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Income Tax

Volume 938: debated on Thursday 10 November 1977

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asked the Chancellor of the Exchequer what was the total amount of income tax paid in the year 1973–74 and the estimate of the amount that will be paid in 1977–78, divided in each case by the number of households in the United Kingdom.

The figure for 1973–74 is £384. Assuming implementation of the proposals announced by the Chancellor on 26th October, the estimate for 1977–78, at 1973–74 prices, is £446

Does the Minister agree that those figures, making allowance for the fact that he has turned them into real terms, indicate that in money terms he has taken about £10 from every household and now gives just £1 back? Will the Minister further acknowledge that in, as we hope to see, the further reductions in taxation he should reject the advice of his hon. Friends that these should be done only through allowances, which will merely mean a further compression of net differentials?

No, Sir. I think that the hon. Gentleman is wrong in complaining that the figures are given in real terms. That is the only proper basis for comparison. He will also appreciate that his question was extremely inaccurately phrased because households as a unit do not pay tax. The answer, therefore, cannot take into account the benefits for families of family allowances and child benefit.

Is it not the case that, despite the changes made in the last Budget and the last mini-Budget, the total revenue this year is expected to he £300 million higher than last year?

That may very well be the case, but I cannot see what point the hon. Gentleman seeks to make. My right hon. Friend's proposals reduce the burden of direct taxation, as we said we would do.