Negative Income Tax (Hansard, 18 December 1975)

§ 10. Mr. Wigley
asked the Chancellor of the Exchequer if he will take steps in his next Budget to introduce a negative income tax.

§ Mr. Dell
The hon. Member will not expect me to anticipate the Budget Statement.

§ Mr. Wigley
In view of the plethora of means-tested benefits and the inertia which often works against those who most need help from the welfare systems, does not the right hon. Gentleman agree that a negative income tax, properly geared, with the right rates, would help to ensure that there was an effective safety net to help those most in need?

§ Mr. Dell
We have tried to improve the position of those most in need by improving a number of current means-tested benefits, and we propose to introduce others. One of the ways of helping people in need is in relation to the current very low threshold of the income tax system. These are all matters which my right hon. Friend must consider.

§ Mr. McCrindle
Until such time as we can introduce a negative income tax, will the right hon. Gentleman consider urging his right hon. Friend the Secretary of State for Social Services to make far greater use of the family income supplement, which has the outstanding advantage of paying people while they remain in work?

§ Mr. Dell
Family income supplement was upgraded in July, and other means-tested benefits have been upgraded recently. All this helps people who are most in need.

§ Sir G. Howe
Does not the fact that the Minister acknowledges the serious implications of the low tax threshold, the fact that people on social security benefits are now paying tax, and the fact that widows on the standard rate of widow's benefit are now above the tax threshold, powerfully underline the case that we continue to make against the overall impossibly high burden of taxes imposed by this Government, and the overriding necessity, therefore, to get public spending under control?

§ Mr. Dell
My right hon. Friend has announced on many occasions what he intends to do about public expenditure in the next financial year, and there is further consideration of the years beyond, to help bring the problem of taxation under control.