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ON THE RECORD
RECORDED FROM TRANSMISSION BBC-1 DATE 27.3.94
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JOHN HUMPHRYS: Good afternoon and welcome to On The
Record. The Chancellor of the Exchequer has been taken to task today for
telling the Tory central council yesterday that his Government's tax rises will
cost the average household only a fiver week. Is that the whole truth - and if
not, does that sort of claim create a lack of trust on the part of the voter.
I shall be talking to Mr. Clarke.
**********
But first, the economy. Next week we
shall all be paying another eight per cent to heat our homes and cook our
meals. That's because of VAT on fuel. If you add the other tax rises we'll be
paying the equivalent of seven pence more for every pound we earn. Hardly
likely, you might think, to increase our confidence as we come out of
recession. When I spoke to the Chancellor, Kenneth Clarke, this morning I began
by asking whether he accepted that confidence was essential to the recovery.
KENNETH CLARKE: It's one of the keys to sustained
economic recovery but obviously confidence comes when you have the right
underlying economic policies which justify that confidence. So, I'm very glad
indeed that we have much increased confidence in the prospects for recovery of
the British economy now.
HUMPHRYS: You say "much increased confidence" do
you really believe that?
CLARKE: Yes. I mean some of the surveys show
these things rising and falling because a lot of the confidence surveys in
themselves rather reflect what the people being asked the question have been
told in the newspapers the day before. But if you look at the behaviour of the
markets, if you look at the prospects for investment in this country, if you
look at what is happening to our manufacturing production and our industrial
production it's obvious that confidence is steadily coming back into the
British economy.
HUMPHRYS: But if you look at the most respected
index of all - the political and economic EC index - that shows that confidence
is at its lowest point since the beginning of 1990 and we were in the middle of
the recession then.
CLARKE: You've chosen to singularly obscure
review there and cloaked it with a very great deal of heavy weight in putting
your question, but there are various reviews of confidence, CBI review of
industrial confidence here, you get reviews of consumer confidence. If you look
at what's actually happening to the economy, outlook for investment is very
good because consumer demand is up, because the volume of our exports is
rising, certainly quite clearly outside the EEC and we are on course to have
steady growth.
HUMPHRYS: But this survey looks specifically at
consumer confidence.
CLARKE: Well consumer confidence, as I said,
does tend to vary from survey to survey, because if you ask the ordinary person
if they feel confident it does rather tend to depend on what they read in the
newspaper that morning. I'm talking about business confidence, I'm talking
about runs of confidence figures if you look back. There is no doubt that
confidence is much higher than it was twelve months ago.
HUMPHRYS: Not surprisingly because you were in the
middle of a recession then.
CLARKE: Not we weren't in the middle of the
recession.
HUMPHRYS: Only just coming out of it.
CLARKE: We've been coming out of recession now,
we're coming up to the end of the eight quarter - two years of steadily coming
out of recession with growth getting stronger throughout that time. That's why
when you look back you find confidence is much better now than it was twelve
months ago. Confidence, I think, is justified because the British economy is at
the moment performing better than any other major western European economy.
HUMPHRYS: If it's really two years now since we've
come out of the recession...
CLARKE: Since we started to come out of the
recession..
HUMPHRYS: All right, started coming out of the
recession. Why, haven't consumers taken that on board?
CLARKE: Consumers have taken that on board.
HUMPHRYS: Not according to these surveys.
CLARKE: ......actually spending more. Consumer
spending three per cent or so up compared with twelve months ago..
HUMPHRYS: It's slowed down, you know that figure
has slowed down, retail figures have slowed down.
CLARKE: What happens when you say that is you
get, which is always the case as you have a recovery strengthening, one month's
figures is better than another month's figures, you get bobbles within them.
But if you look at the worthwhile figures, you look at the trend, you look at
three months' figures, you look at twelve months' figures. What we've seen
steadily is this rise, amongst other things, in consumer demand but also a
steady improvement in all our performance. And actually with respect, there's
no reputable economist, no reputable forecaster who doesn't doubt that we are
going to continue to be the strongest growing major economy in Europe.
HUMPHRYS: But if you look at trends, if you look
at the consumer confidence trend which is what I've got in front of me here -
this EC index - which most people do take seriously...
CLARKE: I take it quite seriously but it's only
one..
HUMPHRYS: Well indeed but an important one and
what it shows..
CLARKE: It's the only one that gets near to
proving your thesis which is why you're placing so much weight upon it but it's
isn't brought out by the behaviour of consumers who are buying more.
