Finance (No. 2) Bill — 21 Apr 1998

[Relevant documents: The Fourth Report from the Treasury Committee, Session 1997-98, on the 1998 Budget (HC 647) .]

Order for Second Reading read.

I beg to move, That the Bill be now read a Second time.

This is the second Finance Bill of the Parliament, and it continues the process of modernising the British economy with the objective of raising the sustainable rate of long-term growth, and ensuring that everyone has a share in rising prosperity.

The Bill implements the second Budget of my right hon. Friend the Chancellor of the Exchequer, a Budget which will help to turn ambition into achievement, and which encourages work, promotes enterprise and supports families. Like the Budget, it takes an unashamedly long-term view. There are no quick fixes. Instead, the Bill introduces radical reform designed to bring about long-term gain for the country.

We have made it clear that, first, we need to build economic stability, with a commitment to low inflation and sound public finances. That is the essential foundation for building long-term growth and rising prosperity.

Secondly, we are determined to promote enterprise. The Bill introduces a range of tax initiatives to boost investment, helping small firms and promoting research and development.

Thirdly, we are determined to modernise the welfare system. Our objective of sustainable growth needs a highly skilled and trained work force. We are determined to end the waste of resources when people want to work but face needless barriers to so doing. We want to encourage work by making it pay.

Fourthly, to create a fairer, and therefore more efficient, society, the Government are introducing measures to support families and to protect the environment.

The Bill builds on the first Finance Bill of the Parliament, which introduced the new deal, which is already helping the young and long-term unemployed back into work. It continues with measures to promote enterprise, with further reforms to the corporation tax system. This year, it introduces long-overdue reform to the capital gains tax regime, to encourage investment and innovation.

The Bill, along with other measures, continues to reverse the desperate situation that we inherited. Almost one year ago, we inherited a situation in which 18 years of instability had destroyed many businesses. The Opposition's amendment refers to a "golden economic legacy". Let us consider the legacy that we inherited, and the nonsense it is.

The Government inherited a national debt which had doubled in six years. We were spending £25 billion a year servicing the debt left by the previous Government--more than we spend on schools. We inherited a situation in which BSE will cost Britain some £5 billion--money

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which could be far better spent on schools, hospitals and other services. The previous Government left a situation in which they were planning to spend £19 billion more than they were due to get in. It is only our deficit reduction plan that is reversing that situation.

I beg to move, To leave out from "That" to the end of the Question, and to add instead thereof:

"this House declines to give a Second Reading to the Finance (No. 2) Bill because it increases business taxation, reduces the incentive to save, increases the incentive for cross-border shopping in duty-paid goods, adds to the complexity of the taxation system, fails to deliver an environmental strategy, and threatens to turn a golden economic legacy into a Work to Welfare programme."

I know that all hon. Members are aware of that, and they will also recognise that lambrini bianco does not fall into that category. It will carry exactly the same duty as before, because it has a pressure of less than one bar, and so will continue to be a counterfeit Italian wine. The only people who will suffer are those making traditional Somerset cider that is bottled and fermented and sold at only a few outlets across the country.

Question put, That the amendment be made:--

The House divided: Ayes 144, Noes 350.

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