HC Deb 09 March 1971 vol 813 cc224-5
9. Mr. Meacher

asked the Chancellor of the Exchequer whether he will recommend the appointment of Select Committee, Royal Commission or other public inquiry to examine taxation policy from a comprehensive viewpoint, in the light particularly of the high marginal rates on the low-paid worker.

Mr. Patrick Jenkin

No, Sir.

Mr. Meacher

Will the hon. Gentleman acknowledge that the combination for the low-paid worker when he increases his wage of a low-tax threshold, higher graduated insurance contributions, and the loss of means-tested welfare benefits forgone can involve him in a higher marginal tax levy than that borne even by the richest tycoon? As the imposition of the means-tested family income supplement and the means-tested housing allowances on top of this situation will make matters a great deal worse and will push the marginal tax rate beyond 100 per cent. in hundreds of thousands of such cases, what does the Minister propose to do to alter this intolerable disincentive to the low-paid worker?

Mr. Jenkin

The hon. Gentleman made a very long speech about that on Friday, of which I read every word. The Government are well aware of the general point to which the hon. Gentleman has drawn our attention on a number of occasions. It is forming part of our general studies of the problem of poverty, the results of which will be laid before the House in due course.

Sir B. Rhys Williams

Has my hon. Friend considered the recommendations of the Select Committee on Procedure with regard to the scrutiny of taxation? Is he in favour of the Committee's findings being adopted at the earliest possible date?

Mr. Jenkin

As my hon. Friend knows, those recommendations were made only a few days ago. The Government have them under urgent study.

Mr. Taverne

As the Government's policy of more use of selectivity necessarily implies a high marginal rate of implicit tax, could the hon. Gentleman explain on this occasion, since he has failed to do so in the past, how that is reconcilable with the Government's stated policy of giving more incentives to the higher-paid?

Mr. Jenkin

I have never sought to conceal from the House or from the hon. and learned Gentleman that there is a problem here. What we have said is that this is a problem which is receiving urgent and continuing study in the context of our general study of poverty.