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Finance Bill

This Finance Bill is introduced against a backdrop of unprecedented uncertainty facing the British economy. Over the past six months, we have seen key leading economic indicators turn downwards, consumer and business confidence collapse, retail sales dip and the housing market turn. Millions of families and businesses are apprehensive about what the future holds for them. At times like this, people want a Government who are strong and unified, with a clear long-term strategy and a sense of purpose. Instead, they have a Government who are weak and disunited, fighting each other rather than fighting for Britain, dithering and indecisive, and focused on their own short-term problems. They have a Government who have lost their sense of where they are going and their will to go there. This Finance Bill is an opportunity missed. What the country needs today is a Finance Bill that will set Britain back on the right course. It needs a Bill to deliver a fair deal to hard-pressed families as the cost of living soars and earnings stagnate; to restore our business-friendly credentials, which the fiasco of the pre-Budget report did so much to undermine; and to set out a transparent process for future business tax changes and for proper consultation on them. The country needs a Bill to define clearly the scope of the rules and the processes for enforcing them consistently and fairly, and to reinforce the incentives for the investment and entrepreneurship that will deliver the jobs and prosperity that Britain needs for the future. What we have is a Finance Bill that exposes the legacy of the economic incompetence that has left Britain so ill prepared for the current uncertainty and given the Chancellor so little room for manoeuvre. He has so little room that he has to increase taxes on average families who like an occasional drink or drive a family car. The Bill leaves the business community still facing huge uncertainty about the detail of the non-dom taxation policy, which is now set out in schedule 7—a schedule that is so dense and impenetrable that even the experts tell us that they are baffled by it. By the Government's own admission, it is still so full of holes, six months after the PBR announcement, that it will require substantial amendment during the Bill's passage. In short, this is a Finance Bill that does exactly what we do not need at this point in the economic cycle. It raises taxes on households as the economy slows, the cost of living soars and the housing market teeters on the brink, fuelling the collapse in consumer confidence. It raises taxes on business at a time when our competitors are cutting them to support their economies, undermines investment and business confidence, and kicks families and businesses when they are down. It is typical of this Prime Minister that, at a time when the focus of attention in the Bill should be on supporting business and consumers and stimulating investment to keep the economy from slowing still further, the income tax measures announced in his Budget of 2007, when he was seeking to box in his successor, have dominated the debate. Perhaps it is poetic justice that when he stepped off the plane to confront the grim reality of home, it was his income tax reform that was fuelling the collapse of his authority and undermining his successor's first Finance Bill. It is typical, too, that the Prime Minister seems to be just about the only person who still does not get it and is still in denial that there is a problem. He still refuses to acknowledge his cynical sacrifice of the interests of the poorest to his own short-term political agenda. Opposition Members well remember the farce of the 2007 tax con Budget, and how Labour Back Benchers cheered the announcement of the reduction of the basic rate. What a coup to crown the then Chancellor's decade in the Treasury, and to launch his bid for the Labour leadership. How he basked in that achievement—for about five minutes. Then, it unravelled. Table A1 of the Red Book exposed the sleight of hand that paid for the tax cut with the abolition of the 10p rate. Then, the Institute for Fiscal Studies identified who the losers would be; the Chief Secretary to the Treasury apparently cannot say the figure, but I will: 5.3 million of Britain's poorest families. That figure was confirmed, give or take, in the Treasury's evidence to the Select Committee, and that is after taking account of the increases in tax credits.