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Finance Bill

We have to have a fair system that affects everybody. The priority in our current economic difficulties is those at the bottom end, particularly in respect of tax allowances and those areas where we want to increase incentives to work. We are going to have the problem of higher unemployment. We want to move people from unemployment into employment, and we can use the tax and benefit systems to encourage that. That must be the priority. I know that the hon. Gentleman is something of an old socialist—dare I mention that in the Chamber these days?—but the reality is that if higher tax rates are not collected, there is no point in having them. In the longer term, the key point must be to get revenue in to pay the debts and to pay for public services. My hon. Friend the Member for Runnymede and Weybridge made an important point. We have had a massive temporary reduction in VAT, to which I and many other hon. Members are opposed and which I do not think will make much difference, yet the Government are raising national insurance contributions, which is a tax on jobs. That is not a good thing to do. We are going to have a problem maintaining employment. Many workers have said to me that they would like temporary measures, whereby people go on to short-time working. Indeed, there is a big debate about that in manufacturing. However, at a time when we hear trade unionists on the radio demanding more action from the Government, which is understandable, it seems daft that the Government should be putting up the cost of employment for those still in work and for the companies that employ them. That is a particularly bad thing. I welcome what the Government are doing on capital allowances. I welcome the fact that companies that have made losses are able to offset them against past profits, but the Government have not managed to stop what has happened since the credit crunch. Essentially, credit is still not flowing to companies. Things have eased since the worst of the current situation, six or seven months ago, but we still hear a lot of anecdotal evidence about banks not lending to businesses, while a lot of other finance companies, particularly those that would loan to companies for hire-purchase, are finding it difficult to get credit. That is causing problems for companies up and down the land. The Bill will impose a serious tax burden, which will cause a problem for many people who are struggling to make ends meet. The VAT reduction is clearly a means of getting money into people's pockets, but there is not much point in introducing it if we have negative inflation, if there are already massive price discounts as a result of what retailers are doing and if it will be reversed after a certain period. The Government have announced some goodies, but they have also announced some increases on the radar. People are not stupid: if they think that they will be hit, that may reduce their incentive to go out and spend. I represent an urban constituency, albeit one in a rural county. We all have to be aware that, for many of our fellow citizens, public transport is not an option. It might be an option in London, but it is not one in Cornwall, in many parts of Scotland or in many other rural counties. If we keep increasing fuel duty, it will have an impact on prices. There is no such thing as a painless tax increase: somebody, somewhere, has to pay. The road haulage industry has been struggling for a number of years, but high increases inevitably make it difficult for many people to stay in business, let alone make a profit. We have already heard a voluble campaign from pub landlords and from the brewing industry, which is suffering from the increases, with a number of pubs going out of business. The hon. Member for Dundee, East (Stewart Hosie) made a valuable point about the Scotch industry, which has generated hundreds of millions of pounds for our nation in exports over the years. If we keep hitting a particular industry hard, it is bound to have a long-term impact on it. I think it is beholden on us to point out that keeping on raising money in that way can cause difficulties. Environmental taxes are very much part of the Budget papers before us, and I welcome the fact that the Government are retaining air passenger duty. I think that their other proposal was misjudged, but it must be noted that the proceeds from the duty will go straight back to the Treasury and will not be devoted to environmental concerns. Landfill tax is paid mainly by local authorities—and essentially by council tax payers—and it too goes back to the Treasury and is not spent on environmental matters. If we are serious about green Budgets and the green agenda, green taxes should be related to green outcomes; they should not simply sink into the black holes of the Treasury. My hon. Friend the Member for Runnymede and Weybridge spoke about naming and shaming tax avoiders or people evading tax under clause 93. The Bill proposes amnesties for people who avoid tax, but I believe that it is more important to try to get people to pay their tax than it is to name and shame them. We need revenue, and any sensible tax authority will enter into a negotiation to get money back. In a world where capital can be moved through various accounts and offshore, the sensible thing is to have a very businesslike approach to dealing with people from whom one wants to get tax. We have a difficult time ahead of us. As always, the Finance Bill will take many hours to consider. As politicians, we have to be honest with people, and it will be an interesting time, but I am still optimistic about our nation.