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Budget Resolutions and Economic Situation

I agree with the hon. Gentleman, and I was encouraged by the comments of my hon. Friend the Member for Tatton when he said exactly what the hon. Gentleman would have wanted to hear—namely that this across-the-board attack on the cider industry is not supported on this side of the House. My next-door parliamentary neighbour, the hon. Member for Hereford (Mr. Keetch), also speaks strongly for the cider industry, so it is a shame that he is not in his place today. He will be leaving the House at the next election, so I hope he will use this particularly vicious attack on our constituents as an opportunity to speak in this debate before next Tuesday. I would like to talk about something that happened last week. The Minister for Housing, the right hon. Member for Wentworth (John Healey), who I believe is the Government's pubs Minister, announced on 18 March 12 action points designed to support struggling pubs. Only a few days later, however, we see his Government attacking the key product that pubs are supposed to sell. It defies belief. We are losing five pubs a day. These duties will have an impact on the sale of cider. I received an e-mail this morning from a publican in my constituency who runs the Crown Inn at Woolhope, which prides itself on being one of the homes of Herefordshire cider and perry, stocking 18 types of cider all produced within 15 miles. This is locally produced cider being sold in a local pub to local people. That is the sort of model of sustainability that supports rural economies. It is something that the Government say should be encouraged, yet as soon as they get the opportunity, they torpedo all those good intentions with this savage increase in duty. That puts at risk the cider producers and apple growers, as well as the cider industry's strong and worthy efforts to improve not only environmental sustainability and local pubs, but higher standards of responsible drinking. At the start of his statement yesterday, the Chancellor of the Exchequer said:""At the heart of our decisions is a belief that Government should not stand aside, but should help people and business to achieve their ambitions."" What hollow words! This Budget and the cider duty increases do not correspond with those comments. The Chancellor also explained why this was being done:""A long-standing anomaly has meant that cider has been under-taxed in comparison with other alcoholic drinks."—[Official Report, 24 March 2010; Vol. 508, c. 249-256.]" This, unhappily, ignores the far higher costs involved in producing cider and the considerable environmental benefits generated by the cider industry. It is a tragedy that the Chancellor has gone down this route. There is another message here, too, for those in the beer industry. I hope that the House will remember that large numbers of hop growers also live in my constituency and do a tremendous job at a time when there is a great deal of pressure from the brewers to use less and less hops and to choose hops with higher alpha acids. The industry—whether it be brewers or cider makers—decided to fight among themselves about duty and as soon as the Government saw division, they nipped into the gap and increased the duty not just, aggressively, on cider, but on beer, which is a great shame. Let me touch on binge drinking, too, as the high-strength, low-fruit-content ciders are deeply associated with this problem. The overwhelming majority of ciders are not beverages used by binge drinkers and the country's unique, traditional and responsible cider makers should not be punished for this behaviour. I think that if these cider makers lived in Labour marginal seats, the difference in the Budget might have been considerable. I hope that the Government will reconsider. I hope that, in the years to come, they will realise that attacking a British industry run by British producers for British consumers in British pubs is a very silly and sad mistake to have made. Let me touch an another aspect of the Budget that I noticed—the proposal for a green bank to deal with green issues. At a time when bankers are, let us face it, not popular, it is extraordinary that the Government are acquiring yet another bank. They have bought RBS and Lloyds, they have taken on a nationalised Northern Rock, and now they want another bank. I believe that Post Bank, which was promoted yesterday, will be the Government's fourth. I am very happy to see green businesses supported—I am a passionate environmentalist myself—but I do not understand why the Government want to own more and more banking businesses. If the Government really wanted to promote environmental issues, they could start by cutting red tape and ensuring that industries that are exceptionally environmentally friendly, such as cider making, are protected. They could deal with the microgeneration certification scheme, which is affecting green energy suppliers. They could also help farmers to produce more on-farm renewable and low-carbon energy. There are 2,500 on-farm anaerobic digesters in Germany, and only about 30 in England. One of my constituents tells me that he wants an anaerobic digester on his dairy farm and has invested in one, but he needs help from Advantage West Midlands. It wants to help, but it is bogged down in red tape. Regulations and red tape from DEFRA cost about £530 million, and prevent farmers from expanding into the low-carbon energy sector. After a decade of Labour, barely 2 per cent. of the energy used in the United Kingdom comes from renewable sources. That is a record that the Government will leave behind. They should be supporting jobs and the rural economy by making it easier for businesses to invest. Labour's claims to support green technologies are inconsistent. The rate of duty on liquefied petroleum gas, a fuel that the Government should be encouraging more people to use because it is cleaner, has spiralled upwards in recent years. In 2005, it stood at 9p per kilogramme. It has already trebled to 28p, and will rise further to 30.53p on 1 April, to 31.95p in October and to 33.04p on 1 January next year. Over six years it will have risen by 367 per cent. That is really not the best way in which to promote clean alternatives. The Government are sending a mixed message on green jobs: in March last year the Prime Minister promised to create 400,000 of them, but by the time of the Labour party conference the figure had fallen to 250,000. The real problem for businesses is the ability to borrow. The Government have increased the target for the amounts that banks should be lending to business, but the lending is not happening. During the current economic downturn 27,000 businesses have gone under, and lending is a problem for businesses in my constituency. Last year I arranged a meeting between banks and businesses, at which it was made clear that there was a problem. The banks themselves say that they would like to lend—especially to farming businesses, because the collateral in the land value is good—but they cannot take the risk unless a business has a long track record. The reason, they say, is that other banks will not lend the money to them. Liquidity is a real problem at present, and the Government will not solve it merely by creating new banks. Broadband is another example of rural communities being badly left behind. Towns and villages in my constituency that are not connected are suffering. Only 58 per cent. of households in the rural west midlands have fixed broadband connections. According to the Commission for Rural Communities, 42 per cent. of rural England can currently only access speeds of 2 megabits per second or below. I have written to Ministers, whose answers show that the Government have no idea of the percentage of business and residential properties in Herefordshire without access to the 2 megabits per second envisaged in Digital Britain. I met representatives of BT the other day to discuss the issue, and they were keen to help, but BT is a business too. It has shareholders, and faces challenges of its own. I am extremely worried that the Government's policy will not work. Lingen currently has no broadband provider. A company called QiComm used to provide it, but can no longer do so because the service is not commercially viable. Members of the community joined forces to get a service up and running themselves, with the support of the local council. There are 36 users, whose broadband service will be operational from 1 April. That demonstrates what can be done when users get together. However, if they are to pay tax on their phone bills, they will be paying for something that they used not to have but went out and acquired for themselves. I do not think that the Government's 50p tax on fixed-line telephones will deliver the changes that we would all like to see. The Government have spent hundreds of millions of pounds on bailing out the banks. Businesses will want to know why that hard-earned taxpayers' money is not filtering through the system and reaching them. We heard plenty about the car industry in the Budget statement, but I have not forgotten what happened in the west midlands before the last general election. The Longbridge plant was failing, and vast quantities of taxpayers' money were poured in. That was before the Phoenix four story broke. I therefore have grave reservations about what the Government have promised in the Budget. I am particularly sad about what they are going to do to the cider industry—a fantastic industry that was doing so well, and which has been dealt nothing short of a body blow by this attack on it by the Labour Government. There are now clear dividing lines. The Government have demonstrated that they have no regard for the rural communities. The best description of the Budget that I have heard is that it is a Polo mint Budget: it looks all right around the edges, but there is the gaping hole in the middle of £19 billion in tax that needs to be raised. We heard nothing about that. It was a Budget designed for an election campaign, which, like the Budget, will fail.