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Mr. Tom Harris: The right hon. Gentleman sets great store by the need to increase private investment in the NHS. Can he not welcome, in a bipartisan spirit, the huge increase that the Chancellor has announced for the NHS in the next five years, which represents a 100 per cent. increase since 1997? Surely his party would welcome that. Will he take this opportunity to commit his party to matching that increase?
Mr. Redwood: I do not welcome sums of money: I welcome results. If, in three or four years' time, there are no waiting lists in my constituency, the local hospital has many more beds and the nurses and doctors tell me that they have a more realistic work load, I am a big enough man to acknowledge that improvement. I might take the precaution of doing so the day after the election rather than the day before, because I am also a politician, but I would not mislead anyone about it. If that is delivered, everyone in my party would feel great about it, but my worry is that it will not happen. We have had five years of promises and it is always jam tomorrow. All we actually get is a traffic jam, not the benefits of better health services or transport.
I will wait. I will welcome results, but not the spending of huge sums of money in itself. I certainly do not welcome the tax increases that it necessitates. If all the money goes on auditors and paper clips, I will not welcome it at all, and the Government have some serious questions to answer about where the money will go and how quickly they can spend the money wisely by recruiting the nurses and doctors and building the bed spaces and wards that are so clearly needed in many parts of the country.
The big issue in the Budget is tax, tax and tax. After five years of huge tax increases, we get the whopper tax increase. It is the tax increase that is so big that not even this Chancellor thinks that he can get away with it without telling people. It is the first tax increase that he has not attempted to introduce by stealth.
The Chancellor's record on tax increases shows that he began by deciding to tax savings, prudence and old age. He put a massive tax increase on pension funds. When we objected to that, we were told by the Chancellor and the Prime Minister that because the stock market was rising, it would not hurt anybody and nobody would notice it. The stock market was making magic money and the Chancellor wanted to take a bit, while leaving people mysteriously better off. In the past two years, the stock
That cruel tax on old age, prudence and savings is now doing real damage to people's pension prospects. The Labour party gets angry because companies are closing down final salary schemes, but they are too expensive and do not have enough money left in them. One of the biggest culprits is the robber Chancellor who has taken quite a bit of the money out.
The next big tax from the Chancellor was the huge telecom windfall tax, from the so-called auction of licences, which was another tax that was meant to go unnoticed and inflict no pain on anyone. It cost £22 billion for the mobile phone companies to stay in business. The auction was cleverly designed and I give full credit to the Chancellor and his advisers, who worked out a perfect system under which not enough licences were on offer so the phone companies had to make crazy bids. Of course, disaster followed. The Chancellor now refers to the collapse in the telecom and high-tech industries, but he does not say sorry. He does not admit that taking £22 billion out of the industry had a bad impact.
Mr. Hendrick: The spectrum that was sold is a finite resource. It was not a form of taxation. A finite resource has to be sold, not given away for free. The state of high-tech and telecom companies is a reflection of America sneezing and industries across the developed world catching a cold, not the sale of the spectrum to British telecom companies.
Mr. Redwood: The hon. Gentleman does not understand the magnitude of the sum of £22 billion. It was a prosperous leading industry, but that is a colossal sum of money. The German Government followed the British example and took another £28 billion, making £50 billion of tax. It was a tax. The companies were using the airways free of charge, but the Government saw an easy opportunity to raise some money. Now, of course, the Government do not want to admit that they were part of the cause of the collapse of that industry. I do not claim that the Government were the sole cause, but the hon. Gentleman must concede that taking £22 billion out of the industry had a serious impact. It dried up the cash flows and meant that the companies had to keep prices higher. They could not pay wages, recruit extra staff or expand the networks as quickly as they would have liked. That was the Chancellor's second tax that did a lot of damage.
Mr. Chris Bryant (Rhondda): The right hon. Gentleman is giving away his whole argument. He argues in favour of more private intervention in the health market, but then he says that when auctions were used as a largely market-driven answer to how to allocate a scarce resourcethe spectrumthat somehow became a tax. He is confused.
Mr. Redwood: I am not confused. The spectrum was available freely until the Labour Government designed a system that was bound to lead to a supertax, because of the bidding rules and the number of licences on offer. If the Government had offered a realistic number of
I come to the Chancellor's third tax. He decided that it would be a good idea, under the cover of greenery, to impose far more taxes on motorists, especially on fuel. He brought the haulage industry to its knees, major bankruptcies were threatened and some haulage companies even decided to give up on Britain and set up on the continent where the tax regimes were more benign. The damage that tax caused got through to the Chancellor, because it led to a mass protest, andup to a pointhe apologised and announced that he would make some reductions in duty after all. He has continued that apology in the Budget by announcing that there will be no immediate further increase in the tax.
I am glad that the Chancellor has learned from that case, but why does he now think it a good idea to impose a tax on jobs? He has tried everything else. He has wrecked the pension funds and the motorists.
Sir Robert Smith (West Aberdeenshire and Kincardine): Has the right hon. Gentleman spotted that yet again the Chancellor is talking the right talk about charging foreign lorries to use our roads? But page 125 of the Red Book shows that such charging will not happen for several years to come. The promise has been made since the protests.
Mr. Redwood: The hon. Gentleman is right. The right hon. Gentleman, as a high-taxing Chancellor, could have put equal or higher taxes on foreign competition. He did not even do that to help the domestic haulage industry, which made the protests even more intense.
The Chancellor has tried to wreck several industries. He has been successful in helping to do enormous damage to telecoms, to haulage and to people's savings for pensions. Now, he has decided to tax jobs. That is especially disappointing because he made his reputation in Opposition in campaigning against every job loss that was ever announced under a Conservative Government. Now that we have him in power, he seems to ignore the thousands of redundancies that take place week by week in manufacturing industry under his stewardship of the economy. He is taking the incredible risk of placing an even greater burden upon employers and employees by raising the cost of employment.
I am sure that there are quite a few successful and prosperous parts of the economy that will be able to pay the bill. They will not enjoy paying it but they will manage. However, there will be a serious impact on marginal parts of the economy. The most likely area to be badly damaged is relatively labour intensive and often quite low-wage parts of the economy in manufacturing. That is the area that is most at risk already from all the other Government policies of high tax and high regulation and the current exchange rate. It will now face an additional imposition from the Chancellor. For a Chancellor who has always rightly said that he wants more jobs, more enterprise and more prosperity, it is a great pity that he has now decided to raise so much money in the form of a tax on jobs and enterprise.