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House of Commons
Thursday 3 February 1994
The House met at half-past Two o'clock
PRAYERS
[ Madam Speaker-- in the Chair ]
PRIVATE BUSINESS
Bournemouth-Swanage Motor Road and Ferry Bill
Sheffield Assay Office Bill
Federation of Street Traders Union (London Local Authorities Act 1990) (Amendment) Bill
University of London Bill
Orders for Second Reading read.
To be read a Second time upon Thursday 10 February.
Oral Answers to Questions
NATIONAL FINANCE
Marginal Tax Rates
1. Mr. Hendry : To ask the Chancellor of the Exchequer what assessment he has made of the effect of the changes in marginal tax rates since 1979 on incentives.
The Chancellor of the Exchequer (Mr. Kenneth Clarke) : Cutting tax rates has improved incentives at all levels and has contributed to the improved economic performance of the country since 1979.
Mr. Hendry : I am grateful to my right hon. and learned Friend for that reply. Is he aware that in 1979 the top 10 per cent. of income tax payers contributed 34 per cent. of the total income tax take, but by 1992 that had risen to 45 per cent? Is not that the most graphic demonstration that the policies of successive Conservative Governments, in cutting direct tax levels, have dramatically improved the incentive to work and at the same time dramatically reduced incentives to avoid paying taxes?
Mr. Clarke : I wholly agree with my hon. Friend. In 1979, the top rate on so-called unearned income was 98 per cent. and the top rate on earned income was 83 per cent. Those penal rates drove people into tax evasion and drove them abroad. We now ensure, by rates that give greater incentive, that the better-off contribute more to the total tax revenues.
Mr. Skinner : Why does not the Chancellor of the Exchequer tell the real truth about what has happened since 1979? We have finished up with a £50 billion public sector borrowing requirement, we have a balance of payments deficit of well over £10 billion and likely to rise next year, we have 4 million people on the dole and now the Government have the gall to call upon working-class
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people to bail them out. Instead of doing that, they should tax the rich, whose percentage share of national income has increased from 35 to 43 per cent. while poor people's share has dropped from 10 to 6 per cent. Get the priorities right or get out of the road.Mr. Clarke : My hon. Friend the Member for High Peak (Mr. Hendry) has just shown the total folly of the Labour party in taking the advice of the hon. Gentleman in the 1970s and imposing penal rates on the so-called rich, which had the effect of driving people into tax evasion. Bringing things up to date, in the 1980s we had the strongest run of growth in the British economy that we have had in modern times. We are now the only major economy in Europe that is growing again. Manufacturing production is up, unemployment is coming down and business confidence has never been higher. Their fear of people such as the hon. Gentleman will keep people supporting the Government in their efforts to get British recovery under way again.
Mr. Nicholls : Will my right hon. and learned Friend also remind the hon. Member for Bolsover (Mr. Skinner) that in 1979, in addition to all the other taxes that Labour had imposed, there was an unearned income surcharge which meant that the small earnings of poor people who had worked hard all their lives were then taxed because the money was regarded as unearned? Is that the tax on the rich that the hon. Gentleman has in mind?
Mr. Clarke : I am sure that it is, and the Labour party's attitude to taxation in 1970 became disastrous, punitive and
counter-productive in terms of revenue. They are now trying to abandon that attitude, but I heard the shadow Health Secretary say on the radio this morning that although he had no spending promises to make at the moment, he would have by the time of the election. No doubt, by the time of election we shall have some fresh tax proposals from the hon. Gentleman.
Mr. Gordon Brown : Will the Chancellor confirm that, despite everything that he says, after 15 years of Conservative Government, the only people directly benefiting from the Tory tax regime are those earning £64,000 a year or more, while the burden of direct and general taxation on everybody else has increased? Is that not the £64,000 question that the Chancellor must answer? Is not his party not merely the party of broken tax promises, but the party of unfair taxation?
Mr. Clarke : The actual position, as the hon. Gentleman knows, is that the real income of the average earner in the country is now 40 per cent. higher than it was in 1979. Real earnings went up by 40 per cent. above inflation, whereas during the Labour party's time in office, they had completely stagnated and hardly risen at all. More than 1 million more people would be paying tax now if we still had Labour's tax regime from 1979. We have created more prosperity, we have a better tax system with higher incentives and we are on the way to strong economic growth-- something which Labour could never deliver.
Mr. Ian Bruce : You and I, Madam Speaker, are simple people.-- [Interruption.]
