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Mr. St. Aubyn: Will the hon. Gentleman confirm that this Government, with three Budgets in two years, have had a dramatic effect on the escalator, not only by increasing it, but by increasing the number of times that it has been applied? That is why motorists in this country are complaining. The hon. Gentleman has made it clear that his party is against motorists.
Mr. Caplin: As a motorist, I am certainly not against them. I was privileged to serve on the Standing Committee on the first Finance Bill of this Parliament, in July 1997. That Budget was primarily about putting right some of the ills that we had inherited from the Tories and implementing the windfall tax, to which I hope to return shortly if time allows.
I welcome the increase in the winter fuel allowance, which along with the minimum income guarantee represents a significant change to pensioners' funding. The £100 has been widely welcomed throughout my constituency. I am very much looking forward to speaking at the meeting of Age Concern in my constituency next week, given that organisation's long-standing campaign on winter fuel payments.
I shall refer briefly to the windfall tax as I find it rather disingenuous of the Tories to include the windfall tax in the figures that they continually quote. The shadow Chancellor tried to do so last night on television, but his broadcast persuaded me only that we were about to spend £40 billion on health and education.
The windfall levy was in our manifesto. Before the election many Conservative Members said that it would be challenged in the courts. Some companies said that they would challenge us in the courts, but no such challenge ever occurred. The companies affected by the windfall levy knew that it was right and accepted the democratic principle of a general election. It cannot be described as a tax, as it was freely given. I am pleased that it was accepted by all the companies concerned.
I have three final points. First, I am an officer of the all-party football group. One issue that has not yet been raised in the Budget debate is nevertheless very good news for football--the change in the pools betting duty, which will allow the Football Trust to continue for another three years. I very much welcome that funding, which could amount to £20 million; and I make the plea that the FA Premiership should match pound for pound the Government's new funding for the Football Trust to provide support for grassroots football.
My second point relates to smuggling. I was pleased to hear that the Government intend to take action on tobacco smuggling. When the Financial Secretary to the Treasury replies to the debate, perhaps she will reassure me and other hon. Members with constituencies in the south-east about the white van trade in alcohol which causes considerable problems in Sussex and Kent. There are several small breweries in the region, so the smuggling trade has a double-whammy effect. The small breweries very much welcome the freeze on alcohol duties, but I wonder whether the Government's approach to tobacco smuggling can be extended to the illegal trade in alcohol
so that we can make some real inroads into a disgraceful trade that is imparting an imbalance to the tobacco and alcohol industries.
Mr. Christopher Chope (Christchurch):
It is a pleasure to follow the hon. Member for Hove (Mr. Caplin). I am sure that his constituents will be most interested to read about his priorities in this year's Budget. I suspect that many of his constituents, like many of mine, are enjoying their retirement on the south coast and will be most concerned about the Budget.
The Budget gets an alpha plus for presentation and marketing but a gamma minus for honesty and content. It is a dishonest Budget; it is bad for business and for many individuals. Indeed, it is a Budget of missed opportunities. The Government could and should have rectified some of their past mistakes. As the former Minister for Small Firms, Trade and Industry--now the Financial Secretary to the Treasury--is on the Front Bench, let me say that I was particularly disappointed that the Government did not have second thoughts about the capital gains tax retirement relief. Why will they not admit that they are wrong, and withdraw the penalties that are being imposed on those who sell their businesses on retirement after a lifetime of hard work?
The second missed opportunity is the tax on the dividend income of non-taxpayers. It is outrageously unfair that those with incomes below the tax threshold should have to pay income tax on the income from their savings. Why should they be forced to rearrange their modest portfolios and put them into individual savings accounts, which seem to be the Government's answer?
The Government should also have second thoughts about abolishing personal equity plans and tax-exempt special savings accounts. The idea that ISAs will increase savings has been disproved by projections that show that they will further harm the savings ratio. The Government are damaging the savings culture in Britain.
The Government should have realised with experience that they made a big mistake when they removed from the over-60s the tax relief on health insurance premiums. If that were reintroduced, it would encourage many more people to help themselves as regards the provision of health care. Its abolition is one of the factors that has contributed to the increase in national health service waiting lists. My constituents are saying that as a result of the increase in premiums by something like 23 per cent. they can no longer afford private insurance, so they are now placing an additional burden on the national health service.
My strongest criticism of the Budget relates to the so-called environmental taxes--the taxes on fuel oil, diesel and petrol. The taxes on fuel oil are very much in the small print and involve relatively small sums of money, but what can be the justification for a 21.5 per cent. increase in the duty on fuel oil? For the most part, fuel oil is light heating oil which is used by householders, mainly in rural communities, who do not have access to
mains gas. It is also used by small industrial and commercial undertakings. To impose such an increase is petty and spiteful. It will produce £30 million a year for the Exchequer. I am concerned that it will produce a further £30 million every year for the next three years. In other words, it is an escalator of 21.5 per cent. per annum on those who choose, or have no alternative but to have, central heating systems that use light oil.
The increases in fuel duty at three times the rate of inflation every year until the end of this Parliament are a tax not on a luxury but on a necessity. Why are we imposing so much pain on the motoring public and our road transport industries? The money is not being reinvested in the transport infrastructure, which is crumbling, and it is certainly not being invested in new roads. The Government have slashed the new roads programme, even compared with the reductions that were made by the previous Administration. The money is certainly not being reinvested in public transport. Some Labour Members may be satisfied with the thought of collecting an extra £2 billion in tax and giving back £10 million to rural motorists and bus users, but Opposition Members do not consider it in the least bit fair.
What is the purpose of all those increases? The hon. Member for Hove said that they would produce great environmental benefit. According to the small print in the Red Book, the gain is that the Government estimate that, in 11 years' time, in 2010, there may be a reduction of some 5 per cent. in carbon dioxide emissions from transport--what a price to pay for such a paltry reduction.
Reducing carbon dioxide emissions by the price mechanism is extremely unfair and inefficient. The environmental justification for every fuel tax increase is specious. The Government are acting on that basis only because they achieved such a bad deal for Britain in the share-out of the Kyoto targets last June. When one considers the European target of an 8 per cent. reduction in carbon dioxide emissions, it is clear that the Government took pride in giving Britain a larger burden than almost all other European countries.
We accepted a 12.5 per cent. reduction; the Netherlands accepted 6 per cent.; Finland and France did not accept any reduction; Sweden is allowed to increase emissions by 4 per cent.; Ireland by 13 per cent.; Spain by 15 per cent.; Greece by 25 per cent.; and Portugal by 27 per cent. Is it any wonder that fuel is much cheaper in those countries?
The gap will widen between now and the end of this Parliament, resulting in a lot more cross-border shopping for fuel. There is already a loss of revenue of probably £1 billion a year because of what is happening between Northern Ireland and the Republic, and increasingly hauliers are driven to take their businesses overseas to the continent.
Why are motoring taxes being increased? I suggest that it is part of the Government's vendetta against the motorist and the motor car. They are using the Kyoto summit as an excuse for doing something that they relish. Why is the Secretary of State for Trade and Industry making much of the price of new cars, when most of our constituents are finding the burden of driving their used cars too great? Why do not the Government think about the burden of extra taxes on the ordinary car user?
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