HC Deb 08 November 2001 vol 374 c356
5. Mr. John Smith (Vale of Glamorgan)

What recent representations he has received on future income tax policy; and if he will make a statement. [11330]

The Financial Secretary to the Treasury (Mr. Paul Boateng)

My right hon. Friend the Chancellor receives a number of representations on 27/4/2549future income tax policy from a wide range of organisations. Changes to the tax system are considered as part of the Budget process.

Mr. Smith

I thank my right hon. Friend for his reply. Given the crucial role played by small businesses in economic growth and job creation, especially in Wales, does he have plans to extend the 10p income tax rate to those very small businesses that are vital to the economy?

Mr. Boateng

My hon. Friend has a keen interest in the creation of employment opportunities in Wales, and my right hon. Friend the Chancellor will no doubt take his remarks as a Budget representation. The principles that underlie the Government's tax policy are very much based on encouraging work, savings and investment. The action that we have taken to cut the basic rate to 22p and to introduce a new 10p starting band makes work pay, which can only be good news, not just for Wales, but for the whole country.

Mr. Mark Field (Cities of London and Westminster)

Does the right hon. Gentleman stand by the commitment in the Labour manifesto not to increase national insurance contributions during the lifetime of this Parliament?

Mr. Boateng

The commitment that we made in the manifesto was clear: it was a commitment not to raise the basic rate or top rate of income tax. The hon. Gentleman knows full well that no such commitment was given about national insurance contributions. He will also know that the Government simplified the national insurance system and made it easier and less of a burden for employers. That is good for employment and good for employers.