Orders of the Day — Finance Bill

Part of the debate – in the House of Commons at 3:49 pm on 30th April 2002.

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Photo of John Bercow John Bercow Shadow Chief Secretary to the Treasury 3:49 pm, 30th April 2002

I beg to move, To leave out from 'That' to the end of the Question, and to add instead thereof:

'this House declines to give a Second Reading to the Finance Bill because the provisions contained in its two volumes and 488 pages increase the burden of taxation on important sectors of the economy;
fail to make adequate commitments about taxation and personal allowances in future years;
and will have a negative impact on competitiveness and the attractiveness of the UK as a location for investment.'

I begin by drawing attention to my declaration in the Register of Members' Interests. Specifically, I do occasional work on staff communication skills with employees of J P Morgan and Deutsche Bank.

I can say without exaggeration, and with the assent of my right hon. and hon. Friends, that the Chief Secretary's speech in winding up the Budget debate last Tuesday was widely viewed as the most peculiar parliamentary performance of this Parliament, and probably of the past five years. The right hon. Gentleman was overcome with hysteria and propelled into such flights of uncontrolled fury that many Conservative Members feared that Vesuvius had exploded all over again. I am an observant as well as a compassionate chap and I therefore recognise that it was a terrifying experience for the Chief Secretary to try to cope with the forensic dissection of the Budget that my right hon. and learned Friend Mr. Howard unleashed. Nevertheless, let me say with all due courtesy that it is reassuring to observe that this afternoon he has returned to some semblance of normality.

Let me continue as I have begun, in a generous spirit and with some words of welcome for specific measures in the Finance Bill. We welcome the tax credit for research and development by large companies, even though it has been announced for the third time. We welcome the cut in corporation tax for small firms and the modest reform of the basis for the payment by companies of VAT. However, they and other not unwelcome features of the Budget must be viewed in the wider context of other, damaging imposts.

I refer specifically to an impost of which business is painfully aware: the £6 billion a year extra taxation with which it has been encumbered in the past five years and the additional burden of £5 billion a year in regulatory costs. Those burdens impede companies' ability to win orders and create jobs.

The Bill must be viewed in the light of the fact that new regulation that affects business has been introduced and continues to be introduced every 26 minutes of the working day. It must be viewed in the light of the fact that since the Government took office, Britain has plunged from ninth to 19th on the world competitiveness scoreboard. It must also be considered in the light of the fact that productivity growth is below that of the United States of America, under the Labour Government, when it was consistently above it under the previous, Conservative Government.