Debate on the Address

David Tredinnick Excerpts

Tuesday 25th May 2010 Commons Chamber

[Mr Redwood]

Of course, and I said that it came as no pleasure to me to say that unfortunately what we saw as the failings of the euro are now coming true. I was going to deal with the right hon. Gentleman’s point: it is in Britain’s interest to try to tackle the problems with our eurozone friends in a way that does not penalise this country. They are, of course, an important trading bloc in the world and an important market for ourselves.

I would like to finish my earlier point, however. There is a very important difference between the United Kingdom and Greece: whereas when Greece needs to borrow a lot of money, it cannot print the money to do so, and whereas when Greece wants, or has, to repay the money, it cannot devalue the currency to do so, the United Kingdom can do, and has done, both on a heroic scale. The reason we have not yet got into the Greek situation is that the whole of last year’s massive borrowing requirement was simply printed. The money was printed and injected through the banks into the public sector, so that we avoided the market pressures that Greece experienced. Greece could not do that because she shares a currency managed by the European Central Bank. The previous Government presided over a devaluation of the currency of about a quarter, so, although we will obviously not renege on our debts, the previous Government reneged on them by the back door, saying to all the foreign holders of those debts, “You will only get back three quarters of your money or interest.”

[David Tredinnick (Bosworth) (Con)]

Surely if the Greeks had the drachma, which was valued at much less than the overvalued—from their point of view—euro, they would be able to stimulate the economy, and many of us could perhaps go there in the summer and help them to do it.

[Mr Redwood]

Indeed, and even in this new possible age of austerity, and even with a September sitting, I am sure that it would be possible to fit in a visit to Greece. That is exactly the kind of help that the Greek economy needs, and it would be much more attractive if they had a devaluing drachma—so that we could buy ouzo rather more cheaply. So my hon. Friend’s point is, of course, absolutely correct.

There are these very important differences, therefore, but the message to Britain has to be that we cannot go on printing and devaluing ad infinitum. There comes a point where the markets pull the rug from under us and say, “This is extreme—you cannot do this anymore.” There comes a point where we will be effectively reneging on our debts, because we will be devaluing the currency in which we are repaying them by so much.

That is why I so strongly welcome the clear response of the coalition Government to put at the top of the Queen’s Speech the need to take action to tackle the deficit, and why I think that they are right to have three phases. We saw the first phase on Monday—the down payment of £5.7 billion net—and we will then have the emergency Budget, which I hope will include some guidance on how we are going to get the deficit down in the medium term. We will then have the really important work, in the autumn, when the Government have had time to do the full-scale public spending review that the previous Government ducked out of and declined to do at the appropriate time. We will then be able see the proper trajectory for spending, which will be important for curbing the deficit.

I want to see the euro stabilised. However, it will be difficult to do that, because it was not wise, as many of us said at the time, to include Portugal, Spain, Ireland and Greece in the euro area. The euro works fine for France, Germany, Benelux and Austria, but it is difficult to get it to work for such a diverse grouping. However, the United Kingdom Government have to allow the euroland members to take more direct power over the euroland economies, because a single currency cannot work unless there is a single budgetary policy and controls over the amount that those countries borrow. They are all borrowing in the same currency. It is like sharing a bank account with the neighbours, where we need to control how much the neighbours spend, otherwise there will be an awful shock when we see how they have flexed the credit card and the overdraft. We need to let those countries have such power, so I hope that the Government will offer advice and assistance.

I would like us to get some powers back for ourselves, at the same time that more powers are being taken for the centre. However, it would be quite wrong of Britain to be obstinate and say that the centre should not have those powers. It is in our interests that the euro should work, and the only way that a currency union can work is if there is centrally controlled budgetary discipline and central agreement on how many euros are printed—some more will probably need to be printed now—in order to get out of this mess and get reflation going in those economies.

However, I am, of course, much more concerned about the prosperity of this country. I am conscious that although we need to control the deficit and take the measures that I and others have often argued for, we are not going to get out of this mess unless we have the strong private sector recovery that I and others are now referring to. I would therefore say to the coalition Government that they need to spend as much time on regulation, tax and other matters that affect the rate of growth of the private sector economy as they spend on curbing the spending problems in the public sector. The two need to go together. It is not a good idea simply to cut the public sector, if we do not create the conditions for strong and good growth in the private sector.

Let us take the sensitive issue of tax. I have been doing a little research on the topic of capital gains tax. I share the Liberal Democrat and Conservative coalition Members’ wish to raise more money from capital gains tax. That might come as a shock to many of my parliamentary colleagues, but in this situation we need to tax the rich more. They have more money and we need more money to come into the Treasury; we need to tax the rich more. However, the result of my researches shows that the way to get more money out of capital gains tax is to lower the rate. The figures are quite dramatic, although it is easier to see the effect in the United States of America than in the United Kingdom, because there have not been so many fiddles and changes in the way that capital gains tax is levied there as we have had here. We have had indexation, business relief and all sorts of complications, although the British series, as adjusted, seems to bear out the same case.

