HC Deb 07 July 1970 vol 803 cc473-4
9. Mr. English

asked the Chancellor of the Exchequer what are the present proportions of revenue derived from direct and from indirect taxation; and how these proportions compare with those in the European Economic Community countries.

Mr. Patrick Jenkin

As the Answer involves a number of figures, I will, with permission, circulate them in the OFFICIAL REPORT.

Mr. English

Do the figures show that the proportions of direct taxation in the main Common Market countries are higher than here?

Mr. Jenkin

What the figures will show is that the Common Market countries raise a very much higher proportion of their revenue by way of social security contributions. The level of direct taxes by themselves in Britain is higher than in any Common Market country.

Following are the figures:

The following information is based on the latest returns to OECD*:

COMPOSITION OF TAXATION†, 1968
As a percentage of total taxes
Taxes on income Social security contributions Taxes on expenditure
United Kingdom 38.1 14.7 47.2
Belgium 30.9 28.8 40.3
France 17.8 39.3 42.9
Germany 30.3 30.4 39.3
Italy 22.3 36.4 41.3
Netherlands 34.9 35.5 29.6
* Figures for Luxembourg are not available.
† Excluding taxes on capital, but including social security contributions.

21. Sir G. Nabarro

asked the Chancellor of the Exchequer whether he will make a statement upon taxation policy.

Mr. Maurice Macmillan

My right hon. Friend will announce his detailed proposals at the appropriate time.

Sir G. Nabarro

When the appropriate time approaches, will my right hon. Friend have careful regard to the central position of savings and investment and bear in mind that the Save-as-You-Earn proposals, which have not been very satisfactory, although he was the author of them, are now largely negatived by the rate of inflation outstripping the tax-free gain of 40 per cent. over a period of seven years? Would he reinforce the savings attractiveness in his savings and taxation policy?

Mr. Macmillan

My hon. Friend may rest assured that the position of savings is regarded as central to the whole problem, and my right hon. Friend will naturally pay great attention to my hon. Friend's words.

Mr. Jay

Can the hon. Gentleman say whether any practical measures will be announced by the Chancellor before the Summer Recess?

Mr. Macmillan

My right hon. Friend hopes to catch your eye, Mr. Speaker, and will doubtless make his own speech, but I have nothing further to add to what I have already said or to what he will say then.