Government Assessment for the Purposes of Section 5 of the European Communities (Amendment) Act 1993

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Mr. Clappison: As the climate change levy is due to be introduced next April, when is that approval expected to be given?

Miss Johnson: I am afraid that I cannot give the hon. Gentleman an answer on that score, because I do not have the information in front of me.

The hon. Gentleman asked about regulation and tax. The Conservatives have long contended that the tax burden is increasing. We utterly refute that. The Tories ran a deficit of £28 billion in 1996 and 1997 alone. They borrowed to fund current spending. We are paying the bills that the previous Government ran up. We have had to bring public finances under control. The tax ratio under this Government is lower than the tax ratio planned by the previous Government for last year, this year and next year. Cutting deficits means real benefits. Lower interest rates have reduced the amount that we have to spend in interest payments on national debt. We have £4 billion a year more to spend on services because we are not spending it on servicing the debt that the Opposition ran up when they were in power. Employment has grown: we now have a record 28 million people in jobs.

Mr. Clappison: The answer the Minister gave was not quite the answer to the question that I posed. I asked whether the tax burden is higher or lower now than it was in 1997.

Miss Johnson: We have run through those figures many times, and the hon. Gentleman is well aware of them. The fact is that the tax burden was lower last year, and will be lower this year and next year, than under the plans of the previous Government. As a result of personal tax and benefit changes, by next April households will be on average £500 a year better off. Families with children will be £850 a year better off, and the tax burden on the typical family will be the lowest since 1972. Living standards for a typical family will have risen 10 per cent. over this Parliament, and 1.2 million children will have been lifted out of poverty.

We kept all our promises on tax, unlike the previous Government. We have cut the basic rate of income tax to 22p, which is the lowest basic rate for 70 years, and we have introduced a 10p starting rate of income tax, which is the lowest starting rate since 1972. I will not take any lectures on tax from Opposition Members: we only have to remember who introduced value added tax, who nearly doubled it in the 1970s and again in the 1980s, who increased national insurance contributions, who extended VAT to goods never before covered and who introduced the poll tax. I could go on, but I will not.

I shall conclude by drawing hon. Members' attention to the fact that this important debate provides an opportunity for us to consider what we will send under the section 5 procedure as part of our stability pact programme. A number of interesting points have been made, and I hope that I have managed to answer all of them. We ask the Committee to approve the Government's assessment of the medium-term economic and budgetary position as set out in the PBR for the purposes of this report. Our economic and social policies will help to ensure a stable and prudent management of the public finances while building a fairer society for the people of Britain. They will help to improve incentives to work, and provide firms with the right incentives to improve their productivity and to help to raise living standards. Sharing the information in these reports with our European partners will help us to shape Europe and bring employment and growth to Britain and to other member states. I urge the Committee to support the motion.

Question put and agreed to.

Resolved,

    That the Committee has considered the Government's Assessment as set out in the Financial Statement and Budget Report 2000-01, the Economic and Fiscal Strategy Report 2000-01, and the Pre-Budget Report 2000 for the purposes of Section 5 of the European Communities (Amendment) Act 1993.

Committee rose at five minutes to Six o'clock.

The following Members attended the Committee:
Mr. Bill Olner (Chairman)
Allen, Mr.
Borrow, Mr.
Bradley, Mr. Peter
Clappison, Mr.
Davey, Mr. Edward
Fraser, Mr.
Healey, Mr.
Hendrick, Mr.
Jackson, Ms Glenda
Jackson, Mr. Robert
Johnson, Miss Melanie
Linton, Mr.
Luff, Mr.
McDonagh, Siobhain
Michael, Mr.

 
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Prepared 18 December 2000