31. Mr. John Hallasked the Chancellor of the Exchequer his estimate of the gross income which, in the year when 1261 £2,000 was first established as a level at which Surtax would begin, would have given a married man with two children the same purchasing value after tax as he derives from a gross income of £2,000 today.
§ The Financial Secretary to the Treasury (Mr. Henry Brooke)For a married man with two children a gross earned income of £1,275 in 1920–21 would have given approximately the same purchasing power after tax as an income of £2,000 at the present time.
Mr. HallDoes my hon. Friend agree that the majority of those earning between £2,000 and £3,000 a year are drawn from the managerial and professional classes, on whose energy, initiative, and leadership this country largely depends, and would he agree that at the present level of Surtax the only way in which these people can be remunerated adequately is by finding some remuneration which does not attract tax?
§ Mr. BrookeI think that I can agree with my hon. Friend's first suggestion but, at this time of year, he must not tempt me into Budget speculation.
32. Mr. John Hallasked the Chancellor the gross earned income required today by a married man with two children to equal, after deduction of tax, the purchasing power of a gross earned income of £2,000 in the year when that figure was first established as a level at which Surtax would begin.
§ Mr. H. BrookeFor a married man with two children a gross earned income of about £3,910 would be necessary at the present time to provide, after tax, the same purchasing power as a gross income of £2,000 in the year in question, namely, 1920–21.
Mr. HallDoes not it appear that the position of those earning £2,000 a year before the war is now steadily going backwards, and is it possible for anybody today to earn the standard of living which £2,000 a year gave him before the war? If it is not, is not it discouraging to our more able men and women?
§ Mr. BrookeI will certainly take note of the views expressed by my hon. Friend, but I am sure that he—and the House— 1262 realises the difficulty I am in in being asked to express an opinion on these matters just now.
§ 41. Mr. R. Bellasked the Chancellor of the Exchequer the respective increases in the earnings of wage-earners, retail prices and company dividends between 1938, 1951, and 1954.
§ Mr. R. MaudlingBetween 1938 and 1951, total earnings rose by 166 per cent., retail prices of all consumer goods and services by 110 per cent., and total interest and dividends before the deduction of tax, paid by companies and public corporations, by 22 per cent. Between 1951 and 1954, provisional estimates suggest that total earnings rose by about 20 per cent., retail prices of all consumer goods and services by 10 per cent., and total interest and dividends, before deduction of tax, paid by companies and public corporations, by about 30 per cent. Comparable figures for dividends paid by companies alone are not available because of changes in the company sector due to nationalisation.
Between 1938 and 1954, therefore, earnings rose by about 220 per cent., retail prices of all consumer goods and services by 131 per cent., and total interest and dividends, before deduction of tax, paid by companies and public corporations, by about 60 per cent.
§ Mr. BellDoes not that answer show how misleading it can be to take so short a period as a single selected year as a basis for this comparison?
§ Mr. GaitskellDo not the figures for 1938–51 show a very satisfactory trend in favour of a fairer distribution of income for the wage-earners as compared with the property owners? Is not it a matter for regret that in the three years during which the present Government have been in power the reverse tendency has been shown?
§ Mr. MaudlingI do not think that it is a matter for regret that under this Government production—and incidentally profits at the same time—has reached a record level.
§ Mr. JayDo not the figures show quite clearly that since 1951 there has been a switch back of real income in favour of property owners?
§ Mr. MaudlingI think that the right hon. Gentleman failed to notice the words "before deduction of tax" in my reply.