Amendment of the law

The hon. Gentleman demonstrates only too clearly why I think that he and his Government are wrong. I approve of expenditure for such purposes, but we do not have to call it an "investment" for it to be something of which one approves. He was discussing proper, social expenditure; I talk to him as a social Tory, if he likes. We could go back to Lord Shaftesbury. He called such spending not "investment", but "social expenditure". It is social welfare, and it is what a civilised society should have. However, we should not kid ourselves that it gives an economic return. It does not—it improves our civilisation and the nature of our country, and it enables us to live with ourselves, but it is not an economic investment. That is my point. One issue of competitiveness—I am sure that Labour Members will entirely disagree with me on this—has worried me for some time. Incidentally, it also worried Keynes. If one goes back and reads Keynes, there are some interesting parts where he discusses reparations after the first world war. He was critical of the reparations that we imposed on Germany for a number of reasons. Some of those were moral and ethical, but he also said, to paraphrase, "If we put this burden on Germany, Germany will grow strong in having to pay this burden; we will grow soft in living off this burden." He was talking about the work ethic in our respective societies. In the famous Keynesian example of the state paying a worker to dig a hole and then paying another worker to fill it back in, he was talking about not only effective demand but the need to maintain the work ethic in British society to ensure that when idleness is forced on people, that does not enter into their soul and institutionalise the unemployment that arises from major recessions. I worry about the work ethic in British society. When I looked up the numbers in this morning's publication, I found that there are currently 7,851,000 economically inactive citizens in the United Kingdom. That figure is not quite as shocking as it sounds, because about 2 million are students, a couple of million are people raising families, and so on. What is interesting is that over the course of the past decade the number of people who have determined that they do not want to work has gone up— these are round figures; it has bounced around a bit—by between 500,000 and 600,000. Half a million people in our adult working-age population have decided that they do not want to work. We often see anecdotal evidence of people refusing work. A lot of the arguments about immigration have focused on the fact that people who come into this country are doing jobs that British citizens will not do. That is worrying in terms of the nature of our society, which we were debating earlier, and our long-term competitiveness. We have to think very hard about the whole welfare structure of our society. I am pleased that the Financial Secretary is on the Front Bench, because I know that he takes an interest in this. I have been backwards and forwards on this argument, but I am beginning to think again that we have to reconsider workfare. If the forecast is wrong and we end up having a long recession, we must ensure, first and foremost, that that does not visit habits of idleness on our population. I am happy to hear the Chancellor speak about action to help the young, but it is not just about the young: we are talking about a much bigger sector of the population, particularly in some of the old industrial areas near where I live and where I come from. We do not want to allow such habits to take hold in those areas. The economic historians will answer these questions on the basis of whether we come out of recession, which is all about growth. On taxation, everybody in this House knows that I am a low-tax Tory and that I would like to see lower taxes. I am not going to pick a fight with the Government over having a 50 per cent. top rate for those earning £150,000 a year or more—frankly, in terms of the argument, I do not care too much one way or the other. However, the independent Institute for Fiscal Studies has said in terms that a 45 per cent. rate would not deliver any more money—not a penny—to the Exchequer. Therefore, if that is the purpose, it will fail. What is more, it carries the risk—we do not yet know how big it is, because it depends on what other countries do—that people of talent will not come here. It is fashionable now to decry Ireland, but for 25 or 30 years Ireland has had a fantastic success story. One of the key parts of that was ensuring that talented people came to Ireland and had good tax arrangements in doing so. I suspect that if the Scottish Parliament had control of its own destiny it would do the same. That is why I am in favour of tax competition. There is a real risk that in doing something that is designed simply as a trap for the Tories, which is what it is, the Government may harm our long-term economic prospects. My right hon. Friend the Member for Penrith and The Border mentioned regulation, and he is absolutely right that that is the real impediment to employment growth in our economy. The reason why I specify employment growth rather than GDP is that the big generators of employment are small businesses, and those are the ones that suffer as the result of regulation. Big businesses have no trouble. I used to be a director of Tate & Lyle, and we had departments designed to deal with employment regulation and to maximise the amount of money that we got out of the Government in grants here, there and everywhere. We had departments and specialists for all those things, and the regulation was no impediment to us. In fact, it was an advantage because it got other people out of the business. Others did not have those departments, so it was a competitive advantage to us. That is exactly what regulation should not do, but it is what it does. I shall give an example. We will all have seen vans going around near here with "Pimlico Plumbers" on the side.