HC Deb 27 April 1978 vol 948 cc1629-32
12. Mr. Rost

asked the Chancellor of the Exchequer when he expects to introduce his next Budget.

Mr. Joel Barnett

I have nothing further to add to what my right hon. Friend said in the Budget debate on Monday 17th April on the possibility of introducing further measures this year.

Mr. Rost

As the Chancellor's thirteenth Budget, like all his others, has again failed to provide the incentives to restore prosperity and jobs, will the Government at least support the Conservative amendments, which will go some way to making this a Conservative Budget?

Mr. Barnett

I am not sure how the hon. Gentleman can say that the Conservatives will deal with the problems when the tax reliefs have not yet worked their way through. When they do, I am sure they will be beneficial. I do not yet know what kind of irresponsible amendments the Conservatives will be tabling.

Mr. James Lamond

Will my right hon. Friend tell the Chancellor, when he introduces his next Budget, to take account of the fact that public expenditure has been reduced by more than £1,000 million, due to the cash limit methods introduced in 1976–77, and that all the present estimates of the outturn this year are that the shortfall will be even greater than that figure?

Mr. Barnett

I think that my hon. Friend misunderstands the working of the cash limits system. Only about one half of the shortfall in 1977–78 relates to cash-limited expenditure. In any event, I hope that my hon. Friend will agree with me that when we fix our priorities in expenditure we want to try to ensure that those priorities are met. Of course, I do not welcome a massive underspend. What I would not welcome either would be an overspend that resulted in our own priorities being put out of line.

Mr. Tapsell

Will the Chief Secretary take this opportunity to apologise to the House and to the country on behalf of himself and the Chancellor for the fact that their irresponsible talk, subsequently repudiated by the Prime Minister, of a further Budget in July has knocked thousands of millions of pounds off the value of Government bonds and industrial shares and weakened international confidence in sterling?

Mr. Barnett

I can only tell the hon. Gentleman that he and his hon. Friends, and those who seek to misinterpret words that have been spoken in this House, do much more damage than any Labour Member could ever do.

16. Mr. James Lamond

asked the Chancellor of the Exchequer how many letters he has received from members of the public on the subject of his Budget Statement of 11th April.

Mr. Robert Sheldon

About 100 a day.

Mr. Lamond

Will the Chancellor make it plain, when answering these letters, that the Tory slogan "pay as you spend" really means that Conservatives want to transfer the burden of taxation from the rich to the poor—particularly to pensioners and those who are not paying income tax at present?

Mr. Sheldon

My hon. Friend's assumption will be tested in due course during the Committee stage of the Finance Bill. Certainly, we have sought to ensure that the burdens of taxation are shared equally, bearing in mind the problems that we inherited. The country as a whole has come to understand that and is grateful to the Government for the way in which they have acted.

Mr. Adley

Does the Minister think that a cut of 1p in the standard rate of income tax would so destroy the Government's Budget strategy that the Chancellor and Prime Minister might put their heads together and decide that it would be too much for the country to stand, and that a General Election would be necessary? If 1p is not enough for that, would those on the Treasury Bench get toegther and decide how much would have to be cut from tax before a General Election was needed?

Mr. Sheldon

We shall come to all these questions in the Finance Bill debates. The Budget judgment itself is a matter that cannot be quite so easily tampered with as some hon. Members, without the necessary experience, might suggest. When one makes changes one must take account not only of the total amount but of the phasing, to ensure that the money coming in is in line with what is required, at the right time. Otherwise one may find that there are certain distortions. I urge Opposition Members to study this more effectively than they have in the past.

Mr. Ron Thomas

Does the Financial Secretary agree that we should try to bring in a different direct tax system? Is it not a fact that at present, in order to give £100 in tax rebates to a person on £2,500 a year, we also have to give £750 to a person on £25,000 a year?

Mr. Sheldon

I am aware of some anomalies and problems in the present taxation system. I urge my hon. Friends to take account of the fact that there would be greater difficulties if we were to change these fundamental matters in the way that has been suggested by professors and others. These are complicated matters, and one must bring about changes to meet particular problems. The restructuring of the taxation system needs much more careful consideration.