§ 2. Mr. Fernyhoughasked the Chancellor of the Exchequer the total amount of Income Tax paid in the financial year ended 5th April, 1955, by the 2,400,000 taxpayers now removed from liability altogether as a result of his recent Budget.
§ 8. Mr. Chetwyndasked the Chancellor of the Exchequer the total estimated Income Tax relief to the 2,400,000 individuals who have been relieved of liability for payment of Income Tax.
§ Mr. R. A. ButlerThe estimated cost of the tax relief given by the Budget to the 2,400,000 taxpayers who will be 737 removed altogether from liability is £4 million. It is not possible to say what this particular group of taxpayers paid in 1954–55, as a number of them would then have been in different income groups or different family circumstances.
§ Mr. FernyhoughWould not the right hon. Gentleman agree that this begins to put his Budget in something like a true perspective? Can he, for the information of the House, say whether the Inland Revenue recommended that it was not economic to collect this tax, and how much it was costing to collect the £4 million from these 2,400,000 people?
§ Mr. ButlerThe second part of the question would require a separate Question, as I have not the exact figures with me. As for putting my Budget in perspective, I myself had indicated that the amounts involved were small, and, as that represented the truth, I do not see how I can put the truth in a different perspective.
§ Mr. ChetwyndIs not this relief of something just over 1s. a week to the bulk of these people—[HON. MEMBERS: "Less."]—derisory in view of the Chancellor's claim that it gives them an incentive to produce more?
§ Mr. ButlerI have never particularly referred to incentives in relation to the 2,400,000. As my distinguished predecessor, the late Sir Stafford Cripps, observed on more than one occasion, we cannot take off more tax than people pay. That is in fact what I have done; I have taken off the tax which they pay.
§ Mr. CallaghanTo get the arithmetic right, is it not the case that the average relief which each of those 2,400,000 will get is about 9d. a week? Is not that a derisory amount?
§ Mr. ButlerA detailed answer, giving the exact amounts—some of which I have worked out—would show that they differ very much. The hon. Member is only working out the average as against the figure of 2,400,000.
§ Colonel Gomme-DuncanDoes not my right hon. Friend agree that the electors will be very interested to hear the views of the Opposition upon trying to stop taxing people?
§ 4. Mr. Jayasked the Chancellor of the Exchequer how much of the Income Tax 738 revenue remitted in his Budget will accrue to those receiving incomes of less than £10 a week.
§ Mr. R. A. ButlerAbout £19 million.
§ Mr. JayIs not that an extraordinarily small proportion of the £152 million which the Chancellor is remitting in Income Tax in his Budget?
§ Mr. ButlerIf the right hon. Gentleman were to add up the reliefs given during my tenure of office in 1952, 1953 and 1955, he would find—and I think this is the most remarkable feature—that there has been a combined relief of £116 million given to those people, which is a reduction of over 50 per cent. in taxation since this Government took office.
§ 5. Mr. Jayasked the Chancellor of the Exchequer how much of the Income Tax revenue remitted in his Budget will accrue to those with incomes over £2,000 a year; and what is the total relief given to personal incomes.
§ Mr. R. A. ButlerThe total relief accruing to personal incomes in a full year as a result of the Budget changes is estimated at about £110 million, of which £25 million will go to incomes of over £2,000 a year.
§ Mr. JayIs not that a very remarkable figure? Is the Chancellor telling us that a larger total of revenue will be remitted to the minority, with incomes of over £2,000 a year, than to all those with incomes of £10 a week or less?
§ Mr. ButlerThe percentage advantage upon the smaller incomes is much greater than the percentage advantage upon the larger.
§ Mr. JayIs the Chancellor aware that what people are interested in is not the percentage but how much actual revenue they gain?
§ Mr. ButlerI shall explain the matter in as simple English as I can. If one takes off a flat rate, it is natural that the people who pay more tax get more relief.
§ Mr. GodberWill my right hon. Friend remind the House how much was remitted to these taxpayers with small incomes in the last Budget of the previous Government?
§ Mr. CallaghanIs the Chancellor aware that his last two answers mean 739 that 250,000 Surtax payers get more relief than 10 million people whose incomes are less than £10 a week?
§ Mr. ButlerThe relief in the higher grades is about 4¼ per cent. and in the lower grades about 15 per cent., so there is a very considerable difference. It shows that, in so far as one can take something off everybody, I have endeavoured to take more, in proportion, off the lower than the higher grades.