Mr. Bruce : We have a simple approach to such matters, Madam Speaker. Having given us all those statistics about
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tax rates, can my right hon. and learned Friend tell the average earner what extra money he will have in his pocket today, as opposed to 1979?Mr. Clarke : If he is an average earner, he will be 40 per cent. better off--almost half as well off again, over and above inflation--than he was in 1979. He will also be living in one of the most successful and prosperous economies in Europe, where he can feel more secure about his job and see more jobs being created. That is something which Labour could never achieve consistently ; we achieved it in the 1980s and we are achieving it again now.
Family Tax Burden
2. Mr. Hutton : To ask the Chancellor of the Exchequer what was the tax burden for a married couple on average earnings, and with two children, in 1978-79 ; and what is the most recent figure.
The Financial Secretary to the Treasury (Mr. Stephen Dorrell) : A single-earner couple with two children on average earnings will pay 20.3 per cent. of their gross earnings in income tax and national insurance contributions in the current year, compared with 20.9 per cent. in 1978-79. Over the same period, the real take-home pay of the same couple will have risen by £83 per week in today's values.
Mr. Hutton : Do not those figures confirm the scale of the deception perpetrated by the Conservatives at the last general election, when they promised the British public year-on-year tax cuts? Instead, they have delivered year-on-year tax rises. Is not it clear that the current record level of taxation is not being used to lay the foundations for future growth and prosperity, but is simply the price that we are all paying for 15 years of Tory failure?
Mr. Dorrell : I find it utterly impossible to link that question with my previous answer. What we have done is to introduce a tax system that has made growth possible, while delivering £83 a week in extra purchasing power to the average man. That is the result of our policies, and it is not something for which any of us need apologise.
Mr. Nigel Evans : Has my hon. Friend been able to calculate what would have happened to the taxes of a married couple on average earnings if the Government had decided not to control public spending--if, indeed, they had increased it by £38 billion?
Mr. Dorrell : The straight answer is that £38 billion represents about 19p on the basic rate of income tax. My hon. Friend has illustrated the dishonesty of the claim of Opposition Front Benchers to be interested in controlling the tax burden : in fact, they lose no opportunity to commit themselves to future spending that must be translated into a future tax burden.
Mr. Andrew Smith : Will the Financial Secretary now answer the question that the Chancellor evidently lacked the mastery of detail to answer? Is not the hard truth that the only people who have benefited from the Tories' tax policies are those earning more than £64,000 a year? Let us have an answer.
Mr. Dorrell : The question to which the country wants an answer is this : when will Labour start to take an interest in the creation of wealth? The question that‡ we have just
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heard demonstrated, yet again, Labour's myopic obsession with redistribution, and their utter lack of interest in the generation of wealth. It is because the British economy became more successful during the 1980s that we have been able to deliver the £83 a week to which I referred, which translates directly into the 40 per cent. mentioned by my right hon. and learned Friend the Chancellor. That is the pay-off from the success of the Government's economic policies.Mr. Brazier : Following that answer, does my hon. Friend agree that further improvements in living standards can be delivered only through growth? According to the Organisation for Economic Co-operation and Development, our projected growth level is more than double the EC average, while our inflation rate is approximately half the EC average. That means that living standards will continue to improve.
Mr. Dorrell : My hon. Friend is absolutely right to point out that the only way to improve living standards is to create circumstances favourable to economic growth. That is why, as a result of our policies throughout the 1980s, this country moved from the bottom to the top of the developed countries' growth league. Our policies delivered improved living standards in the 1980s and they will continue to do that throughout the 1990s.
Income Tax
3. Mr. Byers : To ask the Chancellor of the Exchequer how many people will begin paying income tax in the next financial year as a result of the freezing of personal allowances.
11. Ms Coffey : To ask the Chancellor of the Exchequer what his estimate is of how many more people will have to pay income tax by December 1994 as a result of the decision to freeze income tax allowances.
Mr. Byers : Does the Financial Secretary remember the written reply that he gave to one of my hon. Friends in which he said that some 400,000 individuals would be brought into the tax net as a result of the freezing of personal allowances? How will those 400,000 mainly low-paid workers manage to pay that tax without being led into even greater poverty? Does he accept that the freezing of personal allowances will mean that about £1.1 billion will be taken from taxpayers' pockets? Given the Government's broken promises, will the Financial Secretary tell the House why the country should ever again trust the Tories on tax?
