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Mr. Bruce: It is always interesting to hear the Minister and other Labour Members say, "Next time." It was always
the Liberal Democrats who used to say that. They thought that they would take five of the seats in Dorset at the general election. The Conservatives went into the election with six seats in Dorset and came out with eight. I have emphasised that there are many Labour voters in my constituency, and I wish to stress that I am in this place to represent all my constituents.
There are 17,678 incredibly disappointed people who thought that the health service would be helped by a Labour Government. Throughout the 18 years of Conservative Governments--there were not 20, but we will own up to 20 if that is wished of us. Perhaps the first two years of the Blair Administration are supposed to be part of a Tory Administration, but I rather doubt that.
Every year of Conservative government showed an increase of 3.1 per cent. above the rate of inflation in spending on the health service. On education, we always did better. Our record on social services and roads, for example, has been of benefit to the people.
We must remember that at every Budget the Chancellor of the day always has something in his gift box. He will say, "Last year, I said that I would spend only this much, but this year I shall increase that spending by £X billion." We have heard from many who have analysed the miserly sum that has gone into the health services in all of our constituencies under the current Administration.
What has local government been given? As for expenditure on education, for every extra £1 that we were supposed to have £1.40 has been taken away from social services, from the elderly and from expenditure on roads. In addition, we have enormous tax rises. Increases of three or four times the rate of inflation are the norm in Dorset.
In some ways, we were looking forward to asking, "If this is a wonderful new reforming Government that will help to create jobs, what will it do for regional policy?" The South Dorset economic partnership has announced that it is closing because it receives no funds to keep it going. That partnership was causing unemployment in the area to decrease month after month. We are starting now to see the turn-round of our economy, but we need the partnership if we are to continue to go ahead.
We have not heard yet how much the defence budget will be cut in real terms. I understand that that is shortly to be announced.
I thought that I would be able to congratulate the Government on one point. I went on radio and said, "It looks very much as if I as a fat-cat business man will benefit from the nice situation of reducing capital gains tax right down to 10 per cent." What did we find? We found that the Government were doing away with the capital gains retirement relief and introducing a 10 per cent. capital gains rate. The Chancellor was saying from the Dispatch Box that he was doing something for small business men when in fact he was increasing the amount of tax that he would take off such people after they had built up their businesses, retired, and sold out. That is an interesting little twist.
What about millennium gift aid? The Government have gone to the lottery month after month, saying, "We have decided that the lottery will pay for this or that Government policy." They are even saying now, "We would like you to give to charity and, by the way,we would like you to focus on education and poverty relief." Bearing in mind their policies, the Government want people to give to charity to bail them out.
I have difficulty in following the logic of many people when they talk about the stability of the pound. The pound that I have taken from my pocket is stable. We can all see that it is stable. If I put it flat down on the Bench, it stays where it is. Things are more difficult if it is placed on its edge. In relation to what is the pound supposed to be stable?
It is useful to look back to the speeches of Lord Shore of Stepney. He always talked very well about these matters. In fact, he had a speech which he delivered regularly in the House. As older Members will say, "If you get a good speech, stick to it." It is interesting that in 1990, when we had just entered the ERM, Lord Shore, as he now is, was predicting everything that is currently going wrong throughout Europe and how we would have to get out of the ERM.
Against that background, the Government are saying that they want to go into the European single currency. Yet they refuse to go into the ERM. People are asking, "How can we keep the pound stable?" Of course we can keep the pound stable if we go into the ERM and insist that our partners help to keep the pound at a stable level.
Why are we not doing that? I would have thought by now that we all understood that the rush to get a stable pound is an illusion. Against what is the pound stable? We can run our economy wonderfully well but what if we decide that we want zero growth? Is that stability? Is zero growth in employment or productivity stability? We are seeking not to have boom-and-bust economics. I understand that and accept that that is something we should be going for. Every time a British Chancellor says, "I'm going for a stable pound," he is saying stable in relation to the deutschmark or the dollar, and that depends on other people and the way in which they keep their currencies going.
One will never achieve total stability in currency, but one has to manage the economy. It was Lord Shore of Stepney--when in this place, and pretty much on this Bench--who said that giving the power to the Bank of England to set interest rates was total nonsense, because bankers can always keep to the narrow requirements of keeping a stable currency, or keeping inflation down, but they do not have the responsibility of managing the economy, which is so important and which the Government gave away almost on day one when they came to power. They believe that they can simply tell people, "It's not our fault that the pound is at an unsustainable level as far as our exports are concerned." They refuse to do anything about it.
What about the change to national insurance? If people pay average wages, they will more or less not be affected, but if they pay above average wages, they will subsidise those who pay below average wages. A Labour Government are suggesting that that is a good idea. I do not understand it, and we need an explanation of what is happening.
The hon. Member for Ealing, Acton and Shepherd's Bush (Mr. Soley) refused to accept that the ratio of taxes to GDP had gone up. He said that that was because of the windfall tax. He must look at the Red Book--the "Un-Red Book" as far as the Labour party is concerned. Even without the windfall tax, taxes have risen as a proportion of GDP and will continue to rise despite the fact that we shall lose the windfall tax from the figures.
What about child care? We all understand that the social security budget needs to be kept under control. I understand why the policy is not coming into effect
until October 1999: the Government do not have a clue how they will introduce it. They say that they will give £5,060 a year--the 70 per cent. of the £7,800 a year that people would have to pay--to pay for child care, when an individual on a 30-hour week at £3.50 an hour will earn only £5,060. The Government will double that amount, with all the additional things in child care.
