Browne) rightly described it, the doubling of the 10p rate—on the 5.3 million households who will lose out as a result, and who are among the poorest households in our land. I know that there has been a certain amount of controversy about that figure, but no Member has put forward an alternative. The only Member who came close to doing so was the Chairman of the Treasury Committee, the right hon. Member for West Dunbartonshire (John McFall)—and, indeed, if we add up the various components he itemised in his speech, we get to a number that is pretty close to 5.3 million.
It is right that we should concentrate on that aspect of the matters before us this evening, because there is no doubt that this change will cause genuine hardship to people such as the young man I met in a supermarket in my constituency on Friday. With great pride, he told me that he had been unemployed for some time and that he had just got a job in the supermarket. I congratulated him, of course. He is precisely the kind of person whom we ought to be helping by making work a more attractive prospect. It is madness to take action that will make the world of work less attractive to him and others like him, as this change will do.
However, I want to concentrate in my brief contribution to the debate on another aspect of the change: what does it tell us about the Prime Minister? I have studied the Prime Minister for many years. We entered the House at the same time, after the 1983 election. During the 25 years that have elapsed since, I have had ample time to get to know him, sometimes at close quarters, such as when he was Chancellor and I shadowed him, and at other times from a distance. I do not want to damage him by praising him too extravagantly, but I have long had considerable respect for the Prime Minister. It has always seemed to me that, quite unlike his predecessor, he brought to his political life a clearly formed philosophy and a deep-seated sense of values. He wanted to help the poor, and he cared about social justice—indeed, we all do, although we may differ radically on what is the best way of achieving that eminently desirable goal.
It has always seemed to me that the Prime Minister has been clear in his own mind that the best way of helping the poor has been through old-fashioned, socialist redistribution. By and large, that is what he tried to do during most of his tenure as Chancellor. Of course, that has given rise to a great deal of internal tension, because he was never prepared, or allowed, to admit that that was what he was doing. The word “redistribution” was expunged from the new Labour lexicon, so it was all carried out by stealth—and it was only moderately successful, largely because the Prime Minister’s chosen weapon of the tax credit system is so complicated and unwieldy that many do not claim what they are entitled to claim, and many who do claim suffer severe hardship when overpayments are recovered. I was, however, always prepared to give the
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Prime Minister credit for good intentions; I always thought that although his methods may have been flawed, his intention was clear.
So how on earth did it come about that this Prime Minister could introduce a change that hurts so many who are among the least well-off in our society? What is the explanation? We know that in one sense the explanation is that through making this change he found the money to reduce the basic rate of income tax from 22p to 20p, but why did he choose to benefit the somewhat better-off at the expense of the less well-off?
The hon. Member for Hyndburn (Mr. Pope) said in his short-lived early-day motion earlier in the month that that was not the intention of the Government—that, in effect, it was an accident. However, no one doubts that the Prime Minister is a very clever man with a reputation—although perhaps not always well deserved—for prudence and caution. It is inconceivable that he could introduce such a measure without making a careful assessment of its consequences. After all, as Chancellor—when he introduced the Budget we are discussing today—and now as Prime Minister, he has held in his hands the power to make a real difference to the condition of life of millions of our fellow countrymen. I do not believe for one moment that he is so irresponsible that he would introduce a change of this kind without carefully thinking through all that it would mean for those affected. No, I think that the Prime Minister knew very well what he was doing, and he was doing it deliberately and for a purpose.
Of course, we can only speculate about the reason, but I am afraid that none of the likely candidates reflects well on the Prime Minister. My hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond), the shadow Chief Secretary, said, in an excellent speech that has rightly earned tributes from all quarters of the House, that it was to curry favour with the then Chancellor’s own party in advance of a possible leadership election. That is certainly one explanation, but I confess that I am somewhat sceptical about it. I think that if there had been a leadership election, quite a lot of attention would have been paid to the consequences of doubling the 10p rate, and I am not sure that it would necessarily have helped the then Chancellor.
Another possibility is that, even at that early stage, the current Prime Minister had an autumn general election in his sights. What better platform to appeal to middle England, he might have thought, than a reduction in the basic rate of income tax? If that were achieved at the expense of those who were less well off, so what? That would, of course, have been an extremely cynical act. Had it been put to the test, I do not think that it would have worked. We all want to better ourselves, but very few of us, if any, want to do so at the expense of those who are less well off than ourselves. If an autumn election had taken place, I do not think that the Prime Minister would have reaped the electoral reward that he may have expected from the policy.
I am afraid that I cannot put out of my mind the thought that there may have been another, even more unworthy, reason for the Prime Minister’s action. We all remember the flourish with which he finished his Budget speech last year. Without leak or prediction, the reduction in the basic rate of tax was produced, like
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the proverbial rabbit out of a hat, in the last few sentences of his speech. It had not been leaked or predicted, and came like a bolt from the blue.
As we all know, the reply to the Budget is given by the Leader of the Opposition. It is often said that it is the most difficult speech in the parliamentary calendar, and as someone who has had the dubious privilege of delivering it on two occasions, I am rather inclined to agree with that assessment. The Leader of the Opposition is not given any notice whatever of the Budget’s proposals. The hon. Member for Taunton missed the point that immediately after the then Chancellor announced that shock, unexpected, unanticipated reduction in the basic rate of tax, my right hon. Friend the Leader of the Opposition had to get to his feet to reply.
I am afraid that I cannot entirely escape the thought that at least one reason behind the Prime Minister’s action was the hope and belief that it would wrong-foot and embarrass my right hon. Friend and cause him to stumble at precisely the time when all the media’s attention was upon him, and that that would damage his reputation, possibly even permanently. In the event, that proved a total miscalculation, as has happened so often on other occasions. My right hon. Friend dealt with it with his usual aplomb and the Prime Minister’s arrow conspicuously failed to hit its target.
What a tragedy it is that a man who undoubtedly came into politics wanting to help the poor, who devised extraordinarily ingenious and complicated policies for doing so, and who staked his reputation and integrity on that cause, should end up betraying those ideals, betraying those whom he had promised to help and, ultimately, betraying himself. What was the slogan of which we heard so much early in his premiership? “Not flash, just Gordon”. Well, we know an awful lot more about Gordon now, and I suspect that we will hear an awful lot less of that slogan. |
