HC Deb 06 December 1990 vol 182 cc438-9
5. Dr. Moonie

To ask the Chancellor of the Exchequer what proportion of gross earnings a married couple with one earner on 75 per cent. of average earnings, with two children, paid in all taxes and national insurance, including local taxes and treating child benefit as negative income tax, in 1978–79 and 1989–90.

The Minister of State, Treasury (Mrs. Gillian Shephard)

Approximately 31 per cent. and 33 per cent., respectively; over the same period, measured at 1990 prices, the same family has enjoyed an increase in real net income of nearly £43 per week.

Dr. Moonie

I welcome the hon. Lady to her new job. We have crossed swords before in Select Committees and in various other places, and I am sure that we shall do so again. I am glad that she has confirmed the figures. Will she confirm that the net result of the Government's taxation policy over the past 11 years has been to reduce taxes for the rich and to increase them for the poor?

Mrs. Shephard

What counts for families are real earnings. The total tax burden in all cases is now lower than it would have been if Labour's tax regime had simply been indexed for inflation. That same family which has enjoyed a rise of £43 per week under this Government would have had a measly £3.20 under Labour.

Mr. Oppenheim

Is not one of the most pernicious barriers—the trade barrier—equally damaging to the rich and to the poor? Does my hon. Friend agree that even if we get a 30 per cent. cut in food subsidies under the GATT round, every family in Britain will pay more in increased food prices as a result of trade barriers than they pay in the poll tax? [Interruption.] My hon. Friend should also bear in mind the extra costs caused by trade barriers in relation to cars and consumer electronics. Is it not time that the Government started to take those issues seriously?

Mrs. Shephard

It was a touch difficult to hear the whole of my hon. Friend's question, but I assure him that the issues that he raises about the GATT round are taken very seriously by the Government.

Mr. Nicholas Brown

I welcome the hon. Lady to her new job and invite her to win the support of the House by repudiating the policy adopted by her predecessor of refusing to give the House the figures for the distributional effect of the poll tax on the tax burden. Does the hon. Lady understand that such a refusal completely undermines the initiative taken by the Secretary of State for the Environment yesterday? The Treasury team can take campaigning against that right hon. Gentleman a little too far. Is not the truth of the matter that the Treasury has the figures and is concealing them because their effect is deeply embarrassing to the Government?

Mrs. Shephard

I thank both the hon. Gentleman and the hon. Member for Kirkcaldy (Dr. Moonie) for their kind welcome. I remind the hon. Gentleman that nothing is ruled out and nothing is ruled in. The figures are not available. The increased burden on families from the community charge has been the result of Labour-controlled local authorities spending well in excess of appropriate levels. I remind him that at least 10 million people get help through community charge benefit.

Mr. Conway

It is delightful to see my hon. Friend at the Dispatch Box today in that capacity. She is there because of her ability and not because of her gender. [Interruption.] Labour Members should listen to this—they might enjoy it. Is not it the case that four out of five families with children of school age pay direct taxation? Does my hon. Friend think that they would be happier to have the high spending plans and taxation policies of the Labour party?

Mrs. Shephard

I am not sure whether to thank my hon. Friend for his obviously well-intentioned welcome to the Dispatch Box. I will make no comment on the gender-oriented remark. Of course people prefer to have a cut in direct taxation.

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