Tax Cuts (Hansard, 23 February 1989)

§ 15. Mr. Madden
To ask the Chancellor of the Exchequer if he will estimate the differential impact of his tax cuts in the last Budget on the median earner in (a) the south-east and (b) other regions.

§ 16. Mr. Maxton
To ask the Chancellor of the Exchequer if he will estimate the differential impact of his tax cuts in the last Budget on the median earner in (a) the south-east and (b) other regions.

§ Mr. Brooke
The impact of the income tax reductions in the 1988 Budget was broadly the same for the median earner in both the south-east and the rest of the country. In both cases the proportion of annual income paid in tax has fallen by two percentage points.

§ Mr. Madden
Is it not true that people on average incomes in the south-east gained more than £40 from the income tax cuts compared with those on average incomes in the regions, including Yorkshire? In the "prudent and cautious" Budget that the Chancellor has just announced that he is to make next month, will he heed the views of public opinion polls which have shown solid majorities, including Conservative voters, wanting the available resources to be invested in the National Health Service, in public housing and public education and not on more tax cuts which primarily overheat the economy in the south-east?

§ Mr. Brooke
The general statistics that the hon. Gentleman quoted at the beginning of his question were correct. However, he was relating them to the median earnings in the two regions. My right hon. Friend the Chief Secretary to the Treasury will have heard everything that the hon. Gentleman said about public expenditure.

§ Mr. Maxton
I apologise for just arriving in the Chamber—

Hon. Members
What is the question number?

§ Mr. Speaker
Order. I hope that the hon. Member for Glasgow, Cathcart (Mr. Maxton) heard the answer.

§ Mr. Maxton
Unlike Conservative Members, I knew that this was a connected question.
Will the Minister make every effort to ensure that the Budget provides proper investment in Scotland and the rest of England and not just another heating-up of the economy in the south-east?

§ Mr. Brooke
The hon. Gentleman had the disadvantage of not hearing my answer and of having forgotten his original question. This question has nothing to do with the Budget, but I heard the hon. Gentleman's question.

§ Mr. Ian Taylor
Does my right hon. Friend agree that the tax cuts in the last Budget have benefited people right across the country and, because of the resultant bouyancy of the economy, have resulted in higher expenditure in exactly those areas where the Laboutr party has urged us to spend more money? We have been able to spend that money without increasing the national debt.

§ Mr. Brooke
My hon. Friend is correct to draw attention to the way in which prosperity has fanned out across the country. As I said in my original answer, the effect of the 1988 Budget on those on median earnings was broadly the same in the south-east and elsewhere.

§ Mr. Hind
My right hon. Friend will be pleased to know that people living in the north-west will be glad to hear that they have benefited equally with the south-east from the tax cuts. In his deliberations with my right hon. Friend the Chancellor of the Exchequer, will he consider that some of those tax cuts could benefit the community by improving the income-to-savings ratio, thereby providing us with further investment in the north-west to tackle our unemployment problems?

§ Mr. Brooke
I am grateful for what my hon. Friend said, but I cannot make any comment about his Budget representation.

Mr. Robert Hughes
As the Chancellor has defended the tax cuts on the basis of having to protect pensioners against inflation, what does he say to my constituents and many others on income support who will find in April that pensions are going up, but transitional support is going down and they will be left with not a penny of an increase? Is that not robbery? Is he not ashamed of himself?

§ Mr. Brooke
The relationship between that question and the original question is not precise. However, what happens from April onwards will be determined by what my right hon. Friend the Chancellor introduces in his Budget.

§ Mr. Sumberg
Does my right hon. Friend agree that a feature of the north-south divide is that the north-west of England is booming, unemployment is being reduced there faster than in any other region and once again Labour Members appear to be walking around with their eyes closed and their ears blocked?

§ Mr. Brooke
My hon. Friend is quite right to draw attention to the greater incentives produced by the Chancellor's tax cuts and their highly beneficial effect on his region.