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Provisional Collection of Taxes
Motion made, and Question,
Mr. Deputy Speaker:
I now call on the Chancellor of the Exchequer to move the motion entitled "Amendment of the law". It is on that motion that the unified Budget debate will take place today and on succeeding days. The remaining motions will not be put until the end of the Budget debate next week and they will then be decided without debate. After the Finance Bill has been brought in, the House will be invited to dispose of proceedings on a motion dealing with public expenditure, which will have been debated along with the Budget resolutions.
Motion made and Question proposed,
That, pursuant to section 5 of the Provisional Collection of Taxes Act 1968, provisional effect shall be given to the following motions:--
put forthwith, pursuant to Standing Order No. 50(2), and agreed to.
(a) Spirits, and wines of equivalent strength (rates of duty) (motion No. 2);
(b) Hydrocarbon oil (rates of duty and rebate) (motionNo. 7);
(c) Tobacco products (rates of duty) (motion No. 9);
(d) Vehicle excise duty (increase in general rate) (motion No. 12).--[Mr. Kenneth Clarke.]
That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance; but this Resolution does not extend to the making of any amendment with respect to value added tax so as to provide--
(a) for zero-rating or exempting a supply, acquisition or importation;
(b) for refunding an amount of tax;
(c) for varying any rate at which that tax is at any time chargeable; or
(d) for any relief, other than a relief which--
(i) so far as it is applicable to goods, applies to goods of every description, and
(ii) so far as it is applicable to services, applies to services of every description.--[Mr. Kenneth Clarke.]
4.49 pm
Mr. Tony Blair (Sedgefield): We have heard a Budget that was very, very big on boasts, but let us look, one by one, at the facts of what the Chancellor of the Exchequer said. The one advantage of what has happened in the past 24 hours is that the Opposition are perhaps a little better prepared than normal on exactly what those facts are. We shall go through every one of the claims and test them out--first, tax. [Interruption.] I know that Conservative Members may not like to hear the facts, but they are going to get them from us, if not from the Chancellor.
One thing that we now know for certain is that taxes will be higher at the next election than they were at the last. The Conservative party, which fought the election on the promise that it would cut tax, will, after all the changes that have been made today, leave the average British family £2,120 worse off in tax. The Chancellor announced a crackdown on tax cheats. I think that he should start with the Conservative party.
There have been 22 Tory tax rises. Mortgage tax relief has been cut, the married couple's allowance has been cut--and not made up for by what he did today. National insurance has been raised, and not compensated for by what he did today. VAT was raised--we did not hear much about VAT, did we? It was as if that was never touched. The Chancellor said, of course, that the Conservatives have reduced the burden of tax. If one takes into account all the Tory taxes, the burden of tax is greater now for the average family than it was.
On what we thought was coming, I was going to say that, as a result of the Budget, the Government have subtracted 2p from the equivalent of 7p that they have put on the standard rate of tax, which equals a 5p rise. I thought that that was going to be good enough, but that would be too generous.
The other point that one notices when one goes through the facts is that the Government are back to their old Tory tricks. Let them confirm this: council tax, on their figures, is due to be put up by £4 billion over the next three years--a 6 per cent. rise. The Chancellor said that profit-related pay would not bite until next year, but will he confirm that some of the people on profit-related pay are low-paid workers, and that, when all the changes come
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Insurance tax is also going up, airport tax is going up, there are measures on lone parents and there are measures on company cars. The record of the Tories over the years is that they give with one hand and take with the other.
We may like to ask just how credible the Government's tax promises are. Days before the last election--in fact, in the Budget before it--the then Chancellor, the right hon. Member for Kingston upon Thames (Mr. Lamont), said:
I thought that the most extraordinary point that the Chancellor made was about the great cuts in public spending that will come about as a result of the closure of loopholes and a more effective policing of the tax regime. I must point out that, when my right hon. Friend the Member for Dunfermline, East (Mr. Brown) used to talk about loopholes, the Chancellor said that the problem was that they did not exist, and that my right hon. Friend was living in an "Alice in Wonderland fantasy". Now, the right hon. and learned Gentleman's spending plans rest on such loopholes. He says, apparently, according to the press release, that there will be 2,000 extra Inland Revenue civil servants, who will be hammering down--
Mr. Jerry Hayes (Harlow):
He has seen the press release.
Mr. Blair:
I am sorry, but these things have already been put out by the Government. Perhaps the hon. Gentleman is not aware of that. Perhaps he thinks that, although the Chancellor is able to say such things, we are not able to respond to them in any way.
I should like to quote a figure to the House. According to the Chancellor, he is going to get £7 billion over the next few years out of the changes and--apparently--cracking down on tax avoidance and loopholes. First such loopholes are an "Alice in Wonderland fantasy"--now, the entirety of the Government's spending plans rest on them.
The Chancellor says that borrowing will come down, but I should remind him of another promise that the Government made. At the last election, the Prime Minister proclaimed that he was going to cut the national debt, and that borrowing was going to come down. Perhaps the Chancellor recalls that, according to the Government before the last election, the borrowing requirement by 1994-95 was going to be zero. It was actually £44 billion. This year, on the original plans, it was supposed to be £6 billion--it is now £26 billion.
Having won an election on the pledge that he would cut taxes and cut debt, the Prime Minister has doubled the national debt. As a result--again the Chancellor did not give the figure; he was being very coy about the figures he gave in certain parts of the Budget--and according to
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The Chancellor said that one of the other ways in which he would get the money is through our old friend the public finance initiative; that somehow, hey presto, the money--[Hon. Members: "Give some details."] Conservative Members want me to give some details. Fortunately, I am able to do so again. Last year, the Tory party said in the Budget that it was going to build 12 new hospitals; the contracts would be signed, and one hospital a month would be signed off. I shall tell the House how many hospital contracts have been agreed: one--last night, by an extraordinary and mystical coincidence, just minutes before the Budget was due to be announced.
The Tories say that there will be more money for health and education. They always say that; they said it before the last election. A newspaper report said:
I have something more to announce to the House. We have the plans on NHS spending, and I find in them a very curious inconsistency with what the Chancellor said. He said that he was going to put up spending by almost 3 per cent. in real terms next year, but in the provisional plans for the two years after that, the increase is down to 0.2 per cent. and then 0.1 per cent.
In other words, there will be a boost for election year, but the Department of Health's actual total spending in the year after next, which obviously includes some of the community care and personal social services, will in fact fall by 0.7 per cent. Even on health, there is an absolutely classic example of the Tories giving with one hand and taking with the other.
Let me tell the House what else we learn from the press release from the Department of Health. I presume that we are allowed to have the press releases from the Departments. Let us look at the national health service press release.
"I now turn to the question of value added tax. I have a very important announcement to make, to which I hope the whole House will listen carefully. I have no need, no proposals and no plans either to raise or to extend the scope of VAT."--[Official Report, 10 March 1992; Vol. 205, c. 761.]
If they told those untruths then, why should we believe them now, no matter what they say?
"Christmas comes early. Big increase for health. Lamont puts spending up £11 billion. Extra for health, transport and education."
Let us look at the facts and what is happening in our national health service today. Waiting lists are rising again, 36 trusts are in deficit, there are 20,000 more managers under the Conservatives, and there are 50,000 fewer nurses.
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