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In the short time available to me, I wish to focus on a number of aspects relating to business, the children's tax credit, national insurance and the health service. On business policy and the contents of the Budget impacting on companies, we will certainly look dispassionately and constructively at the research and development tax credit, the Government's proposals for VAT reform, the pilot schemes to encourage the provision of training and the attempted reduction in the payroll burdens on business following the Carter reportburdens that have been substantially imposed by the very Government who are now pledging to review them.
Similarly, we will look critically but with interest at the Government's policy on gains from substantial shareholdings, on tax relief for intellectual property and other features of the Budget that have been highlighted in contributions this afternoon. However, I have to say to the Financial Secretary to the Treasury, who is winding up for the Government, that any progress in relation to enterprise, any assistance to companies that has been provided and any betterment of the business climate that might result from particular measures in this Budget must be viewed in the context and against the background of two important facts. First, the consequence of the changeslet us be explicit and say the huge increasesin national insurance contributions will be extremely damaging to large numbers of companies the length and
These measures must be viewed in the light of the damaging regulatory imposts that have spewed forth from Whitehall since May 1997. The Government said just before they were elected that they would not impose burdensome regulations upon business because they understood that successful businesses must keep costs down. Since then, they have progressively increased regulatory burdens so that the sea of regulation with which businesses have to contend is deeper and more hazardous than at any time in the history of the United Kingdom.
As my hon. Friend the Member for Basingstoke said, the Government have imposed one regulation every 26 minutes of the working day. In 2001, from the Treasury alone, we had no fewer than 188 regulations in the form of statutory instruments, running to 1,352 pagesa veritable cure for insomniaand weighing 4.074 kg. That is the record of a Government who do not understand business, have not worked in business, have never run a business and have certainly never owned one. That is the context in which we must view what they say now.
The Government have talked with enthusiasm and no little pride about their child tax credit and the measures that they are taking, the better to assist families. As a number of my right hon. and hon. Friends have pointed out over the past 24 hours, that must be considered in the light of the fact that between October 1999 and April 2003 the Government will have introduced five new such credits, withdrawn four of them and then added another two on top. Many of those measures require substantial swathes of regulation if they are to become effective in practice, and that means regulation on businesses. When we talk about regulation on businesses, we do not mean businesses including small businesses, we mean predominantly small businesses. Some 99.6 per cent. of companies in Britain employ fewer than 100 people; at my last examination of the matter, they accounted for approximately 57 per cent. of the private sector work force and they now generate about half our national output. Those companies are being belaboured by the regulatory leviathan so favoured by this Administration.
We know that the increase in national insurance contributions will hurt some people badly. It has been imposed even though, on 29 May last year, in a debate on the "Powerhouse" programme towards the end of the election campaign, the present Secretary of State for Trade and Industry said that there was no question that national insurance contributions would be increased. She said that the Government had no such plans, and she added that it simply would not happen.
In defiance of those apparent commitments, the increase has happened. The Forum of Private Business said yesterday that the additional bill would be £2,361 a year for companies with 10 employees. For any firm daring to grow and become more prosperous, to generate greater wealth and employ up to 100 people, the additional national insurance burden as a result of yesterday's Budget will be £23,606.
The change also has a relevance for public services. My hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) pointed out to me today that each of the six secondary schools in his constituency will each face an extra bill of £40,000 a year as a result of the 1 per cent. increase in employer national insurance contributions. I think that even the Financial Secretary will be able to do the arithmetic readily enough. The extra bill will amount to almost a quarter of a million pounds a year for those schools.
In the education service, for 361,200 teachers, the extra bill will be £79 million a year. The police service has 124,970 officers, and the additional bill there comes to £32 million a year. The NHS is now the largest employer in western Europe, following the collapse of the Red Army. The extra national insurance bill for the NHS as a consequence of yesterday afternoon's deliberate and calculated imposition by the Chancellor is £336 million a year.
That is the reality of what is about to be implemented by the Government. They say that the purpose is to finance improvements in health, and that those improvements will be accompanied by reform. However, before the Budget, I made a cursory examination of speeches by the Prime Minister, the Chancellor, the Chief Secretary to the Treasury and the Secretary of State for Work and Pensions. Since 1998 there have been no fewer than 23 references to the matter but, although we have had the extra £100 billion in taxation and some of the promised increases in expenditure, we have not had the reform.
The Secretary of State for Health made a statement today, but on reform he gave us only woolliness and gimmickry on a grand scale. Problems of bed blocking and cancelled operations77,818 of the latter last yearpersist. The problem that there are more people waiting to see a consultant remainsthere are 113,000 more of them since the Government came to office. The problem that our NHS has more administrators than beds persists and is exacerbated almost every day. To be precise, there are 12,290 more administrators than there are beds.
A little while ago, I praised the hon. Member for Warrington, North generously and perhaps extravagantly. She spoke about the danger that more people will have to pay for operations. She is a keen student of the facts of political debate, and she must know that, last year alone, an extra 250,000 people in this country did just that, even though they had no insurance.
The two-tier system already exists under this Government. Many Conservative Members, including those who have used the NHS for decades of our lives, do not think it right that people should have to use their life savings to save their lives. That is what is happening under this new Labour Administration.
I shall take no lectures from the Financial Secretary, and certainly none from the Secretary of State for Work and Pensions. I hail from the wing of the Conservative party whose members pay mortgages and buy their own furniture. I have used the NHS for 35 years of my life. I did not go to a Scottish public school called Loretto, and I will not take lectures from the Secretary of State about
This Government have failed on their public service agreement targets. They have failed on truancy, they have failed on numeracy levels for 11-year-olds, and are failing now in terms of the growth of passengers on the railway system. They are failing in terms of the reduction of congestion on our roads, which increased in 2001 by 3 per cent. They are failing in relation to their criminal justice targets, too. They say that they want to cut robbery; they are failing to do so.
The Government know how to tax and they know how to spend, and, as my right hon. and hon. Friends and millions of people the length and breadth of the country are increasingly aware, they also know how to waste money on a monumental scale. They have failed, and they are failing. With their approach, they will continue to fail.