§ 6. Mr. David Ruffley (Bury St. Edmunds)If he will estimate the financial impact on a family on average earnings of tax and mortgage rate changes since 1 May 1997. [41678]
§ The Chief Secretary to the Treasury (Mr. Alistair Darling)As a result of the Budgets in July last year and in March, a family with two children on median income of £17,500 will see an increase in their disposable income, excluding housing costs, of about £260 a year from October 1999.
The impact on any family's housing costs would depend not only on interest rates, but on their accommodation, on the size of their mortgage and on other factors.
§ Mr. RuffleyWhen will the Chief Secretary stop fiddling those figures and accept the calculations 1094 independently arrived at by the House of Commons Library, which demonstrate that the average family is £1,000 a year worse off after the mortgage and tax rises under this Government?
§ Mr. DarlingThe hon. Gentleman should face the fact that interest rates went up because of the previous Government's failure to take appropriate action when they knew that inflationary pressures were building in the economy. If he looks back over the 18 years of the Government that he supported, he will see that interest rates were in double figures for much of that time and mortgage rates were extremely high—far higher than under this Government.
We are determined to ensure stable economic conditions so that all families can have the long-term prosperity that they want. When the hon. Gentleman criticises us, he should reflect that, for much of the past 18 years, instability and high interest rates led to a record number of repossessions and we did not hear a single word of complaint from him then.
§ Mr. Barry Gardiner (Brent, North)Will my right hon. Friend comment on the EU proposals for the harmonisation of tax rates on income from savings, and the effect that they could have on families in this country, especially those paying lower rates of income tax?
§ Mr. DarlingI am aware that proposals have been published, but we have no intention of going down that road. For obvious reasons, we certainly would not do anything to disadvantage this country.
§ Mr. Michael Fallon (Sevenoaks)Does anybody seriously believe that the official family tax burden figures would have been suppressed if they had shown a fall since 1 May last year? Will the Chief Secretary confirm that the poorest households have been the hardest hit by the tax rises so far? Will he now guarantee that, by the next general election, the average family will face no higher a tax burden than they had on 1 May last year—yes or no?
§ Mr. DarlingThe hon. Gentleman is certainly trying to wear new clothes in expressing concern about poor people. He was one of those who fervently espoused the poll tax, which must have hit poor people more than any other measure introduced by the previous Government. I remind him that, as a result of Budget measures introduced by my right hon. Friend, including the working families tax credit, every working family will be guaranteed an income of at least £180 a week, no family earning less than £220 a week—half average earnings—will pay net income tax, and child benefit is being increased from next year by a record amount. We also reduced VAT on fuel, which helped poor people, as it helped everyone else.
All the measures that the Government have introduced have been geared not only to increasing work opportunities, especially for those who are either unemployed or on low incomes, but to ensuring that families, especially those on lower incomes, are helped. Not only did the Conservative Government do nothing about that, but, during their entire period in office, they could not have cared less about the plight of poor people.