Finance Bill

May I say how disappointed we Conservatives are, not only because the Chief Secretary did not have time to join us in Committee, but because she has not, apparently, had time to make the Third Reading speech tonight? However, I congratulate the Financial Secretary and her spokeswomen—I do not have to say ““spokesmen and spokeswomen”” on this occasion—on how they handled the Bill through some complicated Committee sittings. They have always been well briefed and they have nearly always been good humoured. I congratulate the Financial Secretary on her performance. I am afraid that I cannot say the same about the Bill itself. It all started with the pre-Budget report last October, and what a lot of water has passed under the bridge since then. We have had the cancelled election, ““discgate””, the credit crunch, the nationalisation of Northern Rock, the soaring cost of living and the stalling of economic growth. The Prime Minister's stock has hit record lows and the Chancellor's pre-Budget and Budget packages have fallen apart. Britain is a less self-confident place than it was last October. What people want in these difficult times is a strong Government who are clear of purpose, united around a long-term strategy, and competent in delivery. What they have is a disunited, indecisive, incompetent Government, whose failures in managing the British economy during the good years are now being paid for by the British people. The Government have become so distracted by their own problems that they have missed the opportunities that the Bill offered. They are so busy fighting each other that they have not had time to fight for Britain. There has never been an occasion on which a Government have had to surrender so comprehensively on their keynote financial legislation. Never in my memory has a Finance Bill grabbed the newspaper headlines in the way this one has done. First, there was the abolition of the 10p rate. We went from receiving a prime ministerial insistence that there were no losers to the announcement of a £2.7 billion compensation package for 4.2 million of them in just a few weeks. However, there is still no answer to the plight of the remaining 1.1 million people, and no confirmation of the treatment, next year and the year after, of personal allowances and additional winter fuel payments for the lucky 4.2 million. It was never clear to me why it is apparently possible to announce a solution for those 1.1 million people only in the pre-Budget report, but eminently possible to announce a solution for the other 4.2 million people in the middle of the Crewe and Nantwich by-election campaign. When short-term political interest demanded it, the Government re-opened the Budget that they said could not be re-opened, and found money that they said they did not have. Next there was the humiliating climbdown on capital gains tax. Faced with a united outcry from the business community, and seeing his base of business support disintegrating, the Prime Minister ordered a U-turn, picking off the largest business lobby with a watered-down retirement relief for small businesses. However, that did not work, and the retirement relief that business really wants today is the relief that the Prime Minister's retirement will bring for all of us. There was also the non-dom climbdown—the retreat from the proposals spelled out in the pre-Budget report. That retreat was executed with all the finesse that one would expect of a great, clunking fist, and the Government achieved the worst of all worlds. They have alienated the non-dom community and have undermined its confidence in the future and they have managed to raise £100 million less from the whole exercise than they said they would. I could go on and mention the foreign profits tax regime and the income-splitting rules, both of which were cancelled. The common theme is of short-term political calculation overriding long-term principle. The man whose decision not to hold a general election was not at all influenced by the opinion polls has managed the tax agenda for short-term political advantage, not long-term fiscal stability. That is the very opposite of the long-term decisions about which the Prime Minister used to boast. What we needed was a Finance Bill that would begin to repair the damage done to Britain's reputation and tax competitiveness over the past few months. Instead, the Government are focused on digging themselves out of their own difficulties and trying to save their skin. They never learn; instead of taking the lifelines that they have been offered on vehicle excise duty, they have insisted on enshrining ““son of 10p”” in the form of the delayed road tax rises for next April, which is probably a month or so before the county and European elections, and the following April, which will probably be a month or so before a general election. They will do another U-turn on vehicle excise duty, and they just have not had the guts to own up to it today. Labour Back Benchers have tasted blood, and fiscal policy is no longer under the control of the Chancellor. The question is not if, but when, they will force that change. Will it be at the pre-Budget report, or will they bide their time until next spring? The Bill goes on to extend the powers of the tax authorities to enter premises and seize material on an unprecedented scale. It raises the tax rate on small companies and road tax on 80 per cent. of cars by 2010. It penalises responsible drinkers with unfair excise duty rises, clobbers businesses with £500 million of extra capital gains tax and scraps agricultural and industrial buildings allowances. But still, after all those measures, it fails to deliver relief to the 1.1 million losers from the 10p fiasco—among the lowest earners in our society. This will go down in history as the 10p Finance Bill, and those 1.1 million losers will be a lasting reminder of this Prime Minister's abandonment of principle and conviction to political calculation. I urge my hon. Friends to record our rejection of that approach and of the Bill by voting against its Third Reading.