§ 11. Mr. Philip Hammond (Runnymede and Weybridge)What estimate he has made of the incremental amount of tax that will be paid in the next financial year as a result of measures announced since 1 May 1997. [112224]
§ 12. Mr. Tim Boswell (Daventry)How much extra tax will be paid per annum as a result of his Budget measures to date. [112225]
§ The Chief Secretary to the Treasury (Mr. Andrew Smith)All changes to the tax system are included in the relevant Budget reports, which are publicly available. As a result of those Budgets, the direct tax rate on an average family with children will fall below 20 per cent. for the first time since 1979, and will be at its lowest level since 1972.
§ Mr. HammondThe Chief Secretary focuses on direct taxes, of course. Is it not a fact that, if the total tax burden as a percentage of GDP had remained at the 1996–97 level—which applied before the general election and before the Chancellor started introducing his stealth taxes—in the coming financial year, the British people 1185 would pay £15 billion less in tax? Is that not the truth that the Chancellor and the Prime Minister will go to any lengths to try to conceal from the British people?
§ Mr. SmithNo. Conservative Members are the last people who should focus on indirect taxes—they are the ones who put VAT on fuel, in breach of their election promises. The hon. Gentleman would do well to heed the advice of the shadow Chancellor, who, on 20 September, said:
Conservatives have become increasingly connected with uncaring social attitudes, selfish behaviour and sleaze. It is not easy for the party to strike the right tone. Of course it should be apologetic for mismanaging the economy.However much they apologise, their record will not escape them.
§ Mr. BoswellIs it not remarkable that, whereas other Ministers are so keen on adjectives such as "new", "modern", and even "joined-up", Treasury Ministers become sensitive—they dislike it—when a particular noun is used in relation to tax changes, which are otherwise commonly known as "tax increases"? For the sake of argument, let us call them tax changes. Will the Chief Secretary tell us what assessment he has made of the impact on ordinary people of those tax changes? What is the effect, for example, of an annual petrol tax hike of £178 on people in rural areas and on heads of families on the national minimum wage? What is the impact on pensioners with incomes below the income support level, but who have small savings incomes, whose payable tax credits have been withdrawn?
§ Mr. SmithThe hon. Gentleman should remember who it was who introduced the automatic petrol tax escalator, which we have now abandoned. Who was it who imposed VAT on fuel, which did the damage to pensioners? The answer to his question is that families with children are £740 a year better off as a consequence of our tax changes.
§ Mrs. Anne Campbell (Cambridge)Many of my constituents are paying more tax than they were prior to May 1997, and they are doing so because they are earning a great deal more than they were prior to May 1997. Would my right hon. Friend like to take the opportunity to congratulate some of the high-tech entrepreneurs in my constituency—such as Mike Lynch, of Autonomy—who have done so well with the economic stability that the Government have created?
§ Mr. SmithYes, I do join my hon. Friend in congratulating those high-tech and other firms in her constituency, and across the country, that are making an investment in, and success of, the crucial sphere of the knowledge economy and high-tech industries. We have been helping those companies by cutting corporation tax to the lowest level. We are also helping them by introducing research and development incentives and the management enterprise initiative, and by operating the economy so that there is stability, enabling businesses to plan and invest with confidence for the future.
§ Mr. Denis MacShane (Rotherham)Is my right hon. Friend aware that, in 1949, the great socialist Government of Clement Attlee cut income tax by 10p in the pound, 1186 and that, in 1951, the average industrial-wage worker with a family of two had to earn 107 per cent. of industrial wages before he paid any tax? In today's terms, that would be about £22,000. Although I do not invite my right hon. Friend to put that in the Budget, will he move in the general, socialist direction of cutting taxes, letting workers have more money to spend from their wages?
§ Mr. SmithYes indeed. As I said earlier, all Budget representations are carefully considered. The good socialist record of the Labour party in ensuring fair and low taxes is commendable, and stands in stark contrast to the record of the Conservatives, who were responsible for the highest tax burden in the past century when they took the tax take above 39 per cent. We shall not follow that example.
§ Mr. Howard Flight (Arundel and South Downs)Will the Minister stop trying to conceal the truth about tax increases? As he well knows, the Government's Red Book figures show a 2 per cent. increase over this Parliament. If we count the fiddle on the working families tax credit, that becomes 2.5 per cent. The latest wheeze is to quote figures on average families that exclude the increases in indirect taxes. Ordinary people well know that their taxes have gone up, while the health and education services that they receive have declined. They are paying more and getting less. The Prime Minister has—[Interruption.]
§ Madam SpeakerOrder. It is about time that I heard a question.
§ Mr. FlightWill the Government at last come clean on taxes, before we have to apply the same edict when referring to them as the Prime Minister has applied to all references to the hon. Member for Brent, East (Mr. Livingstone): stop using the "L" word and call him untrustworthy?
§ Mr. SmithI shall give the figures again. Last year, the tax take was 37.4 per cent. of gross domestic product. This year it is 37 per cent. Next year, on present measures, it is projected to be 36.8 per cent. That is a falling tax burden, not a rising one. Coupled with the record increases in real take-home pay, it is a conclusive demonstration that people are better off with Labour.