In America in the early 1980s, there was a period of cutting capital gains tax rates, down to 20%. Capital gains tax revenues hit a massive high in 1986, on the back of the lower, 20% rate. The Americans spent the next part of the 1980s hiking up capital gains tax, from 20% to, I think, 33%, and the revenues collapsed, but they did not get the idea. However, in the ’90s they returned to a more common-sense policy and the revenues picked up again. By the 2000s, the Americans decided that even 20% was a bit high for maximising the revenue, so they took the rate down to 15%, which is where it is now, and revenue surged. The 15% rate seems to be much nearer the optimum, producing far more tax from the rich in the United States than 20, 28 or 34% produced.

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[David Tredinnick (Bosworth) (Con)]

It is a great honour to be called in the Queen’s Speech debate, particularly on the first day, and it is great to be back on these Benches. Like the hon. Member for Stoke-on-Trent North (Joan Walley), I have been returned for the sixth time and it is a humbling experience. I sincerely thank my constituents, of Bosworth constituency, for returning me. I agreed with the right hon. Member for Leicester East (Keith Vaz) when he said that the feel of the House had changed. It has certainly changed for us—there are nearly 100 new Conservative Members, who give a new energy. Furthermore, the gender balance is different and there are so many more from ethnic minorities.

We can look forward to many exciting things with this Parliament. Looking back at the last coalition, in the 1970s, we see that it had the seeds of its own catastrophe in its creation. It did not have any kind of solid majority and Jim Callaghan was defeated because a minority party changed sides. He said afterwards that it was the first time in history that turkeys had voted for an early Christmas, and he was right. In this new Conservative-Liberal coalition, however, we have a chance to go the distance and make a big difference.

My right hon. Friend the Prime Minister has given us a wide-ranging programme, as we would expect. The deficit issue, about which my right hon. Friend the Member for Wokingham (Mr Redwood) talked at length, is clearly the key issue. We have to get control of our nation’s finances. Many interesting and important Bills have been put forward. I will touch on the health reform proposals and education reform later. There is also the “I” word—immigration. It is funny how in every election campaign there is a defining moment when the campaign changes. In this campaign it undoubtedly came with the former Prime Minister’s interview with Mrs Duffy. Many of the media completely misunderstood the issue at the time. The issue was not that the Prime Minister had been caught describing Mrs Duffy as a bigot; it was that he did not understand that what she was talking about really concerned ordinary people in Britain. If those remarks have done anything, it has been to enable us to talk about some of the more controversial issues in a sensible way. We were not able to do that before.

Before I get to those issues, I want to say what a delight it was to listen to my hon. Friend the Member for Sherwood (Mr Spencer), who delivered his speech without notes. He spoke cogently about issues of food production and energy—the issues of the future. I absolutely agree with him that increased food production will be absolutely essential. I also much enjoyed the speech made by my hon. Friend the Member for Watford (Richard Harrington). He was very generous to his predecessor, Claire Ward, and his points about wanting to take people on in business and being unable to do so because of regulations and red tape were well made. This new Bill, whatever we call it—the big reform Bill, perhaps, or the bonfire of the vanities Bill—will be one of the crucial aspects of this Parliament, because there is no doubt that in this country we are caught in a spider’s web of our own creation. We have to release the energy and do away with many of the regulations that have been imposed on us over the past 13 years.

When I toured my 100-square-mile constituency during the election campaign, with its 23 villages and a large town, I was astonished that all the time national identity and national security came up as the key issues. This is linked to cultural identity, to immigration, to a feeling of disempowerment among ordinary people because of the flouting of planning law—I have an issue with Travellers in my constituency—and to anger about people working the system and claiming benefits to which they are not entitled. I was given the example of a man on disability allowance who was walking to the pub with a stick in the evening and laying paving stones in the morning, and was clearly not eligible. It is a good idea that we are going to review that.

One of the failings of the outgoing Government is that they put us in a situation whereby minority interests have become almost sacred, and at the expense of the majority. That is fundamentally wrong. I am all for protecting minority interests, but we now have a situation, certainly with planning law, in which the boot is very much on the other foot as regards advantage. We need to stop treating the minority as if they were the majority and, as my right hon. Friend the Prime Minister said, we need to stop treating adults like children and children like adults. We need to get back to a rather more realistic regime.

Let me deal with the “I” word, which came up in Mrs Duffy’s conversation—immigration. I am pleased that the incoming Government are tackling this issue head on and are going to do something about it, because it is what people were talking about. In my acceptance speech, I gave a pledge to deal with the issue of immigration, as well as schooling, which is crucial to the county. I believe in my heart that it is frankly absurd for us to complain about the British National party and some of the other fringe parties, which are articulating these concerns, if the mainstream parties will not deal with them. Whether we like it or not, this is what people want us to deal with, and we have to listen. We do not have to do this in a racist way. I spent some years at university looking at policing and public order in a multi-racial Britain—I did it for a degree—and I am very sensitive to this issue, but it has to be addressed.

