§ 2. Mr. John Hannam
asked the Chancellor of the Exchequer what is now the highest rate of tax payable by a resident of the United Kingdom upon his marginal earnings and upon his marginal investment income.
§ The Minister of State, Treasury (Mr. Terence Higgins)
75.4 per cent. and 88.75 per cent. respectively.
§ Mr. Hannam
I welcome the reduction in the levels of tax on high incomes and the reduction in surtax, but may I ask the Government to consider an early reduction in the levels of taxation on the levels of income?
§ Mr. Higgins
We fully understand the point which my hon. Friend is making. As my hon. Friend pointed out in his Budget, the changes which are being 209 made in personal taxation will be such as to relieve taxation on a particular slice of investment income. We believe that this will be very important in its effect on encouraging savings.
§ Mr. Barnett
Does the hon. Gentleman agree that, although the Government may have done something at the higher level—although apparently still not sufficient to satisfy some hon. Members opposite—the Chancellor and the Government generally have over a wide field increased the disincentive to over 100 per cent. for very much greater numbers of people at the lower end of the scale? Are the Government suggesting that it is not a disincentive to lower-paid workers?
§ Mr. Higgins
I do not accept what the hon. Gentleman says. He should study carefully the speeches made by my hon. Friend the Financial Secretary in the Budget debate.