§ 20. Mr. Pardoeasked the Chancellor of the Exchequer if he will estimate, from information available to him, the proportion of their gross income, excluding cash benefits, paid in all kinds of direct and indirect taxes and rates by an average family of husband and wife and two children, living on an income of £5,000 per year, on an average income for such a family, and on an income of £1,000 per year, respectively.
§ Mr. Patrick JenkinThe 1969 Family Expenditure Survey showed that in that year rates and taxes took 33 per cent. of family income exclusive of benefits at £1,000 a year, and 35 per cent. at £1,760 a year, the average income for such families. The Survey did not give enough data about £5,000-a-year families for the comparable percentage to be calculated. Information for later years is not available.
§ Mr. PardoeWhile thanking the hon. Gentleman for those figures, may I ask him to accept that if the other figures were available to his Department they would show that far from being a progressive tax system ours is a regressive system? Is he aware that it has singularly failed to redistribute income in the ways that radicals would wish and that those with the lower incomes are paying a higher proportion in taxation than those in the middle and upper income brackets?
§ Mr. JenkinI would not accept that. It is totally unrealistic to leave out of the calculations the cash benefits and benefits in kind that are received. If the hon. Gentleman would like some other figures, he may care to know that for the family of the size mentioned in the Question with an original income of £600 a year, this would represent an increase of 56 per cent. At about £1,000 the 1124 combined effect would be to decrease such a family's income by 4 per cent. and on £1,760 the effect would be to reduce it by 16 per cent. That seems to be a fair degree of redistribution.