§ 5. Mr. Collinsasked the Chancellor of the Exchequer if he is aware that, including the increase announced on 18th February, the National Insurance contribution represents approximately 7 per cent. of the weekly wage of a farmworker; and if he will revise his proposals so that no employed person shall be required to pay in contributions a sum greater than 5 per cent. of his weekly wage.
§ Mr. SimonThe National Insurance and National Health Service contribution will be raised under the Government's proposals from 6.3 per cent, to 6.6 per cent. of the minimum wage of a farm worker. It could not be reduced to 5 per cent. without cutting down the provision 1312 for larger benefits and contributions which the House passed last November.
§ Mr. CollinsIs the Minister aware that this penal tax on rural workers must eventually affect food prices and have a totally disproportionate effect on the country's economy? If the Government reject the principle of the contribution as a percentage of wages, what does he propose to do for the lower-paid workers who are very seriously affected?
§ Mr. SimonThe increased contributions represent a rather smaller proportion of the average earnings of male agricultural workers than the 1946 Act contributions did in 1946, but, as the Prime Minister indicated, we are at present reviewing the financial basis of the National Insurance Scheme.
§ Mr. J. GriffithsIn view of the financial basis of the scheme, will the Financial Secretary take one thing into account which marks a significant difference between 1946 and now, and that is to what extent those in the higher income groups derive benefit from reliefs on part of their contribution which is not open to those who do not earn enough to pay Income Tax?
§ Mr. SimonThe Government will, of course, take all factors into consideration, but the tax is less regressive now than it was under the scheme introduced by the right hon. Gentleman.
§ 16. Mr. Jayasked the Chancellor of the Exchequer what would be the percentage of total income deducted in Income Tax and National Insurance contribution, together, on the basis of present tax rates and 9s. 11d. a week contribution for the employed man, in the case of a man with wife and one child, and income all earned of £8, £10, £12, £15, £20, and £30 a week, respectively.
§ Mr. SimonAssuming the child is not over 11, the respective percentages are 6.2, 6.1, 8.1, 10.8, 15.5 and 21.3.
§ Mr. JayDoes the Financial Secretary think that that is a satisfactory rate of progressive taxation?
§ Mr. SimonIt seems to me to be very highly and sharply progressive on all incomes over £10 a week.
§ 18. Dame Irene Wardasked the Chancellor of the Exchequer how many people 1313 paying insurance contributions to the National Insurance Fund pay no Income Tax; and how many people contributing to the National Insurance Fund are receiving tax allowances in respect of their contributions.
§ Mr. SimonI regret that precise figures are not available, but it is estimated that between one-fifth and one-sixth of insured persons pay no tax; the remainder receive tax allowances on their contributions.
§ Dame Irene WardWill my hon. and learned Friend kindly explain to the House why a Conservative Government maintains a Socialist policy of penalising those who are living in the lower income groups?
§ Mr. SimonI cannot accept the implitions of the second part of my hon. Friend's question. We have done a great deal to relieve those who are in the lower Income Tax paying groups, and, as I have pointed out previously, we have also so altered the tax incidence of part of the National Insurance contributions—the whole of the National Health Service contributions—that they no longer rank as deductible expenses against tax.
§ Dame Irene WardA good beginning has been made. and I hope that it will go further.