Mr. Dorrell : The hon. Gentleman is wrong about an important point. If someone pays tax next year because his income exceeds the personal allowance whereas it does not do so this year, the reason is not that the Government have cut the allowance--we have not--but that his income has increased.
Ms Coffey : Does the Financial Secretary accept that the tax increases that he has introduced, which include the extension of VAT to fuel, mean that the tax burden is being borne disproportionately by the least wealthy? Does not he think that that is unjust and unfair and a betrayal of the fundamental principle of taxation, which is that it is based on the ability to pay?
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Mr. Dorrell : The hon. Lady has very wisely moved off the subject of her main question, but the ground on which she has chosen to question me is no better. If she examines the distribution effect of the Budgets introduced by my right hon. Friend the Member for Kingston upon Thames (Mr. Lamont) last March and by my right hon. and learned Friend the present Chancellor in November she will find that, broadly speaking, the burden is distributed evenly across the income scale. That is not a coincidence but the result of the deliberate plans of both those people.
Mr. Dickens : Does my hon. Friend recall the dark days of the previous Labour Government and their tax regime, which drove overseas all our inventors, scientists, engineers, entrepreneurs, risk-takers and job- providers? Was not that the result of socialism and should not we be fighting back? Why should we take lectures from the Opposition? Let us go for them.
Mr. Dorrell : My hon. Friend asked if I remembered the dark days of the previous Labour Government. The answer is only just. If one examines that Government's record on the specific subject about which the hon. Member for Wallsend (Mr. Byers) questioned me, one finds that during their five years in office the single person's allowance fell in real terms by 21 per cent. whereas under this Government it has risen by 25 per cent. I do not think that we need to take lectures from the Opposition about the merits or demerits of indexing personal allowances.
Mr. Congdon : Is not the marginal rate of tax as important as the numbers eligible for taxation? Do not the Government deserve great credit for having a basic rate of 20p in the pound, unlike the Opposition's rate of 33p in the pound? Does not that prove that people are better off under this Government?
Mr. Dorrell : My hon. Friend is absolutely right. It is as a result of the introduction of the 20p band that 4.8 million people are this year paying income tax at a marginal rate of 20p whereas, as my hon. Friend rightly says, when Labour left office the basic rate of income tax was 33p in the £1.
Low-income Households
4. Mr. Kirkwood : To ask the Chancellor of the Exchequer what proposals he has to provide financial relief for low-income households ; and if he will make a statement.
The Chief Secretary to the Treasury (Mr. Michael Portillo) : The Government have recently taken measures by introducing a child care disregard in family credit and making a substantial package of help with fuel bills available to pensioners and those on income-related benefits.
Mr. Kirkwood : Has the Chief Secretary had a chance yet to study the report that was recently issued by NCH Action for Children? Will he understand that NCH Action for Children believes that its report has been substantially misrepresented in the press? It never said that children were worse off now than they were in Victorian times. It argued that, although the standard of living has increased dramatically all round, the gap between the rich and the poor is as wide now as it was then. What further steps will
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the Treasury take, together with the Department of Social Security, to meet the urgent needs of low-income households with children?Mr. Portillo : Our concern is to increase the prosperity of the country generally by following the economic policies that we have, and to provide protection for people on low incomes. The figures of people on low incomes show how well they have done in recent times. Disposable income increased, on average, by 35 per cent. between 1979-80 and 1990-91, and pensioners' real incomes increased by 54 per cent. during that period. The real take-home pay for a household, even on half average earnings--that affects the children about whom the hon. Gentleman is talking--has increased by 34 per cent. during the period of the Conservative Government.
If the hon. Gentleman cares to measure not what people earn but what they have, he will find that 69 per cent. of households in the bottom fifth have central heating--it was only 39 per cent. when the Conservatives came to power--and that 50 per cent. of those in the bottom fifth have cars, compared with 39 per cent. in 1979. There has been an enormous change in living standards in the country and the hon. Gentleman should recognise it.
Mr. Forman : Is my right hon. Friend aware that the attention that he drew to benefits such as family credit was appropriate because they greatly help low-income households, and especially those who are on low incomes in work? Does he also recognise that the greatest benefit of all for low-income households would be to achieve price stability during this Parliament, and will he redouble his efforts to that end?
Mr. Portillo : My hon. Friend makes a good point--low inflation is extremely good for people on low incomes. It is of special benefit to the elderly. Even while we have low inflation, income-related benefits will rise, at the next increase, by about 3.9 per cent. That is obviously well above the rate of inflation, and it is a great deal better than the increase that will be experienced by most of the people who are in work.