The proposed cap for non-European Union immigration is certainly in accordance with what people want. I am afraid that the Labour Government were very remiss in failing to deal with the accession of new states to the European Union and in allowing such a fast inward migration of people, particularly from Poland. One can talk to my hon. Friend the Member for Peterborough (Mr Jackson) about the enormous problems that he faces with so many people coming into his constituency. This is very regrettable. Having studied race relations over the years, one of the things that comes through is that the way to really upset communities is to overload them with new communities. I think that this is probably the most tolerant nation in the world. We have a wonderful record of accepting people, going back to the Huguenots. If one looks at London now, it is the most amazing mixture of different races, colours and creeds. People from all over the world love living here because it is largely safe compared with other major cities, although I am not saying that we do not have our problems. It was remiss of the Labour Government not to tackle inward migration from the European Union by getting the derogations that other European states such as Germany and France obtained. If we are to bring in Ukraine, Turkey, Croatia and other such states, I say to my right hon. Friends on the Front Bench that we must deal with this.

The decentralisation and localism Bill, which hopes to devolve greater powers to councils and local communities, will certainly have an impact on my area. The top-down imposition of planning instructions has been very cack-handed and out of tune with local people’s requirements. We have to make some changes in this respect. One of the issues that we have faced in my area is a huge allocation of housing under the old plan, and I want this to be looked at again. We also have in my constituency Travellers’ sites that are unauthorised; they have been developed on land that is owned by the Travellers, completely riding roughshod over local planning requirements. There is a site called the Good Friday site, which, predictably, was built on Good Friday. I hardly need tell hon. Members why—it was because the council officers were all off work. There was no stop order, and by the following bank holiday Monday the tarmac had been laid and the concrete and infrastructure were there.

I have been approached by councillors from Ratby—Chris Boothby and Ozzy O’Shea—who deal with this all the time. They tell me that the most difficult aspect is circular 01/2006, issued by the then Office of the Deputy Prime Minister, which tips the balance by enabling planning officers to claim that they have to treat the needs of the Traveller community above those of the established community. I do not mind an even playing field, but this tips the balance; it is also used on appeal. I ask my right hon. Friends on the Front Bench to consider immediately suspending this circular. [Interruption.] As my hon. Friend the Member for South Derbyshire (Heather Wheeler) says, this is a major and difficult problem for us. There is an unfair advantage, and it must be put right.

I referred to the man who was claiming disability allowance when he should not have been doing so. I welcome the Bill from my right hon. Friend the Secretary of State for Work and Pensions to co-ordinate, slim and make more effective the benefits system and welfare generally. I pay great tribute to him for all the work that he has done. The hon. Member for Nottingham North (Mr Allen) has also worked very strongly on this. It irritates ordinary people so much to think that people are in there fiddling the system, and it must be made better.

It is a rare privilege, Mr Deputy Speaker, to talk in the Chamber without having a time limit, but I am not going to abuse the situation. In the old days, when we carried out filibusters, I have spoken here for an hour and a half, but I am not going to do that tonight, I can assure you; I shall finish fairly soon. However, I want to say a few words about the academies Bill. I very much welcome the idea that every outstanding school can be an academy. There may be a high take-up in Leicestershire, because we have several excellent schools. However, I have a question: is this going to apply automatically, or will they have to apply for it? In my county, the funding of schools has been an absolutely crucial issue. I would not want academy schools to attract more funding than the other schools maintained by the county council. We are in a most dreadful position. The designated schools grant in Leicestershire is the lowest in the country, and for many years I have been campaigning, with colleagues, to have that situation rectified. We are very much disadvantaged. If we take a lot of schools out of the system and make them academies, that may make it harder for the county council to provide the excellent services that it provides now. However, they will not miss the 4,000 instructions that come down from the Education Department every year. If we can get rid of this top-down, Stalinist structure, that will be very welcome.

I have for many years raised issues of health care in the House, and I am delighted to see in the document produced by my right hon. Friend the Prime Minister and the Deputy Prime Minister, the coalition programme for Government, the attention that will be given to providing doctors and patients with more powers. I have been arguing that that should be the case for a long time, and it is really important that we consider the issue of integrated health care with great care. Most people in this country want access to integrated health care, by which I mean alternative therapies such as Chinese medicine, acupuncture, homeopathic medicine and all the back treatments that are available. The issue is whether we have effective regulation. The last Government had a consultation period on the regulation of herbal medicine and acupuncture, but they did not decide on statutory regulation. It is important that the new Government do, and I encourage my right hon. Friends to examine the matter.

The former Member for Oxford West and Abingdon campaigned vociferously against integrated health care and complementary medicine. He lost his seat, and the word is that part of the reason for that was that he was so vociferous about the matter, and people were angry about it. In my constituency, I had a Science party candidate put up against me, to make publicity, specifically because I support complementary medicine. He could certainly use the publicity, because I polled 23,000 votes and he got 176. What kind of message does that send out? It shows that we must examine the matter seriously as something that can make a major contribution to health care.

It is always a delight to serve under you, Mr Deputy Speaker, and I am grateful to you for calling me this evening. It is a great honour to me and my constituents for me to have been called in the Queen’s Speech debate. I promised them in my acceptance speech that I would not duck the big issue of immigration, which affects and concerns them, and that I would raise the matter of schools in the county and other major issues. I have done that tonight, and I am most grateful to you.