§ Mr. WoodburnCan the Chancellor make clear the fact that, in addition to taking these small amounts off the tax-payers with lower incomes, he has also added a considerable amount of indirect taxation during the last two or three years—for instance, through increased fares owing to the cost of petrol?
§ Mr. ButlerI have not added nearly so much by way of indirect taxation as was done in the Socialist Budgets.
§ Mr. JayCan the Chancellor say whether this extraordinary result was deliberately intended or was accidental?
§ Mr. ButlerEverything I do is intentional.
§ 7. Mr. Chetwyndasked the Chancellor of the Exchequer the number of taxpayers in the income groups below £500, £500-£700, £700-£1,000, £l,000-£2,000 and £2,000 and over, respectively; and whether he will give the estimated total Income Tax relief given to the taxpayers in each income group.
§ 15. Mr. E. Fletcherasked the Chancellor of the Exchequer how many persons with incomes of £500 a year and less at present pay Income Tax, how many persons with incomes of between £500 and £2,000 a year, and how many persons with incomes of over £2,000 a year.
§ Mr. R. A. ButlerAs the reply contains a number of figures, I will, with permission, circulate it in the OFFICIAL REPORT.
§ Mr. ChetwyndCan the Chancellor say whether the figures he is circulating continue the trend of his previous Budgets in giving more to the wealthy than to the poor?
§ Mr. ButlerIf the hon. Member will study the figures—which are in a table of a considerable size—he will be impressed 740 by the approximate amounts which fit each particular bracket to which he refers.
§ Mr. ChetwyndWhat does that mean?
§ Mr. F. M. BennettWhen my right hon. Friend publishes these figures, will he consider also publishing a table showing the reductions which occurred in the same income scales when the right hon. Member for Bishop Auckland (Mr. Dalton) reduced the standard rate?
§ The following are the figures:
| Income range | Estimated numbers liable to tax before Budget proposals* | Tax reduction in a full year under the Budget proposals | |
| Thousands | £ million | ||
| Under £500 | … | 8,350 | 19 |
| £500-£700 | … | 4,800 | 24 |
| £700-£1,000 | … | 3,000 | 22 |
| £1,000-£2,000 | … | 1,125 | 20 |
| £2,000 and over | … | 325 | 25 |
| *A married couple are counted as a single unit and the allocation by range of income is based on their joint income. |
§ 10. Mr. Doddsasked the Chancellor of the Exchequer how many persons employed in the United Kingdom at the latest convenient date were not required to pay Income Tax.
§ Mr. R. A. ButlerI regret that this information is not available.
§ Mr. DoddsWill the right hon. Gentleman say why this information is not available? Is it not very important?
§ Mr. ButlerIt is extremely important, but it is not available. The position is that the Income Tax statistics do not differentiate between those employed and other categories, such as pensioners, self-employed persons and rentiers. If the hon. Member wants an approximate answer to a general question, leaving out the word "employed," I would refer him to the "National Income Blue Book." which shows that there were some 253 million people with incomes—counting husband and wife as one—and that the number paying tax at that time was 15¾ million. This is likely to increase to 17½ million in 1955–56 owing to the increased wage rates. That means that only 7¾ million people would be left not paying tax. and of these over 4 million 741 will benefit from the increase in National Insurance pensions. This shows how very comprehensive this tax reduction is.
§ 11. Lieut.-Colonel Liptonasked the Chancellor of the Exchequer what additional Income Tax will be collected by cutting the first reduced rate band from £100 to £60.
§ Mr. R. A. ButlerNo taxpayer will pay more tax as a result of the Budget proposals taken as a whole. The reduction in the width of the first reduced rate band is designed to restrict the benefit from the increases in the single and married allowances to the lower income and thus achieve, in a simpler way, the object of the Royal Commission in putting forward its scheme for a minimum earned income relief.
§ Lieut-Colonel LiptonWhy does not the Chancellor want to answer this Question? I am asking him how much additional tax is going to be collected by cutting this rate band from £100 to £60. That is all I want to know. I do not want to know what other things are to be set off against it. Will he answer my Question?
§ Mr. ButlerI have done my best to give the hon. and gallant Gentleman the best answer I can.
§ 12. Lieut.-Colonel Liptonasked the Chancellor of the Exchequer for an estimate of the additional cost of cutting Income Tax by 6d. in each of the reduced rates for all Income Tax payers earning less than £10 a week; and how many taxpayers would benefit thereby.
