HC Deb 24 October 1972 vol 843 cc971-2
8. Mr. Knox

asked the Chancellor of the Exchequer what were the percentages of the revenue taken in direct taxation and indirect taxation in the year 1971–72; and how the figures compare with those in the year 1969–70.

Mr. Higgins

The shares of central Government's total current receipts taken by direct and indirect taxation respectively were 42.4 and 34.3 per cent. in 1971–72 compared with 40.9 and 38.0 in 1969.70.

Mr. Knox

As indirect taxation is normally considered to hit the poorer harder than the richer members of society, would not my hon. Friend agree that there has been a change in the incidence of taxation from the rich in favour of the less well-to-do since the Government took office?

Mr. Higgins

Certainly in cutting both forms of taxation my right hon. Friend has had in mind the effects that taxation can have on broader issues, as my hon. Friend suggested. It is for that reason, particularly because of prices, that we have put so much emphasis on the cuts in indirect taxation.

Mr. Ashton

Will the hon. Gentleman give us the figures for next year when value added tax is introduced?

Mr. Higgins

The available information has been clearly stated both in the Red Book and in statements made during the Budget debates.

Mr. Joel Barnett

Despite the surprise with which his hon. Friend's statement was heard, will the Financial Secretary confirm that over the two periods the amount of tax collected rose by more than £1,600 million and that this in itself is evidence of the considerable degree of inflation over which the Chancellor has presided? Will he confirm that if he wants to reduce taxation even more, he could preside over an even faster rate and transfer even more to prices and charges? Does the Chancellor intend to continue with these policies, which are undermining his desire to get agreement with the TUC? In the circumstances, will he at least confirm that he will not proceed with the £300 million tax hand- out due to be given to the higher income groups next April?

Mr. Higgins

The fact is that we have made substantial reductions in both direct and indirect taxation. The true indicator, as the hon. Gentleman will recognise, although he did not say so, is the figure for the overall level of taxation as a percentage of the gross domestic product. In 1969–70 that was 34.5 per cent. and in 1971–72 it was 31.8 per cent. A further significant reduction may be expected this year.