I am sure that my hon. Friend will also think that the rates of withdrawal for people who are on benefit are an important factor, and I would remind him that now only per cent. of households face a withdrawal rate of more than 90 per cent., whereas before 1988 there were 70,000 households that had a withdrawal rate of more than 100 per cent.
Ms Harman : Can the Chief Secretary explain a bit further the answer that the Financial Secretary gave to an earlier question--that it is the Government's economic success that has caused them to break their promise to cut taxes? Can he also explain why low-income families will pay more tax after April than they would have done in 1979, whereas families on incomes of more than £64,000 will pay less tax than they would have done in 1979?
Mr. Portillo : I thought that the point that my hon. Friend made, very effectively, was that if the Labour Government were in power today--if we had continued the allowances that the Labour Government had--there would be 1 million more tax-paying households. That burden would fall on the lowest paid, those who are least able to pay. The hon. Lady needs to consider her party's record closely before she starts to criticise us.
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Mr. John Greenway : Was not it this Government who introduced very low rates of national insurance for low-paid workers? Has not that greatly helped to get many people back into work?
Mr. Portillo : My hon. Friend is correct. He will also remember that we have taken steps to help the most disadvantaged groups. He will remember that, in October 1992, we increased the income support premiums for pensioners by £3 a week for couples and £2 a week for singles. He will also remember that the £700 million worth of additional assistance given to help people pay 20 per cent. of the community charge was not withdrawn when the community charge was abolished.
Private Finance Initiative
5. Mr. Mudie : To ask the Chancellor of the Exchequer if he will make a statement on the present state of the private finance initiative.
Mr. Kenneth Clarke : The Government are committed to a substantial increase in the level of private investment in the infrastructure of public services that were previously totally dependent on public funds. A number of major private finance projects, including the channel tunnel rail link and the Heathrow express, are already going ahead. The high-level working group that I set up under the chairmanship of Sir Alastair Morton is examining how private finance can be developed in many sectors of Government activity.
Mr. Mudie : Is the Chancellor aware that the fear in the country is that there are more announcements than activity? The right hon. and learned Gentleman announced three new schemes in the Budget--the extension of the docklands railway to Lewisham, new air traffic control for Scotland and the refurbishment of the west coast main line. Can he tell the House which of those proudly announced projects has a private sponsor or a construction start date?
Mr. Clarke : Well, they are all being progressed-- [Laughter.] The Labour party has the glorious record of cutting capital investment in the public services of this country by one third at a stroke, when the International Monetary Fund instructed it to do so, and it still betrays a total absence of knowledge about the management of major projects. We are now defining the projects described, and identifying private sector partners. For example, following my announcement, we shall progress to modernise and upgrade the west coast main line in a way that the economic policies of the Labour party would plainly never succeed in doing.
Mr. Dykes : As my right hon. and learned Friend mentioned the channel tunnel scheme, may I ask him whether he is aware that Customs and Excise and other bodies are planning to have 400 officials at the tunnel entrance on the British side? Will he look into that, to see whether it squares with the single market?
Mr. Clarke : I certainly think that the Government should ensure that the costs that they incur in necessary controls and security protection on the trains should be kept to the barest minimum. I am sure that the Departments responsible will be kept up to that by my right hon. and hon. Friends and myself. Clearly, we have particular regard to our obligations under the single market, one result of
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which has been the removal of all routine Customs and Excise frontier checks on imported goods, and a substantial lifting of the bureaucratic burden that previously bore on importers and exporters.Mr. Beith : If all those projects are "progressing", will they take as long as the Jubilee line did to progress through the process of working out a private sector initiative? Is not the truth that while other countries get ahead with, for example, the link to the channel tunnel, only in this country do the Government wait for private finance before undertaking essential infrastructure projects?
Mr. Clarke : The Committee that will consider the Bill on the channel tunnel rail link will have to take into account the hundreds of objections and detailed points that individual members of the public want to make about the route. The Government have just announced the latest batch of decisions about the route, the terminus and the terminals. The Opposition are naive in believing that in this country, or in any other, one can announce a great new project and start construction the following day. The method that we use employs a more rigorous planning system than that enjoyed by any of the populations on the continent. We are using private finance to advance such projects, just as other countries are doing. The attitude of the Labour and Liberal parties towards progressing public infrastructure projects is childish, naive and extremely old fashioned.
