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Budget Resolutions and Economic Situation

I am sorry? I thought that we just heard from the Labour Front Bench that we should not talk about the environment. Is that right? I thought that this was the new green Labour party. The former Cabinet Secretary described the Chancellor’s attitude as follows:"““If you want something done about the environment you don’t talk to David Miliband.””" It is clear that the Chancellor did not talk to the Environment Secretary before putting together the environment part of the Budget. We have the leaked letter that the Secretary of State for Environment, Food and Rural Affairs sent to the Chancellor. Entitled ““DEFRA’s Priorities for the Budget of 2007””, it states that"““market based instruments, including taxes, need to play a substantial role in our emerging strategy to respond to climate change””." I think that we all agree with that. The letter went on to say that"““emissions from aviation are our fastest growing source of greenhouse gas emissions...air travel is lightly taxed…I do not believe we can leave aviation untaxed””." The letter continues with the very compelling submission that"““there is a case to look again at making””" domestic"““flights subject to VAT””." Presumably, the Environment Secretary shares my regret that the Chancellor went out of his way to attack DEFRA’s idea in his speech yesterday. Of course, when a Treasury official was asked what he thought of the DEFRA submission, he said that the Chancellor receives ““many Budget submissions””. The truth is that the Chancellor is not seriously interested in the environment. He never has been: it is all politics for him. The word ““climate”” hardly appeared in his Budgets until my right hon. Friend the Leader of the Opposition came along. Pretty much the only green things about yesterday’s Budget were the endless recycled announcements. I turn now to the package for business. I welcome the cut in the headline corporation tax rate, which is to be paid for by cutting corporation tax reliefs. I welcome it, because I proposed it. I am obviously having more luck with my Budget submissions than some Secretaries of State. What is baffling is that, in this Budget, the Chancellor has taken a completely opposite approach to small-business taxation. There, he has increased the tax rate and introduced more reliefs. What has the right hon. Gentleman done in his time as Chancellor with the small companies tax rate? In 1997, he cut it from 23 to 21 per cent. In 1998, he cut it again to 20 per cent. In 1999, he introduced a new 10 per cent. rate, and in 2002 he abolished the 10 per cent. and made it zero. All that sounds pretty good. Unfortunately, in 2004 the Chancellor put the zero rate back up to 19 per cent. Yesterday, he raised it again to 22 per cent. After 11 Budgets, and six changes in the tax rate, we are pretty much back where we started. The only thing that small businesses have to show for it is a hugely more complicated and burdensome tax system. It is no wonder that the small business organisations are up in arms about the Budget. Last night, the Forum of Private Business stated:"““The Chancellor has used smoke and mirrors to disguise the fact there is nothing in this Budget to support small businesses””," and the Federation of Small Businesses said that it was ““very disappointing””. They will be even more disappointed when they discover that total business taxes are set to rise by £1 billion next year, and by almost £2 billion the year after. What sort of response to globalisation is that?