HUMPHRYS: Unlike the figures that Government
Ministers produce which don't support their thesis but what this shows quite
clearly is a downward trend; confidence is at its lowest point since the
beginning of 1990 and then we were even by your estimation in the middle of the
recession.
CLARKE: I got that as total nonsense. The
idea...there may be the odd character out there who feels less confident now
than they did in 1990 when we had interest rates of fifteen and a half per cent
and inflation very near double figures but I think it's unlikely. The fact is
if you look at the present position of the British economy we have been
steadily, slowly, coming out of recession for the best part of two years. It's
becoming more noticeable all the time and consumers are reflecting it in what
they spend. Take car sales, car registrations about eight per cent up on twelve
months ago, more new cars being registered in this country on a really quite
substantial scale.
HUMPHRYS: Who's chosing a specific factor to
support his theory now?
CLARKE: Well it's rather a good...people who
weren't buying cars in the recession go out and buy new cars I think is a
little bit more reliable than your rather excessive weight you're plying to
that particular index.
HUMPHRYS: But look when you ask people what they
think is going to happen over the next couple of years, they actually think
they're going to be worse off. The last big survey showed that forty per cent
of them, forty per cent of households, think they're going to be worse off,
only seventeen per cent think they're going to be better off over the next
year. That doesn't illustrate great confidence.
CLARKE: My job is to prove them wrong over the
next two years...
HUMPHRYS: So you accept.....
CLARKE: If we achieve what I believe we will
achieve which is the steadily strengthening of this recovery, fall in
unemployment that we're seeing, rise in our output, and keep inflation down to
the present leve, I think we'll see steadily rising prosperity spread across
most of the country. That is obviously my principle task as Chancellor to
create the conditions in which that can happen.
HUMPHRYS: But why should they believe you?
CLARKE: Because if they look at what's been
happening over the last year or two the performance of the British economy is
just substantially better than that of others because we've been pursuing the
right policies, because we have delivered low inflation, getting the public
finances right. A combination of circumstances in which Britain is just more
competitive than it used to be in world markets. The main thing holding us
back still is the loss of demand in our good markets, in France and Germany
where they're still in big economic trouble, which we are coming out of.
HUMPHRYS: But you say we're coming of it, we've
got a massive amount of ground to make up even to regain the position we were
at...
CLARKE: I agree with that. I agree with that.
But not even to regain the position we were at, but actually to get back on
course which I would like to see, of steady year in year out growth and to get
unemployment down to the level that I would like it to see. Some things will
soon start going through previous peaks, the only one I think we've gone
through at the moment, I'm glad to say, is productivity, which is at record all
time highs. That means we're particularly competitive, that means I think we'll
hold our own and keep in front of the others as recovery across the world
develops.
HUMPHRYS: But I ask why people should believe you
when you say the kinds of things you say, when you express the kind of
confidence you express because they've heard this before from the Tory
Government haven't they. They heard it from Norman Lamont with his green
shoots, which you certainly won't need me to remind you of, they heard it from
John Major who said "vote for us on Thursday the recovery begins on Friday" -
there's no reason why they should trust you this time is there?
CLARKE: Well when those things were said, I
think most people believe them..
HUMPHRYS: Really?
CLARKE: Well our political..
HUMPHRYS: Despite the evidence to the contrary?
CLARKE: Well the Labour at the time that John
Major was saying that, the Labour Party were so confident of recovery they were
promising to spend thirty five billion pounds of taxpayers' money.
HUMPHRYS: We're not talking about the Labour
Party, we're talking about....
CLARKE: The commentators at that time thought
the recession was over. Now I've been cautious because ever since I've been
Chancellor I have said, we have a...still it's a fragile recovery, it's got to
get stronger - it has actually been getting stronger whilst I've been
Chancellor and my job is to keep the conditions which do get it stronger.
HUMPHRYS: But why shouldn't they say, all right
we hear you say that, but once bitten twice shy. We heard your Government say
it before and unless you're saying - I Kenneth Clarke am quite different to
people like Norman Lamont and John Major, listen to me 'Honest Ken' - then why
shouldn't they say once bitten twice shy?
CLARKE: Because unemployment's down two hundred
and twenty thousand over twelve months ago. Let's take something that matters
an awful lot to ordinary men and women - there are more new jobs, unemployment
has fallen, that is good practical evidence of a reovery that's getting
stronger. Inflation, I mention inflation which is important if we keep
ourselves competitive, we've got inflation levels which are the lowest we've
had for twenty five years. All that, factually, reinforces my judgment which I
give to you and other people that this recovery is for real, it's getting
stronger, it's going to last.