Mr. Evennett : Will my right hon. and learned Friend confirm that, under the Government, public expenditure has increased in the priority sectors of health, education and law and order, and that Conservatives believe in both public and private finance being used to improve our public services?
Mr. Clarke : Capital investment in the health service has increased enormously under the Government, and capital investment in the railways and roads is roughly double what it was when we took over. We seek to increase both the amount and the quality of investment in the infrastructure of our public services by bringing in the private sector. Our firms and banks are good at enabling countries overseas to do that, and we shall do it here, too. As a result, we shall have the infrastructure that we need, the taxpayer will not have to finance it entirely, and we shall have well- judged, well-managed projects which prove efficient to run thereafter. That is the way in which the world is going--a way which the Labour party is plainly completely incapable of understanding, despite its history of failure on the capital investment front.
Mr. Darling : The Chancellor will recall that, on a wet night in Glasgow last September, he announced 78 new projects to be financed jointly by the private and the public sectors. Given his mastery of detail, will he tell us how many of those projects have a firm start date? Does he accept that, although tarmacking the car park of Eastbourne hospital is no doubt desirable, it is hardly the stuff of economic regeneration, whereas building the channel tunnel is? Last month, he said that the channel tunnel rail link had not even been designed yet. Will he tell us this month whether it will be completed this century or the next?
Mr. Clarke : Heathrow express is under construction. It is financed by the public sector, is being built by the private
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sector and will provide London with a high- speed main line link between the centre of London and Europe's busiest hub airport. The next stage in developing the channel tunnel rail link, as I have already described, involves the decisions that my right hon. Friends will announce on the routes, terminals and intermediate stations. Those decisions matter to the people of Kent and east London. The next stage is to have a competition for the private sector--the managers and financiers of the project. A Bill also has to go through the House-- [Hon. Members :-- "When?"] No Minister in any Government who were controlled by a sensible party would announce the construction date on the day that the project was announced. We are progressing it quickly and efficiently and will produce a high-speed channel tunnel rail link of a kind that is well managed and matches anything produced elsewhere in the world.EC Growth Rates
6. Mr. Peter Ainsworth : To ask the Chancellor of the Exchequer what growth rates the European Commission predicts for each EC country next year, in increasing order.
9. Mrs. Gillan : To ask the Chancellor of the Exchequer what growth rates the European Commission predicts for each EC country next year ; and if he will list them in reverse order.
The Paymaster General (Sir John Cope) : The European Commission has forecast that the United Kingdom will have the fastest growth of major European Community countries in 1994-95.
Mr. Ainsworth : Is my right hon. Friend aware that, during my formative years in the 1960s and 1970s, Britain lagged well behind France and Germany in economic growth? Does he not think that the fact that our growth now exceeds that of both those countries has a great deal to do with our competitive tax system, our competitive labour market and our constant war on red tape? Does he not also think that our European partners have much to learn from that example and that Opposition Members have a great deal to learn from their own mistakes?
Sir John Cope : Yes, all the factors that my hon. Friend has mentioned were important in that matter. The fact is that the 1980s was the first decade since the war in which the British economy grew faster than the economies of Germany and France. We are beating them again now.
Mrs. Gillan : Does my right hon. Friend agree that, with that excellent news of Britain's prospects, it is hardly surprising that the Germans want to invest in Rover and in Britain? Does he further agree that the Opposition parties are completely irresponsible in their attitudes towards business and jobs in this country, as shown by the downbeat and distorted message about our economy that they send out to inward investors? Will he please put the Opposition right and say that we want inward investors in the United Kingdom? We have low corporation tax rates, a skilled and willing work force and the best prospects of any economy in the European Community.
Sir John Cope : I entirely agree. We want investment--inward investment and all types of investment. In the latest quarter for which we have figures, manufacturing investment was up by 2 per cent.
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Mr. Hoon : Every other European Government believe that sustainable growth can occur only in the context of a system of managed exchange rates. Does the Minister agree?
Sir John Cope : The exchange rate is important, but I do not agree with the way in which the hon. Gentleman expressed the point.
Mr. John D. Taylor : Does the Minister agree that the favourable comparison of the United Kingdom with other European Community countries in terms of economic growth is almost solely due to the low interest rates that have applied in the United Kingdom, which became possible only following our departure from the exchange rate mechanism? Why, then, do the Government give the impression that they want to return to the ERM?
Sir John Cope : Interest rates were falling before we left the exchange rate mechanism. I agree that interest rates are important. Certainly, our present low interest rates are important in sustaining growth.
