HC Deb 21 March 1985 vol 75 cc971-3
8. Mr. Winnick

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

Mr. Moore


Mr. Winnick

Is not unemployment likely to be higher this time next year than it is now? If so, does it not show how irrelevant is the Budget to the the situation that faces the country? Bearing in mind the increases that are due to take place in gas, electricity, mortgages, rates and prescription charges, why does the Minister not admit that after the Budget most people will be worse off rather than better off?

Mr. Moore

The House might be more interested in the remarks of the director-general of the Confederation of British Industry, who suggested, when commenting on the Budget, that the Chancellor has got it right, that interest rates should fall because the Chancellor is getting a grip on inflation and on borrowing, and that this Budget ought to be good for growth and for jobs, which is the essence of the point that the hon. Gentleman is seeking to make. It is some kind of cheek for the Opposition to refer to gas and electricity prices, when during their last period in office gas and electricity prices increased by 2 per cent. every six weeks.

Mr. George Gardiner

While accepting all that my hon. Friend said, has it yet been represented to him that the Chancellor's proposals regarding employers' national insurance contributions on higher income earners could have a penal effect on those very enterprising firms which pay out their profits in the form of salaries to owner-directors? Will my hon. Friend turn his attention to this point to see whether he and the Chancellor can avoid hitting some of those very firms which they are seeking to encourage?

Mr. Moore

Some people have drawn our attention to that point, although not in quite those terms. However, there are far more, including the CBI, who have so far recognised the benefits and potential for those at the bottom end of the earnings scale, who may be given considerable opportunities by the recommended reconstruction of national insurance contributions.

Mr. Bidwell

In reply to my hon. Friend the Member for Walsall, North (Mr. Winnick) the Minister said that he had received several representations. That does not really tell us what the volume of representations has been. Is not the truth of the matter that they are coming in daily, and that although he has not yet reckoned them up they are obviously considerable?

Mr. Moore

I thought, two days after the Budget, that it would be most convenient for the House if I simply indicated that several representations had been received. Of course, many more will be coming in. I could cite other comments that have been equally supportive of the Budget, such as the comment by the Institute of Directors [Interruption.] Those who have some recognition of the problem of trying to offer people work, which I thought was of some interest to Opposition Members, said that my right hon. Friend has skilfully squeezed a wide range of employment and enterprise measures from a limited range of resources.

Mr. Stokes

Is my hon. Friend aware that he should not listen too closely to everything that the hon. Member for Walsall, North (Mr. Winnick) says? Is he further aware that yesterday I spent a day in the west midlands visiting a very large factory and did not receive a single complaint about the Budget?

Mr. Moore

I always listen with considerable care to my hon. Friend. I know that he will be reassured when I remind him that the hon. Member for Walsall, North (Mr. Winnick) was my losing opponent in the October 1974 election.

Mr. Robert Sheldon

The Financial Secretary seems to expect a big reduction in unemployment as a result of the changes in national insurance contributions, but will he take into account the fact that they will cost only £450 million in a full year, whereas the reduction in the national insurance surcharge cost £900 million last year, and even more the year before? That did not do very much good for unemployment.

Mr. Moore

The right hon. Gentleman should not underestimate the size of the reconstruction. It is a question not simply of the Government's overall contribution to the restructuring of national insurance contributions but of the redistributive effect of the £800 million odd that comes from the upper income limit. Some people are already criticising, but that makes a total of about £1.2 billion.

Mr. John Mark Taylor

Have any representations been received from the building societies? If so, has my hon. Friend suggested that they might follow the example of the banks and lower their rates rather than increase them?

Mr. Moore

As far as I know, my right hon. Friend the Chancellor of the Exchequer has not received any representations, but I shall certainly draw his attention to that point.

Mr. Blair

If we accept the Financial Secretary's protestations that this is, indeed, a Budget for jobs, are we agreed that,, if by the time of the next Budget there has not been a significant reduction in unemployment this Budget will be accepted as a failure?

Mr. Moore

I was not asked for my protestations. I was asked about what representations I had received. I referred to the representations of two of the major employers' organisations in the country. I could refer to others, such as the Associaton of British Chambers of Commerce, which said that the Budget was a fair and competent package.