HC Deb 24 May 1962 vol 660 cc659-60
19. Mr. Warbey

asked the Chancellor of the Exchequer what was the percentage increase in direct and indirect taxes, respectively, between 1950 and 1961, including in indirect taxes the amount paid in National Health and Insurance contributions; and what, during this period, was the percentage increase in the gross national product.

Mr. Barber

In money terms, the increase in indirect taxes levied by the central Government, together with National Insurance and Health contributions, was 79 per cent. between 1950 and 1961. The increase in direct taxes on income and capital was 67 per cent. and in gross national product 102 per cent.

Mr. Warbey

Does not that reply show that, contrary to what the Financial Secretary has been trying to prove in Committee on the Finance Bill, the Government are, in fact, taking an increasingly larger share of the national income in the form of poll taxes on the whole population, largely in the form of progressive direct taxation? As the Economic Secretary tries to correct that figure by bringing in last year's Budget, will he bring in this year's Budget as well?

Mr. Barber

I anticipated that the hon. Gentleman might refer to the observations of my hon. Friend the Financial Secretary, and I can assure him that there is no inconsistency between what my hon. Friend said and what I have said. One cannot consider this matter of National Health Service contributions in isolation from the increased benefits received. The increase in National Health and Insurance contributions has been more than matched in percentage terms by the rise in the corresponding National Insurance benefits. Furthermore, the cost of the National Health Service almost doubled in the period in question. This country much prefers what this Government have done to the Opposition's action in imposing a ceiling on expenditure in the National Health Service.

Mr. Callaghan

If the Economic Secretary really believes that, will he ask the Prime Minister to put it to the test to see if the country really prefers what this Government are doing? On the particular question, however, would the Economic Secretary tell us whether the ratio he has given would be the same if taxation of company profits were excluded from the calculation? Or would it not show that the proportion being taken in direct taxation, especially from those earning less than £20 a week, has increased very substantially?

Mr. Barber

My answer referred to direct taxation of both income and capital. If the hon. Gentleman will put down a detailed Question, I will provide the figures.