Orders of the Day — Finance Bill

Part of the debate – in the House of Commons at 8:47 pm on 10 July 1997.

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Photo of Tim Loughton Tim Loughton Conservative, East Worthing and Shoreham 8:47, 10 July 1997

After all the hours that I have spent listening to the debate on the Budget and the Finance Bill, both in the Chamber and in my office, it is clear that the Budget lends itself to a great deal of metaphor and analogy. For me, the best analogy is a cake—a large cake, liberally deluged with bucketfuls of rich, squidgy chocolate fudge. On first sight, it provokes applause and slavering on the Government Benches, but it will bring only regret later, even to those who have sampled just a modest slice. It is a veritable death by chocolate fudge. It is a cake that we are told that we can have and eat as well. We have been treated to some extraordinary sights by the new proprietors of the cake shop on the Labour Benches who are churning out fudge.

We have been told that the abolition of advance corporation tax is so harmless that no one will suffer. It is so harmless that, in fact, as we were told by an hon. Member yesterday, no one understands—least of all Labour Members, who are not even able to spell it—that the effect on local authorities will be considered but that the shortfall will not necessarily be made up. Fudge and no fudge.

We were promised a Budget that rewards long-term investment, but the irony is that pension funds have been pilfered in the short term for short-term gain, so that prospective pensioners will face long-term pain from the holes in their pension funds when they need to draw on them when they come to retire. Fudge today, gone tomorrow.

Surely the most extraordinary sight of all over the past week has been that of the Chief Secretary to the Treasury, who last week and again today in Treasury Questions said—it was repeated by the Prime Minister yesterday—that the Government have measured the claimed success of their debut Budget by its effect on the stock market. Who would credit it, least of all those in the City? Perhaps I should at this point declare an interest as a director of a fund management company for some years.

We are now faced with the sight of new Labour, new stockbrokers' friend. I presume that the rather sparse turnout on the Labour Benches for this debate is due to the fact that the City is empty because many have gone to Hyde park and Labour Members have flooded to tailors in the City to be kitted out in the loudest chalk stripes and pinstripes going. I confidently predict that, in a matter of weeks, the little pink ribbons attached to our coat-hangers in the cloakrooms downstairs will be a sea of City bowlers as the new stockbrokers' friends on the Labour Benches claim their places.

Let us indulge ourselves for a few minutes, play the Government's game and consider what the stock market has done over the past eight days between the Budget and the close of business today. Let us look at what that temple of Mammon, as the Labour party would have us know the City, has done since Labour's first Budget. Despite all the hype, the Financial Times all-share index has gone up by 0.26 per cent. since the close of business the day before the Budget. That is not terribly impressive, but it has gone up all the same.

Let us look at some of the biggest losers. The biggest fall on the stock market over the past eight days has been in shares in the engineering sector, which have fallen by more than 5.5 per cent. Is that any surprise when we read the headline in the Financial Times—we know that everything in the Financial Times must be true if it has anything to do with the Government— Strong pound hits manufacturingBiggest monthly fall in engineering output for a decade".