To ask the Chancellor of the Exchequer what information he has as to what will be the higher rates of income tax in each of the major industrial countries in 1988–89.
To ask the Chancellor of the Exchequer what information he has about the higher rates of income tax in each of the major industrial countries in 1988–89.
The higher rate of income tax in the United Kingdom is now one of the lowest of any major industrial country. I shall arrange for the relevant information to be placed in the Official Report.
I thank my right hon. Friend for that information. Does it not prove that as a result of the Budget Britain is one of the most attractive countries internationally? Will it not lead to an increased number of industries moving into this country, providing more jobs and thus increasing the amount of revenue coming to the Exchequer, for the benefit of all citizens?
We certainly hope and expect that there will be an increased flow of inward investment. However, there has been a substantial amount of inward investment in recent years. There was £6·1billion in 1987 alone, the largest figure ever recorded, and £2·6million in Scotland alone over the past few years.
Does my right hon. Friend agree that penal rates of taxation damage the economy as a whole and help no section of society? Does he further accept that there may be no economic justification for any level of income tax higher than the basic rate?
I am certainly prepared to agree with my hon. Friend on the subject of penal taxation. The subject of a single rate of taxation might be a matter for another day. However, I recall that Mr. Disraeli once proposed the abolition of taxation in an election manifesto and lost.
In view of the proposals for capital taxation, why does the Government's philosophy of easing dependence apply to those who seek social security but not to those who benefit from inherited wealth? Can the Minister offer a scrap of evidence that the sons or daughters of those who benefit from unearned income will use that for the greater good? Why should they be dependent? Why should the enterprise ethic apply purely to the poorest of the poor?
I am not entirely sure that the hon. Gentleman's question follows from the specific question on the Order Paper. In any event, I think that his premise is wholly mistaken.
Do not the Minister's answers represent two-nation Toryism at its worst? Does he recall the answer given to my hon. Friend the Member for Fife, Central (Mr. McLeish) that a single person earning over £300,000 a year will benefit by £1,000 a week? Will he contrast that with the admission made yesterday by the Prime Minister that a single person earning less than £50 a week will be £7·80 a week worse off after the social security cuts? Does that not represent two nations, or are they both part of the same big happy family?
Perhaps I might remind the hon. Gentleman that before any tax cuts were contemplated in the Budget an extra £2,000 million was allocated to social security expenditure for the forthcoming year. On the matter of higher and lower rates of tax, I must say that high taxes do not redistribute income; all they do is redistribute it to taxpayers and that is of no use to anyone.
Following is the information:
Higher rates of income tax (percentage) for a married couple without children Group of Seven countries
Total number of rate-bands
Notes to figures in table: