Taxation

Oral Answers to Questions — Treasury – in the House of Commons at 12:00 am on 25th June 1998.

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Photo of Julie Kirkbride Julie Kirkbride Conservative, Bromsgrove 12:00 am, 25th June 1998

How many representations he has received regarding his forecasts for the tax burden. [46165]

Photo of Richard Spring Richard Spring Conservative, West Suffolk

If he will make a statement on his Department's forecast for the future tax burden. [46167]

Photo of Alistair Darling Alistair Darling The Chief Secretary to the Treasury

The Chancellor receives many representations on issues relating to taxation. The tax to gross domestic product ratio is projected to be constant over the next two years.

Photo of Julie Kirkbride Julie Kirkbride Conservative, Bromsgrove

I thank the Minister for that answer, but is he now prepared to come clean about the true state of the public finances? The working families tax credit will not be properly accounted for in inflationary revenue and spending statistics. Rather than being a public spending commitment, it will be regarded as a tax forgone, and therefore will not be truly affected by public expenditure.

Photo of Alistair Darling Alistair Darling The Chief Secretary to the Treasury

The hon. Lady has misunderstood the position. The way in which we account for the working families tax credit is laid down by international accounting standards, by which this Government, like all Governments, abide.

Photo of Richard Spring Richard Spring Conservative, West Suffolk

Will the right hon. Gentleman confirm that the burden on the average family of tax and mortgage increases now amounts to some £1,000? How does he reconcile that with the disgracefully misleading statements about tax before the general election?

Photo of Alistair Darling Alistair Darling The Chief Secretary to the Treasury

The hon. Gentleman will no doubt recall that he supported the previous Government, who imposed 22 tax rises in complete contradiction to everything that they had said at the election. I remind him of two central facts. Measured in whichever way one likes, taxes are lower in Britain than in continental Europe. Corporation tax in the United Kingdom is 30 per cent.—[Interruption.] It is all very well for Opposition Members to get upset about that, but I was not the first to say it. The shadow Chancellor said it last night at the Carlton club. If the shadow Chancellor knows that taxes are lower in Britain than elsewhere in Europe, it should be good enough for Conservative Back Benchers.