House of Commons Hansard Debates for 4 Mar 1993

Hansard

House of Commons

Thursday 4 March 1993

The House met at half-past Two o'clock

PRAYERS

[Madam Speaker-- in the Chair ]

PRIVATE BUSINESS

British Waterways Bill

[Lords] (By Order)

Crossrail Bill

(By Order)

East Coast Main Line (Safety) Bill

(By Order)

Greater Manchester (Light RapidTransit System) Bill

[Lords] (By Order)

Woodgrange Park Cemetary Bill

[Lords](By Order)

River Humber (Upper Burcom Cooling Works) Bill

[Lords] (By Order)

Orders for Second Reading read.

To be read a Second time on Thursday 11 March.

British Railways (No. 4) Bill

(By Order)

Order read for resuming adjourned debate on Question[8 February], That the Bill be now read a Second time.

Debate to be resumed on Thursday 11 March.

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Oral Answers to Questions

NATIONAL FINANCE

Excise Duty

1. Mr. Pike : To ask the Chancellor of the Exchequer what representations he has received on the impact on British industry of rates of excise duty.

The Economic Secretary to the Treasury (Mr. Anthony Nelson) : My right hon. Friend has received a considerable number of representations on Budget matters.

Mr. Pike : Recognising the importance of the Scotch whisky industry to jobs in Scotland and to the balance of payments, may I ask what the Government will do to ensure that that industry does not continue to be greatly disadvantaged by comparison with the wine industry? Are we going to allow it to be destroyed?

Mr. Nelson : The Government acknowledge the importance of that industry and representations have been made to my right hon. Friend by the Scotch whisky industry and associations. I cannot, of course, anticipate anything that might be in the Budget.

Mr. Bill Walker : Does my hon. Friend accept that the premium exporting industry of Scotland is the Scotch whisky industry, which delivers £1.7 billion worth of exports every year? Given the 10 per cent. reduction in United Kingdom sales of Scotch whisky in recent times, is not there good reason carefully to examine the relationship between the excise duties on whisky and those on other drinks?

Mr. Nelson : My hon. Friend is a tireless champion of the industry. The point that he has made today has been well made by the industry to my right hon. Friend and I am sure that he will take full account of those representations.

Dr. Marek : Does the Minister accept that there is a vast haemorrhage of money from the Treasury because of the distortions caused by cross-border trade as a result of differing excise duties in the United Kingdom and in mainland Europe? Can he accept as Government policy a process of harmonisation of those rates to get rid of the cross-border distortions?

Mr. Nelson : The Government always accepted that a cost would be involved in the single market, but it involves opportunities as well. The Government have undoubtedly taken measures to reduce yield loss through cross-border trading, including the deployment of about 130 Customs and Excise officers to inland surveillance, and from the beginning of this year there will be a considerably increased number of prosecutions as a result of arrests.

Trade Barriers

2. Mr. Opphenheim : To ask the Chancellor of the Exchequer whether he will make a statement on the economic cost of trade barriers.

The Chief Secretary to the Treasury (Mr. Michael Portillo) : Trade barriers impose unnecessary costs on both industry and consumers and also deprive them of choice.

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They impede the efficiency of the economy by distorting market mechanisms. A rapid, comprehensive solution to the GATT round would provide a non-inflationary stimulus to the world economy.

Mr. Oppenheim : Of all the huge burden of protected industries that bear down on us all as a result of EC or national actions, is not the one whose extra costs particularly hit poorer people--because they spend proportionately more of their incomes on it--and which causes immense injury to virtually every other industry in the country--because they all have to pay over the odds for its product--and which severely damages the environment and people's health--because it produces excessive carbon dioxide and sulphur dioxide emissions-- [Interruption.] I can see that Opposition Members finally recognise that I am referring to the coal industry. There is absolutely no excuse to extend the many decades of protection that the coal industry has enjoyed at the expense of virtually every other industry in the country.

Mr. Portillo : The Government must and will take seriously the commitments on the environment that they made at Rio. We must, of course, be extremely wary of driving up the price of electricity to our industrial users, because that would put them at a competitive disadvantage. About 90 per cent. of the coal used in power stations in this country is produced in the United Kingdom. The problem of the coal industry is not predominantly one of import penetration : it is one of collapse of demand.