Mortgages
7. Mr. Ottaway : To ask the Chancellor of the Exchequer if he will make a statement on the marketing of low-interest mortgages.
The Economic Secretary to the Treasury (Mr. Anthony Nelson) : The form and content of advertisements for credit, including mortgage credit, are governed by regulations made under the Consumer Credit Act 1974. Those regulations are intended to ensure that advertisements convey a fair and reasonably comprehensive indication of the nature and true cost of loans to prospective borrowers.
Mr. Ottaway : Is my hon. Friend aware that building societies offering low-interest mortgages--I have an example here of one of 3.6 per cent.--are also insisting that it is compulsory to take out captive insurance for the building and contents? Is he aware that the premiums for such captive policies are way above the market rate, which explains how the mortgages can be offered at such a low cost? Does he agree that that is misleading for the financially unaware? Will he please investigate the matter?
Mr. Nelson : I am aware of the advertisement to which my hon. Friend draws my attention. I assure him that the Government are, and would be, concerned about any instances of unfairness and disadvantage in the selling of tied-in products. The Director General of Fair Trading and the Department of Trade and Industry are looking at the tying-in provisions of the Courts and Legal Services Act 1990. A balance must be struck between increased consumer protection and increased costs to businesses. I assure my hon. Friend that the authorities and I will look carefully at any particular examples that he and others draw to our attention.
Mr. Betts : The Minister will no doubt argue that mortgage rates have come down since Black Wednesday ; the Government can point to that fact. However, many of my constituents are currently paying virtually the same rate for their personal loans as they were paying in September 1992. The banks have simply profiteered from falling interest rates during the period. What action have the Minister and his colleagues taken in the intervening period
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to raise the issue with the banks and to encourage them to bring personal loan rates down, which would benefit many of my constituents?Mr. Nelson : The hon. Gentleman should know that the former Chancellor of the Exchequer raised the matter on a series of occasions with the leaders of the commercial banks. They, in turn, responded with codes of practice about announcing reductions in the rate of interest and sought to explain that they had adjusted downwards their rates of interest. However, it is undoubtedly true to say that they have taken the opportunity somewhat to widen their margins from their previous levels.
Panel of Independent Forecasters
8. Sir Thomas Arnold : To ask the Chancellor of the Exchequer what assessment he has made of the work of the panel of independent forecasters.
Mr. Kenneth Clarke : I have read the panel's reports with interest, and I look forward to receiving the next one later this month.
Sir Thomas Arnold : Will my right hon. and learned Friend confirm, yet again, that he has absolutely no intention of disbanding the panel?
Mr. Radice : Has the Chancellor noted that the majority of the independent panel advised against tax increases in his Budget? Does he agree that the total of the two Budgets' tax increases, which amounts, as he told the Treasury Select Committee, to 7p on the standard rate of tax, is in danger of choking off the recovery?
Mr. Clarke : Different forecasters have had different views at different times. On this occasion, the members of the panel of forecasters are rather nearer to agreeing with each other than usual. Most of them are very supportive of the Budget. They are all revising their forecasts in the light of the fact that our determined action to ensure that we got control of public borrowing has restored business confidence to an all-time high. They now share our forecast that we can expect gross domestic product to grow by about 2 per cent. in the coming year. It is realistic to look for about 3 per cent. growth to be sustained thereafter. That growth can be combined with low levels of inflation. Inflation is now at its lowest level for about 20 years.
I am also glad to see that forecasts for business investment are up. Business investment is forecast to rise by 3 per cent. in 1994. Total fixed investment is forecast to grow by 3 per cent. That means that sustained growth, with low inflation, based on investment and exports as well as consumption, lies ahead of us if we continue with the prudent economic policies that we are pursuing at the moment.
Mr. Garnier : When my right hon. and learned Friend next discusses matters, especially investment, with the panel of independent forecasters, will he seek to persuade its members that it would be a good idea to lower capital gains tax rates and that, eventually, capital gains tax should be abolished altogether?
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Mr. Clarke : If someone could persuade them of that, no doubt they would add their voices to the advice of that kind that comes to me occasionally from various quarters, not least from my hon. Friend.
Mr. Nicholas Brown : I understand the Chancellor's difficulties in answering questions about tax burden forecasts, so in an effort to be helpful, may I ask him about public expenditure forecasts instead? Will he share his well-known mastery of the details with the House and say what is the size of the civil service and what he intends the size of it to be in three years' time?
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