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AMENDMENT OF THE LAW

The Budget takes place in difficult circumstances, given what has gone on in the world. I shall not repeat what has been said and, unusually for me, but because of time constraints and many preceding lengthy speeches, I will take no interventions. We all know about the turbulence in the world economy, affecting banking, fuel, especially the price of oil, the price of food—for example, the price of wheat has increased by 118 per cent. in the past year—and commodity prices, which have increased hugely, driven especially by demand from countries such as China and India. That is the difficult background to the Budget. The Chancellor has done a good job, in a steady-as-she-goes Budget, in trying to act positively in the face of the challenges of globalisation and economic turbulence in the world. The Budget was also announced against the backdrop of the Government’s other policies to cope with the challenges of globalisation, such as the Leitch review of skills and the Sainsbury review of science to enable us to foster innovation here. The Government have also taken positive steps to protect intellectual property rights in this country, in the European Union under the treaty of Lisbon, and internationally. They have also increased spending on the NHS in recent years. A company such as General Motors is nearly bankrupt through the health payments that it has to make to its retired workers as well as its current work force because the USA does not have a national health system. Spending taxpayers’ money on the NHS is, therefore, good for the economy. It is an investment, which helps business. Similarly, the Government have invested in education to increase skills. I did not notice any measures on research and development in the Budget, and I wonder whether the Government have conducted any research on the effect of the tax breaks that they have introduced in recent years on research and development. I did not notice any measures on manufacturing, which is especially concerning for me, as a west midlands Member of Parliament. My hon. Friend the Member for Wolverhampton, North-East (Mr. Purchase) spoke about that. I intervened on my right hon. Friend the Member for West Dunbartonshire (John McFall) about insider trading because I believe that the Government need to do much more about that, and make the FSA and the Serious Fraud Office get their act together. On a parochial matter, before I move on to some sniping, the headquarters of Marston’s brewery, one of the major brewers in the country, is based in my constituency. The site of the third largest pub chain in the UK, run by Marston’s, is also there. I am therefore disappointed about the differentials on alcohol duties in the Budget. I am especially disappointed that not only has beer duty increased by 4p a pint, but the duty on a litre of still cider has increased by only 3p. Still cider, bought cheaply from off-licences, causes problems with drunkenness in my constituency and, I suspect, many others. It is unfortunate that the Budget has increased the price of beer through excise duties much more than that of cider, which poses a greater problem. Let me consider the speech of the Liberal Democrat leader, the right hon. Member for Sheffield, Hallam (Mr. Clegg). What a vacuous response to the Budget. He presented almost no policies. He proposed a green tax con, which we have discussed previously in the House when considering green taxes that are revenue-neutral. The problem with green taxes is changing behaviour. If the behaviour changes, one cannot have a revenue-neutral tax unless one increases other taxes or ratchets up the green taxes. Neither of those options is desirable. The right hon. Member for Sheffield, Hallam also tried to steal the amendment that I, not the Liberal Democrats, was the first in the House to bring forward, to increase massively the vehicle excise duty on the most polluting cars. In case the 4x4 fraternity get on to me, I have repeatedly said in the House that nine of the top 10 most polluting vehicles sold in the Untied Kingdom are not 4x4s, but cars such as Bentleys, Maseratis and Lamborghinis. The first-time duty of £950 on the most polluting vehicles in the Budget is a step forward, but I wish that the Chancellor had gone much further, by doubling that rate and imposing an annual rate, which would change behaviour, because the second-hand value of those vehicles would plummet. That is where we will hit the market. The right hon. Member for Sheffield, Hallam seemed to have no understanding of non-dom taxation, which caused great hilarity in the House, and talked about poor non-doms. I am in favour of helping poor non-doms, through the Gangmasters (Licensing) Act 2004 and so on, but that is not the group that we mean when we talk about the taxation of non-domiciles. We are talking about the rich, not the poor non-doms, who will not make so much money that they will have to pay the £30,000 levy or whatever it is. The right hon. Gentleman completely misunderstood that. Things got worse with the Conservatives. It is like ““Groundhog Day”” with them. I have sat through seven Budget debates and the Conservative party is like a clock that has stopped: every 24 hours it is right twice. I concede the possibility that the Conservatives might be right this year, with the doom and gloom that we hear from them every year. However, they have not been right for the past 11 years, and the betting is that they will not be right this year. If the Conservatives are right, it will only be because the 12 hours have come round and, with their doom and gloom, the clock is briefly showing the right time again. As for the Conservative party’s spending policies as an alternative to the Budget, the hon. Member for Cities of London and Westminster (Mr. Field) asked about the £10.5 billion spending spree. I can give him some figures on that: cutting the corporation tax rate to 27 per cent. will cost £1.75 billion; the transferable marriage tax allowance will cost £3.2 billion; the increase in the working tax credit will cost £3 billion; the increase in the inheritance tax threshold to £1 million will cost £2 billion; and raising the stamp duty threshold for first-time buyers will cost £400 million. On top of that, we have heard all kinds of wonderful commitments: more funding for the armed forces; more anti-MRSA funding; additional drugs for thousands of stroke patients; high-speed rail pilot schemes; billions of pounds more for the NHS, according to the shadow NHS spokesman, the hon. Member for South Cambridgeshire (Mr. Lansley); the national school leaver’s programme that is so beloved of the right hon. Member for Witney (Mr. Cameron); his demand for a larger Army; and extensions to light rail. All those are worthy, but what did he say about raising taxes in his speech on the Budget? He talked about raising taxes on binge drinking. Raising taxes on binge drinking might be worth while, but if it works, it will be like green taxes—it will be revenue-neutral, because people will drink less. That was the right hon. Gentleman’s only tax-raising measure to pay for the long shopping list that I have read out, which will cost considerably more than £10 billion. Binge drinking taxes alone is not a good way to go. On sharing the proceeds of growth, the right hon. Gentleman talked about cutting capital gains tax, taxes on family businesses and corporation taxes, saving loads of post offices and every maternity hospital in the country, and more spending commitments. That is an even bigger black hole when all he is doing is putting up binge drinking taxes. So what is the right hon. Gentleman going to do? He is going to borrow loads of money. What is the form for that? The form is the previous Conservative Government, who doubled the national debt. They did not want to put up taxes, but they had to get the money from somewhere, because they did not have the guts to cut the programmes—thank goodness for the working class in the United Kingdom—so they borrowed the money and left us to take over, with a big financial hangover. Despite what the Conservatives say, the Government have paid off quite a lot of that debt. National debt is now far lower as a proportion of GDP than when we took over in 1997. The Conservatives are going nowhere. The other idea that the right hon. Gentleman put forward was that green taxes should go into a family fund. Again, that is the kind of revenue-neutral nonsense that we heard from the Liberal Democrats. The proposal will not work, because although it is very desirable if people or companies change their behaviour and stop acting in such a polluting way, the tax take will drop. If we had green taxes going into a family fund, as the right hon. Gentleman suggested, that would do nothing and be just another tax rise. Both Opposition parties have put forward vacuous policies, if policies at all, and wild, unfunded spending commitments. It will not do. At least the Chancellor has put forward a considered package in difficult economic times, which I think will work.