HC Deb 02 December 1968 vol 774 cc1023-4
28. Mr. Gwilym Roberts

asked the Secretary of State for Social Services what study he has made of the computerisation of the individual family into a positive-negative income tax system; and what plans he has within the ambit of the current major social security review for introducing social security benefits based on negative taxation.

Mr. Crossman

On the first part of the Question, I would refer my hon. Friend to the answer given by the Chief Secretary to the Treasury to the hon. Member for Chigwell (Mr. Biggs-Davison) on 7th March, 1968. On the second part of the Question, the Government's proposals for the future of national insurance will be announced in the forthcoming White Paper.—[Vol. 760, c. 134.]

Mr. Roberts

But would not my right hon. Friend agree that, irrespective of the steps the Government are taking to close gaps in the social security system, immense gaps will remain unless there is some system of a negative Income Tax basis with a work incentive? Will my right hon. Friend give priority to helping lower-paid workers by introducing some scheme with that sort of basis?

Mr. Crossman

I do not think that helping lower-paid workers is necessarily only to be achieved by introducing negative Income Tax, of whose practicability I am profoundly sceptical, if for no other reason than that there are a great many workers who do not pay Income Tax.

Mr. Kenneth Baker

Would not the right hon. Gentleman agree that P.A.Y.E. and the social security system run so closely together that they should be combined, and would not he agree that, if they were combined, there would be substantial administrative savings?

Mr. Crossman

I hope that the hon. Gentleman observed the skill of the Chancellor of the Exchequer on the last occasion in his notorious claw-back in getting the first successful combination between Social Security and Income Tax personal allowances.

Mr. Barnes

Is my right hon. Friend aware of the negative Income Tax experiment that is being run by the Office of Economic Opportunity in the States? It so, will he look at it very carefully, because negative Income Tax can be a radical means of supplementing low wages? It is not necessary for the workers concerned to be paying Income Tax.

Mr. Crossman

It may not be necessary, but one of the claimed advantages of the scheme is that one has a single form to fill in whether one is receiving from or giving to the State. The point I made was that millions would have to fill in forms who had never filled in an Income Tax form in their lives. I suggest that there really are very great practical difficulties in the scheme being tested in the States, and I cannot give my hon. Friend any confidence that in the near future we shall be able to rely on it as a kind of cornucopia.

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