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Budget Resolutions and Economic Situation

I just tried to explain it. We can argue back and forth about statistics, but I shall not do that. I simply make the perfectly good point that, in every Budget, tax thresholds should relate to the real world where there is growth and inflation. In a fair Budget, tax thresholds should do that, leaving aside the debate on tax credits. If we are to have an honest debate and achieve the £21 billion of savings, which is achievable—after all, the private sector regularly makes 5 per cent. efficiency savings—on what could we spend the money? The number of people who pay inheritance tax is rising rapidly. This year, 37,000 people were paying it, whereas in 1996–97, the figure was15,000. The amount paid has doubled since 1997, from £1.6 billion to £2.9 billion. If one is spending £550 billion, one can address that tax. I hope that my hon. Friends on the shadow Treasury Bench will view the matter as a priority. It has a massive impact on behaviour and is not good for the way in which families plan inheritance. It often causes disputes, it raises only £2.9 billion and it should be a priority for a future Government. We could increase efficiency in so many ways. For example, the Chancellor makes a great song and dance about spending £7.5 billion or more on the skills learning sector. The private sector already spends £20 billion because it reckons that too much public sector investment is academically based and not based on what is useful to business. A sea change in public opinion may be occurring. New Labour’s success was its realisation that it needed to marry its belief in social justice with economic efficiency. That was the headline claim. However, buried in that message was a clear realisation that, however compassionate one wants to be, one cannot win elections in this country if one hammers middle class people. I am afraid that, increasingly, middle class people, who are faced with the largest tax burden ever, are beginning to wake up to the fact that they are being hammered. The inheritance tax that I mentioned increasingly bites into ordinary middle class homes.