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Finance Bill

My Lords, we usually take an opportunity of a debate on the Finance Bill to debate the Budget which preceded it, but we had an excellent debate on the Budget, led by my noble friend Lord MacGregor of Pulham Market. The Minister will notice that my usual team of supporters on Treasury matters has not turned out on this occasion because we have no wish to do anything which will hold up the end of this Parliament, and with it the economic management of the UK by this Government. I was, however, pleased that my noble and learned friend Lord Mackay joined us today, and I hope that the Minister will respond to his questions. I shall not rerun the critique of the Budget that we discussed before Easter, but I should say that it does not represent a credible plan to restore health to our country’s finances. In the past couple of days, the Minister has become fond of quoting the OECD, which has recently said some obliging things about the UK: but that of course is just one judgment. The European Commission has been far less complimentary about our deficit reduction plan and our growth prospects. Its analysis was based on the Pre-Budget Report, but the Budget was no better in terms of setting out a credible plan, so I imagine the Commission’s judgment will remain unchanged—and we never hear about that from the Benches opposite. Closer to home, the Budget got little or no support from commentators in the UK. The CBI was deeply unimpressed, as were most other business groups. By ignoring the increase in inflation that we are currently experiencing in favour of the short-term, negative inflation last September, the Government have managed to introduce yet another stealth tax on ordinary people. Based on the Treasury’s own calculations, this latest stealth tax is worth £2.2 billion to its coffers. Worst of all, the Budget failed to take the opportunity to rethink unwise decisions made in earlier years to introduce a tax on jobs from next year. It is not in the Finance Bill. It will require separate legislation, which will not be a money Bill and hence will be scrutinised by your Lordships’ House. My party is supported by a growing list of business leaders, and by all business groups, in condemning the increases in national insurance that the Government plan. We are clear that the health of our economy will be harmed if the increase goes ahead in full next year. It will act as a huge disincentive to businesses to create jobs, and hence undermine economic recovery. If introduced, it will cause unemployment to rise. The Chancellor of the Exchequer has admitted this to the Treasury Select Committee in another place. I give way to the noble Lord.