HUMPHRYS: But let me go back to this basic
fundamental question of trust. They have heard these sorts of things before and
they have been - we - if you like, have been let down before. You seem not to
be denying that fact so the question now is why at this stage when you recite
these kinds of statistics and interpret them in the way you chose to interpret
them that they shouldn't say "but yes, we have heard it before"?
CLARKE: Well they've heard honest judgments
before and they're hearing honest judgments from me now. What has happened as
the recovery has got underway is that it has been uncertain, it has...we were
been bouncing along the bottom at one time as the pundits continually said. But
if you look back now, you can see that two years ago we did have the beginnings
of recovery and it's taken longer to get to come along. It's steadily
strenghtened because of our success; getting our inflation down from the
heights I mentioned in 1990, getting our interest rates down, getting our
public finances sorted out and getting public spending under control. All the
things that every other Government in the Western world is going to have to do
to get recovery and in the United States and in the United Kingdom you have
that recovery which we now need to see in Continental Europe because that's a
very important market to us.
HUMPHRYS: But you see, the last time you told them
what you thought was going to happen - before the election admittedly, what you
thought was going to happen with the economy you were mistaken. You thought it
was going to happen much more quickly, as you just said, than it actually did.
Now they will say you were either mistaken - genuinely mistaken, which means
you were incompetent to a certain extent - or you were being mendacious.
CLARKE: No we weren't, we were mistaken, we did
at the last election believe - as everybody else did - that for example the
public spending deficit would go up to..the public deficit would go up to
thirty million...billion pounds or thereabouts. If you look back that's what
most people thought. It wasn't just the Conservatives, it was the Labour
Party, it was the Liberal Party and...and most of the economic forecasters.
Everybody was proceeding on the basis that the recovery was underway, that the
peak of the PSBR would be thirty billion or thereabouts. You can't find, I
don't think, a single reputable economic forecaster who at the time of the
election thought we would actually have a borrowing requirement of fifty
billion pounds. That developed thereafter. That is why the Government, when
that developed, had to take the steps we had to take to get that under control
and make sure the recovery still came through. But when you say now "why
should they believe my current judgement" what I am saying is a judgement, the
best judgement I can make on all the information I have flowing in to me - some
of which is of variable reliability, as is the way with economic statistics -
but I think it shows now and it's seen and is visible in day to day life that
we are seeing things steadily picking up as the recovery gets stronger.
HUMPHRYS: All right, you say...
CLARKE: We got the time wrong, that's all. It
took a little longer because we had underestimated the extent to which what was
called the 'debt overhang' made us slower to come out of recession. But that's
true across the rest of Western Europe as well. You will find the politicians,
economists saying the same, slightly mistaking things in timing about recovery
across Western Europe.
HUMPHRYS: Well let's look at some ways in which
people might now say we are still being misled. Let's look at what you've been
saying very recently. You wanted your campaigners, the Tory Party campaigners
when they go on the doorstep, to remind people of what you describe as facts.
If you are a basic rate taxpayer for instance, you said, there was no change to
your tax rate in the budget. Now that's simply not true in reality, is it? At
least it's being highly economical with the truth.
CLARKE: The marginal rates of taxation which we
reduced in the 1980s, I took as a 'given' in the budget. That's why standard
rate of income tax is twenty five per cent, kept it there, compared with the
thirty three per cent that Labour used to have; the reason being that I think
it has an incentive effect that you keep three quarters - put in
straightforward terms - of every extra pound that you earn.
HUMPHRYS: But when you give me that sort of answer
do you think people actually dissect it as carefully as you have just done?
When you say something like "if you are a basic..."
CLARKE: What you mean is, is what I have said is
totally accurate?
HUMPHRYS: No, no. Well, oh yes. As far as it
goes...
CLARKE: Let's get to the point. You are getting
a bit like Harriet Harman, what particular theory are you now about to run to
try to show that what I have just said isn't right?
HUMPHRYS: Because what you just said wasn't the
whole truth, it was part of the truth, but it wasn't the whole truth and what
people want when they listen to politicians....National Insurance, National
Insurance, it does not include the fact - your statement didn't include the
fact that National Insurance has gone up by one per cent. And you know and I
know and everybody watching this programme knows that National Insurance is
direct taxation by another name.
