HC Deb 13 July 1995 vol 263 cc1077-9
6. Mr. Thurnham

To ask the Chancellor of the Exchequer when he received a reply to his letters of 12 May and 14 June to the right hon. Member for Dunfermline, East (Mr. Brown). [32552]

Mr. Kenneth Clarke

I regret to say that I have received no reply from the hon. Member for Dunfermline, East (Mr. Brown) to my letters to him of 12 May and 14 June. I assume that he is still unable to decide on an inflation target and whether or not he agrees with my decisions on interest rates.

Mr. Thurnham

Does my right hon. and learned Friend agree that Labour cannot answer serious economic questions because it does not have a serious economic policy—only classical exogenous waffle to camouflage the job-destroying minimum wage and social chapter?

Mr. Clarke

I agree that members of the Opposition Front Bench find themselves in a sad position. There cannot be a Member of the House of Commons who has not at some stage expressed an opinion on the movement in interest rates. The markets have since moved, there has been a wide range of financial comment and all the data—including the Bank of England's advice to the Government—are before us. The hon. Member for Dunfermline, East cannot even answer a letter because he cannot make up his mind whether or not he has an opinion.

Mr. Andrew Smith

As the Chancellor is so upset about replies to letters, will he now answer my letter to the Treasury of 23 June, which refuted fraudulent Conservative spending claims? While the right hon. and learned Gentleman is at it, will he account for his evident loss of control over the Prime Minister and his new spending commitment, now amounting to more than £11 billion? Answer that.

Mr. Clarke

At least the hon. Gentleman wrote only on 23 June. I shall certainly let him have a prompt reply based on the experience of having taken £45 billion out of my colleagues' spending plans already, so I must rebuff the hon. Gentleman's claims about spending. As to the repeated theme concerning my right hon. Friend the Prime Minister, I was present when he made his excellent speech confirming his leadership of the party. I was not startled by his remarks, and I checked the text to remind myself why.

My right hon. Friend said of capital gains tax and inheritance tax: My aim is to see these taxes reduced and if possible abolished altogether. I make no promises about when we can do it … no certainty that we can do it in the near future. But it should be set down now as a clear objective of any Government that I lead that I wish to see an end to inheritance tax and capital gains tax. That is, if anything, slightly more cautious in tone than my agreement with the remarks made by my right hon. Friend the Prime Minister yesterday. We have set that long-term objective because we believe in the benefits of low taxation and that one generation should be able to hand on the wealth that it has earned to the next generation.

We believe also that capital gains tax should be re-examined because it can impose damaging effects on investment, particularly in unquoted companies. The Opposition, because they have no policy on anything and cannot answer straight questions on any economic policy, keep inventing fraudulent misquotations to try to make an issue of something else.

Mr. David Shaw

My right hon. and learned Friend surely is aware that a considerable amount of taxpayers' money goes to the Opposition in Short money, so that they can reply to letters from him asking about the Opposition's policies. Should we not examine the value that taxpayers receive for that money? Should we not be getting answers from the Opposition about their policies, so that taxpayers can see and understand them?

Mr. Clarke

I share my hon. Friend's feeling. I can only assume that the Short money all goes to the hon. Member for Hartlepool (Mr. Mandelson) and the many public relations assistants that he must employ. As we all know, the hon. Member for Hartlepool plays the role in the Opposition that they mythically believe my right hon. Friend the First Secretary will be playing in the Government.

Mr. Gordon Brown

Will the Chancellor now answer the question that he did not answer yesterday? Does he support the principle of abolishing inheritance tax and capital gains tax? Will he confirm that that would cost at least £3 billion? Will he further confirm that the main beneficiaries would be 5,000 people, who would get half the gains from abolishing the two taxes? Will he now tell us who is in charge of the Treasury and of tax policy? Where is the Budget being written—in No. 11 Downing street, No. 10 Downing street or No. 10a Downing street?

Mr. Clarke

If the hon. Gentleman is having difficulty with his correspondence, he could have given me a reply just now when he was on his feet. Let me read again what the Prime Minister said: My aim is to see those taxes reduced and if possible abolished altogether. I make no promises about when we can do it. I said: The Prime Minister set out these objectives as a long-term aim for the Conservative party". I do not see the faintest difference. I remain in charge of economic and taxation policy, with the full support of the Prime Minister. The Government's aim is to achieve low taxation, as and when we can afford it and when it is in the interests of the economy.

The hon. Gentleman seems to think that we have a lot of people in charge of economic policy, but it is clear that absolutely no one in his party is in charge of it.

Mr. Salmond

Is the Chancellor aware of just how desultory and pathetic many of us find the exchanges between him and his shadow? Why cannot we have an economic debate conducted on real economic aggregates, such as employment, productivity and output? Surely that would be better than debates that seem to turn on whether the hon. Member for Dunfermline, East (Mr. Brown) is aware that there needs to be a half-point correction in interest rates so as to meet one of the Chancellor's many inflation targets.

Mr. Clarke

We had a debate on the economy in the House yesterday. Unfortunately the hon. Gentleman seemed to have a prior and pressing engagement elsewhere and was not able to join us. Hardly any nationalists from Scotland or Wales were present from beginning to end, as far as I can recall.

I prefer to talk about the 3 per cent. growth that we are going to achieve this year; about keeping inflation to 2.5 per cent. or less at the end of this Parliament; about the 660,000 people who have come of the unemployment register; about the need to get unemployment down further; and about the need to give this country a modern, industrial economy that will sustain growth throughout the rest of this decade. It is the pathetic nature of the official Opposition and the absence, when we debate the economy, of the Scottish nationalists, that reduce us to the kind of drivel that we have just heard.