I must say that I have not had lunch in the City recently. Indeed, my contacts with City people have not been of the highest order since 1998. I once had lunch with the Governor of the Bank of England, shortly after being elected, and very enjoyable it was too. That was when “steady Eddie” was in charge—he was a splendid Governor and I am sorry that he is no longer with us.
I believe that there are ways of ensuring that we collect the taxes that are due from the rich. Personally, I believe that I should pay more income tax, along with everyone else on my kind of salary—I earn £74,000 a year. Indeed, the majority of the population have said that they would be happy to pay a little more tax in order to help our health service, which is still seriously underfunded.
I believe that national insurance contributions set at a modest level are an important part of our tax and revenue-colleting system. It gives us all a sense of collectivity, which I think is right. We call that the contributory principle. It means that we have a sense of duty in paying taxes as well as a sense of entitlement in receiving what they pay for. I agree with my hon. Friend the Member for Bishop Auckland, who is no longer in her place, on the upper earnings limits.
VAT is a regressive tax. It was noticeable that Gordon Brown, when Prime Minister, cut VAT from 17.5% to 15%, which boosted demand at the moment that was needed and, together with a substantial depreciation of sterling, helped to keep the economy relatively stronger than some other economies. We have since survived, but I think that we are now making a mistake in allowing sterling to appreciate. It has moderated a bit in recent weeks, but it is still far too high, and manufacturing is suffering as a result.
I understand that the Opposition are going to acquiesce in what the Government are proposing today, but I agree entirely with the view put forward by my hon. Friend the Member for Bishop Auckland. I look forward to my party coming into government next time around with our new leader committed to ensuring that the rich, the corporates and those who have been getting away with it for years pay their taxes so that we can build a decent society on the revenues that they should provide.
3.24 pm