Taxation (Hansard, 3 March 1994)

§ 3. Mr. Keen
To ask the Chancellor of the Exchequer what assessment he has made of the effect of the Government's tax policies on the economic well-being of the average family on average male earnings with two children and one spouse.

§ 12. Mrs. Roche
To ask the Chancellor of the Exchequer what assessment he has made of the effect of the Government's tax policies on the economic well-being of the average family on average male earnings with two children and one spouse.

§ The Financial Secretary to the Treasury (Mr. Stephen Dorrell)
The real take-home pay of a family on average earnings has risen by £83 a week, in today's values, since 1978–79.

§ Mr. Keen
The Financial Secretary has not answered my question. Is that because he wishes to hide the fact that the burden of taxation will have risen from 34.75 per cent. in 1979, to 38.5 per cent. next year? If he did not intend to mislead and the policy to switch from direct to indirect taxes is genuinely thought out, why do his answers fail time and again to include the total tax burden? Does he not think that the British public deserve straight answers?

§ Mr. Dorrell
The hon. Gentleman is wrong. I gave a very direct answer to his question. He asked what assessment we had made of the effect of the Government's tax policies on the economic well-being of the average family, whose take-home pay has increased by £83 per week in today's values since 1979 as a result of the Government's economic policies.

§ Mrs. Roche
Will the Financial Secretary explain how it is fair to the ordinary family and the British taxpayer to increase taxes for everyone except those earning more than £64,000 a year?

§ Mr. Dorrell
Once again, an Opposition spokesman is wrong. The Institute of Fiscal Studies studied the effects of the two Budgets last year and concluded from its research that they will raise extra revenue in roughly equal proportions all the way up the income scale.

§ Mr. Horam
Has my hon. Friend seen the estimate by the Confederation of British Industry that the shadow Chancellor's loophole-closing devices would add £3.6 billion to the tax bill for industry over two years? Leaving aside any question of withholding tax on gas and electricity bills, has my hon. Friend estimated what effect that policy would have on prices, jobs or investment?

§ Mr. Dorrell
My hon. Friend asks an important question. Labour Members parade their interest in closing tax loopholes, but the measures that they espouse under that banner would close not loopholes but businesses and would put people out of work.

§ Mr. Willetts
Does my hon. Friend agree that any assessment of the well-being of families has to include the effects of the fall in mortgage rates and that those reductions were possible only because of the Government's sound fiscal policies?

§ Mr. Dorrell
My hon. Friend is right. It is not a coincidence that we are enjoying the lowest interest rates for 17 years—it is a result of the Government's success at bringing down and controlling the rate of inflation and we shall continue to deliver that.

§ Mr. Darling
Talking about loopholes, why do the Government not close down the tax break that allows boardrooms to avoid paying tax by using offshore tax havens? Or were the Chancellor's words on boardroom restraint just bluff as usual, with no action to follow?

§ Mr. Dorrell
The Government's approach to pay and the taxation of pay is the same all the way up the income scale. We want a pay system that reflects the performance of the organisation that employs the individual. That is the policy which will continue to inform our approach to public and private sector pay.