Surtax

HC Deb 26 July 1966 vol 732 cc1433-4

43. Mr. Maude

asked the Chancellor of the Exchequer what he estimates will be the effect on the balance of payments, or on the current level of demand, of the proposal to increase payments of Surtax made in September, 1967.

Mr. MacDermot

The additional revenue is estimated at £26 million. The effect of this upon demand cannot be accurately assessed.

Mr. Maude

Is the hon. Gentleman aware that this does not answer the Question? Is he aware that this is a measure which cannot possibly be effec- tive before September, 1967? We understand from the Prime Minister that the crisis of demand in the balance of payments is an immediate one. Could he say what effect this is likely to have on the current crisis?

Mr. MacDermot

It can have an effect before September, 1967, if Surtax payers reduced their expenditure in anticipation of paying the duty, but it is impossible to estimate the extent to which they will do so.

44. Mr. Maude

asked the Chancellor of the Exchequer why the Government have selected Surtax-payers, irrespective of their contribution to the national economic effort, as the only members of the community whose net incomes will be specifically reduced by the new economic measures.

Mr. MacDermot

We are all being called on to make sacrifices. It is right to ask for something extra from those with the biggest incomes.

Mr. Maude

Is it not a fact that, whereas the Government are saying to all the other members of the community that their disposable incomes may not be increased, they are saying to Surtax-payers that theirs will be specifically reduced? Is this a sensible way to give incentives to senior managers and technologists, upon whom our industrial future depends?

Mr. MacDermot

I am sure that the hon. Member will appreciate that some of the other measures will bear more hardly upon other people than they will upon Surtax-payers. As far as the particular class of Surtax-payers to which the hon. Gentleman has referred is concerned, I would remind him that the earned income allowance provisions will still apply to them.