Mr. Livingstone : Does the Minister agree that although trade barriers damage our balance of payments, much worse damage has resulted from neglect of our industrial base? Does he agree with the Prime Minister that that was a great mistake? What will the right hon. Gentleman do to rebuild our manufacturing industry?

Mr. Portillo : During the 1980s, manufacturing productivity in Britain grew faster than in any other country in the G7, the group of the richest countries. Our manufacturing production reached its record position in 1990. During the 1980s we stabilised our share of world trade after a decade in which it had been falling. These are all remarkable achievements. My right hon. Friend the Chancellor of the Exchequer went further in the autumn statement in providing some encouragement to manufacturing industry- -for instance, by the scrapping of car tax and by providing extra money to the Export Credits Guarantee Department.

Mr. Merchant : Does my right hon. Friend agree that an important aspect of free trade is the free movement of capital? Does he agree also that the European Community should not do anything to discourage foreign investment in Europe, bearing in mind the large amount of such investment that is coming to Britain, such as Toyota in Derbyshire and Nissan in Sunderland?

Mr. Portillo : My hon. Friend is absolutely right. Toyota is investing £700 million at Burnaston, near Derby. Nissan is expected to invest £885 million by the end of the year and to create 4,600 jobs in Sunderland. There is also the Toyota investment that is taking place at Shotton, which will provide 300 jobs. The plant will produce 200,000 engines a year and represents an investment of

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£140 million. The free movement of capital is important and the conditions that make Britain such an attractive place for inward investment must be sustained.

House Prices

3. Mr. Gerrard : To ask the Chancellor of the Exchequer if he will make a statement on current house prices in London and the south east.

The Financial Secretary to the Treasury (Mr. Stephen Dorrell) : I am pleased to say that recent developments are consistent with the view expressed by my right hon. Friend in the autumn statement that the housing market should start to recover this year.

Mr. Gerrard : Is the Minister aware that in east London three out of every five people who have bought houses in the past four years have a mortgage that is greater than the current price of their houses and that across Greater London nearly 40 per cent. of those who are in mortgage arrears have a mortgage that is at least £10,000 more than the value of their property? Does he accept that that is the inevitable result of a rundown economy with mass unemployment? When can householders expect to see sufficient recovery for their house values to be restored?

Mr. Dorrell : I recognise that at the end of 1992 there was a welcome decline in the rate of repossessions as a result of the action that the Government took at the end of 1991 to make it easier for people who encountered mortgage difficulties to stay in their houses. I welcome the words of Mr. Michael Jones, the president of the National Association of Estate Agents. Referring to a survey that that organisation had conducted, he said :

"There can be no doubt that recovery is now underway."

I also welcome the fact that the chief executive of Bryant Homes said that, in his view, there was a

"strong pattern of recovery showing through."

Those are things which I hoped Opposition Members would welcome.

Mr. Evennett : Will my hon. Friend confirm that mortgage rates are the lowest for a generation? That is a real achievement and one which should help house buyers in London and Greater London to deal with their problems. Does my hon. Friend agree that there were considerably fewer repossessions last year than in the past few years? Those are real achievements. We should start talking up the economy, not down.

Mr. Dorrell : My hon. Friend is absolutely right. He is especially right to draw attention to the benefits to the housing market that stem from the fact that mortgage rates are now at their lowest level for 25 years. They are not academic benefits. They are manifesting themselves in the sales of house builders in the first two months of this year, which are 20 per cent. up on the same period last year. The number of people viewing new houses on building sites is 15 per cent. up on the same period last year. I hope that those who are willing to look will welcome these signs of recovery.

Mr. Darling : Does the Minister accept that the signs of recovery are fragile and that one of the biggest obstacles to recovery in the housing market is unemployment and fear of unemployment, which is likely to subsist for some considerable time? Does he further accept that one of the problems in the housing market in London and the

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south-east of England is poor transport links? Can he confirm that crossrail and the other rail projects announced by the Chancellor in the autumn statement are to be axed?

Mr. Dorrell : The biggest threat to recovery in the housing market is the activities of those who appear to have a vested interest in continuing to talk down the housing market. There is clear evidence for those who are willing to look at the signs that the market is beginning to recover. I should have hoped that Opposition Front-Bench spokesmen would welcome that.

