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

If the hon. Gentleman will forgive me, I will not because I am answering some of the points that he made.

By definition, the firms and sectors that pay the tax will not be those that will be reimbursed from the revenue. Manufacturing, as a whole, will pay more than its share of the tax, and the money will flow back to different sectors, mainly the service sector. There will be a net distribution of wealth from manufacturing to the service sector. I hope that hon. Members with large manufacturing concerns in their constituencies—I certainly have some in mine—will bear that in mind before they advance the case for the tax on environmental grounds alone.

The estimates on which the Budget is based are extremely shaky. My right hon. Friend the Member for Haltemprice and Howden (Mr. Davis), who has told me that he cannot attend this part of the debate, put forward the good idea that the National Audit Office should audit and check parts of the Budget that it is excluded from auditing at present.

The Government have given in on unemployment. They used to assume that it would simply be flat. They have now agreed that it is more realistic to accept the National Audit Office assumption of an increase in unemployment over the next few years. I am afraid that very little in the Budget will prevent that 400,000 increase in unemployment that the NAO is projecting.

All the Government schemes in the world will do nothing unless the economy generates real new jobs, and the Government keep taxes down and reduce the cost of employing people. I do not believe that the Government have understood that message. If they have understood it, they have not acted on it. They are squandering the golden economic legacy that we left to them, and the country as a whole will pay the price.