HC Deb 30 June 1994 vol 245 cc939-40
11. Mr. Gill

To ask the Chancellor of the Exchequer what representations he has received in support of tax reductions.

Mr. Dorrell

I receive representations on many aspects of taxation.

Mr. Gill

My hon. Friend will be aware that Britain's gross contribution to the European Community Budget is already the equivalent of more than 3p on the standard rate of income tax. He may also be aware that the amount of Britain's net contribution to the European Budget almost exactly equates to the amount that the Irish Republic draws out of the Community. Does he agree that curbing expenditure in that area would not only be extremely popular with the electorate, but would create the scope for the tax cuts to which the Government are committed?

Mr. Dorrell

I entirely agree that curbing European Community expenditure is an important part of total budget discipline. That is why my right hon. Friend the Prime Minister took the line that he did at the Edinburgh summit, where, as the Chancellor said earlier, we achieved a substantial reduction in the ceiling on the Budget that the Commission were seeking. It is also the reason why our party negotiated the rebate in the early 1980s under my right hon. Friend Baroness Thatcher, which was opposed by the Labour party. It is also why we oppose, root and branch, the proposals adopted by the Labour party in the recent European election—to increase Community expenditure.

Mr. Simpson

Does the Minister accept that arguably the greatest success of the policies that the Government have pursued in forcing down wages has been that the poorest paid people have been made increasingly dependent on means-tested benefits, and are paying marginal rates of tax of 97p in the pound? Does he accept that that is the strongest argument now for paying those people decent wages, instead of inflicting punitive marginal rates of tax on them?

Mr. Dorrell

If the Labour party were seriously interested in improving the living standards of people on the lowest incomes, I believe that it would recognise the obvious truth that has been shown by every report on the subject: the way to improve the living standards of the low income groups is to promote job creation, and any Government who are serious about that must conclude that to adopt the social chapter and a minimum wage is to march resolutely in the wrong direction. This Government are serious about wanting living standards to rise across the income scale, and we are pursuing policies that will deliver that.