Mr. Ottaway : Does my hon. Friend agree that the mortgage interest rate has a large impact on house prices? There are many low-cost mortgages on the market, but is he aware that many building societies make it a condition of borrowing that the borrower takes out the lender's in-house insurance policy? That tends to be prohibitively expensive and distorts the advantage that may be gained by low interest rates. Will my hon. Friend investigate that practice?

Mr. Dorrell : My hon. Friend makes an important point and I share his commitment to ensuring that all aspects of the housing market work efficiently to the benefit of the consumer of housing--the owner-occupier.

Trade Deficit

4. Mr. Skinner : To ask the Chancellor of the Exchequer what further steps he intends to take to reduce the balance of trade deficit.

Mr. Portillo : Our traders are helped by low inflation, which is now at its lowest level for 25 years and below the European Community average. Our competitiveness has improved. Our annual unit wage costs are not rising. By contrast, they are rising by over 9 per cent. in Germany and in Japan. We have announced extra support for ECGD to help exporters.

Mr. Skinner : Why does not the Minister admit that the forecast trade deficit is likely to be about £15.5 billion? What a pathetic bunch this lot of Ministers are. Most of them come from the belly of the banking establishment, yet they have got Britain in hock. Who does the Minister blame for this mess? Does he, like St. John on the road to Maastricht, blame Lady Thatcher, or is he tied to her apronstrings? If he wants to alter Britain's balance of payments deficit, why does not he save £600 million by stopping the importation of coal, starting to export coal and saving the 31 pits? If he does that, he will turn the balance of payment deficits round.

Mr. Portillo : I had a feeling that the hon. Gentleman might mention my right hon. and noble Friend Baroness Thatcher. I know that he misses her greatly in this place. They were a great double act in their day. But the hon. Gentleman really should not be so pessimistic. We predict an increase in competitiveness for Britain of about 16 per cent. in 1993. That is made up of the lower exchange rate and, in particular, our very good performance on unit wage costs. As I pointed out earlier to my hon. Friend the Member for Amber Valley (Mr. Oppenheim), only a small proportion of coal is imported--about 10 per cent. of what is used in power stations. That is not the problem. The problem is the collapse in demand.

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Sir Peter Tapsell : Does my right hon. Friend agree that a significant proportion of imports into Britain is tied to production by the subsidiaries of foreign companies manufacturing in Britain and that we should increase the amount of our direct investment overseas, as distinct from stock market investment, so that we can increase the extent of our tied exports?

Mr. Portillo : My hon. Friend must be right, at least in the short term. But I hope that, as companies establish themselves in Britain and as their investment reaches maturity, an increasing amount of their sourcing will be done from the United Kingdom. I heartily agree with my hon. Friend that in our overseas portfolio we want a good balance between investment in manufacturing and services and investment in stock markets abroad. There should be a balance of all those elements and of others as well.

Mr. Andrew Smith : British shipping contributes a net £2.3 billion a year to our balance of payments and a further net £1.5 billion in related services, but every month, as a consequence of the Government's failure to act to enable it to compete fairly with overseas operators, major lines are ceasing to trade, ships are being registered under the flags of other countries and British crews are being replaced and are losing their jobs. Will the Government urgently introduce measures to assist the competitiveness of the industry, before this vital part of our maritime heritage and of our economy is destroyed and our balance of payments plunged still further into deficit?

Mr. Portillo : The shipping industry is important to the British economy. Despite the gloom that was evinced by the hon. Gentleman, the Government have taken a number of steps to help the industry, which has been in a position to respond to the needs of national defence when it has been required to do so. At this stage, it would be unwise for me to say anything that might appear to prejudice the Budget.

Value Added Tax

5. Mr. Anthony Coombs : To ask the Chancellor of the Exchequer how many companies were registered for VAT in 1979 and at the most recent available date.

Mr. Dorrell : At the end of 1979, 1.3 million businesses were registered for VAT. The latest figure available on a comparable basis is for the end of 1991, when the figure was 1.7 million businesses.

Mr. Coombs : Does my hon. Friend agree that those figures show the resilience and remarkable entrepreneurial vitality of British industry? Rover has not only experienced a significant increase in sales recently, but has shown a remarkably flexible attitude to its work force. In the past six weeks, shop-floor workers have sold no fewer than 3,000 cars. Is not such dynamism in stark contrast to the purveyors of doom and gloom on the Opposition Benches, who glory in talking down British industry?

