Budget Resolutions and Economic Situation — Amendment of the Law

Part of the debate – in the House of Commons at 5:53 pm on 25th March 2013.

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Photo of Brian H Donohoe Brian H Donohoe Labour, Central Ayrshire 5:53 pm, 25th March 2013

I became a Member of this House in 1992, and I have to say that this is the worst Budget I can remember—that is, since last year’s omnishambles of the pasty tax and the caravan tax. It will do nothing to reverse the decline of the economy, nothing for jobs, nothing for taxpayers and nothing for those forced on to benefits by this Government’s policies. The February unemployment figures show that any decline in unemployment during the previous three-month period is now faltering.

In my constituency, the picture is bleak. There has been an increase in unemployment, including among those aged over 50, and the number of people on jobseeker’s allowance for more than 12 months has also increased. Those in their 50s, in particular, will suffer when they retire because they will be unable to build up an occupational pension and will have to rely on the state pension.

I recently visited one of my constituency’s Work programme providers. Advisers there told me that most of the jobs they were helping people into were part time and paid the minimum wage, involving basic skills and offering limited prospects. However, the bigger problem is that the number of people who have been unable to find work after 12 months has grown by more than a third during the past year.

The Chief Secretary to the Treasury, who is in his place, might be interested to hear about the effects of the Government’s policy on excise duty. The Chancellor has knocked a penny off a pint of beer, and he made a big deal of it. When I heard about that, I thought back to the days of Denis Healey, when a penny off a pint meant something. Today, it is the equivalent of 0.2% or 0.3% off the cost of a pint. In other words, someone would have to buy 200 to 300 pints to get an extra pint for their money, so it is hardly going to have a huge impact on the pub trade.

As far as I am aware, there are no wine producers in my constituency—although there are some who brew at home—but Scotch whisky is a major industry, as it is for the UK as a whole. It is worth £4 billion a year and employs more than 35,000 people across Scotland, yet the Chief Secretary and his Treasury cohorts have done nothing whatsoever to support it. When I entered Parliament in 1992, the average price of a bottle of Scotch was £10.42, of which VAT and excise duty accounted for 68%. The average price after this Budget will be £12.89, of which VAT and excise duty will account for 78%. In other words, since 1992 the price of a bottle of Scotch has increased by £2.47, but the amount of VAT and excise duty has increased by £2.95. The industry is therefore producing whisky more cheaply, yet the customer has to pay more. The beer industry complains about this issue, but imagine the uproar if it had to bear the same tax burden as the Scotch whisky industry has to bear.

The Chancellor has responded to public pressure on fuel duty, but has totally ignored air passenger duty. The aviation and tourist industries have complained—as has the travelling public, in mass numbers—about this unfair penalty on those who want to travel.