HC Deb 13 July 1954 vol 530 cc256-8
7. Mr. Warbey

asked the Chancellor of the Exchequer the purchasing power today of an income of £100,000 per annum, as compared with November, 1951, for a married man with two children, taking into account the changes in taxation and allowances and in the cost-of-living index.

Mr. R. A. Butler

A married man with two children with an income of £100,000 per annum now has a net income, after tax, of £8,488. This is equivalent in purchasing power to about £8,075 in November, 1951, when the net income corresponding to a similar gross income would have been £5,940. In these figures, it is assumed that the earned income included in the total is sufficient to qualify for the maximum earned income relief.

Mr. Warbey

Does not the answer prove conclusively that the richer members of the community have benefited enormously from the total effect of the Government's financial policy, and that the richer they are the more they have benefited?

Mr. Butler

I would not say that at all. It is a question of relativity.

Mr. Gower

Would not the Chancellor agree that it is a reasonable slice for the Treasury, and could he also tell us if there are many of these people, apart from Labour hon. Members?

Mr. Butler

I have not had any in my acquaintance, but if any hon. Members will introduce me to anybody in that category, I shall be very much obliged.

8. Mr. Warbey

asked the Chancellor of the Exchequer the purchasing power of an income of £500 per annum, as compared with November, 1951, for a married man with two children, taking into account the changes in taxation and allowances and in the cost-of-living index.

Mr. R. A. Butler

A married man with two children, earning £500 per annum now has a net income, after tax, of £499. This is equivalent in purchasing power to about £475 in November, 1951, when the net income corresponding to a similar gross income would have been £487.

Mr. Warbey

Does not this answer show that the lower income groups of the community, including Members of Parliament who are solely dependent on their Parliamentary salary and have to pay their expenses out of that income, are worse off under this Government?

Mr. Butler

The simple facts relating to this question are that the tax on an income of £500 has been reduced from £13 under the benign administration which I have conducted to £12s. 2d., a fall of 91 per cent., whereas, in regard to the mythical family with £100,000 a year which was previously referred to, they have suffered a reduction of only 2.7 per cent.

Mr. Gaitskell

Is it not also the case, judging from the Chancellor's original answer, that the man with £500 a year who has two children, nevertheless now has a purchasing power which is £24 less than it was in 1951; or, if not £24 gross, then £24 net, which was £12 less than in 1951? [Interruption.] If hon. Members do not seem to be able to understand these confusing figures, they had better wait for it. Am I to understand that the Chancellor said that the net income of the man with £500 a year and two children was now worth £475, against £487, under the right hon. Gentleman's dispensation?

Mr. Butler

I can only repeat the figures that I gave with singular clarity and honour in my original answer. The net income of a family with £500 a year would have been £487, and the other figure is £475, so that the perspicacity of the right hon. Gentleman remains as acute as ever.

Mr. Shinwell

What is the Chancellor bragging about? Has he not taken it all back in the prices of food?

Mr. Butler

In contrast to the Administration which we succeeded, for the last year or so the prices of food have barely risen at all.

Mr. Gaitskell

Is not such a family in the position of being £12 worse off than under the Labour Government?

Hon. Members

Answer.

Lieut-Colonel Bromley-Davenport

On a point of order. Are we to allow hon. Members to ask long supplementary questions, with people getting their figures wrong and going back and checking them, like the right hon. Gentleman the Member for Leeds. South (Mr. Gaitskell)?

Mr. Speaker

I have said before that I do not like long supplementary questions.