Orders of the Day — Budget Resolutions and Economic Situation

Part of the debate – in the House of Commons at 9:24 pm on 10th March 1999.

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Photo of David Heathcoat-Amory David Heathcoat-Amory Conservative, Wells 9:24 pm, 10th March 1999

My hon. Friend the Member for South-West Hertfordshire (Mr. Page) said that he was initially rather impressed by the presentation of the Budget speech, but became progressively disillusioned as he read the detail. I completely agree. We have learned from the Government that the packaging may be good, but the substance always turns out to be disappointing. The rhetoric of the Budget speech is beginning to fade, and we are faced with the reality of the Budget as set out in the Red Book. We have always known that this is a tax-raising Government—they broke all their promises on tax within a few months of taking office in their first Budget—but that reputation was confirmed in yesterday's Budget statement.

The Chancellor had an opportunity to repair the damage of the first two Budgets, because, as a result of the earlier tax increases, tax revenue is buoyant. He could have reversed earlier tax increases, but he did not. Therefore, if all the Budgets are taken together, the Government are committed to a £40.7 billion tax increase during this Parliament. That figure is derived from Government documents and was not materially altered by the Budget we heard yesterday. Therefore, the supposed tax reductions, and the other handouts and benefits, are funded from other tax increases in the same Budget or from previously announced tax increases that will take effect in the coming financial year.

Naturally, the Chancellor did his best to try to disguise those facts, but they have been exposed by Conservative Members in the debate today. My right hon. Friend the Leader of the Opposition started the process earlier today when he pointed out that the Chancellor had boasted a lot about the new measures for enterprise and business, while saying nothing in his speech about a much bigger tax increase—the £240 million extra national insurance contributions from the self-employed. That measure is coyly referred to in the Budget report as a reform of the contribution system.

A helpful press release provided a list of some of the enterprise measures. Some are well meaning and may have merit and we shall scrutinise them carefully when we come to the Finance Bill, but they are essentially tinkering at the margin. A £20 million venture capital challenge is all very exciting, but it hardly offsets the £25 billion extra burden of business taxation that the Government have already levied.

Nor have the Government learned the lesson that one of the best things that Government can do for businesses, especially small businesses, is to stay out of the way. My hon. Friend the Member for North Norfolk (Mr. Prior) and others referred to the regulatory burden and pointed out that businesses usually do best when they have least to do with Whitehall and meddlesome Ministers who have no business experience. To take just one example, the working time directive is contained in 72 pages of guidance, and even that is called a basic guide. The minimum wage regulations take up 112 pages. It is not surprising that the British Chambers of Commerce have estimated that the extra regulations so far in this Parliament will impose an extra burden on British businesses of £5 billion every year. If the Government really wanted to help business, they could start by simplifying those regulations. Instead, they have decided to set up a new body called the Small Business Service, which will give businesses advice on how they can comply with all the regulations. Businesses do not want new bodies: they want simplified regulations and fewer of them.