HC Deb 28 November 1996 vol 286 cc449-50
4. Mr. John Marshall

To ask the Chancellor of the Exchequer what representations he has received about the 20p income tax band. [4859]

The Financial Secretary to the Treasury (Mr. Michael Jack)

We listened to many representations on this and many other subjects in the run-up to the Budget.

Mr. Marshall

I thank my hon. Friend for that answer and I thank my right hon. and learned Friend for widening the 20p income tax band so that one in four taxpayers now pay a standard rate of tax of 20p in the pound compared with the 33p in the pound that they paid in 1979. That is real progress. Would it have taken place if we had followed the spending policies of the Labour party, which is never undersold when it comes to making promises?

Mr. Jack

My hon. Friend has put his finger on a very important point, because the last Labour Government disguised their position on tax by overborrowing to the tune of another lop on the basic rate of tax. Our basic rate has come down by 10p—from 33p down to 23p—and now, for a quarter of all taxpayers, as my hon. Friend says, the 20p band is their basic rate of tax.

Mr. Olner

In spite of all the rhetoric that we have heard over the past two days, the fact is that the Tory Government have put up taxes in this Budget and they are higher than ever before. When will the Government come clean and tell the British people that the Conservatives are the tax-raising party in this country?

Mr. Jack

The hon. Gentleman is always a pleasant man in the House, so I say this to him quietly: does he not remember the 83p rate of tax or, indeed, the 33p basic rate when the Labour party was last in power? His question is another cover-up for the embarrassment that he and his right hon. and hon. Friends feel for the fact that this Budget has delivered, in rising living standards, some £370 a year extra to the average family on average earnings. That is £7 a week. That is £20 a week since the previous election and £100 a week since 1979.