CLARKE: No, with the greatest respect you can't
ask me a question about the marginal rate of tax...
HUMPHRYS: No, I didn't ask you a question about
the marginal rate of taxation at all, you chose to interpret it that way.
CLARKE: ...to which you get...you said I haven't
put up the rates of taxation. I answered you perfectly accurately on the
marginal rates. Norman Lamont put up the National Insurance contribution by
one per cent that is true. National Insurance contribution goes to providing
the great part of the finance for the Welfare State, the payments for
pensions...
HUMPHRYS: No it doesn't. It's not a hypothecated
tax at all it goes straight into the bin!
CLARKE: We have a contributory social security
system in this country - most people would support that...
HUMPHRYS: In theory, but in reality it doesn't
work like that.
CLARKE: ...in reality we have very heavy
pressures on public expenditure from retirement pensions, from benefits to the
disabled, benefits to the unemployed, benefits for the poor. That's why at a
time when we were in financial difficulties, Norman announced - it is true -
there was a one per cent increase in National Insurance.
HUMPHRYS: Are you honestly telling me that people
don't regard that as an increase in tax?
CLARKE: It is an increase in National Insurance
but you were accusing me a moment ago of inaccurately answering your questions
about marginal rates of tax and I am explaining why you are wrong to try to say
that what...I always give the straightforward answers to the questions.
National Insurance is up one per cent but my reply to you about marginal rates
of tax was totally accurate. My political opponents...
HUMPHRYS: As far as it went.
CLARKE: My political opponents would raise the
marginal rates of tax, they quite plainly would and did in the past.
HUMPHRYS: But I didn't ask you about your
political opponents, I asked you about...
CLARKE: You asked me what my views on the rates
of tax and I defended them because I think the low standard rate is one of the
achievements of the Conservative Government and I have no intention of putting
the rates of tax back to where they were.
HUMPHRYS: But, look, you are an ordinary taxpayer,
I'm an ordinary taxpayer. If I am asked for an extra one per cent out of my
take-home pay in order to go to National Insurance, that, as far as I am
concerned, is an increase in the rate of tax. Now, that is simple common
sense, isn't it.
CLARKE: I've answered your questions about
National Insurance if you ask about National Insurance. National Insurance is
going up by one per cent, quite right.
HUMPHRYS: Yes indeed, but you didn't acknowledge
that fact when you said to your campaign workers, let us remind people of the
facts, if you're a basic...
CLARKE: I don't mind questions about why we have
raised some taxes, the way in which we spread the burden of tax across the
population, things I've brought into tax and so on, but it is simply not true
that at any stage I have been evasive about that. I will say, I've spent an
hour and twenty minutes telling the country why we were raising tax and which
taxes we were raising. And we can have a perfectly straightforward debate
about that. But if you want to ask me questions about marginal rates of tax I
will tell you about marginal rates of tax.
HUMPHRYS: No I don't want to ask you questions
about marginal rates of tax.
CLARKE: National Insurance, I agree we are
putting up National Insurance, but the effect of all these things on the
average taxpayer has been grossly exaggerated by our critics but it has been
clearly explained by us and I refute your suggestion that I have been
misleading about it and I also think that the current atmosphere is that people
who have been rather frightened by the prospect of the tax changes and that
they will find it's nothing like as bad as it's being made out when they come
into effect.
HUMPHRYS: Well, let's have a look at that. Five
pound seventy five is the figure that you have set.
CLARKE: That's the average across households,
yes.
HUMPHRYS: That's the average across households.
Right. All households?
CLARKE: Yes.
HUMPHRYS: Including those households which at the
moment pay no tax at all.
CLARKE: Well, there aren't many that pay no tax
at all. There are quite a lot that don't pay income tax. But VAT is rather a
difficult tax for any household to avoid, as are things like taxes on
cigarettes, if you smoke, taxes on petrol. That's why when you see these funny
figures people play about - and I know my figure's just the best estimate
across households but if you start coming to others I will point out what's
wrong with all these silly estimates in a moment. But the fact is that you
have to try - if you look across all population, everybody's circumstances
vary and that therefore affects how much tax they pay - but that's the average
across households.
HUMPHRYS: Alright. Well, let me ask you another
question, then. What is the average for earning households, those taxes for
those households who pay normal rates of Income Tax and all the rest of it?
CLARKE: Well, they..it all depends what
assumptions you make about...
HUMPHRYS: Alright, I'll give you an assumption.
CLARKE: Well, the assumption is - you see -
people talk about the average household. They talk about the typical
household.
