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8.57 pm

Mrs. Betty Williams (Conwy): Like those of several other Labour Members, my constituency has many attractions and advantages, but wealth is not one of them. The Budget is welcome news to my constituents. Also like many other Labour Members, I am looking forward to the results of the Chancellor's sound management of the economy further benefiting the economic and social fabric of our nation. The Chancellor's prudent management has placed the Exchequer in a position to respond to unexpected problems in ways that are not possible when a Government spend, day by day, to the limit of their resources.

The foot and mouth epidemic is such an unexpected problem, and is having a serious effect on the economy in my constituency. The news last week that it may continue for a long time was a blow to the many who, although affected by the epidemic, can do little or nothing to bring it to an end. I pay tribute to the work of my right hon. Friend the Minister of Agriculture, Fisheries and Food for acting so incisively and for reporting to the House so well. I also pay tribute to the National Assembly for Wales, not only for the personal commitment of its Minister for Rural Affairs, Mr. Carwyn Jones, but for the excellent foot and mouth disease information service that it has provided on the website, at The Assembly has gathered information from several sources and the website is a great help in the Principality.

Compensation is available to farmers whose livestock is slaughtered, and I understand that other assistance may be available through the European Union under the EU agrimonetary compensation scheme. I am sure that that will be well received. However, the foot and mouth epidemic is having a much wider effect in my constituency. In Conwy, the landscape and the seashore are our livelihood in many ways, and the epidemic is having serious repercussions. Incomes are suffering and jobs are threatened in tourism, hotels, catering, countryside pursuits--including those of climbing instructors and mountain guides--shops and the haulage industry, to name but a few examples.

To seek some measure of the likely extent of the problem, I briefly examined "Digest of Welsh Local Area Statistics 2001". For an accurate assessment, I would need the services of a statistician, which most certainly I am not. My constituency contains parts of Conwy and Gwynedd and it is probable that the agriculture and tourism-related industries provide respectively 2,500 and 10,500 jobs in those counties. A substantial proportion of those 10,500 jobs may be under threat at present and the incomes of some of my constituents who are not involved in agriculture have already been reduced to nothing by the epidemic.

I know that my right hon. Friend the Minister of Agriculture and my hon. Friend the Under-Secretary of State for Wales are aware of my concerns. That, and the

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fact that they and their colleagues are examining the consequences of the outbreak, was made clear in their answers to my questions on 8 March at columns 426 and 427, and on 7 March at column 277. I am grateful for that and for the agreement of my hon. Friend the Under- Secretary to meet my constituents on Wednesday.

The policy of slaughtering all affected animals is of long standing and I accept that it may be one of economic necessity. If so, we must give more serious and detailed consideration to the wider economic effects on constituencies such as Conwy. My right hon. Friend the Chancellor's stewardship has brought our economy to a state of unprecedented security, so I hope that a way may be found to assist my constituency and others where the epidemic is having a disproportionate effect on the local economy.

The Labour Government have brought many benefits to my constituents and to the nation, but they have done much more. International development and the relief of world poverty are examples. Last week, my right hon. Friend the Secretary of State for International Development visited my constituency and that of my hon. Friend the Member for Clwyd, West (Mr. Thomas). During her hectic day, I was delighted to introduce her to the university of Wales, Bangor. In particular, the work of the school of agricultural and forest sciences and the centre for arid zone studies was demonstrated and explained by staff, including the work being carried out under the Department for International Development plant science programme. My right hon. Friend's work on tackling world poverty, in which she co-operates with the Chancellor, is much appreciated by my constituents and I am proud that the university of Wales, Bangor, is playing its part in that mammoth task.

Sadly, towards the end of my right hon. Friend's visit, she was attacked by persons who are neither students of our university nor residents of my constituency. I feel that the House would wish to know that I have been sent many messages from my constituents expressing outrage at the treatment that my right hon. Friend received. I quote from a letter from Penrallt Baptist church, Bangor:

To add to that moving message and the others that I have received, I wish to extend to the House my own sincere regrets and apologies.

9.4 pm

Mr. Michael Fallon (Sevenoaks): I declare the interests recorded in the Register of Members' Interests.

First, I shall discuss the Budget framework. The Chancellor appears to have delivered a healthy Budget surplus, but we need to look behind that. Yet again, he has substantially undershot on the revenue side. Yet again, he has substantially undershot on departmental spending. He goes on about long-term stability and consistency, but he is consistent about one thing: he keeps undershooting his own underestimates.

Secondly, it is by now obvious to almost everyone that the golden rules that the Chancellor claims to have met so comfortably are not quite as golden as all that. This is fool's gold, or at the very least gold plate. One must ask

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oneself, certainly after this year's outcome, whether these golden rules mean anything and whether they are any guide to the Chancellor's performance, so easily does he skip past them. Thirdly, as previous speakers have emphasised, the Chancellor has enjoyed the one-off proceeds of the mobile phone auction--some £22 billion to add to the revenue side.

The plain fact is that behind this year's healthy Government surplus, as defined by the Chancellor, spending goes on rising faster than the economy is growing. Even on his own forecast, he plans to borrow again in just two years' time. In the financial year beginning April 2003 he will borrow £10 billion, then £11 billion and £12 billion. That assumes continuous growth. If growth should slow or stop, all those figures will look suspect.

That must be why the Commission, in its assessment for the Council of Ministers, and the International Monetary Fund have warned of the consequences of the Chancellor's future tax and spending plans. The IMF warned of

When I asked the Chancellor about that last Thursday, one of his junior Ministers said that I was misrepresenting the report. The IMF and the Commission warned that the Chancellor's tax and spending plans over the next three years may not be sustainable if growth turns down. If growth does turn down and he wants to go on increasing spending at the rate that he has been doing, we can be sure that taxes will rise again.

My right hon. Friend the Member for Huntingdon (Mr. Major) told us graphically how taxes have already risen. In the last year of the Conservative Government, income tax receipts were some £69 billion, and this year they are £99 billion. I make that an increase of well over 40 per cent. Pension funds are paying £5 billion more in tax on dividends. Capital gains tax receipts have doubled from £1.2 billion to £3 billion. Inheritance tax is up from £1.5 billion to £2.3 billion. As my right hon. Friend said, 2.2 million more people currently pay tax than paid tax three years ago, and there has been a 30 per cent. increase in the number of people paying the higher tax rate. It would have been inconceivable before the war and in the period just after the war for so many people doing straightforward jobs to be classified as higher-rate taxpayers. Police sergeants in London, heads of department in schools and senior nursing officers are now classed as higher-rate taxpayers.

The result of all that is that total revenues--income tax, VAT, capital gains tax, inheritance tax and excise duties--are up by a third in three years to more than £250 billion. The tables in the Red Book finally and clearly reveal what the Chancellor has consistently tried to avoid disclosing in the past few years, which is that the tax burden is up from 35.2 per cent. of gross domestic product to 38.2 per cent.

Mr. David Ruffley (Bury St. Edmunds): Is my hon. Friend aware that Credit Suisse First Boston has calculated that, after tax and inflation, average household disposable income under the Government has risen by

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1.6 per cent. compared with 2.5 per cent. under the previous Conservative Administration, and 2.9 per cent. between 1979 and 1990?

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