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Mr. Bercow: All my right hon. Friend's points are telling. Does he not agree that it is now becoming clear that what Labour meant when it said that it would be a people's Government was that people who are married, people who pay mortgages, people who own cars, people who have the temerity to put petrol in them, people who acquire savings, people who possess pensions and people who run businesses would all soon face significantly higher tax burdens as a result of the depredations of this Administration?
Mr. Jack: Indeed, and to build on my hon. Friend's salient point, families with children may have had some recompense, but all the married couples, who have lost the married couples allowance, home owners, who no longer receive mortgage interest relief at source, and anyone who runs a car will all know just how hard they have been hit by the Government.
I commend anyone to examine table C9 in the Red Book and compare last year's projections for the percentage of GDP taken by income tax with the current position. The figures for social security contributions may show a more level picture, but more telling is the rise in all tax receipts when compared with last year's projections for them as a percentage of GDP. The Government are condemned by their own figures as a high-tax Government.
I want also to consider the issue from a personal point of view. One of the arguments that the Government have used to explain the increased tax receipts is that more people are in work. Yes, that may be so, but the 1999 edition of the Inland Revenue statistics contains some interesting facts. In the financial year 1997-98, a fraction over 17 million people were basic rate taxpayers. The Government claim that they have created 1 million extra jobs, so one might assume that there should now be 18 million basic rate taxpayers. However, the projection
That is equally true for higher rate taxpayers. I am sure that those on the Treasury Bench will be familiar with the contents of table 3.4 of the Inland Revenue document that points out that we already have 635,000 people paying the higher rate on incomes of only £30,000. Many middle managers pay higher rate tax already.
With the public finances in better order, it is time for the Chancellor to consider how he can take people out of paying tax altogether and to review the total number who are paying higher taxes. Mr. Andy Goracy, the general manager of the Somerfield at Downend near Bristol, was interviewed in the Financial Times and he makes it clear that he, for one, wants that to happen. He says that
The landfill tax has been briefly mentioned and the House was reminded that it has gone up without any corresponding decrease in national insurance. This issue shows how small increases in little taxes, such as the landfill tax, can suddenly become nice little earners for the Chancellor. The Chancellor enjoys spending other people's money. After all the earlier ballyhoo about extra money going into health and education, it is still clear that he had not got things right, because he had to announce a bit more yesterday.
However, if the Chancellor were engaged in a value-for-money exercise, my constituents in Fylde would seriously question whether he has got it right. We had joy celebrating the decision to build a new cardiothoracic unit at the Blackpool Victoria hospital, but a recent parliamentary answer said that that would happen subject to the availability of capital. It is clear that the job is still tight for money. Those who send their children to Lytham St. Anne's High school have heard about all the money for education, but they will wonder why a school for 1,800 pupils can provide accommodation for only 350 of them for school dinners every day, because no capital is available to expand the school's facilities. My constituents in the ward of Ingol, a part of Preston that is beset by vandalism, will still wonder where the extra police officers are in spite of all the talk about extra money being spent on law and order.
I mentioned a moment ago what the Chancellor might have done with some of his surplus. He said in his Budget statement that he was committed to energy saving and to meeting the Kyoto targets. Why did he not use some of the money to promote further work to assist the development of the new generation of nuclear power plants? A 1,000 MW power station would achieve as much as the climate change levy in the reduction of CO 2 emissions. What could be a better way of investing for the future of our environment than helping in that way?
I have already referred to tax and it is evident that, with the plethora of credits, our tax system is becoming ever more complex. I congratulate the Paymaster General on the way in which she has supported the tax law rewrite exercise, but the Budget missed a great opportunity to go
I awoke at an early hour this morning to hear a Mr. John Williams of Progressive Engineering, a midland company, say on Radio 5 Live that he already spends a quarter of his time as a Government agent in dealing with issues such as the working families tax credit. If such people in small engineering companies are spending so much time on the complexities of the tax system, does it not cry out, if entrepreneurship is to be truly set free, for us to get a grip on simplifying the tax system?
