Budget (Hansard, 26 March 1987)
HC Deb 26 March 1987 vol 113 cc560-3
5. Mr. Cash

asked the Chancellor of the Exchequer what representations he has received about the Budget.

6. Mr. Adley

asked the Chancellor of the Exchequer what representations he has received about his Budget; and if he will make a statement.

8. Mr. Soames

asked the Chancellor of the Exchequer what representations he has received about his Budget statement.

17. Mr. Allan Stewart

asked the Chancellor of the Exchequer what representations he has received about the Budget.

Mr. Lawson

The proposals in my Budget have been widely welcomed.

Mr. Cash

Will my right hon. Friend note the accurate headline in The Economist of 21 March, which simply said.: Luck had nothing to do with it."? Does my right hon. Friend recall that when the Labour party was in power the only time that it cut taxation was when the IMF demanded it? Furthermore, does he recall that the alliance would impose penal taxation for increased pay, which would take away people's negotiating rights to wages and salaries, including those of the teachers?

Mr. Lawson

My hon. Friend makes a number of good points. As to luck, I would not wish to quarrel with the verdict of The Economist on this occasion.

It is perfectly true that of the three or four parties which are chiefly represented in the House, one party, on this side of the House, is in favour of bringing taxes down and is doing so, and the three parties on the other side of the House are in favour of putting taxes up.

Mr. Adley

Recalling the budgets of former Socialist Chancellors, such as the absent right hon. Member for Glasgow, Hillhead, (Mr. Jenkins) and the absent right hon. Member for Leeds, East (Mr. Healey), is not a measure of the Government's success that their Budgets were approached with trepidation, fear of higher taxation and cuts in public expenditure, while the Budget of my right hon. Friend has been welcomed and centres on the debate on the distribution of increased national wealth?

Having said that, is my right hon. Friend not being unfair to the Opposition parties? Is it not dreadful to give them so little to criticise that they have to threaten to increase taxation at the same time as unemployment is falling and the initials "IMF" have gone out of general circulation in the language of the country? Does my right hon. Friend think that he is being fair to the Opposition parties?

Mr. Lawson

I always do my best to he fair, as my hon. Friend knows, but I am grateful to him for trying to keep me up to the mark in that respect. It is perfectly true that one of the problems that I had in advance of the Budget was that expectations of a good Budget ran so high that there was a great danger of disappointing people. There were never such expectations when Labour Chancellors were in office.

It is also perfectly true that the only short breathing space of sound finance in which the Labour Government ever indulged was when they were under the iron heel of the International Monetary Fund.

Mr. Soames

Is my right hon. Friend aware of the warm welcome that his Budget has received, in particular from small business men? Does he agree that small business men are an important force in job creation? Does he also agree that if the Government are really serious about curing unemployment, everything possible should be done to secure the future of small businesses?

Mr. Lawson

My hon. Friend is right. Indeed, that has been the Government's consistent policy. The net growth in the formation of new businesses, even after deducting those which have shut down, has been running at about 500 a week, which is far more than in any previous postwar period. That is a very hopeful note for the future. That is one reason why not only have the number of people in work risen by about 1 million since the general election, but unemployment is now falling and has fallen for the past seven months and will continue to fall.

Mr. Allan Stewart

Does my right hon. Friend agree that the decision of the Labour, Liberal and Social Democratic parties to vote against tax cuts is likely to prove as popular as the similar stand by American presidential candidate Walter Mondale, who subsequently just carried only one state.

Mr. Lawson

If the Opposition parties choose to wear the mantle of Mondale, that is their business. Far more important than the Opposition parties is what is happening to British business and industry. We saw only this week the most optimistic survey from the CBI on manufacturing industry since the figures were first collected in the latest form.

Mr. Robert Sheldon

The Chancellor of the Exchequer seems to be going round the country telling all the people of his economic success. If he is so successful, why has he done nothing about retirement pensions, and why has he done nothing about family poverty by increasing child benefit? Why have we between 3 million and 4 million unemployed, and why is there a division between north and south? What sort of success is that?

Mr. Lawson

The right hon. Gentleman is slightly mistaken. It is not me who goes round the country speaking of the economic success; it is the country that is telling me of the economic success. The CBI report on Monday or Tuesday of this week is merely the latest manifestation of that.

The right hon. Gentleman talked about the division between north and south. I was particularly interested in an important speech made by my hon. Friend the Member for Darlington (Mr. Fallon) on the economy in the northeast earlier this week, when he pointed out how many new businesses have now been set up in the north-east. He quoted from the Northern Echo, which recently published a survey entitled, "North on way back."

The Government have played fair with the pensioners, which the Labour party never did when it was in office. The answers of my hon. Friend the Economic Secretary to questions earlier today have supplied chapter and verse.

Mr. Alton

Does the Chancellor really believe that spending a third of public expenditure this year—over £40 billion—on social security, in many cases to keep people out of work, is a sensible way to invest public expenditure? Would it not be better, for very little more money, to create more opportunities for work and to put into work some of the 40 per cent. who have been in the dole queue for over a year who are now long-term unemployed? Does he not recognise that public opinion is in favour of spending more money to create jobs for the unemployed, of doing something about the less prosperous parts of the country and for those on fixed incomes, and not giving the resources away in tax cuts?

Mr. Lawson

The hon. Gentleman has asked a bizarre question and is suggesting that all the money spent on social security is paid to keep people out of work. The vast majority is going on pensioners. I have just been asked about that. There is a need for public expenditure in particular areas. In the autumn statement for 1987–88 I announced an increase in public expenditure on the priority areas of £4¾ billion. On top of that I announced in the Budget a reduction in taxation of over £2½ billion and a reduction in public sector borrowing requirement, above what was set out in the medium term financial strategy, of £3 billion. I believe that even the hon. Gentleman should applaud that balance.

Mr. Willie W. Hamilton

What response has the Chancellor had to the Budget proposals from our nurses? As the right hon. Gentleman is claiming such a success for the policies of the past seven years, will he give an assurance that the Government will accept, without qualification and in full, the recommendations of the pay review body on nurses' pay when it reports to the Government in the next week or so?

Mr. Lawson

I am not quite sure what that has to do with the question, but that matter will be addressed in due course. In any event, it has not come before the Cabinet yet. As for the question of nurses and the Budget, if the hon. Gentleman wants a link, nurses will benefit considerably from the reduction of 2p in the basic rate of income tax.

Mrs. Roe

Has my right hon. Friend received any representations since the announcement that the Government will not proceed immediately with the Green Paper proposals on the reform of personal taxation? Does my right hon. Friend accept that one of the main reasons for the low level of response is that the main beneficiaries of transferable allowances are married women and they do not have a pressure group to represent them?

Mr. Lawson

I believe that my hon. Friend makes a valid point. It has always been difficult with such consultation exercises introduced by Green Papers, because one gets responses from various pressure groups and lobbies, but remarkably few from the public. However, very often it is the opinion of the public that is of great importance in such matters, rather than the views of particular interest groups. I have noted what my hon. Friend said.

Mr. Hattersley

If the post-Budget prospects for employment are as good as the Chancellor makes out, why did the Government write to the EEC to say that, on present strategies, there will be no serious inroads into the level of unemployment in Great Britain?

Mr. Lawson

The Government have done no such thing.

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