Clarke is taxed over meaning of the term 'bribe'

Inside Parliament

Kenneth Clarke found his words turned back on him in the Commons yesterday as Tory right-wingers maintained that tax cuts in the run-up to the election would not be "bribes" if they were paid for by reductions in public spending.

With the public-sector deficit higher than he expected and the beef crisis likely to cost the Treasury another pounds 2.5bn, the Chancellor went out of his way last weekend to damp down talk of 2p or 3p in the pound tax cuts.

Better to preserve spending on health, education and the police than try to "bribe" the electorate, Mr Clarke had argued. But at Question Time yesterday a series of MPs, nominally on the same side as the Chancellor, put it differently.

Reducing taxation was not a bribe but "vital for the future competitiveness of the British economy", said Bernard Jenkin, MP for Colchester North. John Townend, chairman of the Thatcherite 92 Group of backbenchers, said: "If tax cuts are paid for by spending cuts, these are not bribes, these are the rewards of good Conservative government."

Mr Clarke repeated the Government's commitment to lowering the standard rate to 20p in the pound then readied himself for the ritual tussle with his Labour shadow, Gordon Brown, another man at odds with a number of his colleagues.

Adding a Treasury "mistake" in calculating tax revenues to a predicted pounds 3.6bn overshoot in public borrowing, Mr Brown said the Chancellor's strategy for tax cuts in November was unravelling. "It is another example of Conservative economic policy still hurting but still not working."

But Mr Clarke wondered what forecasting would be like in the wide-ranging Treasury favoured by Mr Brown [but not by John Prescott, the deputy Labour leader]. Was the "Super Treasury" making assessments of "what it would cost families to have child benefit taken away if the child stays on at Six Form [and] what it will cost to people who pay electricity and gas bills when he brings in his windfall tax?" Mr Clarke and William Waldegrave, the Chief Secretary, also poured scorn on a European Commission forecast that Britain would have a public deficit next year only exceed by Italy and Greece.

The Chancellor said the prediction appeared to be based on "huge" public- spending commitments made by Mr Brown. It was the only explanation for the extra pounds 10bn of expenditure assumed by the Commission, Mr Waldegrave said.

In contrast, he noted, the deficits of Germany and France were now forecast not to exceed the 3 per cent of gross domestic product set as the maximum for entry to EU monetary union. "If they go on falling at that rate they will disappear altogether about tomorrow tea time."

David Shaw, Conservative MP for Dover, was described as the "number-one smear merchant" of the Commons after he made allegations of corruption against a Westminster Labour councillor. During business exchanges, Mr Shaw asked for a debate on councillor Peter Bradley, who, he said, "fails to disclose the clients of Millbank Consultants Ltd despite earning tens of thousands of pounds in fees for helping gain planning permissions".

"Doesn't New Labour mean new corruption?" declared Mr Shaw, who had made other allegations in Tuesday's debate on Westminster's "homes-for-votes" scandal. David Winnick, Labour MP for Walsall, appealed to Speaker Betty Boothroyd and she duly rebuked MPs who abused the protection of parliamentary privilege. Mr Winnick declared: "Undoubtedly Mr Shaw has demonstrated time and time again that he is the number-one smear merchant of the House of Commons."