HUMPHRYS: Well, let me give you one, then.
CLARKE: Well, it depends whether you smoke
heavily.
HUMPHRYS: Yeah - I'm sure.
CLARKE: It depends whether you use a car a lot.
It depends how often you're going to fly in an aeroplane in the course of the
year. It depends how much you actually insure. It depends what mixture of
things you buy and that is why even the best estimates are, you know,
guess'timates for the individual person. And, then, when you start adding -
as people do - assumptions that someone's going to get a massive pay increase,
you, then, start getting fairly massive figures...
HUMPHRYS: Let's not sort of suck figures out
of the air, then. Let's use a figure. One of your own Government figures,
taken from the House of Commons Library. I mean, it's a perfectly
straightforward figure, here. We're looking, here, at an average family.
Alright, you'll say there's no such thing as an average family. But, I'll
define it. It's somebody - it's a male wage earner earning...
CLARKE: You're plunging into one of Harriet's
interminable tables.
HUMPHRYS: Well, I'm sorry about that but it's not
an interminable table. It's a very, very..
CLARKE: No, no. You cannot get out of this one.
HUMPHRYS ...simple straightforward figure - an
average householder earning just under twenty thousand pounds a year, with a
couple of kids and a mortgage of thirty thousand pounds. Now, that's pretty
straightforward, isn't it? Average. We can use-we can apply the word
'average' there.
CLARKE: Does he smoke?
HUMPHRYS: It's the ideal family.
CLARKE: How big is the car?
HUMPHRYS: He smokes the average amount, he's got
an ordinary car. He doesn't do a huge amount of mileage. And, the figure -
the extra tax that the average - that he is going to have to pay is more than
ten pounds a week. Now, that's nearly double the figures you've been putting.
CLARKE: What assumption are you making for his
pay rise in that? You see, all these figures. If you look at those tables
which are quarried by critics, which is fair enough..
HUMPHRYS: It's not quarried by critics, this is
out of the House of Commons Library.
CLARKE: Yes - with lots of footnotes attached
about what assumptions you made about this household. Let me-let's say they've
got an average mortgage - you did say that. If they've got an average
mortgage.
HUMPHRYS: Thirty thousand a year.
CLARKE: Thirty thousand a year. Well, their
mortgage repayments have gone done by a hundred and sixty pounds a month.
HUMPHRYS: We're talking about a tax....
CLARKE: ...one hundred and fifty pounds a month
in the last three years.
HUMPHRYS: We're talking about a Tax....
CLARKE: I'm talking about how well off they are.
I'm talking about consumer confidence.
HUMPHRYS: I'm not. I'm not.
CLARKE: And whether-whether this taxation...
HUMPHRYS: If you want to talk about that - that's
fine.
CLARKE: ...whether this taxation is actually
going to undermine my confidence that that family is going to benefit from the
recovery and the Tax contribution - whatever they do make - which will depend
on how much petrol or cigarettes and everything else they buy.
HUMPHRYS: You can talk about..
CLARKE: ...is going to contribute to making the
job more secure, the business more prosperous, general living standards going
up which is my main job as Chancellor - rather than this silly game of - as the
Tax increases about to be paid. Everyone will know what they're paying in a
month or two's time, all these guess'timates about what they might or
might not be paying.
HUMPHRYS: As you say, as you say people are going
to know in a month's or two time when they get their payslip, at the end of
their week's or month's work they are going to know and that person I have just
described to you, because of what you've said is going to expect it's going to
be something like he's going to be something like a fiver a week worse off,
he's not, he's going to be a tener a week worse off.
CLARKE: No, not on his payslip, that's not..that
figure you have got there is certainly not just income tax or national
insurance that is the trouble with these figures. We do our best to answer
questions when people ask them but as the old saying goes, if people will ask
silly questions they sometimes get not very good answers...
HUMPHRYS: ....I can't for the life of me think what's
silly about a question which says...
CLARKE: Because you have to assume no one - you
have to be earning far more than that for that to come out of the payslip.
What you are trying to estimate is the effect of the other tax increases in the
Budget and I spread the tax changes of the Budget across all bands of income,
spread it by broadening the tax base to a certain extent, it...so if you think
that figure is sort of income tax being paid by that person, it's wrong.
HUMPHRYS: But the figure...the description....
CLARKE: ...I'm sorry if this is sounding
critical of you, but some of my political opponents - and I'm not going to
go on about Harriet Harman anymore but she goes out sort of giving the
impression that people are going to pay all this ....