§ Mr. R. A. ButlerI assume that the hon. and gallant Member intends the reduction of 6d. for persons earning less than £10 a week to take the place of the reduction of 3d. already proposed in the Budget. On that assumption, the additional cost over and above the cost of the Budget proposals would be about £9 million and the number of taxpayers benefiting would be about 6½ million. Such a scheme, however, would not only be quite impracticable for P.A.Y.E.; it would also be most inequitable, since nearly all the relief would go to single persons or childless married couples and hardly any to the married man with a family.
§ Lieut-Colonel LiptonWhy is the Chancellor seeking an excuse for not 742 giving relief to the people who need it most? [HON. MEMBERS: "He has given it."] By the smaller expenditure of £9 million, would he not benefit a large number of people who need it far more than some of the people who will benefit?
§ Mr. ButlerI have tried to give benefit more to the married man with a family than to the single man or the childless couple. In that I am following the advice of the Royal Commission and my own instincts, and I am sorry that I cannot have the hon. and gallant Member with me.
§ Captain PilkingtonIn view of all these electioneering questions, will my right hon. Friend confirm that the great majority of people are far better off as a result of this Budget than they were under the Labour Government?
§ Mr. ButlerThe answer is not only "Yes, Sir" but that if the benefits in this Budget are added to the benefits in the Budgets of 1952 and 1953, there is, as I have said, a 50 per cent. improvement in the case of those receiving less than £10 a week.
§ 16. Mr. E. Fletcherasked the Chancellor of the Exchequer the total estimated loss to the revenue resulting from changes in Income Tax in respect of personal incomes; how much of this is in respect of incomes of £2,000 a year and upwards; and how much in respect of incomes up to and including £500 a year.
§ Mr. R. A. ButlerThe estimated relief to personal income is £110 million in a full year, of which £25 million will accrue to incomes of £2,000 and over and £19 million to incomes of £500 or less.
§ Mr. FletcherDoes this mean that far more tax remission is given to the relatively small number of people who pay tax with incomes of £2,000 a year and upwards in comparison with the much larger number of people who pay tax and earn £500 a year or less?
§ Mr. ButlerI have said that the ratio of relief is as to 4¼ per cent. for those in the higher income bracket and as to 15 per cent. for those in the lower bracket.
§ 17. Mr. E. Fletcherasked the Chancellor of the Exchequer how much of the estimated loss of £116 million to the revenue resulting from the cuts in the standard rate and reduced rates of Income 743 Tax is in respect of the undistributed profits of companies; how much is in respect of interest payments; and how much in respect of company dividends.
§ Mr. R. A. ButlerThe relief in respect of the undistributed profits of companies and other corporate bodies is estimated at about £42 million in a full year. It is not possible to give corresponding estimates for interest and dividends.
§ 18. Mr. E. Johnsonasked the Chancellor of the Exchequer how many people he estimates will receive net incomes, after deduction of Income Tax and Surtax, of over £6,000 a year and of over £10,000 a year in the next financial year.
§ Mr. R. A. ButlerThis must necessarily be a matter of speculation but, on the assumptions as to the growth in personal incomes underlying the Budget estimates and allowing for the proposed changes in taxation, the number of net incomes after tax of £6,000 or more may be between 450 and 500, of which about 50 may be over £10,000.
§ Mr. FernyhoughWould the Chancellor not agree that that is 400 or 500 too many?
§ Mr. ButlerIt is a matter of opinion as to how much income is too much.
§ 19. Mr. E. Johnsonasked the Chancellor of the Exchequer what will be the average amount, paid yearly, in Income Tax and Surtax, where applicable, after the proposed new rates come into force, by those with incomes of over £10,000 a year, of between £2,000 and £10,000 a year, and under £10 a week respectively.
§ Mr. R. A. ButlerThe amounts are £12,300, £1,315 and £11, respectively. The last figure relates only to those with incomes above the new effective exemption limit of £180.
§ Mr. JohnsonWould my right hon. Friend not agree that these figures put the whole position as regards Income Tax relief into rather better perspective than do most of the questions asked earlier this afternoon by hon. Members opposite?
§ Mr. ButlerI am obliged to my hon. Friend for coming along at the end to act as long stop.
§ Mr. DoddsIn view of the unsatisfactory answers of the Chancellor of the 744 Exchequer, I give notice that I will raise these matters in the General Election.