United Kingdom Tax Burden (Hansard, 15 November 2000)

§ Lord McIntosh of Haringey
My Lords, the estimated costs for measures announced in the Pre-Budget Report are set out in Table B4 of the report. Tax measures subject to consultation are not included in the Pre-Budget Report projections. If they were implemented, they would reduce taxes and social security contributions as a proportion of GDP from 2001–02 onwards by about 0.2 per cent per year.

§ Lord Northbrook
My Lords, I thank the Minister for his reply. In response to my noble friend Lord Saatchi in the Pre-Budget Report debate of 8th November, the Minister stated that the reason for the growth in taxes forecast for the year was the increase in income tax receivable from those put back to work. In Table B12 of the Pre-Budget Report, the figure of increased income tax only amounts to one-third of the extra £20 billion revenue forecast for the Government this year. Does the Minister agree that the balance of £14 billion is stealth taxes, particularly the raising of the upper limit on national insurance contributions, which was not even mentioned by the Chancellor in his speech?

§ Lord McIntosh of Haringey
My Lords, the Question I was asked and to which I responded concerned direct taxes. I gave a proper Answer to that Question. As to what the noble Lord, Lord Northbrook, calls an increase, let me make it clear that if the proposals—even if it were only the transport proposals—are implemented, there will be no increase next year in taxes and social security contributions as a proportion of GDP. The supposition on which the noble Lord makes his final comment is therefore not justified.

§ Lord Tomlinson
My Lords, can my noble friend, who is normally very good at these things, give us a broad brush estimate of the impact of the Pre-Budget Statement on things like sustained economic growth, employment, debt reduction, the reduction in the cost of debt servicing and the consequential use of those financial benefits for deserving good causes from pensions to petrol prices?

§ Lord McIntosh of Haringey
My Lords, as the Pre-Budget Report made clear, the proposals put forward for changes in the tax and social security contributions system would not result in a net increase in 275 government borrowing. Because the estimate of tax receipts and social security contribution payments has been raised since the 2000 Budget, there is no impact on the security of the economic growth and stability which has been a feature of this Government's policies.

§ Lord Saatchi
My Lords, in the light of the Pre-Budget Report, does the Minister recall his statement in col. 758 of Hansard on 28th July when he said, the tax burden is falling"? Can he repeat that statement today?

§ Lord McIntosh of Haringey
My Lords, I have already said that, under the plans and if there is implementation of the proposals for consultation, there will be no increase in what the noble Lord calls the "tax burden", which I prefer to call properly "taxes and social security contributions" as a proportion of GDP next year.

§ Baroness Oppenheim-Barnes
My Lords, can the Minister tell the House, based on the current family expenditure survey, what proportion of the tax burden is now coming from lower and lower middle income families?

§ Lord McIntosh of Haringey
My Lords, not without notice. However, it is a prime concern of the Chancellor of the Exchequer that we should be moving to eliminate poverty, particularly child poverty, in this country. That implies that there should be not only substantial increases in public contributions to those families, but also, for those of them that pay taxes, a reduction in their taxes. I believe that is what the noble Baroness, Lady Oppenheim-Barnes, will find is the case.

§ Lord Brougham and Vaux
My Lords, can the Minister explain why today in Westminster Gardens, the block of flats in which I live, we received a letter from the London Electricity stating that it reckons our electricity will go up by 15 per cent due to announcements made by the Chancellor of the Exchequer?

§ Lord McIntosh of Haringey
My Lords, I am astonished at what the noble Lord, Lord Brougham, says. I cannot believe it is justified. I particularly cannot think it is justified in light of the fact that we are moving towards the new electricity tariff agreement which is expected to reduce electricity prices by approximately 10 per cent.