HC Deb 24 October 1972 vol 843 cc973-4
10. Mrs. Fenner

asked the Chancellor of the Exchequer on how many occasions indirect taxation was increased between October, 1964, and June, 1970; and on how many occasions it has been increased since June, 1970.

Mr. Barber

Indirect taxation was increased six times between October, 1964, and June, 1970. Since then it has been reduced three times—including the halving of SET, and the largest-ever cuts in purchase tax.

Mrs. Fenner

I should like to congratulate my right hon. Friend on what I trust is a habit-forming condition. In the light of the misunderstanding which appears to occur among members of Her Majesty's Opposition, is he satisfied that the introduction of VAT next year is no reason to suppose that this trend will not continue?

Mr. Barber

I certainly hope that the present Conservative Government, just as other Conservative Governments, will continue to be a Government cutting taxa- tion, in marked contra-distinction to the policy pursued by the Labour Government.

Mr. Dalyell

Before we have any more self-congratulation, may we have the unemployment figures for the same period?

Mr. Barber

Unemployment has been going down considerably over the last few months, as the hon. Gentleman will see if he looks at the figures.

Mr. Brian Walden

Will the Chancellor explain something that has been puzzling me? As it has become clear by this time that there have been massive cuts in indirect and direct taxation, and there has been a sharp rise in real income, why is it that the Government are now receiving more money through both direct and indirect taxation than any Government in our history? Why, as has become clear from previous answers, only by prodigious efforts and brilliant statecraft might it be possible to get the level of inflation, the level of the growth in the money supply and the balance of payments back to the same conditions as existed under the Labour Government?

Mr. Barber

I shall he happy to answer the hon. Gentleman. If he looks at the matter fairly and objectively, I think he will agree with me that what matters is the proportion of the gross domestic product that is taken by taxation—[HoN. MEMBERS: "Answer the question."]—I have been asked to answer the question and I will do so; I will deal with the latter part of that question, too. Taking taxation as a proportion of the GDP, under Labour it rose from 25 per cent. in 1964 to 35 per cent. in 1970, while we have been successful in reversing that trend so that in our first two years the proportion has fallen to 32 per cent., and I expect a further substantial reduction this year.

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