Amendment of the Law

Part of Ways and Means – in the House of Commons at 5:20 pm on 30th November 1993.

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Photo of Alan Beith Alan Beith Shadow Spokesperson (Treasury) 5:20 pm, 30th November 1993

I am sorry that the Minister chose to intervene, because I think that he could have given the Government a little bit more of an opportunity. I hope that that is not the last word in the course of the next few days' debate. Clearly, that offer cannot remain open indefinitely. I am not prepared to introduce so valuable a Bill and simply see it blocked and defeated by the Government. That would be a waste of private Members' time, when there are many other issues contending for it.

I want to see such a Bill through. It would be very harsh on small businesses to have to wait another year for anything to happen, because small businesses are facing the difficulties now. I therefore urge the Minister to have expeditious consultations so that he or his colleagues can come back to me in the next two or three days to give a clear answer, bearing in mind that there will be time—between the day when private Members' Bills have to be announced and the proceedings on the Bill-for quite a lot of further consultations. I do not intend to press him further now, but I ask him to take it away and perhaps come back to me over the next few days.

I want to look briefly at some of the spending aspects of the Budget. I shall start with housing. There is nothing new in the way of housing investment. We could have used housing investment to tackle the housing crisis, the homelessness problem and get the building industry moving. The construction industry is showing none of the signs of recovery that are fleetingly apparent in some other parts of industry. It needs to be set to work and we need the homes. With its social housing problem, the Housing Corporation would have been an urgent priority for greater investment, not restricted investment.

Let me give another example of where the Government could have helped. It was announced this afternoon that the Ministry of Defence can sell housing stock to deal with its budget problems. In other words, it can use the receipts of asset sales—sales of houses—for new investment, or even current spending for all I know. Why cannot local authorities use exactly the same form of income—capital receipts in the public sector—to build more houses and renovate existing houses? Surely the doctrinal admission today that it is all right for the Ministry of Defence must mean that it is all right for the Department of the Environment and local authorities. I suspect that it does not mean that, but we should be told why. Local authorities could be adding to essential social housing.

As to transport, there is still not enough new investment. We were pleased to hear the announcement about the west coast main line, but that is a private sector investment project. I welcome the bringing in of more private sector investment, and I hope that there will be a great deal more of it, but we need more public sector investment in London Underground. People have had to be led out of tunnels in the dark because the system cannot keep going, so old and decrepit is its cabling. We need significant new public investment in London Underground if that job is to be dealt with.

The same applies in other parts of the public transport system. I noticed the press release in which the Secretary of State for the Environment—I do not know why it was him—referred to the fact that there were transport projects among the creation of public assets amounting to many billions of pounds over the next three years. When I looked at it more carefully, I discovered that, sure enough, the Minister had counted the Jubilee line yet again. The Jubilee line has been counted in every one of the past three ministerial statements about public expenditure. Every time it comes up, we have the Jubilee line. We have only just got the announcement that we can go ahead, so sure enough it is counted all over again. It is amazing what one can do with figures, but what one cannot do with figures is regenerate a public transport system that is desperate for real, new investment.

As for health, I do not believe that even the figures that we have address the colossal waste in the national health service which has arisen from the huge expansion of managers, management and administration in the health service. The Government knew from the start that they were devising a system riddled with contracts, purchasers, providers, buyers and a lot of people shuffling paper about. The whole NHS system depends on people shuffling paper about, so it employs people at the highest possible salaries to shuffle it about. There are huge increases in costs in the NHS. They have been generated not by new patient care, better equipment or new highly qualified staff carrying out medical procedures, but by more and more managers and administrators.

Let us look briefly at education. Hidden away in the education proposals are provisions which raid the capital budgets of local authority schools to give money to opted-out schools. Not satisfied with the situation in which so many schools—the vast majority—have decided that they do not want to opt out, the Government intend to raid their budgets to give more capital to opted-out schools. That is a disgraceful piece of bribery at the expense of the people who refused the bribe, and it is outrageous at a time when education investment is so badly needed.

The Chancellor made a comment about student grants and asked why the bus drivers of today should pay through their taxes to finance the lawyers of tomorrow. I have another question for him about student grants. Why should not the lawyers of today be paying through their taxes for the sons and daughters of today's bus drivers to get into higher education? That is the real question. Why should more and more people be disbarred from higher education through fear of high debts and the inadequacy of the grants system and the combined grant and loan system to provide a reasonable basis on which they can go through higher education?

Another departmental area with which I shall deal is the Home Office. The great element in the Home Office budget is building more prisons, not preventing more crimes. The more prisons are built, and the more people are put into them, the more crime one assumes has been committed. We are supposed to be stopping crime in the first place so that people are not mugged or injured and do not have grievous bodily harm inflicted on them. Simply having more people in prison does not solve that problem. It shows that the Home Office has not got its priorities right. The building of prisons is very good for my constituency as it is the biggest expanding industry that we have had in my constituency in modem times, and it plays a role in the local economy, but it is not a good crime prevention policy: it is a way of dealing with the consequences of not having prevented crimes and not an objective of policy in itself.

Various measures in the Budget are welcome, or appear to be at first sight—measures such as the enterprise investment scheme, if it works. Unfortunately, there is a trail littered with disappointment of schemes designed to encourage venture investment. I hope that the venture capital trust will not prove to be another of those. It is well worth the Government's effort to try to find new ways of matching available venture capital to businesses that could use it.

Other welcome measures are the pensioners bond—although we do not know enough about the terms to be sure—and the limited child care provision. Many more working women could benefit from other forms of help with child care—for example, tax relief. Many youngsters would benefit if they had access to nursery education. Those are useful measures and we shall consider them in more detail as the debate proceeds.

We have not seen in the Budget a solution to the really big deficits that we face. The public sector deficit is certainly not sorted out once and for all. It will not be sorted out until we get more people back to work and recovery is at a level that ensures that many people are paying taxes instead of receiving benefits. That would require measures that the Budget does not contain.

We have an investment deficit. We are living on the capital that was invested and built up by previous generations, and are not renewing it. The record of decline in our public sector net worth is appalling. The Budget does not solve that problem.

We have a terrible trade deficit, and I was alarmed to hear the Chancellor set such store by the growth in consumer spending. We cannot get out of our economic difficulties in the long term by relying on growth in consumer spending, because it invariably results in a worse trade deficit for this country. Even in the depths of recession we had a bad trade deficit, and we are still not addressing that issue.

We also have a fairness deficit. It has been built up over the years of the Conservative Government, with the benefits to top rate taxpayers and the pressure on lower income people, much augmented by the Budget that 'we had earlier in the year, and not offset sufficiently by the measures in this Budget. It is a fairness deficit which leads people to believe that taxation must be bad and wrong in principle because they are not taxed fairly.

There are justifiable reasons for taxation: there are things that Governments have to do. But taxation has to be fair and people have to see that it is doing the job which justifies levying it in the first place. The Government have added hugely to the tax burden and vastly to the tax system without doing the things which justify taxation in the first place. That is a mark of the Budget's failure.