Mr. Dorrell : My hon. Friend is absolutely right, first, to draw attention to figures published today by the Society of Motor Manufacturers and Traders, which record that in the past three months motor sales were up by 7 per cent. on the previous three months and up by 16 per cent. on the same period last year and, secondly, to the fact that the

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mix of policies that the Government have pursued means that 31 per cent. more businesses are now registered and active than when we took office in 1979.

Mr. Milburn : What is the Minister's message to the 4,737 firms in the north-east that were driven out of business last year as a result of his policies? Does he recognise that the initiative and hard work of people who run small businesses have been betrayed by his Government's broken promise of an economic recovery? When will he act to unlock the skills, potential and enterprise of British people instead of laying them to waste?

Mr. Dorrell : Every insolvency is a tragedy for those involved. We clearly want to avoid that and to create circumstances in which the number of insolvencies is reduced. I should have hoped that, in presenting a balanced picture, the hon. Gentleman might at least pause to reflect that even in 1991, which was a year of business difficulty, substantially more businesses were created in Britain than in any year when the Labour party was in power in the 1970s.

Mr. Butcher : May I persuade my hon. Friend to seek a special derogation from Brussels to raise the VAT threshold to £100,000, as the collection of VAT from a large number of small companies raises a small sum and incurs huge costs, whereas collecting from the bigger companies raises the bulk of the money at a small cost? This would do much for job creation at a time when we are looking for optimistic signs and recovery.

Mr. Dorrell : My hon. Friend makes another interesting Budget representation. He has less than a fortnight to wait and see whether it will be acted on.

6. Mr. Tipping : To ask the Chancellor of the Exchequer what representations he has received about the VAT burden that charities face.

Mr. Nelson : My right hon. Friend the Chancellor of the Exchequer has received a great number of representations on behalf of charities, as is normal before every Budget.

Mr. Tipping : In view of the strength of public concern reflected in the letters in Ministers' and hon. Members' postbags about the burden of value added tax on the Royal National Lifeboat Institution and other charities that perform services that would otherwise fall on public authorities, will the Minister give urgent consideration to ways of lifting that tax on voluntary effort?

Mr. Nelson : Representing a coastal constituency myself, I am very conscious of the vital role and valour of the RNLI, but it already receives special tax treatment through zero rates on a number of purchases, including lifeboats and carriage equipment, and on the construction, repair and maintenance of slipways. That special treatment is worth about £3 million a year to the RNLI. As the hon. Gentleman will understand, I cannot, of course, comment further on any representations made before the Budget.

Sir John Hannam : In receiving representations from the various charitable organisations about their VAT, has my hon. Friend taken on board the fact that, in providing valuable services across a range of activities, local authorities and commercial companies are able to recover

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VAT, whereas charities are not? Will he therefore consider the proposal for a VAT refund system for the services that they provide?

Mr. Nelson : All representations are carefully considered before the Budget. Charities pay VAT on approximately one third of their expenditure, whereas the public pay it on about half. I do not think that my hon. Friend would want me to comment further today.

Mr. Wigley : May I support the pleas made on behalf of the lifeboat and disablement charities? The fact that charities pay VAT on a third of their expenditure is no excuse for not considering alleviating the entirety of the burden on such organisations. Will the Minister bear in mind the fact that this time of financial difficulty, when it is hard to raise money, is absolutely the wrong time for the burden of taxation to be carried by organisations that will probably bear more than their share of public responsibilities, especially when community care develops from April? Please will the Minister reconsider?

Mr. Nelson : I hear clearly what the hon. Gentleman says, but perhaps he will allow me to make the point that since the Government took office, a series of measures have been introduced to encourage charitable giving and charities now enjoy tax relief in excess of £1 billion a year. We have a creditable record, but we shall consider representations.

Inflation

7. Mr. Raymond S. Robertson : To ask the Chancellor of the Exchequyer if he will make a statement on the effects of his policy on the rate of inflation.

The Chancellor of the Exchequer (Mr. Norman Lamont) : Our policies have brought the rate of inflation down to its lowest level for 25 years. Keeping underlying inflation inside the range of 1 to 4 per cent. over the remainder of this Parliament will represent a decisive breakthrough to permanently lower inflation.

Mr. Robertson : Does my right hon. Friend agree that the lowest inflation rate for a quarter of a century is the best possible news for the future of the British economy? Will he give the House an assurance that the Government will take no risks with the future of inflation, and that they will do all they can to ensure that it stays low and stable and in its target range?

