Below is the text of the maiden speech made by Archie Norman, the then Conservative MP for Tunbridge Wells, in the House of Commons on 3 July 1997.
Thank you, Mr. Deputy Speaker, for this opportunity to make my maiden speech on the important subject of the Budget. I congratulate Labour Members who have made their maiden speeches today and welcome their interest in the businesses in their constituencies, especially the highly profitable ones in Leamington Spa. I share their interest and that of the Chancellor in the business community, but perhaps in a more substantial way. I should declare that I am chairman of Asda—the largest private sector employer based in the north of England—a director of Railtrack and a former director of British Rail. That establishes my public sector credentials as well.
I have tried to speak in the Chamber in previous debates, and I think this is about my 11th hour of taking assiduous notes. I have listened to many excellent maiden speeches and, as a result, my geography has been much improved. On this occasion, I do not intend to give the House a guided tour of my constituency, but I should like to speak about my predecessor, Sir Patrick Mayhew, who is now Lord Mayhew of Twysden.
It is not difficult to pay tribute to Lord Mayhew. He was a distinguished Attorney-General and his contribution as Secretary of State for Northern Ireland was remarkable. He undertook the role with an open mind, great objectivity, integrity, enthusiasm and relish, and he brought the prospect of lasting peace in Northern Ireland closer than at any time in the previous two decades. In the constituency and in the House. Sir Patrick was, in all respects, larger than life. He succeeded in making a contribution which was in many ways beyond politics. His halo still shines brightly in Tunbridge Wells and, as I am constantly reminded, he leaves large shoes to fill.
Mine is a delightful constituency, situated in Kent in the heart of England. Its focal point is Royal Tunbridge Wells, a spa town which was famous in the 18th century for its royal visitors who, I suspect, were able to get there rather more quickly than today’s commuters. It has two major public finance initiative projects which are important to the local community and which were supported by the Conservative Government. The first is the long-awaited dualling of the A21, which is the main arterial route from London to Hastings. The second is a desperately needed new hospital because the Kent and Sussex hospital is divided into two parts and has outdated facilities. A PFI project for a new hospital is at an advanced stage.
Regrettably, both projects have been called in for one of the new Government’s ubiquitous reviews. That means that, within two months of the election, my constituents fear that they may have to pay a steep price for a Labour Government. I hope that those fears are unjustified. The people of Tunbridge Wells are famous, apart from anything else, for the forthright expression of their views in national newspapers. They are vigorous letter writers, as the Minister will find out before long if our transport and health projects are not approved.
My warning may be a little too late for the Chancellor. He will hear from many home owners in Tunbridge Wells and especially from those whose incomes are less than £15,000 a year. The majority of those who benefit from MIRAS are in that income range, and their incomes have been cut as a result of the Chancellor’s action.
Many of my constituents are retired or saving for retirement and their pension funds will be hit by the changes to advance corporation tax. The abolition of tax relief on private medical insurance affects many of my constituents who are in nursing homes and many people in the insurance industry. It is short-sighted, mean-spirited and economically insignificant and can only add to the pressure on the health service. It is greatly regretted by my constituents. My ambition is to rebrand my constituents “Contented from Tunbridge Wells”, but I fear that the Government have done little in their first few months to help me to achieve that aim.
Two of the Chancellor’s main themes were business and employment. Unlike many Labour Members, I believe that experience in business, enterprise and industry is good for the Government and for the House. I am proud of my record in business and of the companies that I served. I welcome the Chancellor’s intention to be business-friendly, and I also welcome the promotion of people with business experience to the Government. The appointment of the Paymaster General and of David Simon, the former chairman of British Petroleum, are a welcome recognition of the contribution that business can make to the policy and process of government. I am glad to see that my friend Howard Davies has been given a leading role in the Securities and Investments Board. It is good to see a former McKinsey man in gainful employment in public services. Hopefully, he will not be the last.
It was reported at the weekend in, I think, The Sunday Times that Martin Taylor had turned down a ministerial job. Of course, BP and Barclays are among Britain’s 10 largest companies: Asda is about the 50th. Perhaps as the Chancellor works his way down the list I will eventually receive a call. My badge from my shopkeeping days reads, “Happy to help”, which has always been my motto, but, of course, I cannot be certain that my help would be the sort that the Chancellor has in mind.
It is not long since the Secretary of State for Health described people like me as stinking, thieving, lousy, incompetent scum. Even as I read the words I find them amazing. One of the great strengths of the House is that hon. Members are able to speak freely, and the right hon. Gentleman is entitled to his view, but I hope that there is a little truth in the last part of his epithet because my dictionary defines scum as matter which rises to the top in an otherwise murky liquid. The right hon. Gentleman’s words were, in the main, different from the more honeyed prose that we have heard from the Labour party in the past two years. Its business manifesto states that a Labour Government would create a dynamic and supportive environment in which business can prosper and thrive. We hope that they will succeed in that endeavour, although it will be hard to better the achievement of the Conservative Government in the past 18 years, during which period there has been a comprehensive managerial revolution in the way in which we manage and employ people, create success and invite investment into the United Kingdom. To date, the words from the Government have been friendly, but the substance, I fear, has been increasingly hostile.
