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Mr. Don Foster (Bath): Does not the hon. Gentleman recall that it was the Conservative party that introduced the 5 per cent. above inflation escalator? Presumably, he was critical of that, but does he agree that if you use that sort of escalator--it is now sensibly set at 6 per cent.--it is important that there is an offset in terms of a reduction in vehicle excise duty? The great pity of the Budget is that it does not contain clear proposals on that subject.
Mr. Townend: I shall deal with our position in a few minutes. Because of the distances and the infrequency of public transport that one experiences living in a small village--nearly everybody needs a car--£50 million over three years for rural transport is peanuts. Most Labour Members have probably never lived in a village, so they do not realise that, if there is only one bus a day, which is doubled to two buses a day, not only will that cost hundreds of millions of pounds across the country, but people will still need to use their cars.
The increase in petrol duty will also increase business costs. The Government say that industry should be competitive, but do they think that industry does not use petrol? Do they think that fewer goods will be delivered because they have put up the price of petrol? Will there be fewer calls by salesmen? I suggest that this is an increase too far--enough is enough. It is time that one party in the House started to speak up for the motorist. I hope that my right hon. Friend the Member for Hitchin and Harpenden is listening when I tell him that we should abandon road fuel escalation and say that there should be no more increases above inflation.
Corporate car drivers are being hit yet again with another penal increase. That increase is surprising, because it hits the very people whom new Labour is always saying it wants to encourage--the managers, salesmen and entrepreneurs who are all part of middle England. What is the sop? We are going to have a £50 reduction in vehicle excise duty for small cars and clean cars, but what is small and what is clean? If it means small new cars, that will hit the poor, who mainly own older and second-hand cars.
Mr. Geraint Davies:
Is the view the hon. Gentleman is expressing his personal view, or does it reflect the wider view of the Conservative party? Is it just an odd little view?
Mr. Townend:
I am speaking for myself, but I would not be at all surprised if on Monday, when I go into the Lobby to vote against Labour's proposals on petrol, my right hon. Friend the Member for Hitchin and Harpenden is with me.
Mr. Geraint Davies:
He does not share that view.
Mr. Townend:
That is a matter for my right hon. Friend. I represent a rural constituency, and I shall fight
The cornerstone of the Government's Budget is the welfare-to-work package, including family tax credit and national insurance contributions reform. While the Chancellor's motives are praiseworthy, there remain many unanswered questions and some serious reservations. First, although I welcome the abolition of the national insurance entry fee--I always thought that it was nonsense--I am a little disturbed about who will meet that cost. It will hit the high-productivity, high-tech and high-wage firms that the Government claim that they want to encourage. Many firms that pay high wages operate--or are trying to operate--in the export industry, and that cost will reduce their competitiveness even further.
Secondly, as my right hon. Friend has said, the reforms were first mooted as supposedly reducing the cost of the social security budget, which was getting too big for the country to afford--it was getting out of hand. As we have heard today, far from reducing that cost, the Budget will increase it. People do not realise that the pensioners will pay for that. The Government stole £5 billion from the occupational pension funds last year in order to finance it--and it will do that this year, next year and every year. I think that that is awful. Married couples will also contribute £1 billion. That is appalling, as it signals a withdrawal of support from the institution of marriage at a time when most people believe that marriage breakdown is the major cause of many social problems.
Thirdly, I have doubts whether it should become the accepted wisdom that most mothers should work and their children should be left with child minders. I am old- fashioned enough to believe that the best environment for bringing up children is in the home with the mother as carer. As a result of the costs that we are now incurring, which will increase over time, we could reach the stage where it will cost as much to get mothers into work as it will cost to get them to look after their own children. We must consider that.
My fourth criticism is that the Government appear to have no policies designed to reduce the growing problem, not of lone parents or single mothers, but of unmarried mothers. I believe that Britain has the highest number of unmarried mothers in Europe--and that number is growing. We must address that situation and encourage young women not to have children outside marriage.
I must also ask where all the new jobs will come from. The main failure of the Budget is that it does nothing to encourage the Bank of England to reduce interest rates and the value of the pound. Indeed, the market's first reaction to the Budget was to push up the pound even further. That will cause our exporting industries to shed labour.
Despite all the incentives and the money that will be spent in an attempt to get people into work, I think that the Government will find that a significant number of people are unemployable or do not want to work--I call them the "professional unemployed". Constituencies such as mine have many such people. Unemployed people come to Bridlington from Sheffield, Leeds and Halifax, believing that it is far better to live by the seaside. They certainly do not come to Bridlington seeking work, because there is none.
I turn briefly to the other taxes in the Budget. Stamp duty on more expensive houses has been increased. That is a return to the traditional Labour taxation of envy: it is a tax on mobility. Why should executives, entrepreneurs, export salesmen--and Prime Ministers--who must move house frequently have to pay that extraordinary level of tax? Someone who buys a house for just over £500,000 must pay the Government £15,000 in tax. That is a tax on mobility, and it is wrong.
I make it clear that I have a lifetime's experience in the alcohol industry. That industry is facing difficult times because of cross-border shopping and smuggling. The Financial Secretary should not laugh, because she is responsible for that problem. [Interruption.]
Mr. Deputy Speaker:
Order. There is far too much noise in the Chamber.
Mr. Townend:
Not only are the Government losing an enormous amount of revenue but, as I have warned from my own experience, organised crime is taking over the smuggling. Only last week smuggling gangs used guns in Dover. The only long-term answer to this problem--the Chancellor, who is pro-European, should realise it--is a progressive reduction in the differential between our duties and those of the French and Belgians.
Far from accepting that there is a problem and dealing with it progressively--we know that it cannot be solved in one go--the Government have made it worse by increasing duties on wine and beer yet again. The barriers came down in January 1993 and we have seen a massive increase in smuggling every year since then. Has the differential been reduced in that time? No, it has not. It has not even stayed the same: the differential on wine has increased by 18.4 per cent.
The same principle applies to tobacco. I do not smoke, but I know that, by increasing the duty on tobacco by more than 5 per cent., we will encourage more people to buy from smugglers. If people buy cheap tobacco, they will smoke more. Is it not incredible that duty is not paid on half the hand-rolled tobacco used in this country? The Government have accepted that there is a problem because they have not increased that duty this year--but they have not reduced it, either.
The Budget must be considered not in isolation, but together with the last Budget delivered nine months ago. Although I accept and support several measures, I believe that many people have done badly. Savers, pensioners and pension schemes have done badly. Companies have done badly through the windfall tax and the collection of corporation tax on a quarterly basis. Marriage has been undermined. The Budget does nothing to create jobs, as all the emphasis is on getting people to apply for jobs. The motorist has been savagely attacked and the overall burden of taxation continues to rise.
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