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Part of Oral Answers to Questions — Prime Minister – in the House of Commons at 12:00 am on 10th December 1981.

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Photo of Mrs Margaret Thatcher Mrs Margaret Thatcher The Prime Minister, Leader of the Conservative Party 12:00 am, 10th December 1981

Taxation will be reduced when the public expenditure to which it is related falls as a proportion of the gross domestic product. Taxation would have been a great deal higher if we had acceded to all of the public expenditure requests that come in daily from the Opposition—main taxation, indirect taxation, and rating taxation, too, as people who live under Labour-controlled local authorities can see.

With regard to inflation, perhaps the hon. Member will compare our record with his Government's during the first three years of Government. During 1974 the Labour Government's retail price index rose by an average of 16 per cent., during 1975 by an average of 24 per cent., and during 1976 by an average of 16 per cent. During the first three years of the present Government we had a figure of 13·4 per cent. as compared with their 16·1 per cent., 18 per cent. as compared with their 24·2 per cent., and this year I expect that the figure will be about 12 per cent. as compared with their 16 per cent.