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Mr. Deputy Speaker: Order. I am afraid that the hon. Gentleman's time has elapsed.
3.1 pm
Mrs. Anne Campbell (Cambridge): I am pleased to be able to speak in the debate on a Budget that is good for children, pensioners, business and self-learners. It is very good for entrepreneurs, and it is even good for cyclists. It is especially good for my constituents.
The hon. Member for Ludlow (Mr. Gill) spent some time on the difficulties of living in rural areas and the extra taxes that people there must pay as a result of the Budget. Many of the taxes introduced by the Chancellor will, however, be revenue neutral. For example, the increase in fuel duty will be balanced by a reduction in vehicle excise duty. The Chancellor is also introducing additional support for public transport through the rural transport fund and other measures. That will help people to use their cars less often and to use more public transport. All of us will benefit from the resulting improvement in air quality and from the reduction in congestion.
Mr. Gill:
Will the hon. Lady give way?
Mrs. Campbell:
No, the hon. Gentleman did not give way, and nor shall I. I have made my point to him.
We are fortunate to have a Government who have recognised--as none before ever did--the importance of a strong science base and of the innovation that links that science base to the industrial base. We also have a manufacturing industry that recognises the important contribution that can be made by scientists, entrepreneurs and people who have ideas.
We have a world-renowned university in Cambridge and a strong scientific output which is probably the best in the world. We have recognised the importance of linking the development of high-tech services and products to the science base. There are around 36,000 high-tech jobs in and around my constituency, and industrial leaders there are delighted with the Budget.
The Cambridge Evening News carried the headline "Big boost for region's biotech companies" and the amusing sub-head "Measures to help high-tech firms which almost match 'wish list'". We all know that no one expects a wish list to be satisfied, but the Budget contains proposals warmly welcomed by industrial leaders. Research and development tax credits are important to the high-tech sector. Expansion of the university challenge fund will help universities to produce better laboratories and equipment. The removal of tax from share option deals is designed to lure the high-flyers from the big companies to risky start-up companies.
Tax cuts are good for small business, and the 40 per cent. extension on capital allowances will also boost the high-tech sector and others. The recognition that an extension of employee ownership is good for both business and employees is also welcome.
However, having said many good things about the Budget, I hope that my hon. Friend the Economic Secretary to the Treasury will forgive me for mentioning one concern raised at a business breakfast yesterday. I fear that the raising of stamp duty will have an effect that the Government do not intend, given their strong support for science-based industry. The fear is that the value of most knowledge-based industries rests not in physical assets--typically, they do not have a lot of freely movable plant or machinery--but in intellectual property rights. Dealings in those rights are hardest hit by the increase in stamp duty.
There are several reasons why one might wish to acquire assets of a company rather than its shares. For example, part of the business--the intellectual property rights relating to a particular computer programme or drug discovery--might be for sale, rather than the whole of it. In some circumstances, stamp duty might be payable on licences of intellectual property rights.
I hope that my hon. Friend will reconsider that point, examining how transactions may be affected when the assets of a company are transferred, rather than the shares, which are subject to lower taxation rates. That concern was one of very few voiced by my constituents yesterday. It is unusual for a Budget to be so universally praised.
I welcome the extra £19 billion for education, and the further £560 million added by the Chancellor on Tuesday. Will Treasury Ministers consider, however, how to ensure that county councils pass the money on to schools? Cambridgeshire was given an extra £9.4 million last year for education, but the county council spent only £7.8 million, cheating schools of £1.6 million. This year, Cambridgeshire had an extra £10.7 million for education, but the council plans to spend only £9.4 million, cheating schools of a further £1.3 million.
If the intended increases over the past two years had been passed on fully, Cambridgeshire schools would have benefited by an additional £2.9 million. Many of their problems simply would not have occurred. The hon. Member for Havant (Mr. Willetts) has suggested that the money has been withheld because of increased bureaucracy, but that is absurd, and schools simply do not recognise that argument.
One way around the problem would be to tie money to specific objectives. The recent money for the reduction of infant class sizes could not be spent on anything else, and it was warmly welcomed. Cambridgeshire benefited by almost £1 million, and that will create 69 additional teachers' jobs. It will reduce the number of children taught in classes of more than 30 from almost 7,000 to just 227.
The Government are trying hard, but they are constantly thwarted by local Conservative politicians. I was slightly surprised to receive a letter from the leader of the Liberal Democrats on the county council. She is the chair of Mayfield primary school, one of the largest in the country, which has, sadly, decided to ask parents to contribute towards the cost of keeping a teacher in place. Schools should not be doing that. It would not be necessary if the county council were spending the whole of the money allocated by the Government for education.
Cambridgeshire has a low standard spending assessment, largely because of historical factors: when Baroness Blatch was running Cambridgeshire county council, she did her best to cut education to the bone.
Mr. Michael Fallon (Sevenoaks):
The Chancellor of the Exchequer gave a self-confident performance on Tuesday. I do not entirely share his confidence, and certainly not in respect of the economy. If he has enjoyed a benign six months since the pre-Budget report, it has not been down to his judgment. Japan and South Korea have been recovering, the American consumer remains remarkably buoyant and our economic cycle is clearly out of kilter with that of the rest of Europe. If he is going to enjoy a soft landing, it will not be due to his judgment, but to the framework that he inherited from my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke). It was he who took the key decisions on interest rates and tight public spending, and who started to foster the climate of low inflation which, I suspect, lies behind some of the benign economic indicators.
It is often said that Budgets that are cheered on the day disappoint six months later. I cannot recall one where the gloss has come off so quickly. The newspapers that cheered it yesterday are discovering the reality behind the hype: most taxpayers will be worse off, and they will be worse off at the end of this Parliament. It is the wrong time in our economic cycle for the Government to increase borrowing and taxes.
Let me begin with borrowing. Careful examination of the Red Book shows that the net cash requirement is going up from £2 billion to £4.5 billion. Net borrowing will be £3 billion in each of the next two years. It was only in the March 1998 Budget that the Chancellor chirped about the budget being in surplus. There was much talk of repayment of debt in the interests of our children. Now we are back to old Labour borrowing. The Government are not only borrowing more; they are taxing more. They are taxing marriage, taxing home ownership and taxing car driving. The Chancellor did not make much of the fact that he is increasing national insurance--wages tax--for those in self-employment.
Why are the Government having to borrow and tax more? Of course, they have to fund the stealthy redistribution round the edges, but there are two fundamental reasons. First, they have failed in their promise to tackle the increase in welfare spending. Secondly, they have failed to realise the receipts that they envisaged from privatisation.
The Red Book shows that social security spending will rise from £93.5 billion to £106.4 billion. The Government have failed to use their mandate and the majority that they command. They had one row, over lone parent benefits,
which was a reform that we left for them. They persisted with that, and then the great welfare reform campaign fizzled out into chatter about anti-fraud measures. Even unemployment benefit continues to be paid without any sanction other than that the recipient should turn up for interview.
On asset sales, I warned the House last July that some heroic assumptions had been made. The former Chief Secretary, my right hon. Friend the Member for South Norfolk (Mr. MacGregor), also questioned the Red Book entries. The Government have pencilled them in again: £4 billion every year from privatisation. However, for the first time, the Red Book is silent about exactly where those privatisation receipts will come from. We know now that London Underground privatisation is being postponed. The air traffic control privatisation seems more complex than the Government first thought. The national asset register was a good idea. It has been compiled, but is now forgotten. In the Command Paper on public service agreements, the sections on assets are the weakest part of every departmental agreement. There are no sanctions. If Departments fail to yield asset sales, their budgets remain unaffected.
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