HC Deb 12 March 1998 vol 308 cc739-40
6. Mr. Brady

If he will make a statement on the distribution of the tax burden and public expenditure between different income groups. [32498]

Mr. Darling

An annual article is published by the Office for National Statistics in "Economic Trends" which describes the effects of taxes and benefits on household income. The last one was published in March 1997.

Mr. Brady

I look forward to reading that interesting article and future editions of the publication. Does the Minister understand that the Labour party won last year's general election only because it persuaded the electorate that a Labour Government would not increase taxes on middle England? Does he accept that abolishing PEPs and TESSAs, or putting tax on child benefit, would be an increase in tax on middle England? Will he now rule out any such taxes?

Mr. Darling

The hon. Gentleman should recall that we won in middle England and everywhere else as well. The hon. Gentleman would understand why we won and the Conservative party lost if he read the annual report to which I referred, which shows that inequality increased throughout the 1980s.

Mr. Brady

That is not true. Everyone was better off.

Mr. Darling

It most certainly is true. The rate at which inequality increased in the United Kingdom in the 1980s was faster than in any other industrialised country except New Zealand.

The Labour Government are beginning to reverse that trend. We have reduced value added tax on fuel, for example, and that has helped poor people especially. We have introduced the new deal, which will help many young people and the long-term unemployed. It will give them hope and give them a job—something the previous Government would never have done. Our spending review will ensure that Government help and spending are focused so as to ensure that the people who lost during the Tory years gain during the term of this Labour Government.

Mr. Davidson

My right hon. Friend, like me, comes from middle Scotland. Does he agree that, if the Government reduced tax in some directions, that would be immensely popular electorally? I think especially of introducing a policy of free beer for all the workers. If he were to cut duty on beer, would he ensure that the brewers and licensees were obliged to introduce lined glasses to ensure that the full measure was pulled for those who purchased drink? Of course, if the beer were free, people would not be so worried about lined glasses.

Mr. Darling

I am glad to hear that my hon. Friend now agrees that Glasgow is middle Scotland. I am sure that my right hon. Friend the Chancellor of the Exchequer will have heard his plea on behalf of beer drinkers. My hon. Friend will appreciate that he might have to wait a little longer before he receives a fuller answer to his question.

Mr. Nicholas Winterton

May I tell the Chief Secretary that the Labour party did not quite win in Macclesfield? There is quite a lot of countryside in Macclesfield, and the countryside is an important part of the environment. Does the Chief Secretary accept that if he continues with his intention dramatically to increase the duty and tax on hydrocarbon oils—[HON. MEMBERS: "It is the wrong question."] No, it is not the wrong question.

Madam Speaker

The hon. Gentleman is entirely in order. I know what he is getting at.

Mr. Winterton

I am immensely grateful, Madam Speaker.

Is the Chief Secretary aware that he is discriminating against people who live in the countryside, many of whom are on low incomes, and that the policy of increasing the tax burden on fuel will depopulate the countryside and make the position of farmers even more difficult—and perhaps close village pubs as well? Will he review the Government's discrimination against rural communities?

Mr. Darling

I agree that the Labour party did not win Macclesfield, although many people believe that the Conservatives did not win it, either. I am pleased to see the hon. Gentleman back in his place, and hope that he keeps up his good work in the Conservative party.

I shall make a number of points on the countryside. The first point, which the hon. Gentleman will not forget, I am sure, is that it was the Government he supported—or supported most of the time—who introduced the 5 per cent. fuel escalator. I do not remember many Conservative Members saying anything about it at the time. During their 18 years in power, the Conservatives did much to undermine the strength of rural communities: I am thinking of school closures, the threatened closure of post offices and the deregulation of buses, which had a devastating effect on public transport. I remind the hon. Gentleman—he knows this full well—that the tax burden increased during the previous Parliament, despite the promises on which the party that he sometimes supported fought the election.