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Finance Bill

My right hon. Friend makes an excellent observation. It is a sad reflection on the Government that their own Back Benchers have no confidence in their Budget or their Finance Bill, and do not wish to make any contribution to the debate or come to the Chamber to defend it. That is the shameful state of the Government today. As a Whip, I sit through many debates, not only on the economy and finance, so I know that Labour Members often hardly bother to turn up. Part 1, clauses 1 to 6 contain the provisions on income tax. I was taken by a headline that I saw on economist.com which said it all:""Gordon Brown's budget is a dishonest piece of pre-election politicking"." That is from The Economist, a well respected magazine, and it is especially symbolised by the Government's approach to taxation. We have heard much today about the new 50p band. The Institute for Fiscal Studies, another respected body, predicts that that tax will generate "almost nothing". That is because many high tax earners, especially those who work in the financial services sector—not in manufacturing, because that sector has shrunk to below 15 per cent. of GDP, perhaps even as low as 13 per cent.—are mobile and they will leave. It is a competitive world and people will move where tax rates are more competitive. With one move, the Chancellor has said to those people—to entrepreneurs and those who want to build up their businesses—that he is taking away the welcome mat from UK plc. Those people are no longer welcome here and they will feel that they may as well go elsewhere. The Government often claim that the Tories are for the few, not the many. But when one peels back the layers of the onion on the Finance Bill, the reality is that the majority of people who will be hurt by it are those earning around £19,500 to £20,000 plus. They will be hurt particularly badly and punished the most by this Bill. So it will hurt the many, not the few, because the few can leave the country. At the beginning of the debate, the Chief Secretary was pressed on several issues to do with child poverty reduction. She gave no answer on how close we were to achieving the Government's target of halving child poverty by 2010, but she threw back at us the allegation that we do not support the Government's aspiration to eradicate child poverty by 2020. I want to say here and now that of course we do. We absolutely support the Government's aspiration to eradicate child poverty by 2020, and I suspect that after next year we will go a long way towards achieving that goal. I turn now to clauses 11 and 12 on alcohol and tobacco duties. As I mentioned to my right hon. Friend the Member for Wokingham, these taxes on alcohol and tobacco are highly regressive. Unfortunately, the poorer members of our society—the less well-off—spend a higher proportion of their income, their wealth or their benefits on smoking, driving, alcohol and other such activities. The Conservatives have come up with what I hope is a more creative way of targeting this, which involves targeting alcopops. I believe that my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) talked about that at the beginning of the debate. The Government seem to be using a blunt instrument with this tax on alcohol, rather than being sharp about it and focusing on the real issues, such as alcopops, which teenagers tend to drink and which tend to cause the problems that we all see in our constituencies on a Friday or Saturday night. Equally importantly, the tax is another nail in the coffin of many of our pubs. I live in a semi-rural constituency and I know that many of my publicans are feeling incredibly hard-pressed after the change in the rules on smoking. They are now being taxed more and more on alcohol. I feel that we will see many more of our pubs—particularly those in our rural constituencies—fall by the wayside.