§ 1. Mr. Donald Gorrie (Edinburgh, West)What assessment he has made of the advantages of extending the principle of hypothecation in the tax system. [56858]
§ The Chief Secretary to the Treasury (Mr. Stephen Byers)In general, the Government determine their expenditure according to need, not according to the sources of their revenue. However, we will continue to look at each case on its merits.
§ Mr. GorrieThe answer is encouraging in so far as it goes. The first stage should be to find a more friendly word. "Hypothecation", like subsidiarity, is an excellent concept but not a good word—perhaps we should use the word "earmarking". What will the Government do to encourage the earmarking of national or local taxes or charges for a specific related purpose? For example, office parking charges or road pricing could fund improvements in local public transport or, as Lord Marshall proposed, national taxes on energy could be spent on energy efficiency.
§ Mr. ByersWe said in our transport White Paper that we would consider carefully any pilot schemes in which revenues were earmarked for particular purposes. Our general view is that we need, as a Government, to identify 994 our own priorities. That is why we have committed £40 billion to hospitals and schools over the period of the comprehensive spending review—spending that Her Majesty's official Opposition have still not supported.
§ Mr. Robert Sheldon (Ashton-under-Lyne)Is my right hon. Friend aware that his answer will give great encouragement? He said that he would look at the issue on its merits, which I have never before heard said about this matter; so I am grateful for that. I share the usual Treasury view that hypothecation is a danger. However, there is a case for it in one instance—the national health service. Expenditure on the health service will not fall, which is one of the problems with hypothecation, and an increase in any tax related to health service expenditure could command widespread support.
§ Mr. ByersThere are always presentational arguments for earmarking taxation, but the Government's fundamental principle is that we need to identify our priorities as a Government and allocate resources accordingly. The health service will, of course, benefit from that approach, as we are committing an extra £21 billion to it over the three years from next April. Moreover, on Tuesday, in his pre-Budget report, the Chancellor committed a further £250 million this year to ensure effective health care across the country.
§ Mr. David Ruffley (Bury St. Edmunds)On earmarking tax revenues, may I draw the attention of the Chief Secretary to a report in The Independent today, which states that Ministers want to let the married couples allowance "wither on the vine"? Is that report true? If so, would that not represent yet another tax increase on childless married couples?
§ Mr. ByersI have not seen that report. One of the reasons that I do not read The Independent is that I do not always believe the stories that it covers. The hon. Gentleman will have to wait and see, but, if I were him, I would not rely on reports in The Independent.