Philip Hammond: You Ask The Questions

The MP and Shadow Chief Secretary to the Treasury answers your questions, such as 'Are you really worth £9m' and 'Would Vince Cable make a good Chancellor?'

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Do you believe in low taxes? And fair taxes? In which case, what's your opposition to the Lib Dem policy of taking people earning under £10,000 out of income tax? Felicity Bovington, Chester

I believe in low and fair taxes, but Lib Dem tax plans are not thought through or properly funded. The numbers don't add up and that's a big problem when we face the massive fiscal deficit we do.

Under Labour, taxes are neither low, nor fair. The number of low-income families facing marginal tax rates over 90 per cent has actually doubled during the recession and will increase further according to the PBR. It's the many, not the few, who are suffering. Our first priority is to try to avoid Labour's national insurance increase which will hit everyone earning over £20,000.

If speculating on property helped cause the crash, why aren't you now advocating a 'mansion tax'? Emmanuel Sedding, Reading

Asset price bubbles were a factor, but the crash wasn't just caused by speculation on property. There was excessive risk-taking across the financial system. That is why we would put the Bank of England in charge of monitoring risk and debt. We want the best possible protection against another crash, which is why we don't think it is right to stick with Gordon Brown's failed tripartite system.

The mansion tax was a pretty confused policy and even Nick Clegg agreed that Vince Cable should have done his homework before announcing it, only to backtrack later. And property speculation was not confined to the most expensive properties – the whole country caught the bug and, as many people know to their cost, some of the biggest losses are being nursed by first-time buyers of city-centre apartments. A mansion tax will not prevent asset bubbles: proper regulation of the banking system can.

Does Lord Ashcroft pay tax in Britain? Mary Westerby, Crediton

Lord Ashcroft has said he is meeting undertakings he was required to give at the time of being made a Peer. We have also said we will change the law to require legislators in the Commons and Lords to be treated as resident, ordinarily resident and domiciled in the UK for tax purposes (ie to be full UK taxpayers), so that we will know that all our legislators are UK taxpayers. This would remove any uncertainty.

Labour and the Liberal Democrats should be more honest about their non-dom donors and Peers that reportedly include Lord Paul, the man who bankrolled Gordon Brown's leadership campaign and who was recently elevated to the Privy Council.

Ending the 'couple penalty' and rewarding marriage in the tax system won't encourage people to get married, and will redistribute wealth from poor to rich. Is that why it's Tory policy? Pauline Abrams, Huntingdon

We are committed to recognising marriage and civil partnerships in the tax system during the next Parliament. Mexico, Turkey and the UK are the only OECD countries that don't do this. The couple penalty in the tax-credit system affects any couple who live together, whether they're married or not. So we're committed to ending this unfair policy which is encouraging the break-up of stable family units.

Creating a framework of support for families is something that a strong and confident society should do, and that includes recognition of marriage in the tax system, respecting the importance of extended families, and acknowledging the value that stable families bring to our communities. There is plenty of evidence that being brought up in a stable family unit is one of the most important indicators of a child's future prospects. So encouraging stable families is a key tool in the fight against intergenerational poverty. This is not a moral argument; it is simply a reflection of the fact that stable relationships advance the public policy objectives that we all (I think) share – reducing poverty and decreasing the cost of family breakdown – and should therefore be promoted and encouraged.

Why did you claim so much money on your second home in London, while living in Woking, which is about half an hour on the train from London Victoria? It would be wrong even if you weren't a multi-millionaire. Adam Kroper, Lancaster

I don't live in Woking, but I did make a commitment at the time of my selection as a Parliamentary candidate that I would make my main home in Surrey. When I was elected in 1997, Parliament still sat long and unpredictable hours. That has changed, but since joining the Shadow Cabinet, and especially since the economic crisis began, I have early morning and late-evening commitments in London nearly every day, not just when Parliament is sitting, and I believe that maintaining a base in London enables me to do my job most effectively and to be available at short notice.

On the wider issue of expenses we must change the system and we are working to restore trust in it. For example, Conservatives now publish all frontbench expenses online for everyone to see, Shadow Cabinet members have voluntarily paid back expenses that have attracted public concern, and unlike Labour have made public details of their repayments, including to Sir Thomas Legg. These actions alone will not fix our broken politics, but we have made a start.

America's finest economic scholars (Ben Bernanke, Larry Summers, Timothy Geithner) applied their learning to avoid a depression. Who are our great economic minds? Are you, George Osborne and Kenneth Clarke as clever? Rupert Simms, Bristol

All of the above are appointed, not elected. Here, elected politicians take the decisions. The important thing is not that we are the cleverest people but that we listen to the experts and make careful judgements based on what they have to say. I believe that, under George Osborne, the shadow treasury team has made the right calls, including on debt, bonuses and VAT.

Japan lost one decade (possibly two) by withdrawing stimulus too soon. A similar problem cause the Depression to be double dip. So why aren't you proposing another fiscal stimulus? Elizabeth Powers, Cardiff

I strongly support the unprecedented monetary stimulus that has supported families and businesses through this recession. It was a monetary tightening that was at the root of Japan's problems.

However, Mervyn King, the OECD and the CBI all agree that we can't afford more fiscal stimulus. Even Peter Mandelson admits we can't simply spend our way out of recession due to our large deficit, although Gordon Brown and Ed Balls may disagree. There are lessons to be learned from Japan's experience, but the structure of its economy is very different in many ways to ours.

We're not just facing a global recession but an underlying structural deficit caused by mismanagement of the public finances throughout the boom years. We have to have a credible deficit reduction strategy if we are to avoid higher mortgage rates and borrowing costs which could choke off economic recovery.

Would Vince Cable make a good Chancellor? Freddie McCall, Aberdeen

I like Vince and, to the annoyance of interviewers, we often find ourselves in agreement on many issues. But even a cursory glance at his record shows that his predictive powers are not quite what they are sometimes cracked up to be: last April he was still dismissing concerns about the levels of public indebtedness; he was both in favour of, and opposed to, an unfunded fiscal stimulus in the space of four months; and his tax policies offer the worst of both worlds – a local income tax which would hammer hard-working families and a property tax that would require an intrusive council tax revaluation of people's homes. So let me finesse the question slightly: I am sure he would make a better job of it than the current incumbent!

Does Steve Hilton really send you strategy bulletins? How long do they last in your inbox? Nick Fielding, London

Yes, he does, and I think it's important to have people around whose job is to challenge conventional thinking and inspire new ways of looking at old problems. Who could disagree that the traditional ways of looking at some of Britain's intractable problems have failed to produce answers?

What's the best book you've read on the crash? And when is yours coming out? Morgan Thomas, Swansea

There are many out there and more to come no doubt. For example, Ken Rogoff's This Time is Different which looks at the way policy-makers deceive themselves that short-term booms won't turn to bust – much like Gordon Brown, who believed he had rewritten the laws of economics. Sadly, I don't have the time to write a book now: finding ways to get us out of the economic crisis we are in is a full-time job in itself!

Is it true that you are worth close to £9m? Speaking as an investor, would you say property is still the best thing to put money into? Camilla Ashburton, Ilfracombe

Politicians are called upon to do lots of things, but fortunately, giving investment advice is not one of them!

How would you describe George Osborne in five words (avoiding Corfu)? Arnold Painter, Scunthorpe

Right on all key issues.