HC Deb 04 November 1969 vol 790 cc819-20
20. Mr. Cronin

asked the Chancellor of the Exchequer what is the policy of Her Majesty's Government with regard to the taxation of privately-owned wealth.

30. Mr. Gwilym Roberts

asked the Chancellor of the Exchequer what are the latest available estimates for the yield of a uniform 1 per cent., 2 per cent., 3 per cent., or 4 per cent. wealth tax on accumulated wealth of £20,000 or over ; what plans he now has for the introduction of wealth taxation ; and if he will make a statement.

Mr. Taverne

On the basis of present-day values it is estimated that the yield of a tax at the rates mentioned on the excess over £20,000 of wealth owned by individuals would be £225 million, £450 million, £675 million and £900 million, respectively.

I cannot say if or when such a tax might be introduced.

Mr. Cronin

Would not my right hon. Friend agree that it is an anomalous situation that about one-third of the country's wealth is owned by about I per cent. of the population, while, at the same time, the working population are enduring a very high rate of direct taxation which, incidentally, from an electoral point of view is causing widespread resentment?

Mr. Taverne

I cannot confirm the exact figures which my hon. Friend has mentioned. I am aware that there is a need for some redistribution of wealth. I am also aware that there are certain difficulties about this tax.

Mr. Dickens

As a wealth tax is a commonplace in most other West European countries and bearing in mind the very considerable rise in social inequality in the 1960s in this country, if such a tax would produce the revenue stated by my hon. Friend, why should not we bring it in at a much earlier date than that which the Chancellor of the Exchequer foresees in the early to mid-1970s?

Mr. Taverne

There are several points involved in that question. First, the practice in different countries varies, with different effects. Secondly, I do not accept from my hon. Friend that there has been a rise in social inequality; there has been some redistribution, if not necessarily as much as one would like to see. The answer to why the tax should not be introduced earlier is that it raises formidable problems of valuation, and if one wanted to introduce the tax a very considerable strain would be placed on the resources of the Inland Revenue which are also already considerably strained.