§ 8. Mr. MartlewTo ask the Chancellor of the Exchequer how much tax a typical family will pay in the next financial year; and what was the figure in 1992. [4863]
§ Mr. JackA family on male average earnings should be about £370 better off next year after earnings growth, tax and inflation. This total takes the rise since 1991–92 to £1,130.
§ Mr. MartlewDoes the Minister realise that the rhetoric does not meet what was stated in the Budget? Is not the reality that a penny off tax has been more than cancelled out by the increase in indirect taxation? Because of the local government settlement yesterday, families in my constituency will be paying 6 per cent. more in council tax and will suffer a 6 per cent. cut in services. They will be paying more for less.
§ Mr. JackI must correct the hon. Gentleman. The penny cut in the basic rate of tax was not the only tax reduction in the Budget. My right hon. and learned Friend the Chancellor increased the starting point for tax by enlarging allowances by £280 and he also widened the 20p band. Those are important further tax changes that the hon. Gentleman did not mention.
The figure that I gave a moment ago takes into account all those factors and the growth in earnings in real terms occasioned by the economy's excellent performance—[Interruption.] It is not rhetoric; it is fact. People will be £370 a year better off under the Budget.
On the point about council tax, perhaps the hon. Gentleman should listen to what Sir Jeremy Beecham—a Labour supporter—had to say. He suggested a level of 66p a week for a band C house. The hon. Gentleman should keep things in perspective.
§ Mr. BrazierDoes my hon. Friend accept that many Conservative Members are very glad that so much of the Budget tax cuts are focused on the low-paid, principally through the increased allowances? Does he agree that one of the keys to reducing unemployment—and, indeed, tackling a number of other social ills—lies, rightly, in assisting those working hard on modest wages to put some clear blue water between them and their families and those who, for whatever reason, find themselves fully dependent on the state?
§ Mr. JackMy hon. Friend, who shows his usual perceptiveness, has put his finger on an extremely important part of the Budget, which is to improve the work incentive. By raising the starting point for tax, we are helping people who want to get back into the labour market, but who may initially have to accept lower-paid jobs. The widening of the 20p band will also help them. That help is realistic and is targeted towards those people—unlike the barmy idea of a lop starting rate suggested by the Opposition. Where will the money for that come from? All it would do would be to help all the people who are not at the heart of my hon. Friend's question.
§ Mr. DarlingDoes the Financial Secretary agree with the conclusion reached by his right hon. Friend the Chief 455 Secretary in last night's debate, when he confirmed that taxes will go up this year? Is not one reason why the Conservatives are behind in the polls that they keep breaking their promises on tax? The hon. Gentleman is increasingly aware, as is the Chancellor, that one reason why the Conservative party simply is not capable of being led is that it breaks its promises on tax and spending again and again.
§ Mr. JackI do not recall my right hon. Friend the Chief Secretary making any such admission. I remember an exchange about the tax burden, when he put the record straight and said that, as a result of this Budget, the tax burden would be the same as it was when we went into the last general election. The hon. Member for Edinburgh, Central (Mr. Darling), in putting his question, does not take into account the 25 Tory tax decreases since 1992—[Interruption.]
At least Labour Members' mirth shows that they are awake and have received the message that 25 is a bigger number than 22. They do not like the fact that, taking it all into account, the family on average earnings will be £370 better off as a result of the Budget. Those are the facts, and they do not like them.
§ Mr. CashDoes my hon. Friend accept, without being a Cassandra in any way, that the reason why that lot opposite are incapable of doing anything to help families in relation to tax is that they were up to their eyes in endorsing the exchange rate mechanism, which led to the public sector borrowing requirement going up so high, which in turn led to our having to impose taxes, including value added tax on gas and fuel? They are caught by the fact that they are up to their eyes in it the whole time.
§ Mr. JackMy hon. Friend underscores the fact that, whenever they have made any attempt to run Britain, Labour Members have been up to their armpits and beyond in debt. Labour is a high debt, high spending and high tax party.