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5.32 pm
Mr. Andrew Smith (Oxford, East): No speech from the Chief Secretary to the Treasury is complete without the mandatory attack on my hon. Friend the Member for Bristol, South (Ms Primarolo). He just managed to get it in at the end. He did not, of course, give the complete story of my indirect interchange via the remote screens on "Newsnight" with Lord Desai. The point which I was making was that I had come fresh from talking to my constituents in the Blackbird Leys community centre and that I had much more confidence in what they had to say about the economy and about their being in touch with the realities of job insecurity and downward mobility under this Government than Lord Desai, in what he was quoted as saying.
As we are on the subject of people who have been appointed to their respective positions by parties on both sides of the House and as the Chief Secretary quotes Lord Desai, I will simply respond by referring to Patrick Minford, who has been appointed not as a peer but as an independent adviser to the Chancellor of the Exchequer. Mr. Minford is not simply criticising. He is saying that the Chancellor should be sacked; he is saying that the Chancellor must go. Ministers should therefore be very careful about quoting Lord Desai at us. One never knows what Patrick Minford will say next.
As for the Chief Secretary's claims about the Government's economic record, the fact is that Britain has gone from 13th to 18th in the world prosperity league. Under this Government, we have the worst record on job generation in Europe, our share of total European investment has gone down and growth has averaged just 1.9 per cent.--1.7 per cent., if we exclude oil. During the Conservative party's term in office, we have had a worse record on inflation than any country in Europe bar Italy, so we will take no lectures from the right hon. Gentleman and his friends about relative performance compared with Europe. They have nothing to be proud of and they should be apologising to this country's people for their record, not boasting about it.
On Second Reading, I said that the Bill was profoundly disappointing, even if the sins of omission were greater than those of commission. I said that it had all the hallmarks of a tired and frightened Government who have no new ideas to revitalise a sluggish economy and no vision to bring together a divided society or to embark on the training and investment revolution that Britain needs.
During the Bill's progress through the House and Committee, we have exposed the fact that this is not a Bill for jobs, investment or fairness. It does nothing to advance the opportunity for everyone to make the most
of his or her potential with a true stake in society. It does nothing to build a strong economy or a fair society, still less to recognise how the one depends on the other.As I said, however, those are sins of omission rather than of commission.
If we judge the Bill for what it contains, we apply a number of categories. There are the things that we welcomed, including the 1p tax cut, increased personal allowances, the lower savings rate and the introduction of housing investment trusts. There are the things that we supported in principle and sought, with some success, to improve in practice, including the landfill levy and the reform of loan relationships. There are the things about which we remain concerned, including the burdens of self-assessment, especially on the self-employed and small businesses. There are the things that we opposed, such as the extension of personal allowances to residents of the European Economic Area.
There were also victories. A notable victory was the Government's commitment--the Chief Secretary should not laugh at this; we were pleased that they gave this concession--to uprate in future years the blind person's allowance in line with inflation. That is a long overdue and welcome measure.
Taking it all together, it would be both contrived and churlish to pretend that there is not a good deal more in the Bill that we support than we oppose. On that basis, we shall possibly disappoint some Conservative Members and certainly disappoint their colleagues in Conservative central office, by not voting against the Bill.
Under this Government, there have been two significant developments in relation to the Bill's proceedings, aside from its contents, which give us cause for concern. We have, first, the phenomenon of the shrinking Chief Secretary. I have been considering the statistics of Chief Secretaries' contributions to Finance Bill Standing Committees. I find that, for the first decade of Conservative Government, it was normal for a Chief Secretary to notch up more than 20 contributions during those proceedings.
Peter Rees comes top in terms of contributions, with31 during the proceedings in 1983 and 1984. When Chief Secretary, the Prime Minister managed 28 contributions in 1987-88, and the right hon. Member for Kingston upon Thames (Mr. Lamont) managed 21 in 1989-90. But since then, a decline has set in. The right hon. Member for Enfield, Southgate (Mr. Portillo) managed 13 in 1992-93 and 18 in 1993-94, but what happened then? Last year, the right hon. Member for South Thanet (Mr. Aitken) managed only seven and, this year, the present Chief Secretary made just three contributions. Perhaps he had other things on his mind.
Mr. Robert Ainsworth (Coventry, North-East):
They were very short contributions.
Mr. Smith:
It is interesting to note that, even as Chief Secretaries' contributions to Finance Bills' proceedings become smaller and smaller, so the Finance Bills become bigger and bigger.
That is the second serious cause for concern. Parliament has added more than 1,300 pages of primary legislation to taxes Acts in the past five years, and this evening we shall be adding a further 400 pages. It is incumbent on us all in the House--it is a genuine cross-party concern--
to find ways in which the process can be simplified, legislation can be made more purposive, perhaps better expressed, and the processes of scrutiny can be improved. As taxes legislation is rewritten, as has been agreed, we will have to consider ways in which hon. Members and the public can contribute to the process.
What will the Finance Bill be remembered for?Will we remember the first cut in the basic rate of income tax for seven years? I think not. That memory will be tarnished by the Government's imposition of the equivalent--as the Chancellor of the Exchequer admitted--of a 7p rise in the basic rate, and more than20 increases in taxation since the general election.
Will the Finance Bill be remembered as a Bill for business? After all, in his Budget speech, the Chancellor engaged in a little theatrics, trailing the income tax cut with the cut in the small companies' rate of corporation tax. Considering how much difference the cut makes to companies and given that they have realised that the VAT threshold has not been uprated in line with inflation and business rates have risen by 5 per cent. more than inflation, I do not think that the Bill will be remembered as great for business.
Could the Finance Bill be remembered as somehow, in the fantasies of Conservative Members, echoing Lord Lawson's tradition of omitting one tax every Budget? Unfortunately, it cannot, because the Government have introduced a new tax on average in almost every Budget, and certainly in every other Budget. Four new taxes have been introduced in five Finance Acts since the general election, along with 23 tax increases--from the Government who at the election promised to cut taxes year on year. The Bill will not be remembered for tax cutting. Nor will it be remembered, as I have said, as a simplifying Finance Bill.
The Finance Bill might be remembered for the fact that we have had the third or the fourth attempt at getting self-assessment right. We still have a great deal of concern, however, that self-assessment will not work in the straightforward, simple and unburdensome way that Conservative Members seem to think it will. If the Government will not, even at this late stage, reconsider our arguments for the delay of the introduction of self-assessment for a year, I would at the very least urge them to redouble their provision of advice and support, especially for the self-employed--and small businesses--who will find the introduction of new scheme very onerous, along with, according to the Red Book, the extra £850 million that they will have to pay, which we have debated before.
I suppose that the Bill might be remembered for the extensive debate on loan relationships. We believe that it was entirely desirable that that complicated area of legislation was reviewed, made consistent and codified. The way in which the matter was handled--there was late consultation, a whole flood of very late and significant amendments without the Opposition or interested parties outside the House being given the opportunity to comment properly--was wholly unsatisfactory. The experience of the House time and again is that, if we legislate in haste, we have to repair the damage later.I will be very surprised if we do not have to revisit the issues of loan relationships and--for the fourth or fifth time--self-assessment, in future Finance Bills.
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