Orders of the Day — The Economy

Part of the debate – in the House of Commons at 4:35 pm on 30th October 1996.

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Photo of Kenneth Clarke Kenneth Clarke The Chancellor of the Exchequer 4:35 pm, 30th October 1996

I am not in favour of a uniform rate of VAT. I am sure that we would be against that, as I am sure would most other member states. No one will go to a uniform level of VAT throughout western Europe. I am in favour of minimum levels; otherwise, attempts are made on either side of a border to win markets in particular goods by attracting customers.

I am in favour of some approximation of taxes that bear on sales, such as excise duty, because that would help many industries in this country. I firmly believe that taxation should rest in the hands of member states. It always will, and any British or German Minister, and most of the other Ministers in western Europe, would veto any proposals to the contrary.

As I said, our recovery is stronger than that of any of our major western European competitors. It is becoming balanced and sustainable. The whole point of our policy is to keep it that way.

We are generating growth without inflation. We are generating growth without a balance of payments crisis—something which damaged this country so much in the past. We are generating growth while keeping relatively low interest rates. Too often in the past, we have allowed recoveries to run out of control. We will not allow that to happen again.

One of the guidelines which I have laid down throughout my chancellorship is no return to boom and bust. The public can see that that is what we are delivering. They can also see that the Opposition can offer only the threat of boom and bust, in equal proportions, if they run the economy in the way indicated by the right hon. Member for Dunfermline, East.