Budget Resolutions and Economic Situation

Part of the debate – in the House of Commons at 8:22 pm on 22 April 2002.

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Photo of Michael Fabricant Michael Fabricant Conservative, Lichfield 8:22, 22 April 2002

At one point in his life, the hon. Gentleman was a vicar. On his small income as a vicar, would he have wanted to pay a further 1 per cent? I suspect not. Can the Church of England afford to pay a further 1 per cent? I shall not dwell on that issue in too much detail.

My hon. Friend Mr. Whittingdale talked about the issues that were not addressed in the Chancellor's speech, for example, the climate change levy. He said that nothing had been done to cut red tape, which costs firms between £12 billion and £15 billion each year. As a debutee—if not a debutante—of the use of the internet, I can certainly say that the suggestion made by the Secretary of State for Trade and Industry will not save much time for business.

Some 617,000 hours are spent filling in forms for the Government. Last year, new legislation was introduced every 26 minutes of the working day. That legislation must be understood by people working in industry. While they are trying to understand it and fill in the forms resulting from it, they are not out there getting the jobs and the business that we need to keep small firms running well.

I was disappointed that there were no new initiatives or incentives to improve the rollout of broadband. Much has been said about broadband. I have said many times in the Chamber that, when the Government speak about broadband, other Governments would say that they are comparatively narrow band. If broadband is to be extended into rural areas—I know that the hon. Member for Rhondda is keen for that to happen in his constituency, and he is right—there need to be tax incentives. The Budget included nothing on that.

Nothing was said either about profit-related pay. Some 40,000 people are employed by the John Lewis Partnership. Time and again, year after year, the Labour party promised that it would restore profit-related pay for non-share options. The people who work for the John Lewis Partnership, Unipart and Baxi Boilers are real stakeholders. They are part of co-operatives, and one would think that the Labour party would welcome that, but not so. The word "socialism" is not allowed to be used any more. Labour is renowned for not keeping its promises, and it has not.

To return to the subject of national insurance, as I said in an intervention on my hon. Friend the Member for Maldon and East Chelmsford, the increase in national insurance will prove to be a double whammy—mark my words. From 2003, people will have to spend another 1 per cent. of their incomes on employees' national insurance, firms will have to pay a further 1 per cent. on employers' national insurance, and council tax will inevitably rise, because the vast expense incurred by councils is primarily on their wages bills. Even a small district council such as Lichfield will suffer a £78,000 rise in its wages bill, and the bill in Staffordshire will increase eightfold. That is a double whammy.

When council taxes go up, Labour Members with marginal seats—I am not referring to the hon. Member for Rhondda—will know why. It will be because of this Budget. In the first Budget of the last Parliament—I shall not dwell on this subject for long, Mr. Deputy Speaker, or I will be out of order—there was a huge windfall tax on pensions. Pensions have failed to reach their expected target and suffered badly.

The care home sector is in crisis. Something in the order of 50,000 care beds have closed in the past couple of years, and I think that that number will increase. The care home sector is very labour intensive, and so it should be. The increase in national insurance contributions will be an additional 1 per cent. cost.