HC Deb 23 April 1998 vol 310 c958
6. Mr. John Hutton (Barrow and Furness)

If he will make a statement concerning his Budget measures to increase the financial incentive to work. [38247]

The Chancellor of the Exchequer (Mr. Gordon Brown)

The Budget contained a number of measures to help ensure that work pays, including the working families tax credit and reform of national insurance contributions.

Mr. Hutton

I thank my right hon. Friend for his reply. I strongly endorse his emphasis on making work pay, a central element of the philosophy underlying our welfare-to-work review. Is he aware that 1,500 families and 3,000 children in my constituency will benefit from the introduction of the working families tax credit? Is that not one of the best ways to achieve greater fairness in our society—something that, in 18 years in government, the Conservative party conspicuously failed to do?

Mr. Brown

I am grateful to my hon. Friend. The increased take-up and availability of the working families tax credit to people on low incomes will mean that the number of people benefiting will increase from 800,000 to nearly 1.4 million. It also means that the marginal tax rates of many of those people will subsequently fall. My hon. Friend is right: this is part of a comprehensive set of measures, including the national minimum wage, cuts in national insurance for employees and employers and a child care package, that enable people to have proper child care when they need it. It will eventually include the lop starting rate of income tax.

Mr. Nick Gibb (Bognor Regis and Littlehampton)

How will the tax rises implemented by the Government since 1 May help people's financial incentives to work? What did the right hon. Gentleman mean when he said during the general election campaign:

There's no black hole for the Labour party because we've got no public spending commitments that require extra taxes"?

Mr. Brown

The hon. Gentleman should be congratulating the Government. We cut VAT on fuel after saying we would. We abolished the gas levy and helped people with their fuel bills. He asks about taxation. We cut corporation tax for business, we cut small business corporation tax, and we have now cut national insurance for every employee in the country. We have kept our promises on tax. The Conservative party broke all its promises on tax.