It is always a pleasure to listen to the right hon. Member for Birkenhead (Mr. Field). I would not have minded listening to him for a little longer, but he was commendably brief. I am grateful to him for that, and will try to do the same service for colleagues who are still hoping to participate in this debate.
The right hon. Gentleman rightly said that one of the central points that needs to be addressed in future years, and perhaps even decades, is how we bring revenue towards expenditure. However, he was also honest enough to say that we urgently need to bring expenditure towards what can reasonably be borne by revenue, and the willingness and ability of the public to provide it. That is the central point that we need to consider in the context of this Budget.
The right hon. Gentleman also spoke about the spectre of the vast and rapidly increasing levels of unemployment, as did a number of hon. Members in all parts of the House. That is an increasing concern for us all, in all our constituencies. I know that I am not alone in having seen unemployment in my constituency more than double in the past year, which is an alarming increase, albeit from a relatively low base. The announcement of £1.7 billion more to help deal with that problem is welcome, as long as it is used effectively. I have a real concern, however, that that might just go into the machinery of the new deal, and much of it could be wasted, just as so much has been wasted by using the revolving door method of taking people off unemployment benefit, thus reducing the apparent period of unemployment, then dumping them back on to it. I hope that the Government will make every effort to ensure that those resources are directed to the more effective schemes. Those are often the smaller, more local schemes run by voluntary organisations, of the kind that are all too often run much more effectively in other countries than they are here.
There are, of course, measures in the Budget that we all welcome. I was pleased to hear the reference to the trade credit insurance measures, for example. I am sure that Members across the House will hear repeatedly from those in their constituencies and elsewhere about the very real problems that they are encountering because of the withdrawal of trade credit insurance, so I hope that the scheme will be effective. All too often over the past few months we have seen schemes brought forward with commendable motives, but which do not seem to have come into effect as quickly or as substantially as is needed.
I want to say a few words about some of the details that should have been addressed in the Budget but have not been, before I make a wider point afterwards. I know that Ministers are engaged in live debates on these matters, but I want to highlight some of the things that are missing. Last year I spoke against the adoption of aviation duty, which I thought would be a bad tax that would have all sorts of negative effects. I was therefore delighted when, in November, the Government accepted that it would be a bad tax and would not work. However, they then responded by introducing some ad hoc measures relating to air passenger duty, which have problems of their own, especially in connection with the banding, and the fact that an unfair burden is being imposed on premium economy seats. I know that Ministers are dealing with those problems—or at least having discussions about them—and I know that they are difficult to resolve. However, given that the Budget papers today tell us that the projected revenues from air passenger duty are reducing rather than rising, we have to wonder whether the Government themselves think that they have got that tax right.
I raised the issue of fuel duty in the Budget debate last year. We have now seen a further increase. That will be painful for drivers, but massively painful for British hauliers, who face intense competition from continental Europe, where their competitors often pay much lower rates of duty. There was some recognition in the pre-Budget report of the problems relating to fuel duty, and it was said that the VAT cut would give a degree of compensation, although of course that will only be temporary. The Chancellor said earlier that he would keep an eye on oil prices, but we have heard from the hon. Member for Dundee, East (Stewart Hosie) that the future price of oil is looking worrying. To follow up on the point made by my hon. Friend the Member for Esher and Walton (Mr. Taylor), we still see no coherence in what the Government are trying to achieve through the fuel duty. Do they want to set a competitive level or are they concerned only with maximising revenue? Do they really recognise the necessity to ensure that our industry remains competitive?
This illustrates the central contradiction in the Chancellor's approach. That contradiction was there before today's Budget, but it was also clearly displayed within it. It can be summed up by looking at the temporary VAT cut, which was introduced with the intention of reducing the severity of the downturn by about 0.5 per cent. of gross domestic product. There are questions about whether it was the most effective way of reducing tax in order to achieve that goal, but its introduction provided a wonderful moment of hope that perhaps, after years of the Government thinking that taxes on businesses and consumers could be increased without limit, without having any negative effect or inflicting pain on the economy, the Chancellor was going to cut taxes to benefit economic growth in the United Kingdom. However, the reduction is, of course, temporary, and due to be reversed at the end of the calendar year—and if we look at the wider set of proposals in the Budget, we see fiscal tightening over the years ahead: £1,000 of tax rises per family over the next two years.
As the right hon. Member for Birkenhead said, the massive expansion of expenditure over a number of years has led to an unsustainable structural deficit, and what we have not seen in today's Budget is a credible path towards removing it—nor have we been given a clear sense of how the Government will arrive at a sustainable level of spending in the future. We will all be fighting those battles for many years to come. I hope to be here, along with the right hon. Member for Birkenhead, to listen to future Budgets, which I hope will make the real progress that this one has failed to make.
Amendment of the law
Proceeding contribution from
Lord Brady of Altrincham
(Conservative)
in the House of Commons on Wednesday, 22 April 2009.
It occurred during Budget debate on Amendment of the law.
Type
Proceeding contribution
Reference
491 c328-30 
Session
2008-09
Chamber / Committee
House of Commons chamber
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2024-04-21 11:06:54 +0100
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