Mr. Lamont : I can give my hon. Friend that assurance. We fought a long battle to get inflation down, criticised all the time by the Labour party. We believe unambiguously that low inflation is very important for our trade, for manufacturing and for confidence for businesses. The fact that we have a level of inflation below the average of the European Community augurs extremely well for this country.

Mr. Robert Hughes : Now that the Chancellor appears to be accepting some credit for the present inflation rate, will he accept responsibility for the years of high inflation, low growth and mass unemployment, and apologise to the British people for those policies?

Mr. Lamont : If the hon. Gentleman is referring to the 1980s, he must at least be aware that we reduced inflation decisively during the 1980s. Bringing it down created jobs

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and employment. Low inflation has been one of the Government's major achievements and we intend to stick with our policy of keeping it down.

Mr. Rowe : My right hon. Friend will be aware that a number of us receive many letters from old-age pensioners and others on fixed incomes who are anxious about low interest rates. Will he bear it in mind that it is easy to explain to them that low inflation is their friend, provided that the costs of utilities such as railways and water do not rise well beyond the rate of inflation? Will he continue to bear down on those organisations to ensure that they keep their prices under control?

Mr. Lamont : As my hon. Friend knows, prices in individual utilities are matters for the regulator, but I agree that low inflation matters more to pensioners, savers and people on fixed incomes than to any other section of the community. We intend to honour our promises and pledges to them, and to keep inflation down. My hon. Friend made an interesting point about the level of interest rates and I note carefully what he said. Even in the Treasury our postbag on interest rates, which is always large, is now split at least 50 : 50 in terms of higher rather than lower interest rates.

Mr. Gordon Brown : Does not every expert forecast say that during the year, despite everything that the Chancellor says, inflation and unemployment will rise? Given that the right hon. Gentleman promised that he would not devalue, and then did, promised that he would balance the budget, and then did not, and promised a recovery that has never arrived, has not his only consistent policy on inflation been his view that unemployment is a "price well worth paying"? Will he tell us whether he believes that unemployment will rise during the coming year--yes or no?

Mr. Lamont : I am extremely interested to hear that at long last the hon. Gentleman has mentioned the word "inflation". He has made speech after speech, but has never before mentioned that word. That is not surprising, because none of his policies has ever shown the slightest appreciation of the problem of inflation, and the hon. Gentleman has never shown the slightest interest in bringing inflation down. He refers-- [Hon. Members :-- "Answer the question."] If the Opposition would stop shouting me down, I would answer the hon. Gentleman's question. He referred to the depreciation of sterling and the effect that that would have on the underlying rate of inflation. He will know that the depreciation has not led to an increase in inflation. We believe that the outlook in that respect is better than many commentators have said. The hon. Gentleman also referred to unemployment. I shall make it crystal clear to him that I want to see unemployment reduced--of course I do--but that I totally despise his attitude when he comes to the House with no recognition of the fact that unemployment on the continent of Europe, in the European Community, is forecast to rise beyond 11 per cent. Can the hon. Gentleman name one major country in which unemployment has not increased during the past year? There is not one.

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Retail Prices

8. Mr. Stephen : To ask the Chancellor of the Exchequer what was the change in retail prices during the month of January.

Mr. Portillo : Between December and January the retail prices index fell by 0.9 per cent. This was the largest monthly fall recorded for nearly 35 years.

Mr. Stephen : I am grateful to my right hon. Friend. Does he accept that what the economy of this country needs is low inflation, low taxes, moderate interest rates and a competitive exchange rate? It does not need a policy of raiding our constituents' pockets and spending their money, which is the only policy ever offered by the Opposition parties.

Mr. Portillo : The list of features with which my hon. Friend began his supplementary question is absolutely right. I would add that the productivity performance of manufacturing industry is extremely encouraging and that our competitiveness is shown not only in the exchange rate but in our performance on wage unit costs. Those are very encouraging features. My hon. Friend is also right to say that the Labour party simply does not understand such matters and still looks to spend more money and to raise taxes considerably, believing that recovery can somehow be stimulated by higher spending. That is a delusion.

Ms. Harman : Does the Chief Secretary not realise that what this country also needs is investment in training and in industry? Does he not understand the anger that there will be in this country at the fact that millions of pounds of European Community money earmarked for Britain, for training and investment in the regions, will not come here because the Government simply have not applied for it?

