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Mr. Osborne: My hon. Friend makes a good point. The education budget—not just the schools budget—as set out in our plans will increase to 2007–08.
It is obvious from the spending review and the pre-Budget report that the Chancellor has no intention of reducing the growth in spending to a sustainable and affordable level, so he will have to increase taxes. Almost every independent commentator is expecting that, and it is what the Chancellor is secretly planning. However, I would be amazed if he did that in the Budget that he will present in a few weeks—just before the coming election. We remember that the Chancellor's only Budget that did not raise taxes was that presented—surprise, surprise—just before the last general election. After the election, he clobbered everyone with a hike in national insurance. With Labour, of course, the political cycle is more important than the economic cycle.
We can be sure that taxes will go up in the first Budget after the election if Labour wins. The £8 billion tax question for the Government, which we put to the Chief Secretary today is: which tax will it be? Will it be the 2p on the basic rate of income tax, VAT on food, capital gains tax on main homes, or that old favourite of the Chancellor, a rise in national insurance by removing the upper earnings limit and taking 10 per cent. on incomes over £33,000? According to the Treasury's ready reckoner and the figures that it has produced, all those tax measures would raise about £8 billion. That is £8 billion from hard-pressed families, who, as the Financial Secretary says, have already paid a lot of tax and seen very little in return. I am sorry that the hon. Member for Rhondda (Chris Bryant) broke the cross-party consensus that we had established on that point.
Chris Bryant:
Let me tell the hon. Gentleman why I have broken the consensus. In my constituency, I have seen more police officers and more community support officers, I have seen crime being cut, I have seen the
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schools that used to have leaking roofs and windows being repaired, and I have seen more teachers and more doctors. That is the difference that the money is making.
Mr. Osborne: I am sorry that the hon. Gentleman does not agree with his Treasury Front-Bench colleagues. If he wants to get on in the Labour party, he needs to agree more with the Government.
All the tax measures that I set out would raise about £8 billion. Does the Chief Secretary rule out 2p on the basic rate of income tax? VAT on food—yes or no? We know that the Treasury has considered capital gains tax on people's homes. Does he rule that out? What about getting rid of the upper earnings limit on national insurance? That would be a 10 per cent. tax on earnings over £33,000. I think that the most likely candidate. Perhaps the Chief Secretary will give us a yes or no. Or are there other stealth taxes that will go up instead: petrol duty, stamp duty, or the stealthy moves with income tax thresholds that we are used to?
The choice at this election could not be clearer: higher taxes and more waste under Labour, or lower taxes and value for money under the Conservatives. The question that the Chief Secretary must now answer is: which tax will go up?
1.12 pm
The Chief Secretary to the Treasury (Mr. Paul Boateng): I beg to move, to leave out from "House" to the end of the Question, and to add instead thereof:
"believes that economic stability is the foundation for continued investment in public services; welcomes therefore the lowest inflation since the 1960s, lowest interest rates for 40 years and the longest period of economic growth for 200 years; further welcomes this Government's record investment in public services; believes that it is important to ensure taxpayer value for money and therefore welcomes the fact that the Government is making efficiency savings to release resources into frontline services; further welcomes the fact that Sir Peter Gershon has identified over £20 billion efficiency savings across the public sector and notes that he said that to go further than the efficiencies he identified would put at risk the delivery of frontline public services; and further believes that any proposal to make cuts in public spending would not only damage frontline public services but the economy as a whole."
Britain's economic stability has been hard won. As the Prime Minister said only this afternoon, it follows decades of boom and bust, with the price for economic failure being paid by hard-working families in mass unemployment, sky-high mortgage rates and record home repossessions. Nothing must threaten the strength and stability of Britain's economy. Britain is working. We do not intend to allow the Tories to wreck it, and if this motion were to be agreed, you could bet your bottom dollar that they would.
Mr. Francis Maude (Horsham) (Con) rose—
Mr. Boateng: I shall make a few opening remarks, and then I shall be only too happy to give way to the right hon. Gentleman.
I want to say a few words to the hon. Member for Tatton (Mr. Osborne), the shadow Chief Secretary. I am a great admirer of the hon. Gentleman. In the serried ranks of the Opposition, he is a precocious talent among all those grey locks, and I enjoy his speeches.
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[Interruption.] He is certainly younger than me, and he may be better looking. [Hon. Members: "No!"] Yes, I know, it is hard to believe. I have news for the shadow Chief Secretary: it is no defence for economic failure in the recent past to claim that one was in short trousers. It is not good enough to say that one was at school when Britain had double-digit inflation and, as my hon. Friends have said, when Britain had 3 million unemployed not once, but twice. It is not good enough to say that one was at school when we saw unemployment double and the numbers on incapacity benefit treble. That is the record of the hon. Gentleman's party in government, and we do not intend to allow it ever to do that again.
Mr. Maude: On that point, does the Chief Secretary agree with Derek Scott that the Labour Government inherited the best economic legacy that any Chancellor has ever had?
Mr. Boateng: No, I do not. I say to the right hon. Gentleman, who must, I fear, take some responsibility for this, that when we took office his Government had been paying more to service their debts than they were spending on schools. That is something for which the Conservatives ought to apologise.
Mr. Paul Goodman (Wycombe) (Con) rose—
Mr. Boateng: I give way to the hon. Gentleman, who, perhaps, is going to apologise.
Mr. Goodman: Speaking of debt, my hon. Friend the Member for Tatton (Mr. Osborne) offered the Chief Secretary a menu of prospective Labour tax rises for him to rule out. Will he now rule out all of them? Indeed, will he rule out any of them?
Mr. Boateng: The hon. Gentleman cannot seriously expect me to do that. It would be absurd for a Government to address the issue of tax in a speech by the Chief Secretary in an Opposition half-day debate. The hon. Gentleman is an informed observer of these matters, and he knows well that they are dealt with in a Budget speech or a manifesto. That is how they have always been dealt with, and that, I suspect, is how things will be in the future. Let us have a serious, grown-up debate about these issues.
Let us look in a little more detail at the James report. We waited a long time for it. First, we heard that it was to be published last August. Then we heard that it might be published last December. Last Monday, we had an announcement.
Mr. Boateng: I will not give way at the moment.
What we have not yet had, and I ask for some reassurance on this point now, is sight of the full James report. [Interruption.] I am not talking about this less than salubrious ring-binder. It is not clear who made this folder, but it seems to consist of a number of slides. It seems to be a PowerPoint presentation. All we are asking for is something that goes beyond a PowerPoint presentation and resembles, in its weight, strength of
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analysis, depth and accuracy, the "Independent Review of Public Sector Efficiency" by Sir Peter Gershon, but so far we have not had that. I ask my Conservative opposite number when he will publish the James report—not this PowerPoint presentation but an actual report, with the detailed workings and analysis that underpin it.
Mr. David Cameron (Witney) (Con) rose—
Mr. Boateng: I shall give way to the hon. Member for Witney (Mr. Cameron), who, I understand, speaks with some authority in the Conservative party. Perhaps he can tell us when the report will actually be published.
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