The Chancellor said that this is a Budget for investment and to secure our future. Business people are, in the main, practical, and we will wonder quite what he means. Our economy’s future depends on competitiveness and profit and, so far, the balance sheet does not look too good. To start with, business people will wonder whether it is logical for a Government, who make much of the need for investment in infrastructure, transport and the waterworks, to reduce the prospect of further investment with a windfall tax.
The Chancellor said that the tax will not affect investment, employment or the cost of services. In fact, it clearly will. It takes investment cash from those companies, and it defies belief to suppose that obliging utilities to gear up and take on more debt will have no effect on investment. Surely we are all financially literate enough in this day and age to understand that taxing more means investing less. Stage two, we fear, may be regulation to force the investment, which the Government have made less attractive, by other means.
Business people will wonder also where the logic is in Labour’s plans for the proceeds of the tax. They are to be used, apparently, to subsidise wages to create temporary jobs, but permanent jobs will be threatened as wage costs will be driven up with the introduction of a minimum wage. Those of us with experience of employing people and of being employed do not need to be the principal of the London business school to know that a minimum wage will mean fewer jobs. It will hit the most vulnerable people in society—in many respects, those whom the welfare-to-work programme is supposed to help, including the unskilled in particular, the handicapped, the young, the old and, yes, single mothers who work part time.
There is a piece of hypocrisy floating around that the minimum wage is a form of competitiveness—that it will even up the competitive field between employers who exploit employees by paying less and those who do not. The reality is that big business will not be affected by the minimum wage, but small business will. The companies affected will not be large and profitable; they will be the corner shop, the local pub, the small hairdresser and those that we need to support most.
Business people will wonder also how opting into the social chapter will help our competitiveness. I was curious and interested to hear the hon. Member for Warwick and Leamington (Mr. Plaskitt) say that businesses in Leamington Spa were not concerned. That is not my experience. Many small businesses throughout the UK are in favour of a free-trading Europe, but wholly opposed to further regulation in the form of the social chapter. New regulations in the form of works councils, supervisory boards and paternity requirements can bring us only closer to a European model of inflexibility and ossification.
Business people will wonder also how taxing pension contributions by limiting tax relief on advance corporation tax can do other than raise the cost of employment. It is irrelevant for the Chancellor to justify that measure by claiming, as he did yesterday: Many pension funds are in substantial surplus”.—[Official Report, 2 July 1997; Vol. 297, c. 306.] If they are in surplus, that is a consequence of the funds that have been injected and of their investment performance. Those companies with surplus funds are taking advantage of that by improving their profits through a pension holiday. By definition, eliminating the scope for pension holidays means reducing those profits. It follows that, if those pension funds are in deficit in future, the money to fund them will have to come out of corporate profits. The £5.4 billion that this measure will raise has to come from somewhere. The cost of the Budget is in company profits and individual savings. That is corporation tax by another name for companies and a savings tax by another name for pensions.
It would be churlish of me not to welcome the cut in corporation tax, particularly for small businesses, many of which will benefit in my constituency, but the balance sheet for businesses in the first eight weeks of this Government is in the red—a small cut in their tax bill for a large slice of their pensions and a large increase in pension contributions.
After this Budget, business people will ask whether we have a Government who mean what they say about business, or a Government for whom business was simply a nice idea and who simply said what the electorate hoped they would. The Chancellor’s grand words about investment and long-termism belie a fundamental shift in Government tone and policy—a shift towards a belief that it is Governments who create jobs and shape the economy. The question that business people will be asking is whether new Labour means a new form of socialism—not the ownership socialism of the past, but the regulatory socialism of continental Europe.
The assumption behind the Budget appears to be that the Government can engineer investment, whereas, in the business world, we know that subsidised investment is often the worst form of investment. The other assumption is that the Government can engineer and create jobs, whereas, in the business world, we know that subsidised jobs are often of the poorest quality and temporary.
It is not my intention to be unreasonably contentious, The Chancellor’s aspiration to improve competitiveness and long-termism is, of course, one which we share. It is the means that we contest. This Budget is not a people’s Budget, as the people will have to pay more tax. It is not a Budget for competitiveness or for enterprise. It is a Budget of taxation to enable a Labour Government to pursue political policies that involve spending more of the “people’s money” on their well-meaning, but perhaps ill-judged, projects.
It is not a good Budget for business, for middle Britain or for my constituents in Tunbridge Wells. The business world is pragmatic, not ideological. Most business men operate in their commercial interests and in those of their shareholders and employees. We judge people by what they deliver, not by what they say. As far as we can, we call a spade a spade. Substance triumphs over style, decisions over reviews, and we will hold the Chancellor to account for his promises. Today, the jury may still be out, but the first signs for business and enterprise are ominous—very ominous indeed.