§ 3. Mr. Parkinsonasked the Chancellor of the Exchequer what was the tax threshold as a percentage of average earnings for a married man with two children under 11 years of age in 1963–64, 1970–71 and 1972–73.
§ Mr. JenkinFor 1963–64 and 1970–71 the percentages were 82.1 and 54.4 per cent. respectively. The figures take account of the family allowance and, in the later year, of clawback. I cannot, of course, give figures for 1972–73.
§ Mr. ParkinsonI thank my hon. Friend for that reply and assure him that the last figure is a misprint. I was not seeking to lure him into revealing any of his right hon. Friend's Budget secrets.
Does he agree that these figures demonstrate dramatically the way that, under the previous Administration, the tax threshold fell as a percentage of average earnings and that, had my Question been printed in the way I meant it to be tabled, the figures for 1971–72 would have shown a small but welcome improvement in the situation? May I urge my right hon. Friend to continue that trend in his next Budget?
§ Mr. JenkinI have every sympathy with my hon. Friend's struggle with the printers. However, my answer shows that millions of ordinary working people earning below average wages who were not paying tax at all in 1964 were, by 1970—after six years of Labour Government—paying tax at the standard rate. My right hon. Friend's Budget last year has begun to reverse the trend.
§ Mr. TaverneAt a time when record unemployment urgently calls for considerable tax relief and the marginal rate of taxation—which affects the amount of earnings which one keeps in one's pocket—is much higher at the bottom of the income scale that at the top, may I ask the hon. Gentleman to convey to his right hon. Friend the Chancellor of the Exchequer the need to give far higher priority to raising the threshold than to giving tax relief to those in the top income bracket?
§ Mr. JenkinMy hon. Friend the Member for Enfield, West (Mr. Parkinson) at least assured me that he was not attempting to exact Budget secrets. The hon. and learned Gentleman should not attempt to do so either.
§ 8. Mr. Kenneth Bakerasked the Chancellor of the Exchequer what estimate he has made of the yield of income tax in the year 1971–72.
§ Mr. BarberThe Budget estimate was £6,491 million.
§ Mr. BakerIs my right hon. Friend aware that in the first eight months of this financial year, according to figures published by the Treasury, the yield of income tax has gone up by 12 per cent., compared with an increase in incomes of about 8 per cent., which means that income tax is taking a greater proportion of earned incomes as the months go by? Will he bear this in mind over the next fortnight with a view to reducing the yield of income tax, either by an adjustment of the standard rate or, as I would prefer, an adjustment of the allowances?
§ Mr. BarberAn estimate of the out-turn for the same year—1971–72—will be published in the Financial Statement and the Budget Report. As my hon. Friend knows, it is not the practice to publish revisions of the Budget estimate. I had better merely say that I have noted what he has said. Any further observations from me would be inappropriate, if not imprudent, at this time.