid, Dr John
Hogg, N. (C'nauld & Kilsyth)Richardson, Jo
Home Robertson, JohnRobertson, George
Hood, JimmyRobinson, Geoffrey
Howarth, George (Knowsley N)Rooker, Jeff
Howells, GeraintRoss, Ernie (Dundee W)
Howells, Dr. Kim (Pontypridd)Rowlands, Ted
Hoyle, DougRuddock, Joan
Hughes, Robert (Aberdeen N)Sheerman, Barry
Hughes, Roy (Newport E)Sheldon, Rt Hon Robert
Hume, JohnShore, Rt Hon Peter
Illsley, EricShort, Clare
Ingram, AdamSkinner, Dennis
Janner, GrevilleSmith, Andrew (Oxford E)
Johnston, Sir RussellSmith, C. (Isl'ton & F'bury)
Jones, Barry (Alyn & Deeside)Smith, Rt Hon J. (Monk'ds E)
Jones, Martyn (Clwyd S W)Smith, J. P. (Vale of Glam)
Kaufman, Rt Hon GeraldSnape, Peter
Kilfoyle, PeterSoley, Clive
Kinnock, Rt Hon NeilSpearing, Nigel
Kumar, Dr. AshokSteel, Rt Hon Sir David
Leadbitter, TedSteinberg, Gerry
Leighton, RonStrang, Gavin
Lestor, Joan (Eccles)Straw, Jack
Lewis, TerryTaylor, Mrs Ann (Dewsbury)
Litherland, RobertThompson, Jack (Wansbeck)
Livingstone, KenTurner, Dennis
Lloyd, Tony (Stretford)Wallace, James
Lofthouse, GeoffreyWalley, Joan
Loyden, EddieWardell, Gareth (Gower)
McAllion, JohnWareing, Robert N.
McAvoy, ThomasWatson, Mike (Glasgow, C)
McFall, JohnWelsh, Michael (Doncaster N)
McKelvey, WilliamWilliams, Rt Hon Alan
McLeish, HenryWilliams, Alan W. (Carm'then)
Maclennan, RobertWinnick, David
McMaster, GordonWise, Mrs Audrey
McWilliam, JohnWorthington, Tony
Madden, MaxWray, Jimmy
Mahon, Mrs AliceYoung, David (Bolton SE)
Marek, Dr John
Marshall, David (Shettleston)Tellers for the Noes:
Marshall, Jim (Leicester S)Mr. Frank Haynes and
Martin, Michael J. (Springburn)Mr. Allen McKay.

Question accordingly agreed to.

resolved,That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance; but this Resolution does not extend to the making of any amendment with respect to value added tax so as to provide—

  1. (a) for zero-rating or exempting any supply;
  2. (b) for refunding any amount of tax;
  3. (c) for varying the rate of that tax otherwise than in relation to all supplies and importation; or
  4. (d) for relief other than relief applying to goods of whatever description or services of whatever description.

Photo of Mr Bernard Weatherill Mr Bernard Weatherill , Croydon North East

I am now required under Standing Order No. 50(3) to put, without further debate, the Question on each of the remaining ways and means motions. My understanding is that hon. Members do not require a Division until we get to motion No. 23; in which case, with the leave of the House, I will put the motions before that together.