§ 2. Mr. C. Osborne
asked the Chancellor of the Exchequer what are the main tax reductions that have taken place since the Budget of April, 1951; and how much greater he estimates that the taxation revenue would be for the current year if the 1951 taxes still operated.
I am circulating a brief summary of the main changes in the OFFICIAL REPORT. As regards the second Dart of the Question, it is estimated that the yield from Inland Revenue duties would be about £1,300 million higher in the current year if the 1951 rates and allowances were in force. No worth-while comparable estimate can be made of the yield from indirect taxation because it is impossible to assess the effects on consumer spending of the higher level of direct taxation in 1951 and because with 1951 rates of indirect taxation the pattern of consumption would probably be different.
§ Mr. Osborne
Is my right hon. Friend aware that the £1,300 million per annum which he and his Conservative predecessors have taken from the shoulders of the taxpayer is an action for which we are very grateful, that some of us hope that the newspaper reports to the effect that he will not reply to Questions are wrong, and that he will continue to give us his good news for many years to come?
Does the right hon. Gentleman realise that the reason for this is that the real income of the nation as a whole has risen so greatly?
Following is the summary:Changes in rates of taxation since 1951 are set out in the appropriate Financial Statements.The main reductions in direct taxation have been in the rates of Income Tax, the standard rate being reduced from 9s. 6d. to 7s. 9d. with corresponding extension and changes of the lower rates. The following allowances have also been increased—single allowance from £110 to £140, married allowance from £190 to £240, child allowance from £70 to £100, £125 or £150 according to age; earned income relief has been increased from 1/5th to 2/9ths and the ceiling extended. The effective level of Profits Tax has also been reduced by changes in the rates and method of computation.In the field of indirect taxation the rates of Purchase Tax and the rates of duty on heavy wine and beer have been reduced; while the Entertainments Duty has been abolished. Rates of duty have been increased on tobacco and hydrocarbon oils and a television duty has been introduced.