---

Finance (No. 3) Bill

My Lords, I applaud the general direction of the Chancellor’s attack on public spending, yet I nurse concerns about the Government’s economic coherence. The Government’s growth strategy is deficient. Growth requires stronger supply-side measures, starting with deregulation. I tabled a Written Question when the Government had been in office for almost a year, inviting Ministers to set out the number of regulations revoked since the general election. The answer was none. It appears that despite languishing in Opposition for 13 years, the Conservatives were unprepared for Government, otherwise action would have been taken by now. Is not the Chancellor at least willing to remove reams of onerous employment laws, bearing in mind that expensive regulations to meet environmental targets lurk in the pipeline? The ligature of red tape stays tight around our businesses and their growth is further hampered by high tax rates. The Institute of Directors has just gauged that taking all taxes into account, the overall tax burden for a medium-sized firm is no less than 43 per cent. The Chancellor has asked HMRC to examine likely tax revenues from different rates of personal taxation. I had half hoped that Mr Osborne’s apparent belief in the enterprise culture would have informed his opinions without this digression. The noble Lord, Lord Myners, quote John Maynard Keynes in 1933. I am sure that he knows even better than I do that this was the year in which Keynes advised the then Government to cut taxes. Now, even the IMF has urged our Government to slice tax rates. So there is no deregulation, no lower taxes, except corporation tax, and to compound these defects the Government also harm our economic recovery and competitiveness and fuels inflation at the same time with so-called green measures. Last year, the Government raised £40 billion from green taxes with householders paying an extra £200 in hidden charges on gas and electricity bills. The Global Warming Policy Foundation has shown that one-fifth of our soaring energy bills are accounted for by the hidden subsidies and other costs to decarbonise our electricity industry. This injures our recovery. The cost of the low-carbon economy will be £13 billion a year, soon rising to £18 billion. China, India, and to a lesser extent the USA, have rejected constraints on carbon-based energy. Investment and jobs will be forced overseas by the Government’s actions. The director-general of the CBI has wryly observed that green taxes on cement, steel and lubricants will mean that even windmills will soon be too expensive to manufacture in this country. We cannot afford such follies. Last year our trade deficit was £50 billion, despite the 25 per cent devaluation. The benefits of devaluation in terms of exports have been so marginal that I query whether they are worth the manifest inflationary costs condoned by the Monetary Policy Committee.