HUMPHRYS: She is obviously rattling you a bit,
look.....
CLARKE: Well she gets from more gullible
journalists than yourself, she gets too good a run for her money when she
produces these kind of figures.
HUMPHRYS: Well let's hope you all get a suitable
run for your money. The average impact across all households is an increase of
about five pounds seventy five a week, that was what you said right...
CLARKE: Yes but...
HUMPHRYS: Now what I am trying to demonstrate...
CLARKE: It depends on the household, for average
peniosners about a pound a week.
HUMPHRYS: Yes but you see that's going to lead
people to think that when they get their pay packet, by the time they have paid
all their bills, including the cigarettes - all the rest of it, they are
going to be five pounds seventy five a week worse off but the reality is that
the average earning household is going to be more than a tener a week worse off
and you know that that is the case.
CLARKE: It depends on what they spend their
money on I mean, I..my figure, I think as you say I've described quite clearly
it's the average across households, I've never told anybody that means that
everybody is going to have this reduction. The figure that took headlines
spectacularly of twenty two pounds a week that's somebody who's earning about
four hundred pounds a week, has a particular correlation of circumstances and
has two big pay rises.
HUMPHRYS: So it's silly to take this sort of
figure.....
CLARKE: Then you shouldn't misuse them..
HUMPHRYS: Well alright talking of...
CLARKE: Neither of us should misuse them, they
are the best estimates of the kind of burden of taxation we're talking about
which, of course, all taxation people would rather not pay taxation but it's
necessary taxation because if we didn't actually have the combination of
spending cuts I've made and some taxation, our present recovery would be ground
to a halt. Now it's actually going to strengthen it.
HUMPHRYS: The danger is when you produce the kinds
of figures you've produced yesterday people are going to say every time they
discover that it ain't quite like that, you're going to forfeit a little bit
more trust aren't you, that's the problem with those sorts of figures.
CLARKE: I think my figures yesterday were good
figures, I mean they... unless somebody starts claiming that I'd said to the
worldthat everybody will pay five pounds forty five, the ordinary
pensioner household ....far less than that.
HUMPHRYS: But if that's the right basis on which
to calculate those figures, how come when you said Labour's tax bombshell was
going to be a thousand a year for every family in that case when you calculated
that sum, you took only earning households, you didn't take them across the
board as you did to produce your five pounds figure.
CLARKE: What we took was John Smith's Budget,
which even though he like ours assumed that the recesssion was coming to an end
and the borrowing.......
HUMPHRYS: And you spread it across only earning
households.
CLARKE: He only got thirty five thousand
million pounds worth of promises that he's been making....
HUMPHRYS: And you spread it across only earning
households when you produced your figure yesterday, you spread it across every
single household, including old age pensioners who pay no tax at all and people
on unemployment benefit who pay no tax at all.
CLARKE: At the time of the election I don't
think we'd get half the figures to Labour's budget figures...
HUMPHRYS: That's not the quesiton I am asking you.
CLARKE: ...they have done to ours since. That
the underlying truth at the last election and it remains an underlying truth
now, is the Labour Party was then committed to spending huge amounts of extra
money.
HUMPHRYS: That's isn't the point..
CLARKE: It's certainly the point, it means
that tax inevitably would have been higher if we'd then had a Labour
Government, it means if the Labour Government had still been sticking Labour
Party..had still been sticking now to those promises to spend thirty-five
billion pounds, we'd be having a huge increase in taxation now.
HUMPHRYS: My question was a quite simple one. Why
choose a certain set of circumstances?
CLARKE: .... handed over to Gordon Brown.
HUMPHRYS: My question was a simple one. Why
choose a certain set of circumstances to illustrate a Labour Tax figure and a
completely different one to illustrate a Government tax figure? And, the
reason I ask the question is that when people see the reality of what's going
to happen to their take home pay and their family expenditure in a couple of
months' time, perhaps, they're going to say: we were right not to trust him.
We shouldn't have trusted him the last time, we're not going to trust him
in future.
CLARKE: I will stand by that test. I, actually,
think we've now got a situation in this country where some people - some people
- have been given a quite exaggerated impression of the impact of taxation upon
them - two months' time, as I say. We will find out. And, then, in two
months' time, you'll find people are not very interested in all this maze of
figures which through the middle of which I have given my figure, the average
across households, for the necessary taxation that is going to be one of the
things underlying our recovery.
HUMPHRYS: Chancellor, thank you very much.
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