I say that against a background of a Chancellor who loves to fiddle and micromanage the economy. That is why I asked the Secretary of State for Trade and Industry if he could say how much extra investment had arisen from the tax credits or small-scale tax measures. He answered that question and the Paymaster General directed me to page 46 of the Red Book. It mentions a total amount of investment, but does not make a specific analysis of those measures. Before the Chancellor introduces any more whizz-bang ideas, he should undertake and publish a cost benefit analysis to establish whether those ideas are capable of delivering.
The hon. Member for South-East Cornwall (Mr. Breed) mentioned farming. That industry has gone through an unprecedented period of difficulty. Foot and mouth caps it all. I should have liked the Budget to include a measure to help with the costs of slaughter and the difficulties faced by abattoirs. Many farmers have--thankfully--been allowed to take some of their animals for slaughter so as to enter the marketplace, but they are deeply worried that the normal market mechanisms are working against them and that the costs of slaughter are likely to rise in these unprecedented times.
If Ministers are involved in discussions with farmers and their representatives and there is any way to assist the industry temporarily, that would be money well spent. Without a well-financed farming industry, farmers' ability to be the stewards of our countryside--to look after our landscape and environment--is much diminished.
Mr. Nicholas Winterton: My right hon. Friend raises an important point which, for a good reason, the Minister of Agriculture, Fisheries and Food was unable to deal with fully today in either of his two appearances before the House. Does my right hon. Friend accept that farmers in general and livestock farmers in particular are having their cash flow dramatically interrupted? Bearing in mind that financially they are on their knees, should not the Government try to intervene with the financial institutions on their behalf? They should at least deliver guidance or an exhortation that the situation should be properly taken into account, otherwise, many people will be lost from the land.
Mr. Jack: My hon. Friend is knowledgeable on such matters and makes an extremely good point. I can give him a crumb of comfort. Yesterday, I received a letter from Mr. Andrew McThomas of Barclays bank advising me that it had given a three-month period of special help to farmers who have borrowed to keep their businesses going. That illustrates my hon. Friend's point.
Mr. Tony Worthington (Clydebank and Milngavie): The right hon. Member for Fylde (Mr. Jack) said that the Chancellor has led a charmed life. I am reminded of Gary Player, the great golfer, who said, "It's funny. The harder I practise, the luckier I get."
The Chancellor has demonstrated sheer competence, which has had a rich reward. I approve of the Budget enormously. In our job, we sometimes have to think about the things that people no longer say to us, one of which is, "It's not worth working." That used to be said over and again when there was no minimum wage, working families tax credit, children's tax credit and so on. The Government's attack on child poverty is superb. It must be encouraged. If we impoverish our children, we later impoverish our society. Thank goodness we are through that phase. The fact that the former chief inspector of schools left his post has meant that we are no longer hearing the nonsense that poverty does not affect educational achievement, because it does, and we are attacking it.
It is a fine Budget. However, three matters concern me, two of which I should like the Government to reconsider. I am worried about the regulation of insurance companies. There are public expenditure implications if something goes wrong with them. The hon. Member for Macclesfield (Mr. Winterton) knows what I am going to say because he heard me discuss this matter in an Adjournment debate in Westminster Hall.
The conduct of the insurance industry concerns me in one respect in particular. Chester Street Insurance Holdings, which recently collapsed, carried the bulk of asbestos claims that are covered by employer's liability. The company was restructured, and many people would know it better as Iron Trades. It had a concentration of claims with the shipbuilding industry and heavy engineering. The profitable part of the business was sold off in February 2000 to an Australian concern called QBE. The unprofitable part, which involved asbestos claims, was kept by Chester Street. That deal was approved by the Financial Services Authority, which monitors financial services.
By April, Ernst and Young, the accountancy firm, said that it did not know how long Chester Street could keep going with the liabilities that it carried. By January, the company had collapsed. However, the chief executive had not collapsed; he had awarded himself £450,000 extra for what he had achieved that year. He left the company with his performance-related pay and the congratulations of his chairman on his outstanding achievement, but now thousands of asbestos sufferers cannot be compensated through the courts for what has happened to them.