Orders of the Day — Finance Bill

Part of the debate – in the House of Commons at 8:21 pm on 30th April 2002.

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Photo of Robert Smith Robert Smith Opposition Deputy Chief Whip (Commons) 8:21 pm, 30th April 2002

The hon. Gentleman should wonder why, having included such proposals in the Budget, the Chancellor suddenly discovered that he did not understand the procedures of the House and the workings of national insurance, and therefore had to make emergency changes to the business of the House to make his plans feasible. That is typical of the tortuous circles that the Government are having to negotiate—the hoops through which they are having to jump—to avoid the fact that they made certain promises with which they hoped to buy the last general election. They tried to keep the back door open in order to do what we told them they would have to do—find extra money for the health service. If they had not tried to close the front door, we would not be having these rather farcical discussions about their having to use national insurance.

Others wish to speak, and although we could go on for ever I think the aim is to finish at a sensible hour. I apologise to the Government for the fact that, in the interests of time, I may concentrate more on concerns my constituents will have than on all the good news in the Budget and the Bill.

My hon. Friend Mr. Jack spoke of efforts to bring about a simpler tax system and a more effective way of dealing with big policy changes that Governments want to make. They said that fundamental shifts in taxation should be separate from day-to-day tidying up of tax legislation. Any progress in that regard would be welcome. In the last Parliament we tended to sit until much later and we often had debates in the early hours. Mr. Clarke and others used to make rather good speeches at that time of night about the need to simplify and improve the tax system.

I enjoy Finance Bill debates in which we move away from the political aspects and where there is some good cross-party recognition of ways in which we could improve tax and finance arrangements to the general benefit of the country and the political system. We still have not got there, and I urge all with greater minds than mine who have applied themselves to the task to keep up the good work. That would be much appreciated by those who must currently fill in some of the most complex tax returns, and interpret some of the most complex signals sent by the Budget.

Others have touched on issues that will affect my constituency. A measure of the complexity of all this is the fact that, in the Bill, we are still trying to sort out the aggregate tax that the Government claimed to have sorted out last year. It would be nice if they admitted that they could perhaps restrain themselves, step back and look again at the impact of that tax.

The assessment of the environmental impact focused very much on the local impact of quarrying, in terms of environmental costs attributed to it. However, tax is being collected to the centre and being distributed throughout the country. Those from whom the tax is collected do not necessarily see the benefit of undoing any potential environmental damage.

This Budget poses an additional problem. Because of difficulties involved in the introduction of the tax, it will now affect large boulders from quarries. That will hit coastal defences. Given increasing flood threats and the growing need for such defences, it seems perverse to impose a major tax on the cost of building them. Even if the Treasury cannot look at the global nature of the tax, perhaps it could look at the margins. It has made other exemptions. Mr. Salmond mentioned the extra costs affecting the breakwater at Peterhead. The rock used will be transported only three miles from the quarry. Adding to the cost of the breakwater strikes me as an unfortunate side-effect of the tax.

As has been said, fuel duty is being kept down this year. That is bound to be welcomed in the north of Scotland—indeed, in the whole of Scotland. As it is so far from any markets, any move to reduce costs and avoid extra burdens is welcome. I hope the Treasury will resist pressure from Dr. Palmer to extend fuel duty to parts of the economy such as agriculture, fishing and, indeed, heating.

I am pleased about the proposal to charge foreign hauliers for road use, and to level the playing field between them and our hauliers. Some find it frustrating that it may not be implemented for several years. It is indeed frustrating that the announcement has been made so often, but implementation is still only on the horizon.

Haulage is important to my constituents and to the north and north-east of Scotland because, as I have said, we are further from the markets. Another important industry in my constituency is agriculture. A wider debate on finance and the general state of the economy still concerns the high pound versus the euro. Nothing in the Bill explains how the Government will square the circle, and help to remove some of the pressure.

There is still the possibility of access to agrimonetary compensation. If the Treasury could allow the Department for Environment, Food and Rural Affairs access to the money this year, it would redress some of the hangovers of the foot and mouth outbreak. I suppose it would help if DEFRA asked the Treasury, but I hope the Treasury will tell it that it can use the money this year, although it may not be able to in future. The Government should try anything that is available to them to repair the damage of last year's major foot and mouth outbreak.

One of the frustrations for the farming sector is that we are in the European Union, with free trade in agricultural products and a common system of agricultural support, yet the Government deny UK farmers access to the support that is available to competition abroad. UK taxpayers are in effect paying for foreign farmers to take jobs away from agriculture in this country. It would be a great gesture if the agrimonetary compensation were accessed in the last year in which it could be accessed.

We have already touched on national insurance versus tax. It goes back to one of the sad things about the way in which the Government approached the last general election. There is common cause between Liberal Democrat and Labour Members about the need to invest in the health service. Some of us are disappointed that the Government are looking to launch the first year of major investment in the health service when we had hoped to be in the fifth year of it, but at least there is common agreement about that investment.

The Government are in danger, however, of undermining the message that we tried to get across to the public at the election—that investment must be paid for through fair taxation. By not making that point at the election and by trying to use back-door methods to find the funding, the Government could undermine the credibility of the core message that we need to get across. The Government have a last chance to ensure that there is effective delivery of health care. For the sake of future generations, they have a major responsibility not to destroy the fundamental belief in an NHS free to users and paid for out of public funds. This is the last chance to get it right. Having made a mess of how to raise the money, I hope that they do not make a mess of how to spend it.

As the Paymaster General knows, I have major concerns about the Government's proposals for North sea taxation. In many ways, they were most effectively put by Mr. Blizzard. I hope that the Treasury will look at his speech extremely carefully and I hope that the tenor of his arguments have convinced those on the Treasury Bench that he is expressing a genuine concern; it is not a matter of political point scoring. Many in the industry had thought that there was much greater understanding in the Treasury of the complexities of the financial arrangements that apply in the North sea than appears from its presentation of the Budget.

I welcome the promise of the Chief Secretary to put in the Library detailed workings of the Government's assumptions and calculations. I hope that those detailed workings will go some way to explaining the figures that the Paymaster General gave in her reply to the Budget debate last Monday.