The previous Government got into a complete mess with the Child Support Agency. I have always said that and believe it to be true, but that mess was not predicted. That was not the criticism of the CSA. [Interruption.] Please look at what happened under the poll tax and the Child Support Agency. Learn from the mistakes that we made when in government. The whole idea that the state will take over child care for low-paid people is a mistake, because we tried to look at it when we were in government, and it just would not have worked.
Mr. Peter L. Pike (Burnley):
I am glad to have the opportunity to speak in the debate, because, for the first time in 15 years, I welcome the Government's Budget, as it is a change of direction and a positive move for the best. My constituency is in the top five in terms of numbers employed in the manufacturing sector, and a considerable number of my constituents are low paid. In 1983, Burnley elected me--by a slight majority--over the hon. Member for South Dorset (Mr. Bruce). It made a sensible decision.
The hon. Gentleman showed a £1 coin a few moments ago. It was the Tory party that said that it would allow the pound to float. We know what the floating pound did during the 18 years in which the Tories were in office--it sank. I have an old £1 note. Think about what that was worth in May 1979. Compared with the hon. Gentleman's £1 coin, there was massive inflation and erosion of the pound during the Tories' period in office.
The Budget is good for jobs, good for industry and good for Burnley. It is particularly good for the low-paid. It has to be considered with what we are doing on the national minimum wage, which is crucial in an area such as mine. The Budget must also be considered with what we have done about VAT on fuel.
The hon. Gentleman spoke about the national health service and education, and asked what we have done in the 10 months since we have been in office. People outside know what would have happened if a Tory Government had been elected on 1 May last year, and they are glad that we have a Labour Government.
They know what VAT on fuel would have been. Let us remember that, before the general election, it would have gone up to 17.5 per cent. We kept it at 8 per cent., and have now reduced it to 5 per cent. That is crucial to the low-paid and those on low incomes.
I welcome the move to the working families tax credit, which is long overdue. We should have done that many years ago. Many people who are eligible for family credit do not claim it. It has one of the lowest take-up rates of any benefit. It is nonsense to expect people to take up the jobs advertised in the jobcentre and the newspapers if they end up worse off than when they were on benefit. The Budget is a move in the right direction.
The change to child care is long overdue. I welcome what the Government intend to do on that.
The cuts in corporation tax to 30 per cent., and the small business tax to 20 per cent., are welcome. I recognise that we need to have industry and commerce to create wealth for this country so that the Government can have money for the social dividend, to spend on education, the welfare state, the health service and all the other things that we want to see.
Last Wednesday, the Lancashire Evening Telegraph wrote:
Last Friday, I visited the Potterton Myson factory in Padiham, in my constituency. It has just announced a further 125 jobs as a result of consolidation and bringing some work from Warwick. It is wary about the value of the pound--DM3.06 to the pound makes trading difficult. It is the leading manufacturer in its field in this country, and it wants to be the leading manufacturer in Europe.
Industries in my constituency believe that we need to be in the euro as soon as possible, and they condemn the previous Government for having failed to get us into a position where we could join it at the start. They will in any event have to trade in it, so it is crucial that we join as soon as possible. I visited Smurfit in the afternoon, and people there expressed exactly the same view about the European currency. They are in the paper industry and have to compete with other Europeans, and they think it wrong that we will be left on the side.
One or two Conservative Members have mentioned interest rates. The right hon. and learned Member for Rushcliffe (Mr. Clarke) spoke. I think that he is condemned particularly on two counts. First, he did not move ahead on the euro. I do not believe that he had the power or the ability to do so, because he was a minority voice in his own party. Secondly, there was the question of interest rates. I think that the right hon. and learned Gentleman should have increased interest rates long before the general election. Why did he not do so? Because he put the political interests of the Conservative party above the interests of the country: I have no doubt of that.
I must utter one slight criticism of the Budget. I refer to duty on liquid petroleum gas. Lucas Aerospace, in my constituency, makes gas bottles for the vehicles involved, having developed its process from making cases for the multi-launcher rocket system. It has converted that technology, in one of the best defence diversifications. It believes that the market is growing; it also believes that the Government have failed to provide a sufficient incentive to persuade people to convert to the use of an environmentally friendly fuel. Italy has 2 million vehicles on liquid petroleum gas, while this country has only 2,000.
I remind Ministers that, after the introduction of unleaded fuel in this country, the Environment Select Committee produced a report--it was produced some years ago, under the chairmanship of Sir Hugh Rossi and during my membership--recommending a differential encouraging people to opt for unleaded fuel. In their first Budget, the Government introduced a very small differential. They were condemned by an emergency report from the Committee saying that they needed to do more. They increased the differential, which speeded up the conversion. I urge my colleagues to consider the matter, because I think we should be doing more.
"But there was a warm welcome from shops spokesman Rita Walsh, who said the Chancellor's measure would put cash into the pockets of the poor, providing a much-needed boost for retailers.
That is important, as we must recognise that, when the poor get additional money, they spend it, because they need to--they cannot save it. The option for the poor to save is not really there. They need the money. They need to spend it, whether on food, clothing or whatever, to improve their standard of living.
Mrs. Walsh, secretary of Burnley and District Chamber of Trade, said she had expected a balanced Budget, favouring the less well-off, and that is what the Chancellor had delivered."
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