Taxation (Hansard, 16 May 1996)

§ 4. Mr. McFall
To ask the Chancellor of the Exchequer what representations he has received on (a) direct and (b) indirect taxation levels. [28492]

§ The Chancellor of the Exchequer (Mr. Kenneth Clarke)
I have received a number of representations from the public and business on the levels of direct and indirect taxation, many of which welcomed the tax cuts in last year's Budget.

§ Mr. McFall
In view of the 24 separate tax rises since 1992, will the Chancellor admit that the Government have succumbed to the seven-week itch—the equivalent of a new tax on the British people every seven weeks? Will he now admit that the typical family is £670 a year worse off than it was in 1992? The message, loud and clear, is that one cannot trust the Tories on taxation.

§ Mr. Clarke
The decisions that we took, which were tough ones to get public borrowing under control, paved the way for lower taxation last November, increased growth in the economy, falling unemployment, low inflation and rising living standards. The average family is £450 a year better off this year, as a result of the combined effect of rising living standards and falling taxation.
Only yesterday the Labour party committed itself again to a windfall tax that would put up the prices of electricity, gas and water, and drive down shareholder value in the companies, so it is that party which, in that and many other ways, poses the threat of higher taxation if it ever gets the chance to impose it.

§ Mr. John Townend
My right hon. and learned Friend will be aware that I agree with him that irresponsible tax cuts would not receive the support of Conservative Members. However, does he agree with me that if tax cuts are paid for by spending cuts, they are not bribes but the rewards of good Conservative government?

§ Mr. Clarke
The Government are committed to the control of public spending, low public borrowing, low inflation and lower taxation. We are committed to lowering the standard rate of taxation to 20p, and a quarter of taxpayers are already on 20p. We will deliver that at a time when we deliver all our other objectives. As my hon. Friend knows, that is exactly what we delivered in last year's Budget, and that is what we are committed to carry on delivering, for the good of the economy of this country.

§ Mr. Gordon Brown
Will the Chancellor confirm to the House that a mistake was made in his Budget calculations of tax revenues—a mistake that means that his Budget strategy and his scope for tax cuts in November is now unravelling? Will he tell the House the truth about the scale of the mistake on tax revenues? Will he tell us whether it is higher than the £4.4 billion mistake that was made last year in calculating tax revenues? Will he confirm that that is another example of Conservative economic policy—still hurting but still not working? Will he, therefore, agree to the independent audit on the state of public finances that I have proposed—so that the Conservative party can never again deceive the public about the state of public finances?

§ Mr. Clarke
Every Government, for the past 20 years and more, have been committed to producing two economic forecasts each year, and we adjust those forecasts. The forecasts of tax revenue have been produced. They are always the best forecasts that we have available, and we adjust policy accordingly. Will the hon. Gentleman say whether he, with his super-Treasury, is putting into his forecasts assessments of what it will cost families to have child benefit taken away if a child stays on in the sixth form, or what it will cost people who pay their electricity and gas bills when he brings in his windfall tax? He knows perfectly well that, as my right hon. Friend the Chief Secretary to the Treasury said, we are running the economy well on the basis of the forecasts that we are making. The Commission's forecasts appear to be based on huge public spending commitments that he, as shadow Chancellor, keeps making.