Mr. Portillo : We seem to be rather a long way from the subject of prices. Nevertheless, I have no reason to believe that there will be any difficulty in providing the public expenditure cover that the European Community wants for European regional development fund grants. We have made pledges, we made provision in the public expenditure survey, and I imagine that Sir John Kerr will be in a position to write to Mr. Millan in the near future. I see no difficulty whatsoever.

Mr. Sykes : Does my right hon. Friend agree that we have heard more than the usual amount of nonsense from the little Clintons opposite-- [Interruption.] --especially from Bolsover's answer to Hillary Clinton? If Opposition Members were really interested in helping the jobless they would abandon inflationary policies such as the minimum wage and the social chapter.

Mr. Portillo : On the last part of his question, my hon. Friend is absolutely right. It is difficult to imagine policies that would be more destructive of jobs than are the minimum wage and the social chapter. The President of the United States has recognised the need to address his country's deficit. In the context of the United Kingdom, so far as I remember, that has never been recognised by the Labour party.

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Mr. Bryan Davies : Does the Minister subscribe to the old economic adage that any fool can get inflation down if he is prepared to tolerate a high enough level of unemployment?

Mr. Portillo : I do not know whether that is meant to explain why the last Labour Government produced inflation at a rate of 27 per cent. If so, it is a rather poor explanation.

Mr. Brazier : Does my right hon. Friend agree that the remarkable figure for retail price inflation, combined with the very low figure for unit wage costs and the over-capacity in the property market and much of industry, suggests that we really are on top of inflation now and emphasises the importance of ensuring that, over the next two years, interest rates will be determined by domestic monetary conditions and not by reference to economies that are not in step with our own?

Mr. Portillo : My right hon. Friend the Chancellor has made very clear the range of conditions that he will examine to determine the appropriate level of interest rates. My hon. Friend is right to say that there are significant disinflationary pressures in the economy. For example, the money supply--M4--is below the monitoring range at present and we have seen falling house prices. However, I should caution my hon. Friend that it is always easy, when inflation has been brought down, to believe that it does not matter. Inflation does matter, not least from the point of view of our competitiveness.

Value Added Tax

9. Mr. Winnick : To ask the Chancellor of the Exchequer what representations he has received about VAT being imposed on food, books and newspapers.

Mr. Nelson : My right hon. Friend the Chancellor has received a number of representations, and these will be considered very carefully in the period leading up to the Budget. However, I am sure that the House will appreciate that it would be inappropriate for me to comment further at this stage.

Mr. Winnick : Inappropriate or otherwise, may I ask whether the Minister is aware that there would be no possible justification for a Tory tax on food, which would hit particularly hard the people in low-income households--the very people who have suffered enough under the Tory Administration? Would not the imposition of VAT on books and magazines break a clear pledge given by Ministers over the past few years?

Mr. Nelson : I cannot comment on what may or may not be in the Budget, but I can comment on an extraordinary statement last July by the Labour economic spokesman Lord Desai, who proposed that VAT should be applied at the full rate to all zero-rated items. Do the Opposition repudiate that?

Sir Terence Higgins : Is it not the case that the original structure of VAT, with a single positive rate and a zero rate for items of particular importance to families on low incomes, has stood the test of time? It would be wrong to alter that for short-term, revenue-raising purposes, particularly as narrowing the range of zero rating would result in greater pressure, especially from the European Community, to get rid of zero rating altogether.

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Mr. Nelson : I hear very well what my right hon. Friend says. I am sure that he shares my view that the Government secured a very important agreement with the European Commission and other member states, which allowed for the retention of our current zero rates.

Mr. Nicholas Brown : I am sure that the whole House has noticed that the Government's pledges about not raising or extending the range of VAT have got more feeble as the Budget gets closer. Is the Minister aware that extending the VAT base to all currently zero-rated categories would add £7 per week to the budget of the poorest 10 per cent. of households, which is 7 per cent. of their average household income? Will the Minister give the House an assurance that whatever measures the Government bring forward will take into account the interests of the poor and that they will not pass on to the poorest 10 per cent. of households the deficit reduction measures that they are contemplating?

Mr. Nelson : What the hon. Gentleman has just complained about is exactly what his noble Friend proposed on behalf of the Labour party last year. I can give him the assurance that all these matters are carefully taken into account in assessing the Budget strategy.

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